Union Oil Company of California
Union Oil Center, Los Angeles, California 90017

Fred L. Hartley
Chairman and President

March 24, 1976

Dear Mr. Kissinger:

The other day at the Travel Program
for Foreign Diplomats luncheon my
Bicentennial Tie was discussed. I
indicated I had sent you one - you
indicated you had not received it.

We checked our records to find that
Suzanne S. McFarlane, Personal
Assistant, acknowledged receipt. A
copy of her letter is enclosed.

I hope you are successful in getting
your hands on the tie!

Kindest personal regards.

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

February 19, 1974

Dear Art:

Under your leadership, the Bureau of European Affairs performed splendidly during the preparations and convocation of the Washington Energy Conference. You personally deserve great credit for your role in struggling with what turned out to be the most troublesome issue of all -- to find a way of reconciling the two admirable ideals of Atlantic cooperation and European identity. I appreciate your fine support.

To those in EUR who also helped bring success, directly or by their support for your role, I ask you to extend my deepest personal thanks.

The Honorable
Arthur A. Hartman,
Assistant Secretary of State
for European Affairs.

S:DCG:ml

THE WHITE HOUSE
WASHINGTON

July 27, 1976

Dear Mr. Secretary:

Mrs. Hartmann and I regret that we were
unable to attend the reception you and
Mrs. Kissinger hosted last evening at
the Department of State in honor of Mr.
and Mrs. Joseph Sisco.

Unfortunately I returned to the city
too late for us to join in the festivities.

Thank you for inviting us.

Warm personal regards.

September 28, 1975

Dear Mr. Hasan:

Thank you for your letter bringing me up to date.
I am always delighted to know how my former students
are progressing. I only wish I had more time to give.
Unfortunately my schedule this month is very busy
and I do not see how it will be possible for us to get
together.

I nonetheless want you to know how pleased I am
to see you representing Pakistan at the Special Session.
You are a credit to your country -- and Harvard. My
best wishes for continued success.

Henry A. Kissinger

Mr. Ibnul Hasan,
Pakistan Mission to the United Nations,
Pakistan House,
8 East 65th Street,
New York, New York.

S:LPBremer>JCovey:gh

9/15/75

Per Jock Covey--letter signed and sent 9/28/75

P750142-2326

PAKISTAN MISSION TO THE UNITED NATIONS

PAKISTAN HOUSE
8 EAST 65TH STREET
NEW YORK N.Y. 10021

37

S

4 September 1975

Dear Mr. Kissinger,

In June last year I was in the United States --- the first time after 1967 Harvard Seminar American and world events what they were last year, even if I had tried I would not have succeeded in getting an appointment with you. I am again in the United States, now as a member of my country's delegation to the 7th Special Session of the U.N. General Assembly and will stay here until the middle of this month.

I wonder if having once again managed to fly over the continents I can also succeed in flying over to Washington and call on you, subject of course to your finding some time out of your very busy schedule. I am making this request with the confidence and conviction that you do approve of your former students encroaching on your busy time and wishing to meet you.

Perhaps I had informed you last year that I am now editing the weekly *Pakistan Economist* in Karachi. In approaching you for a meeting however my purposes are not professional and it is only because of my personal association with you that I am making this request.

With most kind regards,

Mr. Henry Kissinger
Secretary of State
State Department
Government of the United States
Washington D.C.

FADRC
DOCUMENT ANALYSIS

1975 SEP 11 AM 9 33

RECEIVED
DEPARTMENT OF STATE

ACTION
is assigned to

PRESIDENT'S
COMMISSION ON WHITE HOUSE FELLOWSHIPS
THE WHITE HOUSE

November 5, 1976

Dear Mr. Secretary:

The 1976-77 White House Fellows very much appreciate your taking the time to meet with them.

All of us found the session enormously informative and stimulating, and the Fellows enjoyed having an opportunity to hear your perspectives on a wide variety of foreign policy issues. Without question, the entire group left the meeting with a significantly enhanced understanding of the complexities of conducting foreign policy in the modern day arena of world affairs.

Thank you again for taking the time to meet with us. The nation and its people have benefited greatly from your distinguished service and I am most grateful that the Fellows were able to have the privilege of meeting with you.

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

CARYL P. HASKINS
SUITE 600
2100 M STREET, N. W.
WASHINGTON, D. C. 20037
(202) 833-1720

October 31, 1975

Dear Henry,

Here is the Norman Macrae *American Survey* piece in the current *Economist* that we were discussing at luncheon. Parts of it appear to me quite extraordinary: other parts perhaps overdrawn. But the whole seems very exceptional in some of its insights.

It was a most lovely luncheon. I look forward so much to another opportunity in the not distant future.

In deep admiration, as always, and with every best
wish,

The Secretary of State,
The Department of State,
Washington, D. C.

4 SURVEY-

AMERICA'S THIRD CENTURY

THE ECONOMIST OCTOBER 25, 1975

method of creating a human being—
namely, by copulation between two
individuals giving no thought to what
the product will be—may quite soon
change). Sex is already 99.99% for fun,
and technology is bound to home in
on the pre-planned twice-in-a-lifetime
occasion when it will be for reproduc-
tion. Our children will probably
"progressively" be able to order their
babies with the shape and strength and
level of intelligence that they choose,
as well as alter existing human beings
so as to insert artificial intelligence,
retune brains, change personality, modify
moods, control behaviour. And lots of
even more horrid things like that. The
pace and sophistication with which some
of these things are not done will hang
on the world's leading nations, whom
other peoples will most wish to emulate
or will most fear to fall behind. It
will be very desirable to retain strong
and calm American influence in this
period, rather than to yield all of
world leadership to (at best) the in-
experienced Japanese.

(5) America's contribution in its third century will depend largely on how its three main institutions evolve in or out of pace with the changing times. These three main institutions are, in reverse order of importance: its business corporations; its government; and its mechanisms for living together (what takes over from church, family, pioneer spirit, small-town togetherness, the probably-failed experiment of suburbia —during a century when the third and greatest transport revolution, that of telecommunications, should gradually allow an increasing number of breadwinners to live in whatever communities they wish to form and to telecommute daily into their New York offices from homes in Tahiti or the Alps).

This summary has set a lot of angels
dancing on the point of a pin. It may
seem clumsy to try to pick out the
pattern of the dance by first brooding
on what may happen to American
business during these next few years.
But I think that the influence of this
might be decisive for the lifetime of

my children, just as what happened
to British and then American business
in the years immediately after 1776
and 1876 largely shaped the two cen-
turies 1776-1876 and 1876-1976.

At one stage of my journey through
America in 1975, this thought made
me rather glum.

1 Post 1776 take-off

Smoothed trend, ignoring some decades' zigzags

America joins the Fabian
society

America is adopting many of the upper-class snob habits that checked Britain's economic dynamism after 1876. Such as anti-business paternalism, a glorification of gamekeepers...

The first century of material advance
after 1776, based on the invention of
steam power and the transport revolu-
tion of the railways, was led by Great
Britain. During this period it was widely
understood that God was an English-
man because the most efficient business-
men temporarily were.

The British century ended in around
1876 as it became apparent that the
most efficient businessmen now weren't.
The second century of material advance
from 1876-1976, based on the invention
of manufacturers' assembly line tech-
niques and the transport revolution of
the internal combustion engine, was
therefore led by the United States. There
were societal, psychological and tech-
nological reasons why America was
ready in 1876 to take over industrial
leadership from old Britain. Awkwardly,
these same reasons can be cited in
1975 to suggest that old America may
be about to give up that leadership
to somebody else.

The chief reason why 1876 ushered
in America's century was that entre-
preneurs' verve was by then most likely
to sprout in that nation so largely

self-selected from families enterprising
enough to have migrated across the wide
ocean, and yet new enough not yet to
have created the aristocratic or jealous
or intellectual institutions which casti-
gate moneymaking as *infra dig* or
unfair. The surge into the Henry Ford
revolution should have been as organis-
able in the Britain of 1876 as in the
America. What was missing in Britain
by that moralising Gladstone's and that
do-gooding Disraeli's day was the in-
centive provided by any accordance of
social standing to business panache.

Remember how easy the surge after
1876 was—just as, for different reasons,
see below, I am going to maintain that
a much bigger surge after 1976 is also
going to be. Our grandfathers lived in
a time when any bankworthy member
of the middle class anywhere with a
good entrepreneurial idea could expect
to be profiting from it (and to have set
course to change the world?) within a
few months. The Ford Motor Company
was founded in mid-June, 1903, with
a cash capital equal to today's price of
a small suburban house and only 125
employees; it sold its first cars to cus-

tomers that October, and made a profit
from then on. Yet between 1876-1910—
while America was rearing Rockefeller,
Morgan, Harriman, Carnegie, Frick
and Ford to seize this new age of
opportunity—what single name of a
new and domestically-based British
entrepreneur springs easily to mind?

The main reason for Britain's entre-
preneurial decay around 1876 was that
a century's experience as top dog had
by then become debilitating. The British
upper class was strengthening its gut
feeling that new sorts of commerce were
surely rather vulgar, while the British
business-decision-making class had itself
become bureaucratic and protectionist
rather than entrepreneurial. As each new
technological development appeared in
the late 19th century there were interests
in Britain (entrenched among employers
as well as in craft unions) who had
prospered from the development which
it would replace, so they united to wish
that the new idea would please go
away. America gained also because its
industrial revolution was from the start
based on technology geared to the
market, as Edison and the half-million
other American patentees of 1870-1900
sought dynamically to devise conven-
iences for the many instead of to dredge
up ideas fascinating to the few. By
contrast the British industrial revolution
had even originally been based on more
leisurely and gentlemanly science, as
scholars like Newton and Watt looked
at an apple or a kettle and then thought
of a most ingenious wheeze.

AMERICA'S THIRD CENTURY

SURVEY 7

[LC]

Fabians to the left of them

America's entrepreneurial verve instead of Britain's businesses' bureaucracy, America's output-oriented technology instead of Britain's scientific curiosity whether the moon was made of green cheese, America's bloody-clawed capitalism instead of Britain's good corporate citizenship whose attempt at paternalism was bound to fall down a class and generation gap. In 1876 those were young America's strengths, while these were old Britain's senescent disease.

And today? The Briton travelling through America in 1975 at first has the eerie feeling that he has gone back to when grandfather knew H. G. Wells. The entrepreneurial fervour of the industrial age seems to be dying in the west. I think (see later in this survey) that this first impression is too gloomy, but it will be good neighbourliness first to rub America's birthday nose into the warning signs.

