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as the Protestant Ethic assured us, reflect the rewards for different degrees of diligence and effort and virtue. They more nearly represent random elements of luck. It is the luck of the draw and not their superior virtue that put our children in homes favoring achievement and put other children in a situation where their mothers could not even be sure about the identity of the fathers.

With religion on the wane and with empirical evidence suggesting that the differing material rewards of life are not so closely associated with degree of access to opportunity, some basic philosophical foundation blocks of our economic system are shaking. "In the nature of human consciousness," again to quote Daniel Bell, "a scheme of moral equity is the necessary basis for any social order; for legitimacy to exist, power must be justified. In the end it is moral ideas -- the conception of what is desirable -- that shape history through human aspirations."⁷

And as the fundamental tenets of basic liberalism have found themselves on the defensive and minus their moral and religious buttresses, the door came open to new goals and objectives that would gain allegiance and be implemented by government power if necessary. That equality of end results would be the successor to equality of opportunity was if not inevitable at least highly probable.

## IV

This shift in emphasis from equality of opportunity to equality of results could have the most profound impact on social and economic policy. In the social area it would mean, for example, a turn-about from

⁷Daniel Bell, op. cit., pp. 47-8.

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the view that such matters as race and religion ought to be irrelevant
to the view that they are quite relevant. And practically this takes
the form of quotas for employment or for entrance in our universities or
for membership in the Business Council. This seems perhaps workable
until we remember that most people are in several groups. To fill out
the matrix a company or college may find itself looking for Scottish
Hindus or people with only an eighth grade education who also have Ph.D.'s.
And the full implication of this really begins to take shape when we ask
whether another group should have equal access to our universities, graduate
schools, and offices along your mahogany rows -- namely, the group with
below average I.Q. (which startling as it may seem, is half the population).

For the operation of the economy this shift is making it
increasingly difficult to use the pricing system. The differential impact
on the rich and the poor has become not only a major consideration in
evaluating a policy but one that overwhelms all others. Our current
energy problem illustrates the point. We have some shortages. Conventional
economic wisdom has an answer -- namely, a higher price. No one has found
a better way to encourage economizing the use of a scarce item. With a
higher price, we get 200 million Americans affirmatively trying to do what
is in the social interest -- namely, to curb usage. Yet it is difficult
to go this route because of the presumed perverse effects on lower-income
people. If we are stopped from that route, we shall go the rationing
route -- in which case we get 200 million Americans trying to subvert the
system because at the low disequilibrium price it is in the interest of
each to wangle more if he can. And we also get an enlarged bureaucracy

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of individually well-intentioned people who nonetheless have a vested
interest in perpetuating and enlarging these controls over our lives.

Indeed, one can go further. The natural drift of the equality-of-results doctrine is in the direction of a large expansion of state control over our lives. Equality of results is not easily defined (probably, in fact, impossible to define). If nature were to take its course the end result would be a large array of bureaucracies trying to define (and in the process stepping on each other's toes) and implement the elusive concept of equality of results.

V

Yet this idea is not going to go away. It will be given some
expression in public policy. The problem is to give it expression
without giving up the values of our basically liberal heritage. A few
tentative words may, therefore, be in order here about what to do. They
are in no sense a program, but more in the nature of random observations.
For economic policy we need to have a more explicit and coherent income
maintenance policy. Powerful intellectual impetus for this, as for so
much of the current economic policy landscape, came from Milton Friedman
in his writings on the negative income tax. It was given programatic
expression four years ago in the President's Family Assistance Plan.
Ours is now a rich economy, and we can well afford it. And all of us
here would have to admit that there is a substantial element of random
luck in success. Even those of us here who did not have affluent or
highly educated parents, and I would be in that group, were in most cases
the beneficiary of a strong family structure and a home emphasis on the

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importance of education to make something of our lives. Contrast this
with the vacuity of many who "just growed."

Moreover, we need a more explicit and coherent income sharing
plan to win more leeway for using the pricing system. If we persist in
making pricing system decisions almost exclusively in terms of income
distribution considerations, we shall have neither a good pricing system
nor a good income distribution program. What we shall have is a system
where the lives of the rich and poor alike will be more directly managed
by the bureaucracy (whose incomes, incidentally will be well above
average).

The optimum toward which society is trying to feel its way
here will be neither pure "equality of results" nor just "equality of
opportunity." A society organized solely on the principle of equality
of opportunity is not acceptable, and one organized solely around the
principle of equality of results would not be operational.

To find this optimum we must assure full freedom for the
competition of ideas -- which is the intellectual analogue of the
economists' free and competitive markets. Obviously this requires
eternal vigilance against, for example, overt encroachments by government
on freedom of the press or freedom of thought. The major problem here,
however, is much more subtle and complex. The intellectual world also
is always in danger of a suffocating establishmentarianism that establishes
excessively narrow boundaries of Right Thoughts, and it is all the more
dangerous because it is so easy to be unaware of its development. It is

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within such intellectual establishmentarianism that tidal waves, unchecked by alternative ideas, occur which carry us down roads that later we ruefully wish we had not taken. Members of academic departments are more comfortable with "their own" around them, and being human are much inclined to assume, or at least to strive to believe, that other ideas are monstrosities to be ignored. This is perhaps the counterpart of the business man who sincerely professes fealty to the competitive economy but favors regulation "to stabilize things" in his own market. Society must constantly be on the alert not so much to make sure that Correct Ideas are taught or explored (which is the route to totalitarianism) but to assure that there is a full spectrum of diverse views. A free society can survive even substantial monopoly in the production of things, but it cannot survive a monopoly in the production of ideas. This means efforts to assure that all kinds of schools of thought and points of view are represented in our faculties and public discussions generally. It means taking care to assure that there are many alternative or competitive centers of research and intellectual activity and discussion.

We see many applications of this basic point. Our energy problem is an illustration. The Ford Foundation is to be commended for committing $31 million of its resources to study the problems of a national energy policy. This work will have a significant impact on future national policy. The Foundation's decision would have had a higher probability of better national policy, however, if it had given $1.2 million to each of three different efforts in order to assure that a wider range of ideas would be

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developed. There is little danger that an Angela Davis could not be
heard on most campuses, but it is less certain that the Secretary of
Defense would be heard or even invited. There are even Departments of
Economics who are easily able to restrain any temptation to fill the next
vacancy with a Friedmanite.

* * *

Let me conclude on an optimistic note. There is much in
the new doctrine of equality of results that is solid. Equality of
opportunity does turn out to be far more complex to implement than
had been assumed, and there is some similarity between it and hereditary
privilege. Some blend of the two that will be compatible with our free
institutions can be found. It can be found, that is, if resources are
deployed in a way that assures development of ideas along the full span
of the intellectual spectrum.

Draft

# Political Economy in a Time of Scarcity; or
How to Pull Our Parameters Up

By: W. W. Rostow

## I

The distinguished President of the American Economic Association, Walter Heller, speaking to the press at the 1973 Christmas meeting of the brethren, remarked: "We have been caught with our parameters down." He was referring, of course, to the events in the world economy of 1973, the failure of economists to predict them, the puzzlement of economists in analyzing them and in prescribing remedy.

Professor Heller's *bon mot* is, technically, quite exact. A parameter is an arbitrary constant, a factor or variable assumed to be fixed in a set of equations or a system of thought. The dominant system of thought generated by economists over the past forty years was based on a set of technical, political, and institutional assumptions which froze certain variables or viewed them as automatically dependent on other variables whose movement economists were prepared to analyze. Technically, for example, economists generally assumed income distribution between labor and capital as relatively fixed. They assumed that an adequate level of effective demand and a reasonably competitive price system would evoke the required volumes of food, raw materials, and energy to permit economies to grow, and would do so at reasonable prices. This required that they assume similarly that such a system would evoke the requisite flow of new technologies to sustain a progressive

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industrial civilization. With respect to politics and institutions, they generally assumed that the problem of inflation was a question of the trade-off between the level of effective demand (and of employment) and the rate of price increase. Some were prepared to envisage price-wage guidelines to permit the trade-off to tip towards a higher rate of growth (and level of employment) while avoiding excessive price increases; others believed wage-price guidelines were self-defeating. But both groups of economists tended to focus on the role of monetary and fiscal policy in determining the outcome rather than on the complex political problems, including those of labor union politics, required to provide the social contract necessary for wage-price guidelines to be effective over substantial periods of time.

