We live in a very special moment in history. The whole southern half of the world—Latin America, Africa, the Middle East, Asia—are caught up in the adventure of asserting their independence and modernizing their old ways of life. … Without exception they are under Communist pressure. … But the fundamental task of our foreign aid program in the 1960s is not negatively to fight Communism. Its fundamental task is to help make a historical demonstration that … economic growth and political democracy can develop hand in hand.
—JOHN F. KENNEDY
ANALYSTS WITH AN ORIENTATION TOWARD military affairs are prone to pay most attention to the so-called Kennedy-McNamara “revolution” in military policy, as if it were the centerpiece of the Kennedy administration’s foreign policy. But this is to confuse immediacy with high value. At the center of the Kennedy foreign policy was the premise that the competition between the Soviet Union and the United States was shifting to a new arena: competition for influence over the direction of development in the poorer half of the globe; and it was in respect to this competition that the United States was in greatest danger of falling behind.
In his pre–White House years, Kennedy turned much of his fire on the Eisenhower-Dulles approach to the Third World. The Middle East, particularly, had been the scene or “grave errors”:
We overestimated our own strength and underestimated the force of nationalism. … We gave our support to regimes instead of to people—and too often we tied our future to the fortunes of unpopular and ultimately overthrown governments and rulers.
We believed that those governments which were friendly to us and hostile to the Communists were therefore good governments—and we believed that we could make unpopular policies acceptable through our own propaganda programs. …
We must talk in terms that go beyond the vocabulary of the Cold War—terms that translate themselves into tangible values and self-interest for the Arabs as well as ourselves. It is not enough to talk only in terms of guns and money—for guns and money are not the basic need in the Middle East. It is not enough to approach their problems on a piecemeal basis. It is not enough to merely ride with a very shaky status quo. It is not enough to recall the Baghdad Pact or the Eisenhower Doctrine—it is not enough to rely on the Voice of America or the Sixth Fleet. These approaches have failed.1
For “terms that go beyond the vocabulary of the Cold War” Kennedy went to his “Charles River” (Harvard and MIT) economist friends. They were putting together a doctrine on the relationship between the structure of societies, the availability of external capital, and the modernization process. Most of these economists either had been government officials or were now consultants to the government or were participants in overseas technical assistance programs of private foundations. There were the expected intellectual disagreements among learned men of an inexact science; but there was a notable convergence on a set of propositions with important implications for concrete policy. As put in one of their papers,
The objective of assistance to the underdeveloped nations should be to help them achieve a condition in which economic growth is a normal and self-sustaining process within a democratic political system.2 The attainment of a condition of self-sustaining growth for most of the underdeveloped nations will require fundamental modifications of the economic and socio-political structures of their societies. Putting off the fundamental societal modifications until popular demands for change have risen to a high pitch would likely lead to violent upheavals followed by totalitarian rule. The required structural modifications can be accomplished peacefully if they are begun early, and are translated into carefully coordinated attacks on the particular roadblocks to modernization found in each nation.
Frequently occurring roadblocks are: (1) a lack of sufficient agricultural productivity beyond the subsistence level (sufficient productivity is an important source of investment capital formation); (2) a lack of sufficient investment in social overhead projects (transportation and communication networks especially); (3) the lack of indigenous specialists able to administer these development tasks and to train the rural population in modes of greater productivity; (4) the lack of literacy, which does not allow for the absorption of new values and techniques (including population control) by the population; and (5) the lack of sufficient commitment on the part of elites to greater economic egalitarianism and political democracy.
Since the need for various expensive projects will arise in advance of the market for them, the governments in these countries, not the free market, will have to be the major determiners of investment during the early stages of economic growth.
But in many of these countries these people who run the government, who would be responsible for formulating and carrying out national development plans and negotiating for foreign assistance, are themselves very much attached to the existing social structure. Even in those nations where the top political leadership is personally committed to basic structural alterations of their societies (particularly in the new postcolonial societies where mass nationalist parties were the instruments of the independence movements), their continued authority may rest on the support of those groups in the society who still command the bulk of resources in the countryside, and who continue to staff the civil and military bureaucracies. These latter groups, for material and psychological reasons, may be reluctant to bring on the restructuring that would have to accompany true modernization.