## Treason of the clerks

The bad news for the world's teeming masses this bicentennial is that in America the whole concept of thrustful business is in danger of becoming unloved. The intellectuals have joined in the sneering against it, making it fashionable to believe that stagnation is not only wise but clever. This is exactly how it was when Britain's post-1876 decline began. It is strange that peoples do not see that not learning from history is bunk.

Through most of history, businessmen have been told by the upper classes of society that they are pushful upstarts. Since businessmen want most to rise in society, this has naturally often discouraged them from starting to push up. As even de Tocqueville said in the patchy book which many Americans regard as their national legitimation,

the church in the late middle ages provided the first hope of a dynamic challenge to the old stagnant feudalism —as the clergy opened its ranks to all classes, to the poor and the rich, to the villein and the lord, to every uppity Becket. But by the time societies were rich enough for top churchmen to have a nice life, provided nobody disturbed them, the church comfortably joined itself to the rest of the establishment in deprecating restless change, although it still good-naturedly said it was in favour of succour of the poor.

The breakthrough towards continuing material advance therefore waited on the emergence of another part of the upper class which was ready to reassure the lively that panache was respectable. This new class came in England in the 17th century when King Charles II favoured intellectuals interested in the scientific method, perhaps because he sought male company among an establishment different from that which had lost his father his head. After a century's

slow germination, intellectuals in ferment played a major part in awakening Britain in the first seven-eighths of its 1776-1876 century—agricultural innovators against the squires, freetraders against the mercantilism of governments, and doctors who favoured a chemical feast against opponents of some advances like chloroform. Then, just after the mid-19th-century, this new British ginger group followed the old church into favouring a decent gentlemanly stagnation.

By around 1876 a British intellectual could have a pleasant life in contemplation, and his most natural resentment (like the resentment of the squire, the parson and the bureaucrat) came to be against vulgar people who were restlessly and commercially pushful. After about 1876 a "progressive intellectual" in British public life no longer meant a person who believed in progress and change; no longer a person who was eager to rout down to the roots of every way of doing things, so as to cut and graft wherever an improvement in production or effectiveness or competitiveness or individual liberty could be secured. A "progressive intellectual" meant a paternalist, who did not like change very much but was eager to pass on in welfare benefits a larger part of the easy growth in national income which his own anti-growth attitudes now made it slightly more difficult to attain.

And that is exactly what has happened in America in these years just before 1976. The United States has joined the Fabian Society of about 1903. Many of the new Democrat members of Congress, including some presidential aspirants, would find that Fabian Society their most natural home, militant middle-class feminism and all, but plus the old American disease. When upper-

Fabians to the right of them

8 SURVEY

AMERICA'S THIRD CENTURY

Alaska: they say a pipe will spoil my view

## ACKNOWLEDGMENTS

In this survey I have followed my usual journalistic habit of pinching without attribution and then personally embellishing (usually just beyond recognition) the best ideas of all my friends. No one of them will conceivably agree with all of the mixture of forecasts that comes out. At the assembly of the World Future Society I again raided the fertile minds of Herman Kahn (who always quantifies admirably what I only feel), Professor Dan Bell, a lot of others. The best figures of the past with which to illumine the future now come from John McHale (both from his "World Facts and Trends", published by Collier-Macmillan, and from his unpublished policy study on "Human Requirements", which is obtainable from the Center for Integrated Studies at Binghamton).

In New York City I was particularly indebted to the wise and balanced Professor Sidney Rolfe (and to the apartment-full of New York intellectuals he invited to a party for me to quiz), to the flashing mind of John Diebold (for whose Institute of Public Policy Studies I have done some past work, so our ideas do become a little intermingled), and to my friends at the Sloan Foundation. The Americans have a habit of setting up privately-backed or even official committees to collect diverse views on practically everything. America's leading intellectuals submit to them typewritten documents that are labelled "confidential" but then handed to anybody on request. Newspapermen tell me that this means you can purloin all their best ideas provided you never reveal which intellectuals dared to utter them, because they are all liable to be attached to some presidential candidate next time and attribution could be embarrassing. I have taken advantage of this convention with enthusiasm. Cover picture: Trumbull's "George Washington".

class Americans impose snob values on emotional populists, they often think that they have gotten religion—and catch the lynching spirit.

It would be impertinent for a foreigner to object to America's creeping ethic of anti-dynamism if it had merely sprung from American selfishness. When you have a gnp per head over $7,000 a year, you naturally begin to regard growing much richer as a bit of a bore—although American Christians and humanists should be reminding zero-growth Americans that, by discontinuing their own industrial dynamism which has helped so much to drive world technology up through the bud, they could cruelly reduce the forward prospects of the 2 billion angry people on incomes under $200 a year with whom we share this rather small planet. But the real horror today is that America is not going slowly stagnationist out of selfishness. On campuses across the continent, a peculiarly innumerate anti-growth cult is being taught to a generation of idealistic kids as if it was high moral philosophy, or even a religion.

## Industrophobia

This is a familiar fault in that otherwise lovely, brave continent. Remember G. K. Chesterton?

There is nothing the matter with Americans except their ideals. The real American is all right; it is the ideal American who is all wrong.

Idealist Americans should ponder the delay they caused to the trans-Alaska oil pipeline, without humbug.

There can be no real pretence this delay was motivated by any environmentalists' thoughtful belief that the 15 square miles covered by this pipeline

would spoil the view of the other 599,985 square miles of Alaskan wilderness which are hardly looked at by anybody anyway (the few adventurous tourists who do travel through this wilderness will certainly detour deliberately to what will be the pipeline's slightly contrasting and therefore mildly interesting sight). There can also be no pretence that, at least after its initial redesign, the pipeline will be unfair to local wildlife; for them it will be an occasionally-useful shelter from the Arctic wind. Instead, the delay stemmed from a desire to be nasty to oil companies, plus aristocratic resentment that poorer people growing richer can become more uncouth. The delay could have been justified if it had been used to make the pipeline's building less of a drunkards' gold rush, less expensive, more integrated with the community. But, of course, the costs and urgency created by the delay made each of these factors worse.

It was an unforeseen misfortune that this spasm of industrophobia should have come at a time when the delay to oil pipements has certainly cut America's employment, has certainly aggravated the oil crisis for the energy-shortdesti-tute countries, has necessitated shabby compromises in American foreign policy. In order to make more symmetrical an Alaskan view for practically nobody, the unemployment of black teenagers in New York City has been pushed up the last few percentage points towards 40%, a few tens of thousands more brown men have starved to death in Bangladesh, and several hundred thousand Israeli families have been put in greater danger. It would be vindictive to hammer home these truths to the hangdog, but there still aren't any hangdogs. It was eerie during my trip across the campuses of the continent to hear so many supposedly left-wing young Americans who still thought they were expressing an entirely new and progressive philosophy as they mouthed the same prejudices as Trollope's 19th century Tory squires: attacking any further expansion of industry and commerce as impossibly vulgar, because ecologically unfair to their pheasants and wild ducks. Some of their emotions were rather nicely expressed. The upper class has always had the ability to sound persuasive while being fatuous, to dress gamekeepers' selfishness in pretty witty phrases. At this fin de siècle that mood is infecting the Americans, the upper class of the world. It needs to be turned back.

It can be turned back. But, awkwardly, America in 1975 is also suffering from two other symptoms of Britain's post-1876 disease.

AMERICA'S THIRD CENTURY

SURVEY 11

[LC]

# The retreat from Mr Edison

Two other dangers: America has bureaucratised its technology, and very nearly its business too.

Science is the thing that was nurtured in Britain under Charles II, and has been encrusting in post-caroline cobwebs ever since. A scientist seeks kudos by advancing the frontiers of knowledge, and if you ask him whether he is probing the frontiers that most need to be advanced then you are some sort of a slob. Technology is the thing that was nurtured in America in the days of Eli Whitney and Edison, and in those days it meant a search for the innovations that would be most saleable. In Japan it still means that.

But in modern America, while a scientist seeks kudos, a technologist now searches for something called funding. A large part of funding comes directly or indirectly from the federal government.

I met a man in Washington who makes a living studying political utterances and forecasting which sorts of technology will find politicians to be an easy touch over various periods ahead. He claims his profession is right 60% of the time, and bought me a drink because he said he had prospered through long practising what he kindly called "Macrae's law" which I had much later preached in *The Economist*. This is that:

> In modern conditions of high elasticity of both production and substitution, we will generally create a temporary but large surplus of whatever the majority of decision-influencing people five or ten years earlier believed was going to be in most desperately short supply. This is because the well-advertised views of the decision-influencers tend to be believed by both profit-seeking private producers and consensus-following governments, and these two then combine to cause excessive production of precisely the things that the decision-influencers had been saying would be most obviously needed.

Thus when Russia beat America with a sputnik into space in 1957, everybody in Washington cried that America would be left in a "missile gap" behind Russia for the rest of the century. This meant that America would hurriedly and expensively produce a vast and unnecessary surplus of much better rockets than the Russians, and that the big technological programme for the 1960s would be to fire this surplus off at the moon.

As the American government now directly or indirectly finances more scientific research every few months than took place in all the world in all the 1923 years of the Christian era before I was born, I naturally had a yen to believe that these billions of dollars which could shape my children's futures were distributed on principles more

firmly-founded than those of a bad joke which I had once made up in my bath. I burrowed like a squirrel round America to find those principles, but must report that I could find only nuts.

## Land of low investment

There is an Office of Technology Assessment in the Washington phonebook, so I rang it to find the principles on which it works. It turns out to be the opposite of what its name says. It is a taxpayer-financed ecologists' organisation, created for anti-technology assessment.

If you invent a better mousetrap in America, then this committee with formidable left-wing ladies (see later) is authorised to inquire whether this might be environmentally unfair to mice. Fortunately, the office has no money, so cannot actually do anything; but this chase after moonbeams has reached the dangerously earnest stage where its literature is no longer entirely written by kooks.

The discouragement of investment in new technology in American profit-making industry (as distinct from in politicians' latest emotional spasms) is worrying because it is a dowse that is being banged on an already spluttering light. For the last 25 years America's investment has been a lower % of gnp than any other industrial country's except Britain's. On one definition it has fallen even behind Britain's. During the third quarter of the twentieth century America's output per manhour in manufacturing doubled—but it quadrupled in some other industrial countries, and multiplied by nine in Japan; even Britain slightly exceeded America's poor performance (see chart).

