OP/4/112

I could go right straight down the historical line merely to point out that at no point was the American system ever constricted by a doctrinaire theory. I admit that at the moment, as you read current literature, it looks as if it might be. We talk about "individual initiative" as if a corporation was an "individual." It is actually about as individual as the United States Army. We talk about corporation property being "private" property whereas a big corporation is about as private as say the United States Post Office, as far as I can see.

What I'm trying to say is that this "consensus" really is an agreement on certain elements of "the good society". You could compare its assumptions with the four propositions of Father Murray and find that they match. Thus, "justice", which he translates into "equality of opportunity" comes in as a doctrine controlling the American corporate system. Thus, a powerful corporation cannot unduly discriminate in favor of your friends against your enemies. If you're a railroad or a public utility, you can't discriminate at all. This is a doctrine of law only in some fields, but is controlling even where there is no explicit law. If the oil companies decided that they did not wish to sell gasoline to negroes and claimed they had a right to do this, claiming that the gasoline is their private property to sell or withhold as they chose, we don't need to be told that either there'd be a corporate upset or a law would be passed, or an ensuing explosion of public opinion would blow them out of the water. Few, if any companies would be as foolish as that. This may be the "corporate conscience" we read about.

[LQ]

OP/4/113

Take again the consensus that there must be continued orderly progress. You discover that almost every corporation now feels itself obliged, not only to maintain the operations it has but also to plan for operations that likely are to be demanded of it in the future. This enters into the problem, among other things, of whether a corporation profits are as large as they appear to be, or as some people think they are. Where for example you are required to generate internally capital to provide production to meet the demands which you know are going to be present in five years due to growth of population. Some of your "profits" are conscripted for new capital development.

Father Murray made a point which he called "constitutionalism". You would discover if you went into, that point by point, and bit by bit, as power has emerged in the economic system, a companion doctrine emerges that it must be controlled or checked at least to the extent that governmental powers are controlled and checked. It probably will be standard law within the next ten years that the 14th and 15th Amendments and the Bill of Rights of the Constitution apply as much to organized corporate power as they now do to an agency of the state. This is steadily emerging as a matter of law, but it reflects the American consensus that the individual is enabled to have his freedom respected.

Now, the odd fact is that in the face of this, not only the corporation system has worked extremely well in its productivity, but the American economic system on the whole is healthier perhaps than any other we know. I like to think that it was precisely the incursion of these forces (which, more often than not, were fought tooth and toenail by the business world) that

OP/4/114

probably saved its life. I would not like to cross-examine Nelson Rockefeller on the subject, but my impression is that what happened to the Standard Oil monopoly in 1911 was probably the best thing that ever happened to the oil industry.

I therefore suggest that the major element which has made the economic system into the rather surprisingly dynamic thing that it is today, has been precisely the application, chiefly through political pressure, but not infrequently through moral pressure without political action, to make the American economic system conform to the norms of conduct required by this American "consensus". These norms were based on something deeper than the precise action from timt to time exacted; they were based on philosophical assumptions of values. This, perhaps, is the primary difference between the development of American capitalism and capitalist development elsewhere.

This sketch does not purport to be complete. I close merely by saying a couple of things about the future. I think those of us who have studied this system are most worried as to where it is going. I would agree with a great deal of what Mr. Percy says, and still wonder. Obviously we have split our atom of private property so that part of it is passive-receptive -- this is your stockholder with very little to say -- and part of it is active and dynamic -- this is your management which is most of the time a self-perpetuating oligarchy. Apparently it can't be otherwise. The success of the system perhaps shows that maybe that is the way things have to be.

OP/4/115

Clearly this is not economic democracy in the same sense as political
democracy. But I doubt if we ought to have in the business and economic world
democratic political campaigns with party nominations. We ought not to
nominate the Italian boy from the Eighth Ward in order to have a good Director
of the American Telephone & Telegraph Company. I rather doubt if you could
get good directors that way. I think we are entering into a field in which the
criteria of judgment and the method of choice in personnel are not the same as
in the election of representatives, to, let's say, the House of Representatives.

We are now discovering that as stocks and bonds and so forth increas-
ingly become centralized in pension trust funds, you even eliminate the last
vestige of the property owner. An individual now is dependent on contract
and status. In that respect, he is rapidly approaching the status of a man in
the Soviet Union. Your individual now doesn't "save money"; he has it saved
for him. This will be his pension fund, his social security, his life insurance
policy. At the close of the appointed span, say age 65, 20 years' service,
or whatever it is, he then gets a status and economic support. It has been
already determined by the courts that he has no property interest in a pension
trust fund. In point of fact, if one of them dissolved and if there were surplus
assets after satisfying the contracts, that surplus would escheat to the state.
By a grim jest, this economic system having proclaimed the extreme right to
private property more loudly than most civilizations, is now achieving its
socialization with a rapidity which is frightening as you watch the figures
build up.