As a source of desired investment capital and foreign exchange, the United States, other developed nations, and international development authorities can exercise some leverage over the otherwise sluggish pace of structural change by making performance in attacking the critical roadblocks to modernization the foremost criterion for continued economic assistance.
Military or ideological alignment with the United States should not be a prominent criterion for the flow of assistance.3
Many of the scholars involved in generating these propositions were now brought into the government—on the White House staff, into the State Department, and as ambassadors to important underdeveloped countries (John Kenneth Galbraith as ambassador to India, Lincoln Gordon as ambassador to Brazil). From their point of view and from Kennedy’s, they had practically a carte blanche opportunity to reorganize the entire foreign assistance program, its personnel as well as its operational guidelines. A large new foreign aid program for Latin America was to be funded, one in which the new premises would have a proving ground unencumbered by existing programmatic commitments.
President Kennedy’s appreciation of the highly insecure political base of the leaders of the developing nations led him to expunge cold war rhetoric, as much as possible, from the public rationale for foreign assistance. He responded positively to suggestions from Walt Rostow, David Bell, and others to tone down the anticommunist appeals appearing in the first draft of his March 1961 foreign aid message.4 From the outset, however, he was the focal point of the tension between two “constituencies” of the foreign assistance program: the overseas recipients of assistance (whose Washington champions were the development economists in Kennedy’s advisory entourage); and opposing them, the neo-isolationist elements in the American electorate, in portions of the business community, and in segments of organized labor whose congressional brokers have traditionally coalesced to prune administration foreign assistance requests not carrying a simple “essential for national security” rationale. The president did have a basic national security rationale, but it was far from simple. He did see the need to ride with rather than against a good deal of the political turbulence in the recipient nations, even when it assumed anti-American, quasi-Marxist overtones; but he was too shrewd a domestic politician to assume that his tactical international apoliticism would get the needed appropriations out of Congress. These often contradictory political requirements underlay the observed ambivalence in Kennedy’s public-expressed rationale of his foreign assistance program—with one tendency represented in his socioeconomic case for the Alliance for Progress, and the other in the geopolitical orientation of the Clay Report.
THE ALLIANCE FOR PROGRESS
To be sure, the Alliance for Progress was very much a part of the grand strategy of the Kennedy administration for frustrating communist penetration of the Third World. But this aspect of the Alliance’s rationale was consciously underplayed in the public rhetoric.
As revealed by Harvard history professor Arthur Schlesinger Jr. (who was heavily involved as a consultant to Kennedy on Latin American affairs), the Cold War was a pervasive part of the discussions in the White House on the Latin American aid program. Kennedy’s interregnum task force on Latin America (chaired by Adolph Berle)5 emphasized the communist threat, describing it as “more dangerous than the Nazi-Fascist threat [to Latin America] of the Franklin Roosevelt period.” The objective of the communists, said the task force report, was “to convert the Latin American social revolution into a Marxist attack on the United States itself.” With revolutionary change in Latin America having become “inevitable and necessary,” the way to counter the communist threat was to “divorce” the Latin American social transformation “from connection with and prevent its capture by Communist power politics.” The United States needed to put itself clearly on the side of the indigenous “democratic-progressive movements … pledged to representative government and economic reform (including agrarian reform) and resistance to entrance of undemocratic forces from outside the hemisphere.” The truly democratic social reform groups “should be known to have the good will and support of the United States, just as every Communist group in Latin America is known to have the support of Moscow or of Peiping [Beijing].” It was also necessary for the United States to develop its capabilities for paramilitary and military counterinsurgency operations and to be prepared to offer effective military support to progressive regimes such as Rómulo Betancourt’s in Venezuela. But the United States should not try to “stabilize the dying reactionary situations.”6
The aspect of the Berle report that surfaced in the full-blown Alliance for Progress was the insistence that the United States offer a hemisphere-wide, long-range economic development plan based on the kind of coordinated national planning urged by the Harvard and MIT economists. This was the type of action required to avoid the spread of violent insurrectionary movements in Latin America and also to give credibility to U.S. professions of being on the side of those working for social justice and democracy.
