It is hard to overestimate the damage socialist fallacies have done to
the poor nations of the world. Import substitution and big govern-
ment tax and spending policies have proved ruinous to these coun-
tries-yet these were the very policies the "experts" promised the
poor would lead them out of their poverty. "The LDCs are caught in
the vicious circle of poverty," wrote the young Walter Heller in 1964.
"To break out of this circle, apart from foreign aid, calls for vigorous
taxation and government development programs; on this point
expert opinion is nearing a consensus." ¹

Indeed it was. And Western universities--particularly the presti-
gious ones--played a major role in formulating and disseminating
the "consensus of expert opinion." When Heller at Minnesota, John
Kenneth Galbraith and Richard Musgrave at Harvard, Nicholas
Kaldor at Cambridge University in England, and Gunnar Myrdal,
wherever the peripetic social philosopher happened to be, revealed to
their students that big government was the savior, the gullible, inno-
cent, and naive--many from the less-developed world--hurried to
join the church. "The nineteenth-century sequence will probably not
be repeated," wrote Norman S. Buchanan. "The state rather than the
drive of private enterprise in pursuit of profits will determine the
major features of industrial development in the [now] low income
areas. Domestic savings and investment, labor training and mobility,
imports and exports, foreign borrowing and home finance will be

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