The United States and the Third World

Last fall an ominous development occurred at the United Nations. By a unanimous vote the General Assembly adopted a declaration of a "new international economic order." Known as Global 1, the new order calls for a redistribution of global wealth by establishing mechanisms for the automatic transfer of funds to the have-not countries. Among these mechanisms is the proposal—objected to by the U.S. delegation—for the rich countries to give a minimum of 0.7 percent of their GNP each year to the poor countries by 1980. The new order also calls for the expanded use of cartels to fix the prices of raw materials produced by poor countries (following the OPEC model), and recognition of each country's "right" to nationalize any and all foreign-owned properties, with or without compensation.

The adoption of this declaration signals the triumph of what U.S. Ambassador Daniel Moynihan has termed the "British revolution," i.e. the Fabian socialist doctrine of redistribution as opposed to production of wealth, bequeathed by Great Britain to 47 former colonies which are now voting U.N. members. As Moynihan pointed out last March in Commentary ("The United States and the New World Society"), the largest percentage of the world's population now lives under the rule of Fabian socialist, not communist, regimes. It is these regimes' anti-American, anti-capitalist policies which have finally been enshrined in Global 1, after nearly a decade of propagandizing. The process began in 1967 with the formation of the Group of 77—a bloc of Third World governments which has since grown to 100 of the U.N.'s 141 members. The basic concepts of Global 1 were aired at various U.N. conferences over the past decade and enshrined in the General Assembly's December 1974 Charter of Economic Rights and Duties of States (opposed at that time by the United States, Japan, and West Germany).

Over the past year, however, the Kissinger-led State Department apparently decided to switch rather than fight, in hopes of "moderating" the demands of the Third World socialists. Indeed, in a major address (written by Kissinger) read by Moynihan shortly before the unanimous adoption of the "new order" declaration, the U.S. delegation laid out a blueprint for a Marshall Plan-type program that incorporated most of the points proposed by the socialists, including expanded cartels and increased financial aid. Reaction to the speech was generally favorable, indicating the delegates' understanding that Kissinger agreed in principle with their demands, and was merely haggling over the details.

The Kissinger policy succeeded in avoiding a confrontation, but has laid the basis for an unprecedented, permanent rip-off of the producers (taxpayers) of the developed countries. For the U.N.'s new economic order establishes inter-nation welfare as a matter of "right." No longer is foreign aid looked on as a matter of charity or as a response to emergencies. The developing countries, through their own Welfare Rights Organization (the Group of 77), have succeeded in gaining unanimous governmental acceptance of the concept of "reparations"—payments by the developed countries because they are successful to the developing countries because they are unsuccessful. Although U.S. foreign economic aid today accounts for only about 0.28 percent of the GNP, there is nothing to stop this minimum from being increased, year after year. After all, if the poor countries have a "right" to 0.7 percent of our annual production, why not 3 percent, or 5 percent, or 10 percent?

Free market economists have long since demonstrated that redistribution of wealth provides no long-term solution to poverty. What is desperately needed by the poor countries of the Third World is true economic development: the build-up of capital through domestic and foreign investment so as to create the tools necessary for increased production of goods and services. Such investment will only occur in a climate of economic freedom, in which property rights are respected and investors have a reasonable chance to earn a profit. Such conditions are precisely the opposite of those created by most of the Third World's socialist governments. And programs such as the U.N.'s Global 1, far from improving the situation, increase the hold of such regimes, both by bailing them out financially and by endorsing their mistaken economic precepts.

What could the U.S. government do if it wanted to help the people of the Third World without ripping off American taxpayers? First of all, it should recognize the one valid complaint of the Third World: U.S. tariffs and other barriers to importation of their products. As quickly as possible the United States should abolish all tariffs and nontariff barriers, especially those affecting the developing countries. It is absurd to preach free trade and free enterprise and then restrict trade with those countries which most need to learn the benefits of capitalism. The Ford administration took an important step in this direction in November by eliminating tariffs on 2724 categories of imports from 98 developing countries and 39 dependent territories.

Second, U.S. representatives should reject absolutely and on principle the idea of redistribution of wealth as a matter of right. Past U.S. aid, it should be explained, was given simply as charity, was often wasted (or ended up lining the pockets of bureaucrats), and was given against the wishes of many of those who paid the bills. All future U.S. aid should come only from private organizations, on whatever terms their donors and administrators choose.

Third, the United States should steadfastly refuse to join any international cartels and should exert all possible diplomatic efforts to encourage the natural and inevitable instabilities of such anti-market arrangements. All such cartels should be forcefully denounced as trade barriers, and their disadvantages to all nations in their role as consumers should be emphasized.

Finally, although the United States should quit the U.N., so long as it remains a member, its representatives should abandon compromise and appeasement and should take the offensive, as Ambassador Moynihan has begun doing. The vast majority of U.N. member governments not only are socialist but are police states as well. Their disregard for human rights and the disastrous failure of their socialist economic policies should be zealously denounced. The success of the developed countries and of such Third World models as Hong Kong, Malaysia, and Costa Rica, where both economic and civil liberties are generally respected, should be highlighted by contrast.

Fundamentally, it is ideas rather than money that will make the difference for the Third World. If there is any proper role for the U.S. government in the international arena, surely it is to make the case for freedom.