On the world scene, they assumed the world of Bretton Woods and GATT agreements would continue to work; that is, that nations would continue to co-operate as they have since 1945 to sustain a liberal and non-discriminatory trade and monetary system, in which goods and capital could move with relative freedom and prices would be set in a more or less competitive way, governed by conventional economic considerations.

This is all quite understandable. The dominant economists of this generation in the Western World are children of the 1930's. They grew up as enemies of unemployment at home and of nationalist autarchy on the world scene. They built their theoretical models, taught their graduate students, advised their governments on the assumption that what mattered most was the over-all level of effective demand, the level of employment, and the rate of growth.

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They made major contributions to the consolidation of the Keynesian Revolution and to the design and support of the Bretton Woods system. They analyzed with skill and sophistication the short-run working of economies pulled forward by private or public demand, whether for automobiles or for public services, such as education, health, or the reconstruction of cities. As individuals and citizens they took different positions on the appropriate disposition of income between private and public demand and on the appropriate level and incidence of taxation; but as technicians they were concerned with the over-all level of demand and the aggregate level of investment. Following a tradition which reaches back to Adam Smith, they interested themselves little in the flow of invention and evaded the issue of how science, invention, and innovation relate to each other.

Some economists addressed themselves to the non-Keynesian tasks of growth in the developing world. But the analysis of development was conducted in a separate intellectual world, allocated to special sections in textbooks. The mainstream of economics remained the refinement of price and short-run income analysis within parameters which seemed appropriate to problems of the advanced industrial world, as it was from 1945 to 1971.

The contribution of economists and economics over the past two generations is a proud page in the history of social science; although a sense of the limitation of modern economics has been growing in recent years in the face of social and institutional problems faced in both advanced industrial and

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are right, the bill in the United States for decent standards will rise by 1980 to, say, $25 billion annually for water, $14 billion for air, as opposed to the $4 billion applied to control pollution in 1970.

In short, we entered a period when the basic inputs to sustain an industrial civilization became more expensive.

An index of world market prices for foodstuffs and raw materials moved up from 109 (1952-56=100) in September 1971 to 118 a year later, to 196 in September 1973. This global shift was reflected within the American economy. The American farmer's parity ratio (prices received relative to prices paid) stood at 100 in 1949, 107 at the peak of the Korean War boom in 1951. By January 1971 it had fallen to 68; by the end of 1972 it had risen to 78; in August 1973 it stood at 102, having almost erased twenty years of decline in two years. The shift in the terms of trade in favor of producers of foodstuffs and raw materials also had significant international effect. In 1972 there was, for example, an 8% increase in the purchasing power of Latin American exports in terms of imports, a trend which accelerated in 1973.

This was the general setting in which the oil producers of OPEC, sensing their monopolistic power, began to raise their prices sharply; and then the Arab producers among them brought their bargaining leverage to bear politically.

Although there is much unique about the present situation, it bears a family relation to inflection points that have occurred at four other times in modern history. Phases of relatively increasing prices of foodstuffs and raw materials

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came at intervals of forty or fifty years: in the early 1790's, in the mid-1840's, the mid-1890's, and the mid-1930's. They reached peaks and gave way to phases of relatively cheap prices of basic commodities in 1815, 1873, 1920, and 1951.* The upward phases in these long cycles or trend periods were affected by wars; but there was more to it than that. The first reflected the rise of European population in the latter part of the eighteenth century; the second, once again, a catching up of European populations with existing acreage and agricultural technology, leading to the great thrust to open up the grain fields of the American Middle West in the 1850's and after the Civil War; the third, the rise of American as well as European population, requiring the development of increased food supplies from Canada and Argentina, the Ukraine and Australia; the fourth, the constraints on production induced by the long agricultural depression after 1920 (including reduced U.S. farm acreage), followed by the pre-war economic expansion and war itself. In the two decades after the opening of Korean peace negotiations by and large foodstuff and raw material prices were relatively cheap.

In short, the story of two centuries of industrialization has unfolded in the context of four marked, if irregular cycles in the relative prices of foodstuffs and raw materials.

One should not expect the dramatic changes since 1971 to persist at steady rates. As in the past, the trend period I believe we have entered will not unfold smoothly or continuously. All farm and raw material prices will not move at the same

*I analyzed these trend periods and the various explanations for them in Chapter 1 of *British Economy of the Nineteenth Century* (1948) and in Chapter 4 of *The Process of Economic Growth* (1953 and 1960).

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States or even in the same directions. There will be good and lean monsoons in India; ample, poor, and mediocre harvests in Russia and China. But the inexorable pressure of excessive population increase in the developing world, the tendency of the poor to spend increases in income disproportionately on food, the rising demand for grain-expensive proteins, the pace of industrialization among those catching up, and the strains of the energy crisis will persist. Given the nature of the forces operating on food, energy, and raw material prices and the costs we shall have to incur to achieve and maintain clean air and water, I believe we are in for a long pull when the prices of these basic inputs to the economy will remain relatively high.

In other trend period upswings there have been changes in the economic environment of a quite consistent kind. Interest rates and profits rose, as well as the over-all price level; farmers were relatively prosperous; but the rising cost of living exerted severe pressure on the real income of the urban worker. For example, real wages stagnated or declined in Britain, the United States, and Germany under the trend period pressures of the pre-1914 generation, raising serious issues of social equity which came to the center of political life. In addition, patterns of investment changed. In the period 1790 to 1914, the classic response was to open up new agricultural and raw material producing areas. The great movements of international capital during this era were, in effect, designed to help bring new supplies into the market and to restore balance in the industrializing world.

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We are facing similar problems and prospects, as the leading sectors in the world economy shift again to the generation of the inputs required to sustain our societies; but we confront them in a setting quite different from that of the longer past. We cannot rely on the automatic workings of the price system and private capital markets to restore and maintain balance. At every stage public policy will be involved. At every stage, economists, civil servants, and politicians will have to think in new ways, in an unaccustomed setting. The parameters assumed fixed or automatically responsive in conventional economic analysis must now become the explicit objects of thought and policy. This will be as true of foreign as it will be for domestic policy. Moreover, this time we face the tasks of the trend period with no confidence that we confront a cyclical phenomenon. We do so in the shadow of the possibility -- dramatized by the food-population balance in the world -- that we are in the early stage of a confrontation between man and the long-run physical limits of growth on the planet.

### III

Here are four examples of what is involved in domestic policy.

1. **Income Distribution.** American life has come to a stage in which the various groups in our society are conscious of their interests and more or less organized to press them in the political arena. The situation in which we find ourselves is one which has already yielded a sharp shift in

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income distribution: in favor of the farming industry; in favor of those whose income is derived from interest and profits; against the non-agricultural worker. In 1973 earnings for the non-agricultural worker declined by, say, 10% when corrected for inflation. This happened when the level of employment was high; but now unemployment is rising, in part due to the energy shortage. The grim experience of Great Britain in recent months indicates what can happen in a mature and sophisticated political society, if a sense of community is lost: where those who have acquired increased leverage in the new situation attempt to use it to the limit; where the government fails to generate a sense that the burdens and possibilities of the economy are not being equitably shared. The mood of the miners (and others) shifted from: "I've got it made, Jack", to "I'd better get mine while the going is good."