This is changing the world at about the same speed as it was changed early in Britain's post-1876 decline. A swift

deterioration, but with long trails of imperial glory still. In 1960, the distant year for whose figures Dr Edward Denison produced by far the best international comparison of productivity, America enjoyed a living standard approximately twice as high as that of north-west Europe. Denison attributed about a quarter of this gap to the fact that America then had more capital equipment per worker in industry. In much of manufacturing and the large parts of investment affected by bureaucratic decision, I think that this American advantage has now nearly gone; but in the service industries, which should be much more important in future, the American worker probably does usually have a better programmed computer behind him.

Nearly another quarter of the Denison gap in 1960 came because American workers were better educated and better deployed in workplaces with large economies of scale. In manufacturing I think that some of this advantage has now gone. America's enthusiasm for general higher education (with 56% of its high school girls and 58% of its high school boys now going on to post-secondary education) probably is not providing as many skilled craftsmen as continental Europe's apprenticeship system. If the Europeans do now have more suitable workers using a more quickly growing stock of therefore more modern machines, then America's relative decline in manufacturing should be expected to continue fast. But American (eg) banks still seem to me more efficient than European banks, especially as they now have so many able ex-postgraduate-students about.

And that leads to "Denison's residual", which accounted for most of America's lead over Europe in 1960. This was Europe's "lag in the application of knowledge" and "general efficiency", so that, as I said in my last study of America in 1969:

> North-west Europe's real output per worker in 1960 was only approximately the same as America's in 1925, although by 1960 Europe's workers were much better educated than American workers had been in 1925—and had of course a far more advanced technology to draw on. The implication is that there is some long-standing, history-given, go-getting element in America's culture which Europeans and others have been unable to imitate.

In that study I searched America for this residual, and thought that I found it in the greater instinct of Americans, shown equally by the American engineer in the factory and the American housewife in the kitchen, to say: "now here is the problem, how can I solve it by a systematic approach?" On this trip I searched for it again.

12 SURVEY

AMERICA'S THIRD CENTURY

It is still there when Americans are allowed to make individual decisions. But an increasing number of decisions in America are now being caught up in bureaucratic nets instead. In business this applies particularly to ventures into new fields. If you are introducing a new product in America, then the order of operation is laid down as (1) recognition of need, (2) proposal of design, (3) verification of design concept... and so on to stage number umteen. All those departments and layers of management in big corporations then insist on being consulted at every stage, building up their empires of staff to meet the extra work which they create for themselves. This is serious because half the non-food products in the supermarkets of rich countries did not exist in precisely that form ten years ago, and half those on sale now will have been replaced by competitors in ten years' time. One reason for the growth of American multinational subsidiaries abroad is that they provide top management with the fatal option of the easy let-out; it is simpler to say "let's repeat this set-up and lay-out in Brazil" than to go through all the hierarchical pains of a brand new investment project each time you want to look expansive.

Consultants report that American firms reach initial decisions about investment more quickly than the Japanese, but then take much longer to bring them into effect. The increasing time between the beginning and completion of any task in American business —which Professor Kenneth Galbraith thinks is an "imperative of technology" and a sign of the need for planning—is in fact a sign of increase in bureaucratisation and of the need for America to escape from economic planning back to paying more attention to a rapidly-changing market.

The wheel has come full circle since the generation of Rockefeller, Carnegie and Henry Ford. In 1965-1975 what

name of a new and domestically-based American entrepreneur springs to mind? Even Britain has produced more Jim Slaters.

## Management doesn't exist

In the mid-1960s, shortly after people had grown tired of saying that America was bound to pull ever further ahead of Europe because of a "technology gap" (even though America was investing a smaller % of gnp than any continental European country), it became fashionable to say that America was bound to pull ever further ahead of Europe because of a "management gap" (ie, America had elevated management into a science). It has now been discovered, however, that management science does not exist except in the following ingenious sense.

Big American corporations will often centralise their policy-making, and get a significant initial gain in effectiveness; but then, as time passes, will find that this does not work because the central planners do not know what is really going on out in the field. So these corporations will then decentralise, and get a significant initial gain in effectiveness, but will then find that all their divisions are going in different directions. So they will then recentralise, and get a significant gain in effectiveness, but after a time...

This constant reorganisation is in fact very sensible, and is a main reason why I judge that big American corporations are still often the most efficient day-to-day business operators (though not investors) in the world. European and Japanese companies do not keep their executives on their toes by reorganising nearly as frequently, and governments do not have the opportunity to do so. This is one reason why governments are such inefficient operators. In many of them you nowadays have at the same time all the disadvantages of centralisation (because cabinet ministers are signing bits of paper that have no relevance to what is actually going on) and decentralisation (because what is actually going on is diverging impossibly in a dozen different directions at once).

Still, the present American corporation management system—of chop a little and change a lot—is a device for dealing with the problems set by bureaucracy, not for replacing it by entrepreneurship. In a search for entrepreneurship American corporations have passed in recent decades through phases of being led at one stage by engineers (who tend to disregard both balance sheets and people), then by super-salesmen (whom the general public nowadays find absurd), and then by accountants.

Please don't invest

There is no doubt that America has gained briefly from the age of the rule of accountants. The visiting economic journalist is still bedazzled by the way in which he can get from a quite junior employee in an American corporation more sensible and detailed statistical answers about cash flow targets, about what sales and profit trends as between different products are, than he can usually get at very top levels in equivalent British companies. It must be a continuing advantage to American corporations that they know what they at least think they are trying to do.

Nevertheless, I believe that the age of the rule by accountants is ending, for two reasons. First, in an age of inflation, the units in which they think they work have proved to be units that are too easily fiddled in order to fool stockholders (which may not matter) and fool themselves (which does matter). Secondly, the mode of organisation favoured by the accountant-presidents has been the old hierarchical mode. The hierarchical system served America well in the manufacturing age, when every engineering boss from Henry Ford down could arrange with precision what the person immediately below him did with his hands. But now that most Americans are white collar workers, each corporation executive is finding to his surprise that it is less easy to sit trying to arrange what the person below him should do with his imagination.

In ten years' time, my guess is that the accountants will be departing from the top, and will be succeeded by ... perhaps the packagers of technology for transfer to the places that can most economically use it, but more probably by the organisers of incentives.

Post 1776 take-off

Source: McHale's 'World Facts and Trends

AMERICA'S THIRD CENTURY

[L]C

SURVEY 15

# The way out

How America's business corporations might survive.

American business corporations therefore face three problems: dynamism is becoming unloved at home (and is called imperialism abroad), there is bureaucracy of technology and partly of business. Earnest Swedes are making efficient straight assembly lines run round in deliberately less efficient circles, in order to try to make business more popular. It will be a misfortune for the hungry half of the world if America also comes to believe that the problems of its dying manufacturing age can thus best be met by an unproductivity drive.

The key strategies for American business corporations should be (1) to move the boring manufacturing jobs down to the poor south of the world, at maximum profit to both the poor south and themselves; (2) to redesign their domestic structures to fit the new knowledge-processing, unobsequious, post-manufacturing age.

Manufacturing is going to continue its march out of America anyway, much faster than you think. In 1900, about 43% of America's workforce was in the two largest employments of agriculture and domestic service; that proportion is down below 5% now. Today only about 23% of America's workforce is in manufacturing, and I expect it to drop to below 5% over the next few decades.

Awkwardly, at this moment when America's main exports should be of jobs and technology, America's main mechanism for exporting jobs and technology has run crazy. While novelists write best-sellers predicting that by 2020 the world will be ruled by six giant American multinational corporations, the day of the big multinationals is now likely to be ending.

## End of multinationals?

Probably because the accountant-presidents predicted the future by extrapolating the past, the originally sensible device of the American multinational corporation has surged out of its cost controls. Compared with the moneymaking method of selling the knowhow through some licensing arrangement, the establishment of a multinational subsidiary was supposed to have the great advantage of maintaining ownership of the use of the process for the dear old firm; but multinational corporations failed to notice that, just as their emigrant boom took off, such material ownership was becoming no longer a source of economic

power.

The Americans brought to poorer countries their best equipment, together with the knowledge how to operate it in order to make the goods they previously exported, plus their own capital and managerial skill (which proved to be either copiable or untransplantable). All parts of this system looked tailor-made to turn America's balance of payments towards deficit, although multinational corporations were profitable only so long as the dollar was overvalued—ie, so long as the Americans were expected to have a strong balance of payments.

A multinational corporation has now become a device for taking up an artificially weak bargaining posture versus the host government (which is able to say that the American company can open only in some high-unemployment area to which native manufacturers won't go); versus marxists in the local parliament and ivory towers (who genuinely believe that giant multinational corporations wield some strange meso-economic power); versus the trade unions back home in America (who are liable at any moment to launch a worldwide strike against an American multinational on the grounds that it is being unfair by exporting jobs to workers in lower wage countries, who will then join the strike in order to get higher wages and thus export their own jobs back to America again); versus local business competitors, whose normal practices (tax-dodging in Latin European countries, giving bribes and arranging occasional coups d'état in poor countries) have to some extent to be copied for survival by the multinationals, who are then castigated by American congressional committees and the world's press.

There is one group of countries whose labour force is paid far below the standard of productivity appropriate to its high education (because its non-market-oriented economic system has made its entrepreneurship so inefficient), and where there is no danger of the trade unions turning bolshie. These are the bolshiek countries of Russia and east Europe. But the American system of technology transfer by multinationals has made it politically difficult to transfer American knowhow with good profit there, and has inhibited transfers to many of the poor countries (except about a half-dozen which are temporarily very well-ruled and about

③ Post 1776 take-off

Source: McHale's World Facts and Trends

another dozen which are very corrupt). Also multinationals' executives often don't like living in poor dictatorships, and when they do there is a danger that their expatriate living habits in ex-colonial milieus can brutalise the society. At the back of every multinational's mind is the thought that in one of the 50 or so coups d'état in poor countries during the next three years, some incoming government is likely eventually to execute the presidents of all local American multinationals, probably very slowly in the public square as a populist spectator sport. The state department will then issue a protest. So American manufacturing multinationals have gone especially to western Europe, which was the next-richest area to America and therefore the next where manufacturing was bound to become uneconomic once Europe had stopped importing the temporary migrant workers to whom the natives were unfriendly but on whom European manufacturing relied.