After the Kennedy inauguration the momentum for a new departure in Latin American policy accelerated. Berle was appointed to head a reconstituted task force on Latin America in the Department of State, where he and Thomas Mann, the new assistant secretary for inter-American affairs, labored to give the earlier ideas operational content. One of their recommendations was that the president make a major address on U.S. policy toward Latin America, proposing a ten-year program of continental development. Richard Goodwin, Kennedy’s staff man on Latin America during the campaign and now a member of the White House staff, was given primary responsibility for drafting the address. The problem was how to sell the economic propositions at home and in Latin America without injecting the Cold War rationale, which would alienate the reformist elements in Latin America with whom the administration was trying to align itself.
The “solution,” as exhibited in the president’s proposal of March 13, 1961, for “a vast new ten-year plan for the Americas,” was a coupling of the structural approach to economic development that had been advanced by the Charles River economists with the revolutionary idealism of Thomas Jefferson and Simón Bolívar. Kennedy christened the Alianza the contemporary expression of the American revolution (North and South) for the rights of man:
Our nations are the product of a common struggle—the revolt from colonial rule. …
The revolutions which gave us birth ignited, in the words of Thomas Paine, “a spark never to be extinguished.” … we must remember that … the revolution which began in 1776 and in Caracas in 1811 … is not yet finished. Our hemisphere’s mission is not yet completed. For our unfulfilled task is to demonstrate to the entire world that man’s unsatisfied aspiration for economic progress and social justice can best be achieved by free men working within a framework of democratic institutions.7
The concrete steps “to complete the revolution of the Americas” were to be presented in detail at a ministerial meeting of the Inter-American Economic and Social Council. But the president’s speech gave a preview of the criteria his administration would insist be applied in evaluating a potential recipient’s commitments to the ideals of the unfinished hemispheric revolution. Political freedom, said the president, had to accompany material progress, but political freedom must be accomplished by social change: “For unless necessary social reforms, including land and tax reform, are freely made, unless we broaden the opportunity of all our people, unless the great mass of Americans share in increasing prosperity, then our alliance, our revolution, our dream, and our freedom will fail.”8
This approach was a product of the analysis of the New Frontiersmen that the weakest chink in the armor of the noncommunist world was the phenomenon of the entrenched oligarchy holding on to privilege in the face of rising demands for social justice. Identifying the United States with the current of social revolution would give it a legitimacy in these countries that would draw responsible professional and middle-class elements into the reform movements and thereby channel pressures into practical demands and nonviolent modes of agitation. Furthermore, by providing an agenda of practical reforms and insisting that governments in these countries make discernible progress in this direction in order to qualify for development loans, the United States would be providing significant pressure from above to complement and reinforce the popular pressures it was encouraging from below. Progressive regimes would be strengthened against conservative elements in their societies; and oligarchical regimes would be squeezed in an ever-tightening vise. Opportunist leaders would at least know where their bread was to be buttered.
If the Latin American nations took the necessary internal measures, Secretary of the Treasury C. Douglas Dillon told his fellow delegates at Punta del Este in August, they could reasonably expect their own efforts to be matched by an inflow of capital during the next decade amounting to at least $20 billion. The problem, he said, did not lie in a shortage of external capital but “in organizing effective development programs so that both domestic and foreign capital can be put to work rapidly, wisely, and well.” There were underlying principles to be adhered to: the loan recipients would have to dedicate larger proportions of their domestic resources to national development projects; integrated national programs for economic and social development would have to be formulated, setting forth goals and priorities to insure that available resources were used in the most effective manner, and such national development programs would have to be in accord with the right of all segments of the population to share fully in the fruits of progress.