In the pre-industrial era, both within societies and among nations, the instinctive assumption was that the total level of resources available was relatively fixed: what one man or nation gained would be at the absolute cost of another. This framework of bitter struggle was softened, as industrialization more or less regularly provided the means to enlarge the pie to be divided. Men did, indeed, continue to quarrel over relative shares in the pie; but the confrontation was eased because all could gain. If men and nations assume again that the pie is relatively fixed they are likely to revert to a *sauve qui peut mentality*; and, in our time, the demand for fair shares and equity, at home and on the international scene, will be sharply heightened.

It is my assessment that the American people understand instinctively that a major turning-point has occurred in our

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evolution; that there are burdens to be shared; and that strong
concerted measures will be required to do what needs to be done.
We shall need strong profit incentives, in the United States
and elsewhere, to generate the supplies of energy, food, and
raw materials required. But there is a difference between
profit incentives adequate to generate new required investment
and exorbitant net profits. If our tax system and public policy
permit some to profit extravagantly while others experience
a decline in real income the potential unity of our society in
facing the future together will be destroyed.

Economists and others must cease to regard income
distribution as inherently stable, due to the subtle working
of automatic corrective mechanisms, and begin to devise
policies of social equity for the environment of constrained
possibilities in which we shall have to live and work.

2. **Wage-Price Policy.** The lift in raw material and food-stuff prices by international forces beyond our control has thrown an administration, bemused from its beginning by the question of wage-price policy, into even greater confusion. Obviously, prices could not remain stable in the face of the structural convulsion in the world economy that has occurred since 1971. The classic formulae for wage-price guidelines, stated in the *Economic Report of the President to the Congress* in January 1962, assumed implicitly that the American price level was a function of American economic and political life. That is no longer true; and those guidelines evidently require

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revision. But within the framework of what we can do, effective control of inflation is more important than it was before 1971. We need to minimize the rate of inflation to reduce pressures on non-agricultural real wages; and we need the strongest possible balance of payments position at a time when the cost of certain essential imports may be high and the re-shaping of a viable international monetary system awaits a strong and stable dollar. The re-establishing of an effective wage-price policy is, then necessary. This time it should be faced for what it is: a task of politics and statesmanship in the highest sense, not merely a technical exercise. It is labor's interest as a whole that inflation be disciplined to the maximum. But the necessary self-denying commitments from labor are impossible unless two difficult but not impossible conditions are satisfied: labor self-discipline does not yield a disproportionate increase in profits; and no labor group (or labor leader) gains disproportionate advantage over another. I have great respect for and feel compassion towards those in various democratic societies who have tried to bring about this essential social contract. In no case have they been able to succeed for long. But there is no other way than to learn to build these social contracts, to underpin monetary and fiscal policy, of our advanced democratic societies are not to risk disintegration.

3. The Direction of Public and Private Investment. The trend period we have entered struck us at a time of intense national debate about whether we should continue the remarkable increase of the 1960's in public outlays for social and

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environmental purposes or whether we should stabilize or
contract the role of government in our society and allocate
further increments in national income for private purposes.
By and large the Nixon Administration chose the latter
direction, systematically reducing the federal tax base; but
it has not undone and in some respects has carried forward
the initiatives of the 1960's, in part because budgetary
expansion was built into the legislation. At stake in the
debate are a number of major issues: policies of income
redistribution; the provision of supplementary food, health,
and housing services to the public; the future of public support
for higher education; the fate of child care and other programs
addressed to the great unresolved problems of the inner cities;
the scale of investment in public transport and in providing
clean air and water. This was a debate appropriate to a
society which took the automobile, durable consumers' goods,
and the life of suburbia for granted and argued about how far
and in what ways it should seek to improve the quality of life.

The forces set in motion by the new agenda we confront
have already, to some extent, cut into the older agenda; for
example, President Nixon has vetoed as excessive Congressional
appropriations for reducing water pollution in the light of
current higher priorities. The energy crisis and the drive
to improve the environment have clashed at a good many other
points. At the moment short-term energy problems so absorb
public officials, that no long-term plan has yet emerged. It
is impossible, therefore, to estimate what new burdens will

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fall on the federal budget. It is reasonably clear, however,
that whatever requirements for public outlays may emerge to
restore the nation's energy base for the long pull are likely to
enjoy in the Congress as well as in the Executive branch higher
priority than some existing items on the social agenda. In the
private sector a major shift in the direction of investment is
clearly in the cards. The contraction in the automobile industry
and all connected with it will be balanced by increased outlays
for railroads and other public transport, as well as by the mammoth
investments forecast to generate new energy supplies.

On this complex range of public and private allocation
problems I would make here only three observations:

--The attrition of social programs, at a time of
pressure on non-agricultural real wages, could add to
tensions in our society and political life we can ill
afford. Those programs may, in fact, constitute essential
offsets to pressure on urban real wages.

--The skill with which we manage the energy problem
will determine how much unemployment is generated and for
how long. The maintenance of high levels of employment
is desirable both to reduce avoidable social and political
tension and to maintain the flow of public revenue, already
inadequate at existing levels of taxation and rates of inflation.

--The requirements for both social stability and
movement towards a recovered balance in our economy require
that we analyze carefully not merely the aggregate levels
of public and private outlays, but their directions. Much

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more is involved in where they go than next year's level of GNP and employment.

4. **Science, Invention, and Innovation.** In facing the future, the capacity of the advanced industrial societies to generate new technologies is the greatest asset we command. The scale and direction in which we invest talent and resources in this task is now and will be fundamental to the outcome, at home and abroad. Even if we come to terms with the oil producers, there is only a generation or so over which (as a whole) industrial civilizations/can be sustained with hydro-carbons. In population control and agriculture, raw material substitution and pollution control there are problems to be solved on which the long-term future of the United States and all humanity depend. To some extent the price system and profit possibilities will induce creative talent to work in appropriate directions.

But the history of research and development in certain key industries (for example, automobiles and steel) suggests that private incentives and large sums are not enough. There are a number of critical tasks which will require that the federal government use its incentives and resources to assure that research and development goes forward not only on an appropriate scale, but engaging our best talents. This is an area where our reigning economists have opted out, leaving analysis to a handful of historians and specialists. But we have acquired a highly relevant body of experience in how to orchestrate public and private talent and institutions to solve clearly defined problems. NASA, as it evolved in the 1960's, is probably the best model of how it can be done. But whatever

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institutional arrangements we generate, the mobilization
and allocation of research and development resources in our
society, co-ordinated to the maximum degree possible with
work in other nations, has become a policy matter of exceedingly
high priority.

These four points suggest that we are moving into a world
somewhere between a Keynesian mixed economy and an indefinitely
prolonged war economy. If we generate a wise and forehanded
public policy, there need not be a vast accretion of government
controls and institutions. The problems we face do require,
however, that we assure not merely a given level of output and
[specified] employment but certain/expected outputs at particular times,
and the availability of appropriate technologies.

The extent of the distortion in our life will depend above
all on two factors.

First, domestic politics. If the government can make clear
the nature of the problems posed by the new trend period and
the tasks that must be faced; if it can generate long-run plans
that make sense; if it can conduct affairs so as to convince
the vast majority that the burdens and opportunities of our
society are equitably shared -- then the resilience and power
of our private institutions can be orchestrated in ways which
will permit us to do what needs to be done without undue crisis
and the convulsive concentration of power in Washington crisis
tends to bring. There is a great latent sense of community
in the United States, alive and well in the life of our towns,
cities, and states. It is that sense of community that must

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now be generated and sustained at a national level, suffusing
private and public action. How well we fare in the time ahead
will depend substantially on whether our leaders can achieve
that political result.

But the outcome will depend at least equally on how the
United States conducts itself in dealing with the international
community, where a mercantilist sense of limited resources
and a struggle against an inequitable distribution of resources
is already under way.

## IV

I said earlier that the setting of this trend period
differs from that of the pre-1914 world. This is even more
true of the international than of the domestic scene.

First, there are now more centers of advanced industrial-
ization than there were. Japan, Russia, and Eastern Europe
have joined Western Europe and the North Atlantic basin in
both a command over modern technology and in drawing foodstuffs
and raw materials from the world economy.