## Everybody as entrepreneur?

I stick to what I forecast in *The Economist* in 1971:

> As a prototype for the most successful sorts of firm in 30 or 40 years' time, it may be most sensible to visualise small groups of organisers of systems designers, all living in their own comfortable homes in pleasant parts of the world and communicating with others in the group (and with the systems designers) by picturephone: arranging for the telecommunication of the latest best computerised learning programme on how to make a better mouse-trap (or, more probably, how to make the next successor-but-five to integrated circuits) rooftop to rooftop to about 2,000 quickly trainable, even if only newly literate, workers assembled before their two-way-teaching-in computer terminals by some just tolerably efficient organising subcontractor (also taught by long-distance telecommunicated computer lessons) in West Africa or Pakistan.

That, however, raises a problem.

America invented powerful manufacturing business corporations in the first or 1876-1925 half of its past century, the half one can call the Carnegie-Ford

16 SURVEY

AMERICA'S THIRD CENTURY

① Post 1776 take-off

corporation age; but I have just argued that in the years ahead manufacturing will be most profitable if operated out of the world's poor south. American business spread dynamism round the world in the second or 1926-1975 half of its past century, the half one can call the multinational corporation age; but I have just argued that this age is now ending.

American business corporations will therefore need to lead the world in their third revolution into a new mode within a century. The requirement for the knowledge-processing age will be to become the most efficient incentive-offerers to get a generation of very highly-educated Americans to use their imaginations, instead of being the most efficient at supervising how American non-operators don't turn a screw. The mode that most appeals to me is one of John Diebold's concepts of perhaps gradually making American business corporations more into "confederations of entrepreneurs".

In the most extreme version of this very broad idea (and the most extreme versions seem to me the most probable, as witness what happened with Carnegie-Ford corporations and then with multinationals), a big business corporation would codify the costs and output required from its existing departments: transport department, typing pools, etc.

Then individuals or groups within the corporation could bid if they thought they could produce the stipulated output more competitively than the existing department did. If the tenders looked sensible, they could either take over the job on one of the sorts of contract discussed below, or (more usually at first) compete with the existing departments.

Some contracts for the internal entrepreneurs could sometimes be "very entrepreneurial": eg, pay you something much less than your existing salaries, but the new typing pool which you are running—which would be able to sub-

contract work out and in—would be a subsidiary company 49% owned by you. It could eventually be sold, making you millionaires if you prove to have struck on a wheeze to make typing pools very much more productive in terms of what is actually wanted from them.

Other contracts could be almost-salaried (which would come to little more than a bid by a respected employee that he thought he could reorganise some function in the company better, so let him try, but at nearly full salary plus bonus if he succeeds).

Obviously new products, by-products and products the corporation has not thought of could most especially be handled in this "confederation of entrepreneurs" way.

### Workers' participation?

That would provide more freedom and excitement at work for those who want to become entrepreneurs. But it would be an integral part of any scheme for "confederations of entrepreneurs" that non-entrepreneurial people should also have a wider choice of job satisfactions open to them. This may be the only viable way of solving the problem that peoples in the rich countries (who will generally be the most educated, and therefore include many of the most potentially productive) are going to become weary of working hard to grow richer long before people earning $200 a year do.

In rich societies, such as America has become, the decision whether any worker wants to get off the growth escalator should be an entirely personal one for him: but he should not be allowed to slow the whole escalator for the rest of mankind. Rich countries need to redesign their business systems so that each individual can decide whether to take his own share of the next decade's poten-

tial doubling of gnp per head in another doubling of his accumulated stock of material goods or in an extra six months holiday a year. Then while I go fishing most of you will fortunately choose to go on frenetically redoubling gwp like now.

The first step should be for workers to be able to state the job satisfactions they seek. Maybe Smith just wants $12,000 a year made with the smallest attendance at work at dates chosen by him. Maybe Miss Jones wants to work under a father figure. Maybe Mrs Buggins wants a gossip at work (put her on a Swedish circular production line?) Maybe Browne wants to be a lazy genius, and Braun to be a frenetic one. Maybe total flexitime is important to some people, and total orderliness to others.

Computerised job data banks must eventually be set up within big companies, so that the job-wants expressed can be matched to the job-offers provided by corporations, through a flexible market system. If a huge number of people said they wanted six months off each year (which I would not expect), then the wage attractable by the few who were ready to stick to their job year-round would go up proportionately and that attractable by the long-vacationists would go down (which would both influence firms to change their working habits so as to be able to use the bargain long-vacationists and also make long-vacationing suddenly less popular). If a large number of people showed they wanted to be entrepreneurs (which I think is very likely), then the performance contracts offered would become meaner, but, the vanity of entrepreneurs being greater than the eagerness of those going on six months' holiday with the wife, I think we would still get a lot of entrepreneurs at that bargain price—and some would succeed,

Some might like companionship

SURVEY 17

Mr. Smith goes to Philadelphia.

European executive
finds American city
"attractive place to
live and work."

Eighteen months ago, Angus Smith — financial manager of the International Division, Rohm and Haas Company, one of the world's largest chemical manufacturing firms — transferred from the company's Paris office to corporate headquarters in Philadelphia, Pennsylvania.

Today, Smith views his adjustment as rapid and rewarding, facilitated by Philadelphia's eminent livability and unique location vis-à-vis his business operations.

"Oh, yes. Aside from the many personal amenities, I've found Philadelphia to have some exceptional business advantages.

"For instance, with the company's widespread investments abroad, our location at the heart of the world's financial center — America's eastern seaboard — is ideal. Communications and transportation being what they are today, Philadelphia has all the advantages of, say, a New York, and it's a far more attractive place to live and work."

Philadelphia enjoys an advantageous geographical position at the midpoint of the U.S. eastern megalopolis. Smith need travel only 75 minutes north to New York by train; or 50 minutes south to Washington by air shuttle. And the city's multiple air, rail, highway and mass transit networks also provide Smith's company with easy access to other major cities of the U.S. and the world.

The Port of Philadelphia is one of the three largest in the world, and the busiest foreign trade port in America.

Also centered in the largest concen-

tration of population and industry in the U.S. — one person out of every eight in the nation lives within 160 kilometers of the city — Philadelphia, nevertheless, lacks the crowding of other metropolitan areas, and is known for the openness and beauty of its suburbs. Smith, his wife and two children, live in one such suburb.

"We're within 30 minutes of the downtown area by auto, and it takes me about the same time to the office by train.

"Before Paris, we spent five years in Milan. We've lived in London; and I'm

To reach New York, Smith need travel only 75 minutes by train; 50 minutes to Washington by plane.

Smith samples an indigenous tradition: the soft pretzel.

18 SURVEY

from Suffolk, England. Lovely places,
all. Yet Philadelphia has some of the
finest residential areas I've ever seen.

"And the housing costs are considerably lower than England, France or Italy."

Homes in Philadelphia also average
20% below the cost of homes in other
major U.S. cities.

Smith's short hop to work brings him
into a national model of innovative
urban planning. Under the momentum
of public development programs, Phil-
adelphia has created one of the most
attractive downtown business and
residential areas in the nation. It's all
part of The New Philadelphia Story.

"If I were writing home to a colleague curious about how we are finding life here, I'd say that it's quite an attractive city to live in. It has a lot of interesting history. It's quite civilized from the point of view of restaurants, theatre, schools, shops and the like.

"And from the business view, it
offers everything you can find in the
world's largest cities, without the

Smith's international company is locat-
ed in the world's financial center: the
United States' east coast.

Sharing a light moment at their favorite garden restaurant, Smith and wife Irina find city's amenities "quite civilized" vis-à-vis restaurants, theatres, schools, shops and the like.

congestion and financial instability
many of them seem to have.

"It's really quite nice, after all."

Philadelphia's welcoming hand is
open to you, too. The city's large
commercial banks and local agencies
will work together to help your busi-
ness relocate or expand within the
metropolitan area.

To help arrange financing — up to
100% of the total cost of setting up a
business at preferred rates — Philadel-
phia has a non-profit organization
regarded by *Business Week* as "the
most successful lending authority in
the U.S."

It can provide you with a long-term,
low-interest loan to cover the cost of
land, buildings and capital equipment.
Plus, the group can locate suitable
office space or help find inexpensive,
fully-developed industrial land in the
large supply available adjacent to the
city.

Angus Smith has already discovered
the advantages of Philadelphia — both
as a prosperous location for a business,
and as a vital, exciting place to live.

The New Philadelphia Story. Few
cities of the world can match it.

Angus Smith: makes a rapid and re-
warding adjustment to his new life in
Philadelphia.

To learn what The New Philadelphia Story holds for your business, contact:

Mr. Walter D'Alessio, Executive Vice President

The New Philadelphia Story

Suite 1705, One East Penn Square

Philadelphia, Pennsylvania U.S.A. 19107

Telephone: (215) 568-4448

Or complete and post this coupon:

Name Title

Company

Address

20 SURVEY

AMERICA'S THIRD CENTURY

Table 1: Gross world product

<table><thead><tr><th></th><th>Population (million)</th><th>Total gnp ($ billion)</th><th>Gnp per head ($)</th><th>Annual gnp growth 1960-73 (%)</th></tr></thead><tbody><tr><td>United States</td><td>215</td><td>1,500</td><td>7,000</td><td>4</td></tr><tr><td>Other industrial (west Europe, Japan etc)</td><td>550</td><td>2,300</td><td>From 3,300 (Britain) to 7,000</td><td>From 3 (Britain) to over 10</td></tr><tr><td>"Middle class" (communist Europe, Mediterranean, some fast developers)</td><td>550</td><td>850</td><td>1,550</td><td>5 to 10</td></tr><tr><td>Oil countries</td><td>150</td><td>200</td><td>From 300 (Nigeria) to over 10,000</td><td>Erratic</td></tr><tr><td>Poor countries</td><td>2,550</td><td>650</td><td>250</td><td>Generally around 5</td></tr><tr><td>Total</td><td>4,000</td><td>5,500</td><td>1,400</td><td>Around 5</td></tr></tbody></table>

quickly than that. But note, first, that even if only 5% annual growth were continued, then by 2045 today's $5½ trillion gwp would be over $175 trillion and by 2059 it would be over $350 trillion. My guess is that by 2059 world population might be around 15 billion, and people probably would not want a gwp much higher than that trebling for every human of America's present gnp per head. Note, second, from Table 1 the distribution of income with which the world starts. Two-thirds of mankind are still living at pre-1776 levels of under $300 a head. The other third of us have average incomes between five and 25 times as high. Trillion in this survey means, in the American language, one million million; and billion means a thousand million.

There is a temptation to preach to any world leader from Table 1 on the way in which he should determine to help distribute these many chickens for every pot. But what may stop them from being hatched?