To implement these principles, said Dillon, difficult and far-reaching changes would have to be instituted by many of the Latin American nations:
It will require a strengthening of tax systems so that would-be evaders will know they face strict penalties and so that taxes are assessed in accordance with ability to pay. It will require land reform so that under-utilized soil is put to full use and so that farmers can own their own land. It will require lower interest rates on loans to small farmers and small business. It will require greatly increased programs of education, housing, and health.9
The assembled delegates at Punta del Este, except for Cuba’s Che Guevara, responded with enthusiasm to the U.S. initiative. But it turned out to be an Alianza mainly at the level of verbalized aspiration. According to Theodore Sorensen, the president, after a year or so of little progress, was disappointed. What disturbed Kennedy most “was the attitude of that 2 percent of the citizenry of Latin America who owned more than 50 percent of the wealth and controlled most of the political-economic apparatus. … They saw no reason to alter the ancient feudal patterns of land tenure and tax structure, the top-heavy military budgets, the substandard wages and the concentrations of capital.”10
Moreover, even when there was the will to reform, the targeted 2.5 percent per capita rate of annual economic growth just did not conform to the facts. With population growth running at 2.5 to 3 percent, even that increase would be all but wiped out. The lack of Latin American economists with experience in integrated national economic planning was another factor making for sluggishness. By the end of 1962 only five countries were able to submit national development plans for review, and of these only those submitted by Mexico and Venezuela were competently done and within the spirit of the Alianza. Consequently, the U.S. government was able to disburse only two-thirds of the $1.5 billion it had already pledged for the first year and a half of the program.11 Nor was the picture brightened by the worldwide drop in basic commodity prices—the major source of national income for most of the Latin American countries.
Was it all worth the effort anyway? Kennedy continued to think so but without the earlier euphoria. He admitted that the Alliance for Progress “has failed to some degree because the problems are almost insuperable.” In some ways, he said, “the road seems longer than it was when the journey started. But I think we ought to keep at it.”12
Perhaps the most impressive accomplishment, said the president on the first anniversary of the Alliance for Progress, had been the dramatic shift in thinking and attitudes. “For the first time in the history of inter-American relations our energies are concentrated on the central task of democratic development. This dramatic change in thought is essential to the realization of our goals.”13 The problem was that the dramatic change in thought, if unaccompanied by meaningful changes in government programs in these countries, could create an even larger gap between popular demands and government responsiveness, with governments in turn attempting to stifle demand and the discontented turning in their frustration to insurgency. The strategy for effecting a divorce between communist and noncommunist social reform movements, and making the latter more powerful by tangible evidence of the success of their programs, was based on the assumption that governments, under prodding by the United States, would respond to the mounting political pressure more quickly than they had in the past.
The prod around which the Alliance for Progress was built was the long-term, low-interest loan program for development projects administered in accord with the guidelines set forth in the Charter of Punta del Este. But the diffusion of responsibility to internationally appointed technical experts for implementing the conditions in the charter made it difficult to use this tool as an instrument of reform. Governments could too easily blame their failure to gain the new external capital promised in the Alliance on the bureaucracy and red tape of the inter-American machinery rather than on their own procrastination. And the United States could be accused of insisting upon complicated technical standards precisely for the reason that it would reduce the projects requiring U.S. financial support. Before the end of 1962 the governments of the Americas, through their delegates to the Inter-American Economic and Social Council, were recommending that “in order to prevent disappointment both on the part of the countries seeking assistance and of the financing institutions, both national and international, it will be advisable to make the conditions and operations of these institutions more flexible.”14
Latin American diplomats also began to press with greater fervor for international commodity price stabilization agreements, arguing that the instability of their countries’ foreign earnings more than anything else prevented the amount of domestic capital available for investment in development from being increased. This case was not entirely convincing to the administration, since there was a good deal of “surplus” domestic Latin American private money drawing interest in American and European banks. The people receiving money from the export of basic commodities were very often the same elements least interested in the social reform that would have to accompany true economic development in their countries.
The more conservative Latinos, and U.S. interests unsympathetic to the national planning approach and the emphasis upon public investment in the original conception of the Alliance, pointed to the decline in the flow of private capital to Latin America since Punta del Este. The obvious implication was that all the talk of dramatic social change, including drastic land and tax reforms, had raised the specter of confiscation of private holdings without sufficient compensation, harassment of foreign-subscribed private enterprise, and political instability leading to unpredictable radical economic experiments. “Taking into account the limitations to the availability of public funds,” said the first-year evaluation report of the Inter-American Economic and Social Council, “it is clear that the objectives of the Alliance cannot be achieved without the full participation of the private sector and adequate measures must be taken to assure maximum contribution to growth by the private sector.”15 The forces for stability, recovering from the first shock of seeing the White House seriously identifying itself with the forces for change, had begun to regroup.