Second, key energy and raw material supplies are in the
hands of assertive developing nation states, conscious of their
economic and political bargaining leverage, intent on achieving
levels of affluence equivalent to those enjoyed by the more
advanced industrial societies.

Third, while the Cold War has to a degree abated, the
international environment is still touched at many points by
the struggle of ideology and power, and still framed by an

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uneasy nuclear stalemate and a fragile agreement that the proliferation of nuclear weapons should not extend beyond its present amply dangerous limits.

In this political and strategic setting it requires no great powers of imagination to perceive that the forces set in motion by the trend period could yield a *sauve qui peut* scramble for scarce resources among the more advanced nations of the world; a fragmentation of the political as well as economic bonds among them which were laboriously built over the past generation; and, in addition, a confrontation between more and less advanced nations, each bringing to bear such bargaining leverage as it may command, including ultimately its military power, to make the best possible bargains it can strike. In such a neo-mercantilist environment it is likely that nuclear proliferation would rapidly extend to virtually all of the many nations now capable of producing neuclear weapons; and the fragmentation of the non-communist would might well provide irresistible temptation to the communist powers to resume major expansionist adventures.

These unpleasant possibilities flow from the same two forces on the international scene that threaten the fragmentation of the domestic societies of advanced countries: a return to the sense that a limit exists on the total pool of available resources and, therefore, what one nation gains another must lose; a sense of inequity at the way resources are distributed as this new trend period takes shape.

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The more advanced nations, for example, represent a spectrum: from soy, Canada, admirably endowed on a national basis with foodstuffs, energy, and raw materials; to Japan, overwhelmingly dependent on the international trading framework for all three. The United States stands somewhere in between, although closer to Canada on the scale of relative economic independence than Japan. The United States is the major food surplus nation in the world; contains adequate energy resources, if they are developed; but is dependent in the short run on imported oil and in the long run on a lengthening list of metals and other basic raw materials.

In the face of recent pressures on food and energy supplies a number of industrial nations have exhibited symptoms of a **sauve qui peut** mentality: the American cut-off in soybean exports; the abandonment to Arab oil sanctions of Netherlands by the EEC; the French search for a strictly bilateral solution to its energy supply problem.

The burdens and opportunities of the new trend period are also unevenly spread among the less industrialized nations. The oil exporting nations are obviously enjoying extraordinary monopoly profits. But the two-thirds increase in raw material and foodstuff prices of 1972-73 was not uniform. Here is a sample of individual wholesale price movements over the previous year taken from *The Wall Street Journal* for December 20, 1973: coffee, 21%; cocoa, 74%; pepper, 40%; flaxseed, 163%; wheat, 99%, cottonseed oil, 136%; cotton, 158%; wool, 47%; steel scrap, 105%; tin, 57%; rubber, 141%. On the other hand, butter and soybean meal, remained virtually at the same level, and burlap

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increased only marginally. The list suggests that the benefits of these price increases will be spread unevenly, and that some of the large increases will heavily burden the balance of payments of those developing nations least endowed with the scarcer commodities. The effect on Indian foreign exchange resources of high wheat prices is an example of this problem, as well as the excessive increase in oil prices, for many developing nations. Moreover, the developing nations now average a 7% per annum increase in manufactures -- a doubling each ten years. As increasingly industrial, urban societies they will, therefore, feel the cutting edge of these price increases in foodstuffs and raw materials as well as enjoy such benefits as their natural resource endowments permit.

As noted earlier, the trend period problems considered here represent potential symptoms -- or, perhaps, an early stage -- of the longer run problem of the limits to growth. I shall not attempt in this article to present in detail my views on the long-run prospects for growth. I would only say that I regard the problem as real, the outcome uncertain, and dependent on what we do, individually and together, from the present forward. The greatest optimists with respect to the limits of growth assume that modern science and technology, as in the past, will overcome Malthusian and Ricardian constraints. This is possible; but it will not happen through the working of private markets alone. It will take conscious action and public policy. And if anyone doubts the reality of the problem, let him put aside the energy question and consider the essential facts about the food-population situation in the world.

20

[LC]

In recent years the developing regions have sustained as a whole, at least, rates of increase in agricultural production of about 1.5 per cent., roughly approximating regional rates of population increase. But because of rising incomes and urbanization the increase in demand is running higher -- at about 3.6%. Imports, therefore, have been rising. In 1960 the developing regions imported 19 million tons of grain; in 1966, 36 million; in 1972, 44 million. Moreover, in the decade 1961-71, the rate of increase in agricultural production in forty-two developing countries was even less than their rate of population increase. Then came two bad years. In 1971 agricultural production in the developing countries increased by only 2%; in 1972 there was an absolute decline of 1%. To complete the picture, carry-over wheat stocks in the main exporting countries, which were 50 million tons in 1960-71, fell to less than 30 million tons in 1972-73, the lowest level for twenty years -- twenty years over which world population increased by 50%.

This is obviously a more serious problem than that of energy. In one way or another we already command the energy resources for a good many further decades of industrialization. The oil and coal, shale, tar sands, and atomic energy technology are there and economically exploitable if energy prices remain as high as they are likely to be. And the odds on technological breakthroughs to new sources of energy appear reasonably good for the period beyond. Moreover, energy constraints translate themselves up to a point into a reduction in amenities for the well-to-do. Shortfalls in food translate themselves

[Lc]

21

immediately into malnutrition and starvation for those at lowest income levels. And the girl babies have already been born who guarantee a global population of more than 6 billion, by the year 2000, barring a demographic catastrophe.

Thus, taking the present setting as a whole, the more advanced and less advanced nations -- the nations which entered industrialization earlier and later -- each have serious grounds for complaint against one another. The late-comers can complain of the profligate use of finite natural resources in the past by the more advanced and of their current disproportionate absorption of such resources. As representatives of the less industrialized nations stare at the computer read-outs, they are bound to ask: *Why should we be denied the stage of automobile, durable consumers goods, and suburbia -- whose costs and limitations are mainly perceived by those who take its blessings for granted?*

But the more advanced nations also have cause for complaint. The late-comers have eagerly absorbed the benefits of modern medicine and public health; but they have been extremely laggard in investing political, administrative, and physical capital in measures of population control. Some, indeed, have looked to vast increases in population as a future source of power in the world. Why should the more advanced nations permit themselves to be dragged down by such undisciplined self-indulgence?

Quite aside from the possibility of a mercantilist, beggar-thy-neighbor fragmentation there is, then, latent in the world a dangerous potential confrontation between the more developed and less developed nations as they come to perceive the limits within which they will both have to work

22

[LC]

out their destinies: the more developed confronting the
possibility of absolute reductions in income per capita; the
less developed the possibility that tragedy and decline might
well set in before they attained the levels of Western Europe,
North America, and Japan. In a nuclear age the outcome of such
a confrontation could be a catastrophe greater, even, than
that the semi-knowledgeable computers project from the present
pace of population increase, industrialization, and pollution.
It will evidently take a remarkable and sustained effort by
societies with differing resource endowments, at different
stages of growth to find and establish the rules of the game
which might permit them to surmount together urgent problems
of energy, raw materials, and food supply and, over the longer
run to bring the human race from where it is to a relatively
stable, if dynamic, relationship to its physical environment.

V

Such terms, if they are found, must evolve from protracted
joint study of the facts. The only procedural rule that has
a chance of taking the human race through in reasonable safety
and unity is Jean Monnet's dictum for Europe and the Atlantic:
'Bring men together to examine and solve a common problem, not
to negotiate.' But, also, there will -- and must -- be
negotiations, as there were in building the European and Atlantic
communities; for men and governments do not surrender what appear
to be short-run advantages to a common enterprise unless that
enterprise promises a better long-run result for them as well
as the community. There are circumstances when men will accept

23

[L.C]

some short-run disadvantage for long-run advantage. But they
wish to be assured that the short-run loss is not excessive
and the long-run gain reasonably assured. And they may have
to be convinced that their apparent short-run advantages may
be negated by the short-run leverage

23a

others may be able to generate against them.