But on the constructive side, it is also clear that we are proposing, and
intend, still under the guidance of the American "consensus", never to let

OP/4/116

any of these tendencies get beyond so far. The system has resulted in an
amazing concentration of economic power. But the concentration of power
in America has always provoked a rebellion, be it the Jacksonian one of 1830
or the Pujo committee of 1910. The same phenomenon would unquestionably
recur if you let the combination of concentrated corporation managements, great
life insurance companies and the pension trust funds, reach a monopoly power
system in their turn.

I note, that this brief review obviously does not cover the entire prob-
lem of the unique quality of the American economic system. I do submit,
however, that there is a perpetual form of somewhat disorderly but continual
control over it. I, myself was associated in 1933 with one of those control-
interventions, as was Mrs. Rosenberg. I think I can say that these interven-
tions are effective.

I do not think it fair to attribute the success of an economic system
either to the corporation or corporations, although they have done a great
deal. Nor is it due to the achievements of labor, although these have been
spectacular; or to the brilliant planning of any group of statesmen, though
from time to time some extremely effective work has been done in that regard.
I think this success is more nearly due to the fact that the various abilities
of great groups of people were constantly drawn on. As difficulties appeared,
as needs needed to be met, as resources had to be provided, the American
consensus with equal enthusiasm slapped down a monopolist, provided money
for huge enterprises by socialist process or with an almost paternal assist-
ance allow an endless amount of small builders to make money in housing.

OP/4/117

In each case it checked what it had done, not by theory, but by the results
as tested by a conception of "the good society" which lies deeply imbedded
in the American consciousness.

Whether the American economy stays in this presently successful
balance, I suppose is the preoccupation of all of us. In its next phase, to
find an American tradition which will carry over our supply guide conceptions
in new problems is a consideration of high importance. The tradition that
Panel VII is discussing is, I think, the American consensus that really does
carry forward, remaining as valid in new situations as it has proved in the
past.

(Note: There is no page "OP/4/118")

I - Agenda for Meetings

December 10, 1956

ROCKEFELLER BROTHERS FUND, INC.
SPECIAL STUDIES PROJECT

PROPOSED AGENDA

for meetings of

SUBPANEL I - U.S. INTERNATIONAL OBJECTIVES AND STRATEGY

I. Problems and Opportunities

The Subpanel might consider the subsequent agenda against the
background of the following questions:

A. What are the major problems the United States has to face
in the international field during the next ten to fifteen years?

B. What are the major opportunities with which the United
States may be confronted or can create relating to the international
field during the next ten to fifteen years?

C. Can we more effectively identify the U.S. in a positive
way with the hopes and aspirations of peoples throughout the world?

D. Can the U.S. develop objectives and strategic concepts
relating to areas listed below that will further our own interests and
at the same time reflect the hopes and aspirations of their peoples?

E. Can the U.S. policies in these various areas be so designed
as to supplement and support each other?

F. What are the socio-psychological forces that influence the
international aspects of public opinion in the various areas listed below?

I - Agenda for Meetings

- 3 -

III. <u>Allied and Western Hemisphere Relationships</u>

A. <u>Strategic Concepts</u>

1. Considering military, political, and psychological factors,
what should be the role and nature of alliances in which we engage?

a. To what extent can we establish common goals
and objectives with our allies?

b. To what extent are the alliances valuable for
other than military reasons and how can this value be
enhanced?

c. What is the relationship between the military
and political purposes of our alliances?

d. To what extent will the rapid evolution of
weapons systems make alliances, from a military point
of view, progressively less important?

e. Can we apply in the underdeveloped areas the
same alliance policy as in Europe?

2. To what extent can the United Nations deal with the
contemporary revolution?

a. Can we foresee for the United Nations a role of
growing strength and prestige in terms of international order,
justice and freedom, and if so, what can be done to foster
its growth?

I - Agenda for Meetings

- 4 -

3. Can the American values and institutions continue to flourish in a system of nation-states?

a. Is a different vehicle both more desirable and more suitable for the attainment of American objectives?

b. Specifically, should we seek to promote regional and international political and economic organizations?

c. Can regional organizations be made more effective and give greater strength to the United Nations?

B. Europe

1. What are the probable trends and developments in Europe over the next 10-15 years? To what extent are these developments favorable for the attainment of the American policy objectives and to what extent will they pose new problems for us?

2. What are the political and military factors which have caused the present strains on the North Atlantic Treaty Organization? To what extent can these be attributable to specific American policies? What new or stronger policies are required to strengthen this alliance?

I - Agenda for Meetings

- 5 -

3. With particular reference to Germany, what are the trends likely to hinder or help the attainment of U.S. policy objectives? Will Germany seek reunification even at the expense of leaving NATO? If so, what can be done to minimize the consequences of this decision or to turn them to advantage? What political and military changes in NATO are necessary to make the alliance more palatable to the Germans?

4. What are the present relationships between the U.S. and Western Europe? In the light of U.S. objectives, what modifications are required in these relationships? To what extent may these require further integration among the members of the Atlantic Community?