American ecologists—who for some reason think that all the post-1776 charts which have risen with a whoosh will now drop with a whoosh—say growth is going to be stopped by a shortage of energy, food and raw materials (especially metals) plus high pollution and high birth rates. These seem, in fact, the five least likely forecasts for the next 20 years. Instead, the three biggest worries over the next three decades may be: a fall in the old people's death rate, a growth in mass-killing-power, and the danger that new knowledge will expand out of control. But consider the five red herrings first.

## Too much energy, no pollution

There are many thousand possible ways of releasing energy from storage in matter. They range from petty ways, like 25 BTUs per pound of matter by letting a pound of elastic bands untwist; through fairly petty ways, like 20,000 BTUs by burning a pound of petrol; through more sophisticated ways like

250m BTUs from the fission of the U-235 isotope in one pound of natural uranium; up to 260 thousand billion BTUs from the fusion to helium of a pound of hydrogen. Note that this last system, in which the waters of the oceans could serve as a limitless reservoir of fuel, would be over 10,000,000,000 times more effective per pound of matter than burning a pound of the Arabs' oil.

The trend since 1776 has been for new technology to drive on in sudden bursts towards the cleaner power sources nearer the top of the range. The present "energy crisis"—ie, the raising to 100 times its marginal cost of the asking-price for the inconvenient mineral slime that is temporarily considered the most transportable energy source—must make the next burst a bit faster. The likely speed of the coming glut in oil might best be gauged by the speed with which other sources were displaced when oil became cost-effective (oh, those poor interwar coalminers and horses), by the range of known future alternatives (unprecedented, including fusion, solar, geothermal, ocean-gradient, renewable-cellulose-into-clean-alcohol, a lot of others) and by the inefficiency with which all industrial countries have used fossil fuels (generation, storage and transmission mechanisms have long been archaic).

A big advantage is that each new energy source tends to be much less pollutant than the last one. A horse dragging a cart through an urban mile emits 600 grams of solid pollutant and 300 grams of liquid pollutant; a motor car emits only 6 grams of pollutant of any sort; a battery-driven car will emit ...? Pittsburgh and London peasoup fogs have largely disappeared with soft King Coal.

## The coming glut of food

The present world political system is that nearly all poor countries (under an annual $500 a head) rig their economic policies against their farmers—and then find that the universally-high elasticity

of supply in agriculture means that their countries are very short of food; while nearly all rich countries (over $1,000 a head) rig their economic policies in favour of their farmers—and then find that the universally-high elasticity of supply in agriculture saddles them with butter mountains. Over the next three decades most countries will move above the $1,000 a head mark, and we will suddenly find ourselves swimming in food gluts.

Shortages in food supply per head of local population are not nowadays well correlated with soil conditions. India-Pakistan-Bangladesh, the most tragic area, has more arable land than the United States, great ability for multiple cropping, a more bountiful water supply. More interestingly, the elasticity of food supply (ie, the usual % rise in supply in response to a % rise in real price) is not nowadays well correlated with social conditions.

In the five years after 1965 there were huge increases in wheat and rice yields in India-Pakistan (aided by the politicians' temporary emphasis on agriculture, by favourable terms of trade for petroleum-based fertilisers, by the green revolution, maybe by good weather), so that India temporarily became self-sufficient in agriculture. If these increases in yields had been continued for a century, the world would have been destroyed because its entire surface would have been covered by rice to a depth of three feet. But then Indian and Pakistani politicians turned to concentrate their budgets on more bellicose things, and higher energy prices moved the terms of trade against the farmers.

Agriculture in the rich countries is

Lots of corn

AMERICA'S THIRD CENTURY

SURVEY 27

would previously have required assemblies of machinery that fill a room.

One mineral probably is going to be short for a while, because countries have foolishly made it a free good: water.

## Population: the first worry

At last year's World Population Conference in Bucharest, the United Nations Secretariat presented a World Plan for Action (on which it had been working for years), calling for a reduction of world population growth to 1.7% a year by 1985. Nobody liked to point out that world population growth had probably fallen to 1.7% a year already.

The anti-baby hysteria of the 1960s was a classic of trendy innumeracy. It came after a fall in fertility rates had been made certain by the breakthrough in both birth control technology (the pill, etc) and in birth control attitudes (acceptance of abortion and of papal fallibility). By 1972 the World Bank was already reporting a decline in fertility in 56 of the 66 countries for which meaningful data on births are available; but those whose jobs depended on the continued organisation of the anti-baby World Population Year pressed on regardless. The result will now be a risk of emotion the other way. It is already fashionable to say that the present 4 billion world population will still be under 6 billion by the year 2000. This is probably wrong, because the next problem has not been foreseen.

Awkwardly, medicine is bound eventually to make a breakthrough in curing the main degenerative diseases, so that old people will start to exist longer. This will set the real population problem. As the death rate drops, mankind will probably have to move towards acceptance of euthanasia and even planned death (with a hell of a going-away party on your 85th birthday?).

My guess is that mankind will accept this smoothly. Witness how abortion was a word you could not mention to auntie 15 years ago, but today any woman could get an abortion in most cities by next weekend. It will not be at all surprising if there is in some quite near decade-and-a-half a similarly swift and equally civilised dash to acceptance of killing off old codgers (by then, like me) as there has been, in so short a twinkling, towards the more emotive act of killing unborn babies. Acceptance of planned death means that mankind must then surely alter all the lifestyles for all the ages of present individual existence as well.

But this had better be discussed later, after first pondering whether the real dangers of 1976-2076 will allow mankind lifestyles at all.

# Bombs for everybody?

Real needs: a plan for gwp, and a recognition that control over killing power will become dangerously more difficult, while control over people's brains will become dangerously (?) easier.

One thermonuclear warhead can now release more energy than all the gunpowder and TNT exploded in all the wars of history. So far nuclear weapons have been in the hands only of countries mature enough not to want to blow their neighbours up. But a raw young Massachusetts postgraduate student showed last year that anybody can now work out from published material how to make atomic bombs. All countries and some criminals will eventually be able to knit their own.

The leaders of more than half the world's 150 governments nowadays go to bed each night knowing that they might conceivably be executed after a violent coup d'état tomorrow. This does not make for a calm and unexcitable mind in the lower half of what will be the nuclear-trigger-minders' profession. Within recent memory only one black civilian African government has democratically handed power to an opposition after an election; that was Somalia, now a military dictatorship like the rest.

It is clear that the world's rich north must devise a new policy towards its poor south, and that the policy cannot be that of keeping troops in all poor countries to stop them blowing the world up (ie, cannot be colonialist). It had therefore better be economic, aimed at maximisation of gwp, and America had better set the pace. Some will say that maximisation of gwp will be pollutant (at a time when nine out of ten humans still lack sanitary disposal?) and disruptive (in a world where most of those on annual incomes under $200 are black or brown?). These stagnationists will also quote more and more black and brown dictators on their side.

The dictators who rule most poor countries may increasingly not want industrial development because their main interest, understandably, is to delay the day when they will be murdered during their successor's coup d'état. Industrialisation adds two new classes (an internationalised merchant class, an urban working class) to the two (the army and the political colleagues) who organise these 3 a.m. revolutions. The dictators of today's poor countries can best be regarded as like the monarchs of pre-industrial Europe, but dependent for succession on palace revolutions instead of on the (for pre-industrial countries) more convenient because more peaceful absurdity of primogeniture.

American liberals would be wise to suppose that many of these present dictators will be as progressive as the monarch under whom leadership of world economic advance began, George III.

## Plan for gwp

Nevertheless, the right geo-political-economic target for the next 30 years is definable. It should be to repeat what has luckily happened with Russia in the last 30 years. The Russians had an Idi-Amin-type leader in Stalin in 1945, and it then seemed rather likely that they would blow up the world. They now probably will not do so because there is a broad enough stratum of people in or near the decision-taking cadres in Russia who have a tolerably pleasant life, and do not intend to allow Mr Brezhnev or any immediate successor to incinerate it. As nuclear plants will proliferate, it will be advisable similarly to embourgeois the bottom half of the world in a devil of a hurry.

The best mechanism would be something like this. At present nearly all big industrial countries look forward to what their gnps may be a year ahead, and pump in extra spending power if there looks like being underdemand. The rich countries should start instead to look forward to what gwp may be a year ahead, and must often pump any desirable extra spending power initially into the hands of the poorer countries (extra SDRs created so they can expand their imports?). Their use of this would

Last days of Saigon

28 SURVEY

AMERICA'S THIRD CENTURY

Policeman's lot

then mop up unwanted unemployment
in the world's rich north.

The objective should be to raise ever
more countries to the sort of income
level where their governments will be
composed of people who think of them-
selves and their political opponents as
heading slowly towards comfortable
retirement, instead of racing to get their
brothers-in-law to the firing squad first.
Probably the best definition of the sort
of government that will not start nuclear
fighting is: any government where the
decision-makers assume that they per-
sonally will end their lives in the local
equivalent of Southern California, a
dacha outside Moscow, or the House
of Lords. This seems usual at gnps per
head over about $1,000 a year.

Crime prevention

The uppermost thought of members of
the Baader-Meinhof or Manson gangs,
of teenage paranoiacs and of professional
kidnappers is not that they are likely to
end their years in the House of Lords.
But both mass-killing-power and more
selective-killing-power are going to come
into their sorts of hands.

Some time there is likely to be a
demand from some small organisation
that society do something intolerable
or else a megadeath weapon will be
exploded in some big American city or
hurled in on the next world summit
meeting. Organised crime will increase
its present rather low technological
efficiency. Murder from a distance will
become much easier—such as by tele-
phoning a victim from anywhere and
exploding down the wire a device loud
enough to shatter his eardrum.

There will have to be redefinition of
the objectives of criminal justice, in ways
that may look gruesome. Just as one
frightening technology is bringing the

world to a stage where some criminals
will have an explosive power a million
times greater than strong lunatics have
ever had before, another frightening
technology is going to make it possible
to control their brains and minds and
moods. Electrodes planted in the brain
—and eventually able to switch
themselves on and off—are going to
be able to control irrational aggression;
while love-inducing, placidity-inducing,
apathy-inducing mood pills are going to
multiply by the million. It is almost
certain that governments will use these,
on the grounds that “some crimes are
diseases which can best be treated by
drug therapy.”

