American Economic Policy and Global Defense
THE HISTORY of the decade since 1940 has been marked by a growing participation in and feeling of responsibility for world affairs on the part of the United States. Since the end of World War II, this assumption of responsibility has been intensified by the growing threat of communism, whose frankly avowed goal is world domination. The dream of a world order based on the prewar system of a large number of independent sovereign states whose mutual problems would be dealt with in democratic fashion through international economic and political institutions has been shattered. The United States as the leading power of the non- Communist world must take the lead in organizing the material and moral resources of the free world in a struggle for survival. This involves concerted action in the military, political, economic, and informational fields.
America must have an economic policy which is consistent with her objectives and responsibilities as a great power in a hostile two-power world. If total war is expected to break out in the near future, economic policy, both national and international, should be immediately subordinated to military requirements. Domestic allocation and export controls should be instituted on a comprehensive basis, and the principles of lendlease and reverse lend-lease should replace dollar availabilities and competitive position as the prime movers of international trade. While it might well be argued that the United States and the free nations associated with her should prepare immediately for an all-out war, up to the time of writing at any rate this has not been the decision of the American government. Rather the decision has been to strengthen the defenses of the North Atlantic Treaty powers, including those of the United States, and to provide economic and military assistance to halt the spread of communism in the underdeveloped areas, without interfering to a major degree with peacetime production and trade. This general approach is obviously based on the assumption that the struggle against communism will be of long duration and that it will be carried on by every means short of all-out warfare. The remainder of this chapter will be concerned