Broadly speaking, viable international rules of the game are similar to those I outlined earlier for American society as it confronts at home the energy crisis and other pressures of non-agricultural real incomes:

- Men must sense that a rational long-range plan to deal with the problem has been or is being formulated and that all elements in the community will be called upon to contribute to a solution, according to their capacity and resources.

- Those who gain from the redistribution of income must not be wholly denied their advantage and those who must act to generate necessary additional resources must not be denied adequate incentives to perform in the common interest; but such advantages and incentives must be tempered in ways which avoid excessive profit or extravagant increases in income.

- Those who are most acutely disadvantaged in the short run by the redistribution of income deserve compensatory action from the political process; and the long run processes under way in the community to bring forward less-advantaged groups should not be halted.

- Above all, political leadership must generate and sustain an authentic determination and will to solve the problems confronted in equity, as a human community.

24

[Lc]

What lines of action do these broad principles imply if they are projected out to the world community as it confronts the new trend period and, perhaps, the first stage in the limitation of growth? The following paragraphs, touching briefly on some exceedingly complex matters, can only suggest the directions of an answer.

1. Planning the Expansion and Protection of Resources.

To some extent, of course, the expansion of energy, food, and raw material supplies, as well as the struggle against pollution and to preserve the environment, are matters of national policy.

But if there is agreement that the global energy and raw material base should be expanded and protected in the common interest there is, obviously, a wide range of tasks that ought to be undertaken cooperatively. The nations commanding the greatest research and development capacity should, obviously, pool their assets in working on major particular tasks, and make their results available to all. Given the quality of scientific and engineering talent emerging in some of the smaller nations and in the more vital developing nations (e.g., Brazil, Mexico, Iran, South Korea) an effort should be made to enlist in common enterprises men and women beyond the range of, say, the United States, Western Europe, Japan, and (if possible) the U.S.S.R. Cooperation will also be required between advanced nations and some less advanced which contain essential raw material or other resources whose exploitation demands advanced technology, sophisticated management, and a large volume of capital. Here some urgency

25

[LC]

attaches to moving the debate about the advantages and burdens
of the multi-national corporation towards a conclusion, which
would yield agreed criteria for their operational behavior on the
international scene. The whole cooperative effort should be
framed by international efforts to establish future requirements
in specific commodities and technology.

In addition, the more advanced nations should institute
programs of economy, conservation, and, where relevant,
substitution in the use of energy and scarce raw materials
and to make available the results of their experience to the
developing nations.

2. **Population and Food.** Our ignorance is such that men
may honestly differ on whether we face merely a short run
energy, raw materials, and pollution maladjustment, or the
beginnings of a crunch centered on the long run limits to
economic growth. But the problem of population increase and
the food supply is evidently long run in character. And we
are already at a dangerous point, as the data cited earlier
suggest. Here, in the common interest, a set of fairly
straightforward responsibilities emerge which have, in my view,
a moral character.

The advanced nations have a duty to generate the best,
cheapest, and most acceptable methods of birth control; to
build and sustain large international grain reserves to deal
with famine (say, 25-30 million tons); to be prepared to grant
special priority in development assistance to both population

26

[L.C]

control programs and measures to expand agricultural output in the developing world; and to use their own agricultural resources efficiently. (It is a serious question as to whether the U.S.S.R. has the right to conduct so inefficient an agricultural policy, generating, as it does, large periodic demands on scarce food reserves from an economy that ought, on any objective criteria, to be self sufficient in food, at least.)

27

[LC]

Equally grave responsibilities come to rest on the developing nations: to undertake at highest priority programs of population control; to seek food self-sufficiency to the maximum extent possible; and to undertake, in collaboration with the more advanced nations, programs to provide cheap proteins to infants and young children.

3. **Problems of Equity.** Those developing nations endowed with scarce natural resources commanding an international premium cannot and should not be wholly denied the advantages (their) of a good fortune. But that good fortune should be tempered in two respects. First, they must avoid pressing their advantage to excess both because such behavior is wrong, in communal terms, and because others will be led to devise sanctions against them. Second, those nations which enjoy such advantages, but which do not contain substantial populations undergoing economic and social development should impose on themselves an excess profits tax in the form of allocating an appropriate portion of their profits to development assistance, in much the same manner as the governments in more advanced nations now systematically provide economic aid (about $10 billion net in 1973). The allocation of international aid in all its forms should permit special priority for developing nations not endowed with scarce exportable energy and raw material resources as well as rewards for those who make special efforts of interest to the international community; for example, in population control, agricultural expansion, environmental control.

28

4. Arms Control. The population, food, raw material; and environmental problems on the common agenda strengthen the already overwhelming case for concerted international measures of arms control and disarmament.

Substantial proportions of national product are now diverted to military purposes: the U.S.S.R., say, 10%; U.S.A., 6%; Western Europe about 4%; Asia, over 3%; the Middle East, 9% or more; Africa, over 2%; Latin America, 1.5%. These establishments, their maintenance and modernization, lay a heavy claim on scarce raw materials and, for less developed nations, on foreign exchange required for other purposes.

They also divert scarce research and development talent, as well as capital, from urgent alternative uses.

VI

The question before us is this: can man, by nationally and globally concerted measures, permit the process of growth to proceed by a combination of creative enlargement of resources and self-imposed restraints, equitably shared?

Can man continue to build and maintain on the planet industrial civilizations, under circumstances where nations entered industrialization at different times, where the early comers and late comers will have to make important mutual accommodations, and where both groups will have to work together to belie the computer read-outs that follow inexorably from applying geometric progression to fixed resources?

29

[L.C]

The challenge and stakes are great. And they should be faced for a profound human reason. With all its deficiencies, industrialized societies have provided longer lives, more education, wider options for exploring the human condition than the traditional societies that preceded them, within which most men and women lived out their time as slaves or serfs or peasants at the brutal margin of subsistence. [As] Clarence Ayres once wrote, modern societies have succeeded in reducing humbug, cruelty, and squalor. Plenty of each still exists. But there is no occasion for sentimentality about the longer past as we contemplate the flaws in the world we know or the world as it might be if we fail to solve our problems.

The operational objective is: to provide by, say, the middle of the twenty-first century a situation where each of the world's citizens can enjoy on a long-term basis adequate supplies of food; full health services; the opportunity for the maximum education his talents permit; and the major amenities an industrial civilization can provide. It would be conventional -- and not much of a trick -- to state that objective in terms of average (or minimum) levels of income per capita in current U.S. dollars. But there are too many philosophical and other ambiguities in such neat measurements; technology and relative prices are going to change over the next seventy-five years; and, indeed, we may well define these objectives, including "the amenities of an industrial civilization" in quite different ways than are now conventional.

CONFIDENTIAL

May 2, 1974

Governor Nelson A. Rockefeller
22 West 55th Street
New York, NY 10017

Dear Nelson:

The reason for this letter is a worry among several independent groups of my associates that in the upcoming Moscow negotiations we may make agreements which we shall come to regret. I happen to be somewhat optimistic in this regard because I believe that past agreements have been made with some forethought and particularly because I have the greatest confidence in Henry. Nevertheless, there may be a danger that the advice Henry gets from the technical community in Washington is colored by some pressures, and, therefore, I am anxious to mention to you the possibilities that I heard discussed, and the impacts of potential agreements.

At the top of the list is what is called a "Threshold Nuclear Test Ban". The form in which I heard this ban discussed is that no underground tests should be permitted that give rise to earthquakes greater than five on the Richter scale. The following arguments are made in favor of such a ban:

The Russians want it and we may get something in return if we agree to a Threshold Test Ban.