The president’s response to the conservative counterattack was to show as much favor as possible to reformist leaders like Rómulo Betancourt of Venezuela and Adolfo López Mateos of Mexico and to point an admonishing finger at those Latin American forces that in his view constituted an alliance against progress. The latter should know, Kennedy affirmed four days before his death, that he was fully committed and prepared for a long struggle. “Nothing is true except a man or men adhere to it—to live for it, to spend themselves on it, to die for it,” he declaimed, quoting from a poem by Robert Frost.16
THE CLAY REPORT: REVIVAL OF THE NATIONAL SECURITY RATIONALE
President Kennedy, believing the United States was most effective internationally when its posture combined realism with idealism, was initially disinclined to emphasize the U.S. national security rationale for foreign aid. But he soon was heard stressing this aspect of the case for it almost exclusively as Congress returned to its habit of trimming the “fat” from foreign aid requests.
Congress went along with the essentials of the administration’s program in 1961, creating the Agency for International Development, authorizing the Alliance for Progress and the funds requested for this new venture, and increasing the proportion of foreign assistance appropriations devoted to economic as opposed to military projects. But the next year, the counterattack was in full swing, led by Congressman Otto Passman, chairman of the House Appropriations Subcommittee on Foreign Aid.
In 1962, as Congress began to axe the administration’s economic development programs, Kennedy continued to appeal to the legislators in the terms of his preferred public rationale: if we were truly for a world of independent self-reliant nations, if we really believed that weakness and dependence for national societies was not a proper environment for the development of political liberty and individual well-being, then in good conscience we could not reduce these foreign assistance programs any further.17 Congress was insufficiently impressed and trimmed a full billion dollars off the president’s $4.9 billion foreign assistance request.
Schlesinger portrays Kennedy as keenly disappointed. But determined to get the aid bill through Congress in 1963, he resorted to the stratagem of appointing “a blue-ribbon panel of bonded conservatives set up to cast a presumably cold eye on the aid effort and then to recommend its continuance as essential to the national interest.”18 Designated “the Committee to Strengthen the Security of the Free World,” the panel was chaired by General Lucius D. Clay, highly respected in banking and financial circles and famed for his cold war toughness toward the Soviets over Germany and Berlin. Fiscal responsibility was represented by Robert B. Anderson, Eisenhower’s last secretary of the treasury, and before that secretary of the navy. Robert A. Lovett, a secretary of defense under Truman and the man most identified in the public mind with the New York “establishment,” could never be accused of fuzzy liberalism. Organized labor was represented by the militantly anticommunist George Meany. Edward S. Mason, of the Harvard-MIT economists circle, was added as an afterthought, but largely as a concession to some of the development economists who may not have appreciated the political gamesmanship of the president. The main economic development aura was provided by Eugene Black of the World Bank.
The Clay committee was more than willing to provide the truest blue ribbon, in the form of a return to the strict national security–only criterion that had kept economic development assistance to a trickle since the Korean War, and in its insistence that the “private sector” rather than government-owned enterprises should be the favored recipients of assistance. But rather than squaring the circle by arguing that the nation’s security interest and interest in expanding overseas private investment would be best served by a long-term continuation of the level of effort the president was recommending, the committee, to Kennedy’s great disappointment did just the opposite:
We believe that we are indeed attempting too much for too many and that a higher quality and reduced quantity of our difficult aid effort in certain countries could accomplish much more. We cannot believe that our national interest is served by indefinitely continuing commitments at the present rate to the 95 countries and territories which are now receiving our economic and/or military assistance. Substantial tightening up and sharpened objectives in terms of our national interests are necessary. …
For the present … we are convinced that reductions are in order in present military and economic assistance programs.19
The administration released the report reluctantly, in the knowledge that Clay’s support was politically indispensable, even if only to salvage the 1963 bill after it was torn apart by Representative Passman and his friends. The Louisiana Democrat could not have been more pleased by the Clay report. And now cautious Republicans like Everett Dirksen and Charles Halleck could vote for cuts in the administration’s aid program while wrapped in the mantle of establishment patriotism.