Outpatient treatment for those with
records of violence may involve a great
loss of privacy. Data on felons will
be readily available for tracing the
most likely criminal when there has
been a mugging in Central Park with a
left-hand downward blow at an angle of
77°, and for suggesting the right
medicament for him. Police cars hurry-
ing to an incident will have direct
access to these computerised data banks.
TV cameras already watch some high
crime streets in America; this will be
extended. Some clients of the probation
and parole services (which will be
merged) will have to carry electronic
identifying instruments around with
them so that there can be checks on
where they are. Frighteningly, tests have
shown that even closely-watched
laboratory rats become perturbed (and
more deviant) with loss of privacy; but
these will be outpatients who might blow
up the world.

It has become fashionable (chiefly
because of America's own protests
and determination to clip its CIA)
to portray the organisations and
institutions of the United States as un-

fitted to handle these horrible social
innovations that are likely to be forced
on mankind. My own view, as will
become apparent through the rest of
this survey, is that America will have a
better chance of lighting the way for-
ward, while keeping going the vital
continuing debate on civil liberties, than
anyone else. American government does
keep open most of the possible routes
of appeal, in Byron's phrase, from
tyranny to God.

Ages of man

America may also have the best chance
of tackling the next big problem,
because its experience of the problem is
most advanced. It has become clear that
there is something dreadfully wrong with
the handling of the present four ages
of man: childhood, adolescence, rat race
and retirement.

Citizens of most countries spend
the first and most formative 15 years of
their lives under the haphazard control
of untrained parents, in a grim lottery
according to whether they have drawn
a parent who rears a delinquent or a
paranoid or an integrated human being.

The first of two new horrors lately
added through good intentions is that
medical advances have pushed the open-
ing age of rebellious adolescence down
well below 15, while governments have
been pushing the age to which such kids
must be kept behind small desks above
15. The second is that for the next age-
group—from 15-24—the rich countries
under American leadership have made a
noble and massive and plainly disas-
trous experiment during this last half of
the American century, during 1925-75.

At the beginning of the half-century,

Wrong ages of man

AMERICA'S THIRD CENTURY

SURVEY 31

the great majority of the 15-24 age group were in paid work. Now very many in America and its imitators are in school on state-aided funds even after the age of 18. In an era when the social sciences are an exploding growth re creation, one might expect the last three decades' observed results of this ex periment to be constantly re-assessed. They are not assessed, because they are sociologically inconvenient.

The observed results in most rich coun-
tries are a huge rise in the crime rate
in the 12-24 age group (which now
commits most of all industrial countries'
most worrying crimes), a devastating
impact on family relationships especially
among the urban poor and the suburban
rich, an increased difficulty in handling
the problems of puberty and adolescence,
a flight by teenagers to pot, and the
assumption by employers that anybody
who leaves education before 23 belongs
to the dimmer half of society (so that
American business is being reorganised
to ensure that full-time jobs for
under-23s dry up). When efforts are
made to counter this by pushing still
more of the rejected minority (especially
black minority) into college, this (a)
causes the now-slightly-smaller but
still large minority left out to be regarded
as still-more-obviously-unemployable,
and (b) breeds a catastrophic failure rate
among the new undergraduates, so that
they congregate in separate groups which
defy integration while inferiority com-
plexes among them mount.

In the third age of man, after age 24,
males (and some women) have 40 years
of climbing up the seesaw of a career,
usually having least time to spend
with their children just when they should
be doing most to bring them up. Then at
the age of 65 they are suddenly stripped
of all status—and, in an inflationary age,
of a large part of their spending power—
until they die 10 or 15 years later, although
with the unpleasant prospect that this
period may soon be incontinently ex-
tended. When it is extended, I suspect
(see the preceding article) that man-
kind will be right to accept a system of
planned death.

A main task for the early years of
the 1976-2076 century will be radically
to reshape these wrong ages for human
lifestyles. There is no possibility that the
right new shape will be decided by the
liberal central governments of major
powers. Their efforts so far have greatly
worsened the mess. The best hopes will
lie in experiments by competing govern-
ments, or competing communities, within
some great society. And that, see the
next two articles, is another reason why
it will be a pity if world leadership passes
from America in present mid-torrent.

The dreamy monster

America has the right government system for running a free enterprise society; but the wrong one for running the one-third socialist society into which it has meandered

There are three key points about the way
in which the Americans rule themselves,
but many Americans have not yet
recognised the last two. To begin with
the old hat:

(1) The American system is to set up
lots of competing governments—both
at Washington (as between executive and
supreme court and congress and all those
task forces and a shifting establishment)
and at local level (where the overlapping
between the thousands of local authori-
ties is now being compounded by greater
overlapping within themselves as they
also proliferate advisory committees,
etc). This system has one huge advan-
tage. As Madison saw when he created
it, multigovernment saves America from
being ruled by a "tyrannous majority".
It also has several interesting side-
effects, and now one huge but correctable
disadvantage.

(2) The disadvantage is that this
dreamy monster of American multi-
government is the most inefficient body
for spending money on non-specific and
non-measured objectives that could be
conceived. As it now has more money
(about $¼ trillion) to spend annually on
non-specific and non-measured objec-
tives than the entire annual income of
the poorest half of people in the world,
this is awkward.

Any Cassandra would have been
accused of making a mortally-sick joke
if she had forecast what would happen
in the past quarter-century after the
two greatest surges in public expendi-
ture in world history. After America's
"defence shift" (ie, the diversion to
defence between 1948 and the mid-1950s
of 9% of America's huge and growing
gnp), the military establishment thus
expensively created managed to lose
an unnecessary war to slightly ridiculous
North Vietnam. Then after the "welfare
shift" (ie, the diversion between 1960
and the early 1970s of another 9% of
America's huge gnp to help, in particular,
the urban poor) life for the urban poor
became unmitigated hell. Crime in their
home areas soared, family structures
were destroyed, education and other
public services rotted, cheery if dirty
inner cities became neurotic and dirtier
inner cities. At a cost in social welfare
expenditure that rose from $24 billion
in 1950 to $242 billion in 1974 America
sprouted a welfare system that more
often crippled than aided its clients and
their neighbours.

(3) The Americans are likely to react to this failure of managerial government either mainly in one silly way or mainly in one sensible way. The silly way (at present being widely urged) is to "increase participation": ie, to set up ever more competing units of governments so that all the 5% of people who are interested in government as a hobby can eventually join some local coordinating committees to be coordinated by other coordinators. This would further strengthen America's admirable and already inviolable defences against being ruled by a tyrannous majority, but it would also mean that the volume and inefficiency of government spending of money would grow and grow.

The sensible reform is to reorganise
the system in favour of the 95% of
people who are interested in govern-
ments as consumers of their services, not
as would-be participatory producers of
them. This (see below) should involve
the transfer from bureaucratic to
marketplace mechanisms of many of
today's public services. A great deal
for the world will depend on which of
these two roads America takes. But
consider the other two points first.

So many governments

The first consequence of America's
possession of so many competing units
of government is that a marvellously
radical range of proposals for every
issue is very quickly mooted, but a
rather conservative range of proposals
is then rather slowly put into effect.

Garbage collection is not efficient

AMERICA'S THIRD CENTURY

SURVEY 35

has created what Americans call "New York's British disease".

## Little Britain in New York

"Welcome to your own country" (or something rudely similar), said three of the four prominent New York intellectuals whom I started to question on their city's plight. The pattern is uncosily familiar.

First, rent control predictably destroyed New York's housing market. Then the flight of the property-tax-paying white middle classes to federally-guaranteed or GI Joe mortgages in the suburbs brought their replacement in their now-rotting New York tenements by poor blacks and dark Hispanics. They helped to frighten some New York businesses away. Then the City of New York started during the "welfare shift" to spend on public sector activities a British-style proportion of the gross metropolitan product which the property-taxpayers' flight now made it impossible for it to collect. The first results of this "welfare shift" were that control over New York passed into the hands of the public-sector-trade-unions, who were able to crucify the city with huge pension-and-pay rises and impossibly low productivity. The Americans carry this to extremes. As witness:

* After twenty years' service New York city employees can and do move to another job, carrying an unconditional (and periodically-raised) lifetime pension based on their final year's earnings. Results, in a country where most males work for over 40 years: the city is effectively becoming committed to paying for two labour forces of 350,000 people each; in his twentieth year every subway worker puts in a lot of

How did it go bust?

overtime.

* Private enterprise carters in New York can make a profit collecting garbage if paid one-third the costs per ton that city garbage collectors show.

* Expenditure per pupil in New York City's schools was around $2,250 last year (not much less than total personal disposable income per head in Britain), while in church-affiliated schools in the Archdiocese of New York it was only about one-quarter of that. Reading standards in New York's city schools are lower than in diocesan schools.

* The mayor of New York told a conference this year that his bankrupt city has 160,000 employees working for social welfare programmes such as income maintenance, food stamps, medical and housing assistance. Since most welfare workers get salaries above the national average, and since the main observable statistical effect of welfare

programmes in New York City has been to increase the number of social workers there, it may, says one American scholar, "be hypothesised that most spending on social programmes designed to eliminate poverty in fact increases income inequality" in New York.

## Performance contracts

The economic reasons are now overwhelming for America to lead the capitalist world to total overhaul of its grossly inefficient system of public-sector spending. The logical solution must lie with subjecting more of that $500 billion a year now deployed by American politicians and bureaucrats to various sorts of competition through market mechanisms. Eventually, to quote John Diebold again, the output of every unit in the public sector will have to be assessed (eg, objective measures of "are the streets cleaner?") Then if any body tenders on a performance contract that it could provide greater output at less cost, the citizens should have a chance of engaging it on one of the many devisable systems which would ensure that this particular entrepreneur would have the finance to expand further only if he did improve performance.

The Americans pick the purveyors of the less essential two-thirds of their services and goods (like soapsuds) by competitive consumer choice, and the purveyors of the more essential one-third (like street-lighting) by casting political ballots. At present the mechanism for picking purveyors of soapsuds (free market competition plus mendacious advertising plus independent assessments by consumers' associations) is plainly working better than the mechanism (known as the great democratic process) for picking President Nixons and Mayor Beames. This is not a matter of personalities. Democratic

New York: abandoned through rent control

40 SURVEY

AMERICA'S THIRD CENTURY

Madonna won the west

written and spoken and visual messages with them. Businesses still do not understand how cheap the marginal cost of all this is going to be. Murray Turoff has calculated that in remote African villages today computer-conferencing-systems based on mini-computers could be made available for the price of a cheap truck.