The Richter five earthquake is caused by a nuclear explosion between 50 and 100 kilotons (depending on the geological medium in which the explosive is set off), and our important requirements (those pertaining to the development of tactical weapons) can be satisfied in this range.

The agreement could be policed quite well.

Whenever we shoot at a higher level than Richter six (a factor 10 above the proposed limit) there are strong public protests. It is not clear that it is worthwhile to fight these repeated domestic fights in every instance.

The Threshold Test Ban seems to eliminate the chance for a Comprehensive Test Ban which would stop practically every progress in nuclear explosives on our side and which I believe must be opposed.

CONFIDENTIAL

NATIONAL SECURITY
INFORMATION

Unauthorized Disclosure Subject to
Criminal Sanctions.

CONFIDENTIAL

Letter to Nelson A. Rockefeller
Page two

The following arguments are made against such a ban (the opponents hold
these views quite strongly).

The Russians have recently performed several big explosions and
have considerably exceeded our efforts in that respect. They
probably have planned future tests of this kind for the next year
or two, which is the period after which the agreement is to come
into force. (We have no comparable plans)

We know of a possible great improvement in the field of megaton
explosions and above. These weapons would be most effective in
ABM applications. According to the Russian proposal we could
not test this possibility, while they may have successfully
completed such tests.

The Russians may have completed or may be near the completion of
the nuclear high yield explosives they plan for their missiles,
including their MIRV missiles. They want to make quite sure that
in this respect they remain ahead of us.

There is an expectation that a threshold ban with Richter five may
be in subsequent years replaced by more stringent ban of Richter
four. This would be hard to evaluate outside the Soviet Union.
Such ratcheting down would preclude our important developments on
tactical weapons.

Enforcement of the plan may put unwanted limitations on peaceful
applications of explosives - Plowshare. On the other hand, if we
make an exception in the case of Plowshare, policing will become
impossible.

Based on the above, I have the following recommendations (which are, of
course, merely personal opinions).

Agree to the Threshold Test Ban in principle.

Demand that it come into force upon signature and use any extension
of time as a bargaining point in other respects.

Propose a threshold at Richter six (explosions between 1/2 megaton and 1 megaton) or at Richter 5.5 (explosions between 150 and 300 kiloton). The smaller would satisfy practically all objectors within the United States, the latter would satisfy most of them. Use the precise limitation in the threshold ban as a bargaining chip.

CONFIDENTIAL

CONFIDENTIAL

Page three

Limit the duration of the ban to five years with a plan to reserve
action at that time, depending on the way how the detente functions.
Exclude any ratcheting down below Richter five prior to the expiration
of the five year period.

Except Plowshare from the threshold ban, provided explicit reason is
given for the particular Plowshare shot, in particular, for the need
of using more than Richter five. Ask the Russians to propose how
policing should be performed in case of Plowshare shots of more than
Richter five.

It also seems probable that nuclear free zones will be discussed. In particular, it is possible that the Mediterranean will be made into a nuclear free area. In view of the circumstance that our allies are losing confidence in our ability to support them and that removal of nuclear weapons may increase such fears, I should be worried about such an agreement. On the other hand, I know that Henry is fully aware of all the relevant factors.

I also heard suggestions of making limiting agreements on mobile land based rockets. I believe that this would be a mistake because it appears to be exceedingly difficult to verify compliance, and because we have proposals (particularly Minuteman carried by big planes) which could not be implemented in case of an agreement.

A further topic which I heard discussed is the possible limitation on the
employment of the MIRV proposal. Again, I would be disturbed because such
an agreement could hardly be enforced.

The same holds about maneuverable reentry vehicles.

It is only in case of the first item (Threshold Test Ban) that I could
base my remarks on anything better but a guess on the planned agreements. I
should be delighted if I had the opportunity to help with other possible
proposals that are under discussion.

It seems quite probable that my sending this letter to you is all that
I need to do in relation to the disarmament negotiations. If you should
like to follow it up in any way I will, of course, be available at your
convenience.

With best regards,

ET:oc

CONFIDENTIAL

[Lc]

P.S. to letter (classified) from Dr. Teller

Those who object to the threshold test ban would feel very much better if it would be understood that each year one shot is permitted between Richter 5 and 6.

It also has been pointed out that there is some ambiguity connected with the Richter scale. It would be very important to have an explicit understanding which scale it to be used and in which way it is to be used. Specifically, it would be helpful if the American definition of the Richter scale would be accepted.

THE VICE PRESIDENT
WASHINGTON

April 2, 1975

Dear Henry:

Once again, my thanks for last evening.
It was a great occasion.

I am delighted you will appear before the
CIA Commission on Monday, April fourteenth, at
10:30 a.m. A list of questions will be submitted
to you well in advance of the date.

With this note I am enclosing two papers
which I think you may find of interest: (1) a
recent letter from Charles Malik, and (2) a
paper from Edward Teller regarding the possibility
of establishing oil storage capacity in the
United States.

The other matter we discussed just
occurred to me today; if it appeals to you,
I'd be delighted if you took it up with the
President.

Give my love to Nancy.

MEMORANDUM FOR: THE VICE PRESIDENT March 28, 1975

FROM: DR. EDWARD TELLER

(Dictated by phone)

We have investigated the possibility of establishing oil storage capacity in the United States within a few months. We find that for approximately one billion dollars we can establish a storage of approximately three to four hundred million barrels of oil which is equivalent to imports of three to four months of oil from Arab countries. The details are as follows: Big tankers are available and are in fact underutilized. The total space available can carry or store approximately one hundred eight-five million barrels. An additional capacity of one hundred sixty four million barrels is under construction. Part of this capacity will have to be used to transport excess oil to the United States or other safe places so as to make the oil available to us. Part of this capacity could be actually used for storage with filled-up ships lying at anchor for instance in the Caribbean. Rental of such storage space will cost thirty-five cents per barrel per month or four dollars per barrel per year. To buy the ships will cost well in excess of ten dollars per barrel.

- 2 -

[LC]

One may recommend that buying or renting space and buying the corresponding oil should start at once. If it is done too readily, the prices would of course increase. Approximately one hundred million barrels may be available as oil stored in ships at the end of three to six months.

Approximately one hundred fifty million barrels of oil could be stored in existing salt mines. This corresponds to less than one third of the volume of operational salt mines and this space could be made available without disrupting the salt industry. The storage would be available near the Gulf of Mexico in the vicinity of good pipe lines. The expense would not exceed two dollars per barrel. The space could be made available in three to six months.

In the same general neighborhood a volume that could store fifty million barrels could be made available in salt wells. This also could come on line in three to six months. The cost could be one dollar and twenty-five cents per barrel.

The total amount so far would be three hundred million dollars of storage which is what we can recommend at this time together with the recommendation to initiate action at the earliest possible date.

- 3 -

An additional hundred million barrels of storage space could be made available by washing out salt domes. This again would be in the same neighborhood. A massive program is under consideration at the moderate price of one dollar per barrel stored. This program will take years. Rapid action on one hundred million barrels will probably cost three dollars per barrel. The space could be made available in six to nine months. Disposal of the brines in the gulf will create a minor environmental problem.

Adding the last item we arrive at a total of four hundred million dollars.

Hundreds of millions of additional barrels could be probably stored in abandoned mines (limestone, coal, lead, potash, sulfer and other). The availability appropriate use and expense will be looked into next week.

Storage of oil in open resevoirs could be constructed in three months for one hundred million barrels at one dollar per barrel. Environmental problems (for instance due to the dispersal of oil by extremely strong winds) could be quite serious.

[L]

- 4 -

Other oil possibilities, in steel tanks,
concrete thanks, cavities created by nuclear explosions
or in existing oil wells have been considered but do
not look promising for the near term.

In connection with the actions recommended above,
it would make good sense to press for the reopening
of the Elk Hills Reservoir (~~Naval Petroleum Reserve #1~~).
In three months we could obtain one hundred thirty
thousand barrels per day at an approximate cost of two dollars
per barrel. Known opposition to this action may be
overcome in the present emergency.