C. Latin America

1. What specific problems and opportunities may confront us in Latin America? To what extent is the policy of the U.S. suited to present and developing situations? How can a better basis of mutual cooperation between the U.S. and Latin America be established?

I - Agenda for Meetings

- 6 -

## IV. Sino-Soviet Affairs

A. Is there an irreconcilable antagonism between the U.S. and the Communist bloc, or is a policy of accommodation both possible and feasible in terms of basic U.S. interests?

B. What is the meaning and future possibility of recent developments within the Soviet orbit? Do these presage a weakening of the regime? What opportunities do they pose for the U.S. in its avowed goal of containing and reducing Soviet power?

C. What is the relationship between Soviet bloc internal developments and foreign policy? Can we expect a relaxation of international tensions while the Soviets settle their leadership problems, further build up their economy and carry out their policy of "controlled relaxation"? If so, how long may this process be expected to last?

D. What changes in policy may we expect once the Soviets have attained relative nuclear parity? To what extent can the U.S. influence Soviet policy in directions favorable to us and what measures should be taken to this end?

E. What are the strengths and weaknesses of Communist China? What are the probable trends in Chinese foreign policy and the impact of these trends on United States interests? What policy should we adopt toward Communist China? Is there a possibility of inducing a schism between China and the USSR? If so, how?

I - Agenda for Meetings

- 7 -

# V. Colonialism and the Underdeveloped Areas*

## A. Strategic Concepts

1. What should be the U.S. policy with regard to the former colonial peoples? Is it possible to adopt a single policy, or is it necessary to adjust our policy to circumstances, such as the readiness for self-government, economic viability, or the historical forms from which colonialism developed?

a. What are these forms and how should they affect U.S. attitudes and policies?

2. What are the implications for the United States of the emergence into statehood of former colonial peoples?

a. In this connection what is a nation?

b. Must the boundaries of new states necessarily follow the lines of former colonial rule?

c. How does it affect the role of alliances, the "balance of power" and the effective use of the United Nations as an instrument of American policy?

3. Can the United States play a really important and constructive role in relation to the preparation for and attainment of freedom and self-rule by colonial peoples?

* The problems of Japan are listed under this area for geographic convenience.

I - Agenda for Meetings

- 8 -

4. Can the colonial peoples be prepared for freedom and self-government in such a way as not to weaken further the prestige and economic strength of the metropolitan powers?

5. Can the U.S. play a part in such a program without further compromising its position of moral authority or allied relationships?

6. What are the attitudes and the policies of the colonial and former colonial peoples? Does the attainment of national independence by these countries make for greater political stability? If not, what can be done to improve this situation?

7. Is there a trend towards a split between the Afro-Asian and white races?

## B. Far East and South Asia

1. What specific problems and opportunities may confront us in the Far East and South Asia? To what extent do these problems derive from common political, social and economic factors in the underdeveloped countries? To what extent are they aggravated by Soviet economic penetration?

2. What is the importance of Japan to the attainment of U.S. objectives in the Far East? What Japanese policies will best further U.S. interests and how can adoption of these policies be spurred? To what extent is Japan likely to adopt a militarily and politically neutral position in the Far East?

I - Agenda for Meetings

- 9 -

3. With respect to South and Southeast Asia, what current trends and future problems are foreseen? What are U.S. objectives in South and Southeast Asia? What U.S. policies will best further the attainment of U.S. interests in this area? What should be the role of India in South Asia and how can the U.S. induce acceptance of that role?

C. <u>The Middle East</u>

1. What is the nature of American interests in the Middle East? What are the basic factors hindering or helping the attainment of those objectives? To what extent is our policy adequate to secure these objectives? If it is not adequate, what should be the future course of U.S. policies and what chances of success would these policies have?

2. With specific reference to the Arab-Israeli dispute, what are the basic factors which have caused the continuation and intensification of that dispute? Is a settlement of this dispute possible, and if so, on what terms? What can and should the U.S. do to effect a settlement?

I - Agenda for Meetings

- 10 -

D. Africa
---

1. What are the present factors affecting developments in the divers portions of Africa? What future political and sociological trends can be foreseen? To what extent are these trends favorable to U.S. interests? What can and should the U.S. do to affect developments in Africa?

VI. Topics Discussed by Other Subpanels the Conclusions of which
Will be Submitted to Subpanel I

A. Military Policy and U. S. Objectives

What are the trends and developments in the military
field which may affect our overseas interests and relations.
To what extent do these determine our international objectives
and strategy and to what extent can they be utilized to promote
U.S. interests abroad?

B. Economic Policy and U. S. Objectives

What is the inter-relationship between our international
objectives and strategy and our foreign economic policy? Our
domestic economic policy? To what extent does present economic
policy reinforce or hamper other efforts for the attainment of U.S.
international objectives? What alterations in economic policy
are required to make it better promote U.S. interests abroad?
Are such alterations feasible and desirable, or must U.S.
international strategy be adjusted to the requirements of economic
policy?