Businesses also do not realise that productivity will rise most sharply in precisely the fields where for decades face-to-face contact has wrongly been supposed to be most important. Once people are used to it, computer-augmented confavision across continents will be a more sensible way of getting 20 people to make a decision than ordinary face-to-face meetings, because each individual with his terminal can ask questions from a computer and everybody can look jointly at a screen; because views can be entered on the printout at each person's own convenience instead of everybody having to speak hurriedly after somebody else has spoken; because a usual process will be to leave a printout and videotape for executives not at the conference to see, so they can enter their own views within a strict timetable before a final decision is taken; because votes and sometimes inputs can be anonymous, so that all options can be tabled without fears of offending superiors; and because there is a "whispering" capability all through computer conferences, which allows timely subgroup negotiations without other conferees being aware these are taking place. All these at the chairman's volition. Most businesses' filing systems will become very largely computerised. Data will be fed into the computers from on-going conferences, and can be drawn on by a man living anywhere. The dash to the "paperless office" will probably become a fetish in the 1980s. Most of the 80% of America's first class mail which consists of business items is likely to be sent digitally by 1990, so mail-

carrying will go very bust.

By the early 1980s a computer terminal should be as cheap as a colour TV set. It will quickly rise to become the principal business tool, and in a later surge will become a household mass durable. Household demand for computer terminals may initially be as an entertainment device. There are thousands of possible computer games, including detective games where you will try to discover something hidden in a computer and battlefield games where the computer will referee as you play Napoleon and beat Wellington at Waterloo, or you can say to the computer "anybody for bridge or a discussion group on such-and-such a subject?", and you will find partners and play on your screen, with the computer shuffling the cards. But household computer terminals will soon have more serious roles.

## Living by the screen

Telecommunications will alter society's patterns more profoundly than the previous and smaller transport revolutions of the railway and automobile have done. In tomorrow's scattered communities there will be telemedicare via multiphasic screening, remote physiological monitoring, remote supervision of work by paramedics, computer-assisted diagnosis, your own health record in a data bank; health care will become an efficient information-intensive business, instead of a hit-and-miss labour-intensive one.

Education will move along the same electronic, audiovisual, individualised road; if some fiend was inventing the worst milieu in which to teach an over-10-year-old, he would invent one of today's school classrooms. Shopping will involve intelligent use of widespread and competitive consumer information retrieval systems (a computerised "Which?", a telecomputerised Sears Roebuck), and instant electronic banking in place of cash

deals. The launching of new models of, say, an automobile will be easier because the firm on a distant continent will tele-advertise its model from prototype stage, and offer substantial discounts for orders placed immediately. Consumers who like the thing will push buttons on their computer terminals (thus automatically debiting their bank accounts post-datedly for the day of delivery a declining number of months hence); and that will be the figure for the first production run. This conquest of initial market uncertainty will make the smaller, imaginative businesses and "confederations of entrepreneurs" thrive.

Although all types of American non-metro areas have simultaneously started growing again since 1970 (except the very agricultural, the very military, or the very black), two types have grown most. First, the rich men's outer exurbia —eg, fishing villages filled on weekdays by fishermen and top bankers' wives, but on weekends also by the bankers themselves, because New York is too far for daddy to commute every day. Urban interests say this shows the nonmetro revival is just suburban supersprawl, but telecommuting patterns will be found more feasible now that the rich live furthest out (provided the rich like their wives). The other big non-metro growth has been that on coasts, lakes, reservoirs, hills (Upper Great Lakes, Sierra Nevada foothills). Many of these are recreation-based upper-middle-class retirement areas, including part-time job country now that more upper-middle-class people retire early (you can choose to retire from many federal jobs at 55). But they are signs that America still has a surprising number of nice and fairly-empty places to live.

The second reason why I think that the age of increasing urbanisation is over is that much of today's city and suburban lifestyle is now yesterday's hokum. Psychologists say that people catching

AMERICA'S THIRD CENTURY

SURVEY 43

up with happiness most usually need (a) social support systems from family or friends; (b) some sense of individual achievement; (c) some material well-being. The American-led century of 1876-1976 has provided one-third of mankind with material wellbeing, plus a greater width and equality of opportunity for individual achievement than is generally admitted, but now with some breakdown in the mechanisms feeding family life and friendships. To quote James Ramey: "In America our entire system of laws, customs, attitudes and human service delivery systems are set up to support the monogamous nuclear family, as though all Americans lived in such a family. But most Americans don't."

## Old order changeth

With both teenager and grandma being driven (by impulse or expulse) away from their own folk earlier, over 60% of Americans at the time of the 1970 census did not live in a nuclear family with earning dad and housekeeping mum and the kids; they were childless couples or post-childrearing couples or single people or lived in other sorts of household. Nearly one in four of American bridegrooms has been married before, so plural marriages (ie, consecutive polygamy) are more common in America than in many countries which permit polygamy. Among under 25s the old conventions are now rare (single-parent families are growing at three times the rate of two-parent families), and by the time today's 25-year-olds are 35, the 20-35 age group will be 57% of America's adult population.

About 43m Americans move home every year, yet political representation is tied to geographical districts. This skews political action absurdly in favour of the minority who do not move (politicians favour rent controls, environmental protection, political action for existing

interests but oppose new investment). It unfortunately makes it seem natural to Americans to gear new political action to the groups to which they belong more closely than they do to home town, but which are also, like Europe's immature nineteenth century nationalisms, selfish and antagonistic and jingoist (the dear old corporation, professional associations, trade unions, black power or women's lib). Americans will need instead to gear their political organisations to a situation where they now have the advantages (and some of the problems) of being as free as the birds in the air.

Increasing wealth and technology allow the inhabitants of rich countries to do something totally new in human history: namely, to live according to individual choice instead of in groups. They are therefore naturally throwing away a lot of the old tribal restraints, religious conventions, patterns of obedience to authority, the moods of obsequiousness that were necessary when they lived in groups.

And then, very awkwardly, people are finding that they can be happy only if they do live in groups. It is pointless to say (although devotees of one of the next trendy emotional spasms will say this) that society must therefore return to being ruled by the old conventions, religious restrictions, craven obedience to the convenience of the boss at work. Individuals will not accept these restrictions now they see that wealth and the birthcontrol pill and transport technology make them no longer necessary, and anyway it is cramping of individual freedom to suggest that they should. But the next 25 years will show whether America is going to lead the world to a totally new and exciting society. At this end of this survey let me suggest only briefly the signposts and dangers to watch on the way.

## Rules of community

The key requirement for civilisation is that every individual should be able to make a deliberate choice about which community he wants temporarily to join, with absolute freedom to move to search for variety and with much fuller information than now about the alternative lifestyles available. That will require lots of independent assessments in data banks about how happy people living in particular communities are.

As telecommunications will greatly increase mobility, it will probably be right to finance telecommunication facilities much as roads have been financed. Once satellites are tossed into space, the marginal costs of using them do not vary greatly with distance of

message sent, so it should become as cheap to telecommute daily to your office in New York from Tahiti as from next door.

While it is fun for the like-minded, perhaps four times a year, to get together, to dress outrageously alike and play around a little (as at a pop festival or a white-tie dinner), a few consecutive months of living only with the like-minded will usually become impossibly contentious except under the sort of strict discipline that is acceptable only to nature's nuns. That is why today's hippy or other artificial communities don't work. Most of their members are too like-mindedly earnest in searching for a lifestyle, while the other 99.9% of us don't think about what we want nearly enough.

On the whole, I therefore discount the fear that the new communities will turn into impossibly inbred cloisters of bankers in one village, fetish hippies in another—although dangers of bigger class-splits arise because the first telecommuters will be the affluent, who may therefore learn less about ordinary people than ever as they work in electronic isolation from the underprivileged. I am less worried by the argument that, after television has stopped us from making friends in our leisure time, so telecommuter terminals will stop social interaction at the workplace, and that all mechanisms for making friends will therefore stop. Small communities are generally matier, friends at the local telecommuter work centre will replace friends at the office (thus usefully eroding single-corporation ties). Americans will use telecommuting to make distant telefriends with whom they will play telebridge (and the data banks of America's third century will vora-ciously feed this business of computa-friend). One of the main reasons for movement into a particular community will be a choice of some particular friend-making leisure activity associated with it (whether golf or boating or music), but not too exclusively.

How far should the law allow (indeed, encourage) variations in moral restrictions from place to place? Early in America's second century of 1876-1976 there was an extraordinary attempt to impose upper-middle-class bourgeois morality on the lower classes in both North Europe and North America (with quite unnecessary laws against prostitution, gambling, alcohol, etc). Late in America's second century there has been an even more extraordinary attempt to impose upper-middle-class bourgeois immorality on the lower classes. The dash to the permissive society has everywhere been led by

There's room in the country

44 SURVEY

AMERICA'S THIRD CENTURY

Hardhats should resent softheads

upper-middle-class liberals, and has
everywhere had its most miserable
results for lower-middle-class conser-
vatives and the poor. It is the latter who
have suffered most from the breakdown
of old family structures and taboos, from
the de facto toleration of group violence,
from the habit of regarding muggers
and rapists as socially deprived kids
(which is an unattractive theory if a
gang of socially-deprived mugging rapists
is liable to come to live in your apart-
ment block). The hardhats have a right
to resent the softheads here.

A free man of the future must have an
individual choice between various com-
munities with sharply contrasting
lifestyles. It has been an advantage for
America that the existence of separate
states allows experiments with differing
laws, but state boundaries are an
anachronism. Decisions about com-
munity lifestyles will have to be made
much lower. The result in America's
third century will probably be a choice
between more puritan towns and middle-
of-the-road ex-urban telecommuter areas
with an interesting range of customs
(ranging on the right to groups of citizens
who will have hired some small Dutch
or Japanese multinational company
to run their local government on a
renewable performance contract, and
on the left to the participatory or the
hippy).

Shadows before

This range of choices will be important
as the world moves (a) through the stage
of psychedelic and mood-aferring drugs,
to the point where electronic stimulation
of the pleasure centres of the brain
becomes a rather easy technology (ie,
to a stage where the manufacture of
something which seems to most people
indistinguishable from happiness may
become artificially-creatable without any
hangover); and (b)—here is the horror

-where genetic engineering “advances”
far enough for us to be able to mould
special characteristics into babies and
to stimulate artificial intelligence in
human beings.