Charles Habib Mālik

American University of Beirut
Beirut, Lebanon

[LC]

March 11, 1975

Confidential

The Honorable
Nelson A. Rockefeller
Vice President of the United States
The White House
Washington, D. C.
United States of America

Dear Nelson:

I am enclosing a tear sheet containing a little piece I published the other day in an English magazine called Monday Morning in Beirut. The argument is simple and self-explanatory. It will probably appear to you naive. It was written before the recent attack on the Tel Aviv hotel. Despite that attack, however, I have some reason to believe that the Palestine Liberation Organization is now dominated by relatively moderate elements who, if recognized and prudently encouraged, are likely to develop in time into constructive forces for peace and stability in this region. They crave for American formal recognition even if America should, despite and together with this recognition, declare itself categorically opposed to their ultimate objectives. I am not urging this thesis; I am only saying it is worth being seriously considered. I am sure the United States Government knows all the factors involved and has weighed all the pros and cons of the matter. My point is that there is no peace or settlement here without dealing at some stage with the Palestinians, and the only question is whether this is the moment, or sometime later on, when this direct and public dealing with them should be initiated by the United States. I thought I will put these ideas before you on a wholly informal and personal basis for whatever use you may wish to make of them. Developments here appear to be approaching a critical phase and I shall not fail to communicate to you any important ideas or clues, for what they may be worth, that may come to my attention in a special way.

I did receive a letter from Chancellor Boyer dated June 24, 1974 and my answer to that letter was dated July 9, 1974, of which I am here with enclosing a carbon copy. Because you referred to Chancellor Boyer more than once in your correspondence since those dates, I thought you might be interested in knowing that I received nothing from him since my letter to him of July 9.

[LC]

July 9, 1974

Dr. Ernest L. Boyer
Chancellor,
State University of New York
99 Washington Avenue
Albany, New York 12210
United States of America

Dear Chancellor Boyer:

Thank you for your letter of June 24, 1974. It was such a pleasure
to have met and chatted with you last month in New York.

I am glad you think that what I said early last month at the meeting
of Panel VI of Governor Rockefeller's Commission on Critical Choices
for Americans was of some value. Four things are absolutely clear and
final: that the basic issues, which determine everything else, facing
America today, and indeed facing us all, are essentially of an intellectual,
moral and spiritual order; that the real and effective facing of these
issues is going to meet with immense opposition which will make itself
felt in a variety of ways; that therefore the deepest candor and courage,
seasoned of course with due humility and with unswerving love, are re-
quired to face them to their depths; and that as a matter of fact there are
adequate resources in America and in the Western world that can be
mustered to face and meet them. Suffering there is going to be aplenty,
but I am sure of the end result.

I am happy your great University feels now the need of inquiring
into the place of religion in American institutions and universities. This
feeling alone is enough to absorb all your energies, but I wish it extended
to the consideration of the decay of great philosophy, and to the crisis in
the fundamental intellectual disciplines. For I find the aberration of the
mind these days every bit as grievous as the estrangement of the spirit.
Man is a whole and therefore he cannot be treated by singling out only one
aspect of his being.

I am honored that you think I can perhaps help in your endeavors.
Your proposal interests me but I should like to know much more about

Dr. Ernest L. Boyer

-- 2 --

July 9, 1974

its terms and conditions. Provided there are strategic and sufficiently challenging prospects for my fundamental interests, I would dedicate every ounce of my energy and thought to the task. For I know, I think, what is happening in the United States and the West in general, and I know how much depends, not only for America but for the whole world, on the right mind and the right spirit once again finding their home in the great universities of America and the West by the end of the century. And the time to start this process is exactly now, and should have been yesterday or the day before.

Governor Rockefeller and you can be assured of my good will. These are most pressing times, from every point of view, and there is no urge in my life that can compare with that of desiring to help, with the utmost fear and trembling, in bringing out and reaffirming, both in thought and life, the deepest treasures of mind, spirit and personal existence in the great Western heritage, which stems originally, as you know, from these wonderful lands in the eastern Mediterranean.

With best personal regards, I am,

Faithfully yours,

# TWO MESSAGES TO WASHINGTON

## What the Arabs expect of the United States

By Maha Samara

Dr. Henry Kissinger has come and gone, and although there is no shortage of speculation over the results of his Middle East tour, there is no sign that his February effort has brought a political settlement closer to the Middle East.

In fact, in the 15 months which have elapsed since the October War, Dr. Kissinger's shuttle diplomacy appears to have led the Middle East nowhere near the promised "just and lasting peace".

At this stage, what should the Arabs expect Washington to do?

*Monday Morning* last week put the question to two prominent political analysts in Beirut: Dr. Charles Malik, distinguished professor of philosophy at the American University of Beirut and former president of the U.N. general assembly; and Dr. Hisham Sharabi, professor of political thought at Georgetown University and editor of *The Journal of Palestine Studies*.

Dr. Malik's view was presented in writing, and Dr. Sharabi's verbally. Both are reproduced verbatim here:

## DR. MALIK: RECOGNIZE THE F

By Dr. Charles Malik

We must recognize that the United States Government labors under special limitations in dealing with the Arab-Israeli conflict. Any failure to do so not only does not facilitate matters from the Arab point of view but actually impedes any progress.

At the same time, the United States appears to be capable of dealing with all kinds of governments and interested parties, in full self-confidence and without any inhibiting fears. Thus former President Nixon could visit China and the Soviet Union, and the United States Government is on friendly terms with Israel and the Arab states, and maintains active negotiating contacts with both sides. In this respect there is a difference between the United States and the Soviet Union so far as the possibility of mediation is concerned.

In its openness to everybody, no matter how much it might disagree with some, why should the United States therefore not deal directly and openly with the Palestinians? The Arab states and most of the countries of the world have recognized the Palestine Liberation Organization as representing the Palestinians. The next indicated step appears to me to be for the United States to recognize openly and formally the Palestine Liberation Organization and to enter into active formal discussion with it on all aspects of the Arab-Israeli conflict. The United

Dr. Charles Malik

States can be diametrically opposed to the solemnly declared objectives of this Organization, but that should not prevent it from recognizing and treating with it. The United States does not agree with all the objectives and policies of all the countries and parties with which it deals. Now everybody knows there is no settlement, much less is there any progress towards peace, even less still any real and lasting peace, without taking into account the

will of the Palestinians. In inti-ations perhaps the Palestinians the strongest force, and as their immense suffering developed a mode of being be of incalculable service to the Arab world which has no much. To ask them now to declared will before America nize and deal with their re- seems to me to be unneces- change can come, if it comes after and as a result of rec- ognization. Unrecognized peo- obligation, whether moral or change their mind. Once the responsibility by the fact of and the serious declared proc- tiation, anything may happen- saying that any specific thing -- that is up to them; I am o- anything is to happen, it can then.

Therefore I urge on the U- Government to take the step the Palestine Liberation Org- into negotiation with it. The already so complicated and possible that we should be any positive step that can be out committing anybody to an yet that holds some promise. should be very thankful now clearly indicated step is the re- the United States of- tion Organization.