The “national security” standard as wielded by Congress, applying narrower concepts of security and the global balance of power, was in 1963 a keener instrument for whittling down than building up. The actual appropriations bill of $3.2 billion, a slash of $1.7 billion from Kennedy’s original request, was the lowest since 1958 and the smallest percentage of U.S. gross national product allocated to foreign assistance since the start of the Marshall Plan.
In an administration that defined the Third World as the major arena of competition, this congressional action was interpreted as a severe curb on the diplomatic power of the United States.
The president, however, was not one to take such defeats without fighting back. If the case for foreign aid had to be made in terms of national security, then that was the way he would make the case. But the connection would have to be more clearly set forth than previously.
In a westward swing through the United States with Secretary of the Interior Stewart Udall in the fall of 1963, the president frequently departed from his major theme—the conservation of natural resources—to talk about the preservation of the nation as a whole.
Except for his address during the Cuban missile crisis, probably the hardest-hitting basic national security speech of the president’s career was made at the Mormon Tabernacle in Salt Lake City. It was the last week of September 1963. The Senate had ratified the nuclear test ban treaty. There was talk of détente with the Soviet Union. The president, aware that the audience to whom he spoke would translate their mood of increasing isolationism into a disapproval of foreign economic assistance, drove home the connections between the security concerns of his audience, the global balance of power, and the array of U.S. foreign commitments. This largely extemporaneous address merits liberal quotation:
I know that many of you in this State and other States sometimes wonder where we are going and why the United States should be involved in so many affairs, in so many countries all around the globe. …
I realize that the burdens are heavy and I realize that there is a great temptation to urge that we relinquish them, that we have enough to do here in the United States, and we should not be so busy around the globe. From the beginning of this country … we had believed that we could live behind our two oceans in safety and prosperity in a comfortable distance from the rest of the world. …
I can well understand the attraction of those earlier days … but two world wars have shown us that if we … turn our back on the world outside … we jeopardize our economic well-being, we jeopardize our political stability, we jeopardize our physical safety. …
Americans have come a long way in accepting in a short time the necessity of world involvement, but the strain of this involvement remains and we find it all over the country. … We find ourselves entangled with apparently unanswerable problems in unpronounceable places. We discover that our enemy in one decade is our ally the next. We find ourselves committed to governments whose actions we cannot often approve, assisting societies with principles very different from our own. …
The world is full of contradiction and confusion, and our policy seems to have lost the black and white clarity of simpler times when we remembered the Maine and went to war. …
The United States has rightly determined, in the years since 1945 under three different administrations … that our national security, the interest of the United States of America, is best served by preserving and protecting a world of diversity in which no one power or no one combination of powers can threaten the security of the United States. The reason that we moved so far into the world was our fear that at the end of the war, and particularly when China became Communist, that Japan and Germany would collapse, and these two countries which had so long served as a barrier to Soviet advance, and the Russian advance before that, would open up a wave of conquest of all Europe and all of Asia, and then the balance of power turning against us we would finally be isolated and ultimately destroyed. That is what we have been engaged in for 18 years, to prevent that happening, to prevent any one monolithic power having sufficient force to destroy the United States.
For that reason we support the alliance in Latin America; for that reason we support NATO … for that reason we joined SEATO. … And however dangerous or hazardous it may be, and however close it may take us to the brink on occasion, which it has, and however tired we may get of our involvements with these governments so far away, we have one simple central theme of American foreign policy which all of us must recognize, because it is a policy which we must continue to follow, and that is to support the independence of nations so that one block cannot gain sufficient power to finally overcome us. There is no mistaking the vital interest of the United States in what goes on around the world. …
If we were to withdraw our assistance from all governments who are run differently from our own, we would relinquish the world immediately to our adversaries.20
The New Frontier tried to transcend the vocabulary of Cold War diplomacy but found it often had to return to this vocabulary when addressing the American public in order to be granted the resources to develop more flexible programs for the Third World.