If the leading country in the world is
centrally-governed as these last push-
throughs are gradually made, then its
central decision about them is likely to
be either too restrictive or too permissive-
by-default. If it is too restrictive, grey
markets in artificial happiness and baby-
moulding techniques will loom up. In
the same way as unenforceable prohibi-
tion past a certain point probably
eventually increased alcoholism and
potsmoking, while robbing governments
of respect, so America must be careful not
to create Al Capones who bootleg genetic
engineering. Worryingly, the 1975 world
recession has caused a rush to train more
pre-medic students and even doctors of
chemistry than can possibly be em-
ployed; they might be the bootleg
geneticists. At the other extreme, if legal
controls over these approaching horrors
are too mushy, changes in the nature of
human beings may come about un-
checked.

There can have been no period in
history when it has been more crucial
that the world's leading country should
have lots of competing local govern-
ments, with a cool federal government
sitting on top to decide from gradual
experience which systems of adequate
control look like working and which
systems of overcontrol or no-control
don't. The same is true for the reform
that is now needed of life patterns. It
is obvious that a lot of new experiments
are needed to find how best to change
society's present mishandling of children,
adolescents (especially) and an increasing
number of old people.

Envoi

There are those who say that small-
town America cannot possibly lead the
world through these next few tumultuous
years. They argue that the good-neigh-
bourliness of American small towns,
with everybody knowing everybody
else, which the visiting foreigner still
finds as the most civilised living pattern
in the world, is the last harvest from the
winning of the west by the madonna of
the plains a hundred years ago. They
agree that those who fled the villages and
small towns in the nineteenth century,
hating what Karl Marx called “the
idiocy of rural life”, may thankfully use
the telecommuter revolution to flee back
again from the idiocy of American city
life. But they deny that Americans of
this post-urban age will be well-placed
to recreate the conditions whereby, to
quote William Irwin Thompson,

"mediaeval man dwelled in a village but
lived in Christendom".

They have two unflattering reasons.
First, sophisticated Americans are
running scared. Secondly, both simple
and psychotic Americans have too often
been dominated by religious liars. These
points are worrying.

At this year's World Future Society
assembly in Washington there were
some people wandering around in a sort
of robe from which dangled a con-
voluted cross. About half the audience
found nothing shocking when one of
them said from the platform:

Ecology is the first really moral science,
because it says "Either you believe this, or
you die."

After 2,000 years in which the great
ethical advances brought to many
societies by Christianity have been
intermittently reversed into ethical re-
treats when zealots have threatened
simple people with thunderbolts and
eternal rotting in hell unless they believe
even those parts of the Bible which every
educated man knows to be fairy stories
(most of them pinched from earlier
religions anyway), half an audience of
2,000 very clever people in the capital of
the world now laps up warnings from a
fanatical fop that a similar sad fate will
befall those who do not believe various
schedules of certain commodities'
elasticity of supply which any educated
economist knows to be innumerate
balderdash. At that moment I could see
the arguments of those who say that
America in its third century is as liable
to lead the world back to the ignorance
of the dark ages as into the knowledge-
intensive age before us.

And yet, in the end, the truth is that
in each of their half-a-dozen major
crises since their first, when they seemed
to have lost their revolution against the
British in Valley Forge, the United
States have done more wisely than any
sane man at the time could reasonably
forecast they would do.

There are three main questions. First,
will America continue to believe in
economic growth? Half the world will
remain hungry if it does not, and that
half-world may blow us up.

Second, should America believe in
participatory producers' democracy in
factory and politics, or in extended and
informed consumers' freedom in both?
Please God, it should believe in con-
sumers' freedom.

Third, does the star-spangled banner
still wave o'er the land of the free, and
the home of the brave? The stars glitter,
but no wise foreigner at this hour will
rely wholly on George Washington's
order of April, 1777: "Put none but
Americans on guard tonight."

October 15, 1974

Your Royal Highness:

Once again I would like to thank you
and Her Royal Highness for the kindness and
hospitality you have shown me during my
latest visit to Jordan. I spent a most
enjoyable evening in Your Highness' Guest
House; I ask that you pass along my special
thanks to all who helped make my stay so
comfortable.

I particularly appreciated the oppor-
tunity for valuable discussions with you
during the gracious breakfast you hosted
in my behalf. I believe my visit to Jordan
has further strengthened the long-standing
friendship between our two peoples, and has
brought us closer to a just peace in the
Middle East.

His Royal Highness
Hassan ibn Talal,
Crown Prince of the
Hashemite Kingdom of Jordan,
The Royal Palace,
Amman.

THE SECRETARY OF STATE
WASHINGTON

March 25, 1975

Your Royal Highness:

Once again, I would like to thank you
and Her Royal Highness for your gracious
reception during my recent visit to Amman.
I greatly appreciated the opportunity to
spend a few hours in the pleasant surround-
ings of Your Highness' Guest House. This
kindness was particularly welcome during a
difficult journey.

I particularly enjoyed the gracious
breakfast which you were good enough to
arrange, for it gave me an opportunity to
benefit both from your well-considered views
as well as your wit.

Warm regards,

His Royal Highness
Hassan ibn Talal,
Crown Prince of the
Hashemite Kingdom of Jordan,
Amman.

ANDREW ULYSSES HASSMAN
365 REINDOLLAR AVENUE
MARINA, CALIFORNIA 93933

16 January 1975

My dear Mr. Secretary:

How delightful it was to hear your comments
on Bill Moyer's Journal tonight. Your
optimism and confidence in the art of the
possible - the realities of international
politics, were thrilling to hear.

I merely wish I could convey in words just
how fortunate the United States and indeed
the world is to have the benefit of your
statesmanship.

MARK O. HATFIELD
OREGON

United States Senate

WASHINGTON, D.C.

May 19, 1976

My dear Mr. Secretary and Mrs. Kissinger:

Thank you so much for including Antoinette and me among your guests at the luncheon for President and Madame Giscard d'Estaing. We were truly honored to be there.

The company was delightful, the conversation stimulating.

We wish you both the best.

The Honorable and Mrs. Henry A. Kissinger
Office of the Secretary
Department of State
Washington, DC 20520

November 14, 1975

Dear Sam:

Thank you for your letter.

Your idea of refocusing the attention of the trust
fund on world education sounds interesting, and I
would like to see what I can do to help. Unfortunately,
my schedule is so full it will probably be difficult for
us to get together any time soon to talk about the
details. Rather than let this matter be ignored until I
can take the time personally, however, I have asked
John Reinhardt, my Assistant Secretary for Public
Affairs, to get in touch with you to see what should
be done.

In the meantime, I want you to know I appreciate
your thoughtfulness in sharing your idea with me.
I am looking forward to hearing more about it.

Professor Samuel P. Hayes,
6 East 43rd Street,
New York, New York.

The Campaign for Yale

October 29, 1975

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

Dear Henry:

An opportunity exists, I believe, to make a major break-
through in the financing of world affairs education - an
extremely serious problem with which you are already familiar.
This breakthrough would help many organizations, not just
FPA (from which I retired a year ago, by the way), and
would not require government funding. What it would require
would be a strong supporting statement by you, in person,
presumably reinforced by a couple of other top figures,
preferably at a small luncheon meeting in Washington which
you would call together. Could you consider doing this?

The opportunity exists in the form of a private foundation
in New York, with assets of $50 to $60 million. It currently
makes a wide variety of grants but is apparently free to do
whatever its small Board decides. The three trustees include
two octogenarians who were connected with the donors. The
third trustee is an officer of the bank handling the founda-
tion's funds. There are no professional staff with their own
axes to grind. And the dominant trustee showed his inter-
nationalism in 1920-21 by stumping the country with Ex-President
Taft, drumming up support for U.S. membership in the League
of Nations!

If this trustee were convinced of the importance, the Board
could decide to designate most or all of the foundation's
assets to world affairs education, and thus make a significant
and lasting contribution to public understanding of world
affairs. The contribution would be greatest if the foundation
broke with the policy of traditional foundations, which
emphasize the starting of new ventures, and devoted a major
share of its grants to the support of tested and successful
programs already receiving substantial but inadequate support
from other sources. It could use its grants as leverage to
reduce duplication and require cooperation among the many
organizations in the field.

Chairmen:
Richard F. Swenson, Jr., '40
win Miller, '31
Richard B. Ogilvie, '45

Perry Miller
of Executive Officer

uel P. Hayes, '34 Ph.D.
ctor, New York Region

st 43rd Street
York, New York 10017
687-6310

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The trustees must already be thinking about the foundation's long-term future. By setting a direction and assembling an appropriate new board of trustees or an advisory council, with international and educational distinction, they could have an impact far beyond what they are now achieving by scattering their shots.

This idea would take some detailed planning, of course. Would you have fifteen minutes to discuss the general idea with me, either in Washington (I'll be there on November 12, but could come another time if more convenient) or by telephone? I hope you will feel that this is worth doing.

P.S. As you will note from the letter-head, I'm still working in good causes!

cc: Winston Lord, Policy Planning Staff,
Department of State

SPH:bf

Myopia on Africa

[L.C.]

At a time of dramatic change in southern Africa, President Ford and Secretary Kissinger need an experienced hand—sensitive alike to the fears of white Africans and the long-delayed aspirations of black Africans—to advise them on United States policy. They have had such an adviser in Donald Easum, Assistant Secretary of State for African Affairs since last March, a man of long experience in several countries of the “new” Africa, who has been inexplicably and abruptly replaced.

His successor is Nathaniel Davis, who has concentrated during twenty-seven years in the Foreign Service on Soviet-bloc and Latin-American affairs. It will be on-the-job training for Mr. Davis, counseling on and administering policy for a complicated and volatile continent with which he has had no acquaintance.

Mr. Davis has an additional handicap: he was United States Ambassador to Chile before and during the military coup that overthrew a Marxist Government. African governments, many of them groping toward their own brand of socialism, are distrustful of a man accused—however unfairly—of some responsibility for the downfall of the socialist experiment in Chile.

This appointment is yet another example of official American insensitivity toward those parts of the world that do not at the moment seem to Washington of paramount importance or fit a narrow concept of America's global interests. The premise of American policy in southern Africa seems to have been that the white population in black African countries would remain dominant —and therefore that the only way that constructive change could come about would be through actions undertaken by them.

That premise was exploded last April when Portugal's army, weary of unwinnable wars in Africa, overthrew the authoritarian regime in Lisbon and moved promptly to grant independence to the African territories—a turn-around that also sealed the ultimate fate of Rhodesia's white Government.

United States policy toward Africa was myopic and self-defeating before the Portuguese switch. The tragedy—and the appointment of Mr. Davis illustrates it—is that even that political cataclysm has apparently failed to drive home both the bankruptcy and the peril of that policy.