Page 6

# MESSAGES
WASHINGTON

To expect of the United States

By Maha Samara

me and gone, and although there is no shortage of
his Middle East tour, there is no sign that his February
settlement closer to the Middle East.
which have elapsed since the October War, Dr. Kissinger's
have led the Middle East nowhere near the promised

Arabs expect Washington to do?
but the question to two prominent political analysts in
stinglished professor of philosophy at the American
er president of the U.N. general assembly; and Dr.
political thought at Georgetown University and editor of
ated in writing, and Dr. Sharabi's verbally. Both are

ECOGNIZE THE PLO

Dr. Charles Malik

be diametrically opposed to the
declared objectives of this
on, but that should not prevent
recognizing and treating with it.
States does not agree with all
ives and policies of all the coun-
parties with which it deals. Now
knows there is no settlement,
is there any progress towards
in less still any real and lasting
thout taking into account the

will of the Palestinians. In inter-Arab rela-
tions perhaps the Palestinians today exert
the strongest force, and as a result of
their immense suffering they have
developed a mode of being which could
be of incalculable service to the rest of
the Arab world which has not suffered as
much. To ask them now to change their
declared will before America can recog-
nize and deal with their representatives
seems to me to be unnecessary. Such
change can come, if it comes at all, only
after and as a result of recognition and
negotiation. Unrecognized people have no
obligation, whether moral or political, to
change their mind. Once they feel their
responsibility by the fact of recognition
and the serious declared process of nego-
tiation, anything may happen. I am not
saying that any specific thing will happen
-- that is up to them; I am only saying if
anything is to happen, it can only happen
then.

Therefore I urge on the United States
Government to take the step of accepting
the Palestine Liberation Organization as
representing the Palestinians to enter
into negotiation with the problem is
already so complicated that it is im-
possible that we can find a solution for
any positive step out committing
yet that holds the Palestine Liberators
should be very clear that I believe
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Dear Sirs,

A group of Beirut area teachers visited Feb. 17 the village of Bint Jbeil to attend a workshop on teaching techniques organized by the Modern School Movement (which is a group of educators dedicated to making education relevant to the individual student by stimulating his interest in his own progress).

In addition to the Beirut area teachers, the workshops were attended by local teachers from Bint Jbeil and neighboring villages.

The morning activities started with registration and a welcome from the official school, Al-Ahlieh, where the workshops were to be held. Participants subsequently located the workshops of their choice, and the morning's program got underway.

"Motivation" is of key importance to the Modern School Movement's pedagogical outlook, and it figured prominently in the names of the workshops as well as in the exchange of ideas within the groups.

Available to the participants were presentations on the following pedagogical themes: The Motivation of Expression; Programming; Scientific Research and Inquiry; and Techniques of Artistic Expression. Those presenting the material were Yasmine Ali Rish, Joseph Shedid, Prof. Hassan Ladki, Afaf Sabbagh, Claire Hajj and James Sullivan.

Education inspector Moufida Hamdan of the Bint Jbeil area schools was also present.

Great care was taken to suit the teaching techniques being presented to the school situation in which they might be used. The purpose of the workshops was to acquaint the teachers of isolated and poorly-equipped schools with alternative methods of

presenting educational material. Such devices as limited to a battery-powered egg hatching box drew interest, but might correct and evaluate their own work.

Leaders of the various workshops limited their to materials that are easily available and inexpensive. They also encouraged teachers to make use of the large as a valuable resource in teaching.

The group led by Mr. Sullivan made use of a large art materials which Mr. Sullivan had brought with him. Meshref where he teaches at International College, message to the rural teachers of South Lebanon, can do worthwhile and exciting, creative work with minimum expense. Such common articles as School boxes, ice-cube trays, wax and even earth were used. The room into artistic expression media. One question posed to Mr. Sullivan was a poignant reminder problems that teachers in the Southern part of the country were facing. He was sked if the painting materials he was using were suitable for use on concrete walls. It was also pointed out that the area's students often spend long hours in under and their teachers thought that painting the dry shelters would amuse the students and boost their士 The answer was, "yes".

The MSM program had made possible a valuable ideas and techniques ... on meaningful education.

LIU

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presenting educational material. Such devices as limographs and a battery-powered egg hatching box drew interested attention in addition to grading and correcting techniques whereby students might correct and evaluate their own work.

Leaders of the various workshops limited their presentations to materials that are easily available and inexpensive to use. They also encouraged teachers to make use of the community at large as a valuable resource in teaching.

The group led by Mr. Sullivan made use of a large variety of art materials which Mr. Sullivan had brought with him from Meshref where he teaches at International College. Mr. Sullivan's message to the rural teachers of South Lebanon was that one can do worthwhile and exciting, creative work with students at minimum expense. Such common articles as Sohat bottles, egg boxes, ice-cube trays, wax and even earth were transformed in the room into artistic expression media. One question which was posed to Mr. Sullivan was a poignant reminder of the special problems that teachers in the Southern part of Lebanon face daily. He was sked if the painting materials he was demonstrat- ing were suitable for use on concrete walls. It seems that the area's students often spend long hours in underground shelters and their teachers thought that painting the drab walls of the shelters would amuse the students and boost up their morale. The answer was, "yes".

The MSM program had made possible a valuable exchange of ideas and techniques ... on meaningful education.

Elizabeth Jannot
I.C., Sage Hall

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THE VICE PRESIDENT
WASHINGTON

October 21, 1975

Dear Friend:

It is a pleasure to introduce a personal friend and esteemed colleague, Congressman John B. Anderson, one of the most highly respected Republican Members of Congress. Elected by his colleagues to the leadership position of Chairman of the House Republican Conference, he has exerted a strong influence in favor of moderate and economically sound government policies. He is widely regarded as having one of the keenest minds in the Congress and is recognized as one of the most effective and articulate spokesmen on the national scene.

John Anderson has the longest tenure of any Republican on the House Rules Committee, and the Joint Committee on Atomic Energy. He has been a consistent proponent of the peaceful use of nuclear power as part of a comprehensive national energy program.

First elected to Congress in 1961 from Rockford, Illinois, John has provided informed, intelligent and innovative leadership. If government economic policy is to provide an encouraging climate for American commerce and industry, we must keep men like John B. Anderson in Congress. I encourage any support you may be able to give him.

[LC]

In order to minimize traffic problems at the Rockefeller home and at the request of the Vice President's family, we have arranged for guests to leave their cars at the National Presbyterian Center, 4125 Nebraska Avenue, N.W. (Please use the Van Ness Street entrance.) A shuttle service will be provided continuously to and from the house. There is no parking available on the grounds or on Foxhall Road.

February 27, 1976

Memorandum

To: The Honorable Nelson A. Rockefeller

From: Berent Friele

Subject: Inter-American Relations

Henry Kissinger did it again. He is certainly a master in diplomacy and statesmanship. In spite of handicaps on the home front and diversity of interest in each of the countries he visited, he succeeded in rallying sympathy and understanding for basic United States objectives. Another page has been turned in the history of Inter-American relations which will help in chartering the course for future action. Enclosed is a copy of personal letter for your information.

Enclosure

February 27, 1976

Dear Henry:

Permit me as an old friend and admirer to heartily congratulate you on the success of your Latin American tour. It was long in coming for reasons beyond your control, but when it finally became a reality it could not have been executed with greater skill and better results. The atmosphere has been cleared and the dialogue resumed. The Latins know where we stand and have been reassured of our continued interest in their problems and respect for their points of view. Above all, you have succeeded in winning their hearts by your charm, wisdom, sense of humor and frankness. The personal contacts which you have established in each country are invaluable. I can speak for Brazil in particular, where friends have reported enthusiastically about your visit.

In closing, I want to express my fervent hope that Nancy has completely recovered from her recent illness. I understand she had to undergo surgery just before you left, which must have been an added burden for you to carry on your trip. Please give her my love. I do not go to Washington very frequently; however, the next time I shall take the liberty of giving you a ring. Maybe there will be a chance to see you for a few minutes. Nothing would give me more pleasure.

With warmest regards, as always,

The Honorable Henry A. Kissinger
Secretary of State
Department of State
Washington, D. C. 20520

cc: The Hon. Nelson A. Rockefeller
    Mrs. Susan C. Herter
    Mrs. Ann C. Whitman

MEMORANDUM

THE VICE PRESIDENT
WASHINGTON

THE VP

FROM: ANN

You remember that Bill Coles tried to get you
to attend a United States/Venezuelan symposium
to be held in Boston January 27 to 29. You regretted.

Apparently they have not been able to get anyone
of Cabinet rank to attend -- and ask you to try to help.

Bill Coles was trying to call today, but to this
moment has not gotten through.