## CHAPTER XIV

### THE INTERESTS OF THE UNITED STATES

The future of our hemisphere can be seen as an ex-
tension of time within which these engines of change will
compete with one another and with the status quo. Some will
combine while others remain single; some will unify, some will
divide; some will gain and others will lose; some will live, some
will die. As the competition proceeds, the winning combinations
at any given moment will determine the course of events; they
will set the purposes and priorities which govern the activities
of their communities in Latin America.

Our analysis suggests:

Radical structural change of revolutionary proportions
is virtually inevitable. Its coming has been delayed by the
peculiar tolerance and resiliency of the oligarchy. The longer
it is delayed the more pressure and force it is apt to amass.

Change may well come as the product of a deepening and
prolonged anarchy, the result of a chaotic but continuing oblitera-
tion of the social and political structures, eventually culminating
in a completely new order with new allocations and holders of
power. If this is the course change follows, it will almost
certainly be violent and bloody. It will also constitute a
serious threat to world peace by inviting the aggressive inter-
vention of world powers who see in chaos a way to power, those

whom Walt Rostow graphically called "the scavengers of the modernization process."

It could, on the other hand, come as a radical transformation, more or less consciously directed by some combination of the winning change engines. The end result would also be a new social and political order, but the need for violence might be minimized; the level and dimension of conflict better controlled. It is difficult to find in history incidents of radical change unattended by violence and sacrifice. Bloodshed almost seems to be required to produce the necessary heroes, symbols, myths and legends. The Mexican revolution took close to a million lives, and scarcely anyone today doubts the value of that violence. We cannot but hope, however, that if mankind were realistic and clever about the workings of change engines, we could devise revolution without such pain and waste.

The alternative confronting the United States, therefore, is not between the status quo and revolution. It is between revolution which is hostile to U.S. interests and revolution which is less so. A principal U.S. interest in Latin America must be the protection of U.S. security and that of other nations with which it is associated by treaty. The primary immediate threat to this interest is from foreign predators who today or in the recent past have shown aggressive will and capacity, most especially Cuba, the Soviet Union and China. Cuba's intentions have been made clear in word and deed. The Soviet Union believes its interest can be best promoted by peaceful operations in Latin America, but it may at any time feel obliged to take a more

aggressive stance because of events and its world interests.
China is still far away from Latin America and is preoccupied
with itself and Viet Nam, but it must be regarded as a potential
if not an actual threat. All three countries have, perhaps
cynically and selfishly, identified themselves with the revolution,
its instigation and support.

An immediate and primary objective of the United States,
therefore, is to protect the independence of the inevitable
revolution from the control of these powers which have proffered
it support, both moral and material.* To the extent which we fail
in this objective we are forced into either a sacrifice of vital
interests or into military action committing us to war against
the revolution. And war with the revolution cannot be won. This
is the awful lesson of Viet Nam. Furthermore, such a war would be
immoral since we have already recognized in the Alliance for
Progress and elsewhere that radical change of revolutionary pro-
portions is both good and necessary. In addition, it is quite
possible that the expenses of such a war would be inconsistent
with the urgent demand for domestic change and the general needs
of our economy.

The United States thus finds itself in competition with
Cuba, the Soviet Union and to a lesser degree with China in

* Soviet support of a revolution does not, of course, guarantee
that the outcome will be necessarily consistent with Soviet in-
terests and contrary to those of the United States. It is, how-
ever a sufficiently serious possibility to deserve attention.

establishing a constructive relationship with the forces of
radical change. The opponents of change ... the status quo,
the oligarchy ... in this event become as much the enemies of
the United States as they are of the revolution itself.

We are sadly behind in this competition. Long bemused
by the misconception that the conspiratorial activities of
communism lay at the base of the revolution we have lumped both
together, clumsily attacking both at once. Were the Soviet
threat to cease entirely tomorrow, we would continue to be con-
fronted by the inevitability of revolution in Latin America; and,
as things stand now, it will be an anti-American revolution.
This is an enormous tragedy given the fact that no government
has tried harder to promote the development of poor countries
than the United States.¹ It is a tragedy which can be cut short
of diaster, however, if we can but understand that what we bless
as "development" requires revolution to implement. Present
policies and procedures profoundly threaten the moral, political
and economic interests of the United States.

I

It is reasonable to predict that if present trends in
Latin America are not radically altered there will emerge in the
near future (5-20 years) two general combinations of engines of
change which will have the best opportunity of saving the revolu-
tion from the route of chaos.

The first combination is composed of radical Christian,
nationalist, revolutionary groups plus their numerous allies. In

this category belongs the increasingly militant organization of
priests and bishops committed to social action and change;
Christian Democratic parties; new, radical labor organizations,
particularly those in rural areas; and nationalist revolutionary
student groups. It is quite possible in some countries that
these groups will be associated, indirectly or directly, in secret
or in public, with armed bands in the countryside. The principal
strength which this combination represents is its purpose and
vision; its ideology and the motivation which it brings; its sense
of legitimacy and pride; its consciousness of independence and
dignity. To succeed this combined engine of change will need to
infiltrate, influence, gain the support or at least cope with the
hostility of the military, government bureaucracies and the new
managerial group in business. In this way the Christian-nationalist
engine of change may become gradually pervasive and capable of
producing radical transformation in a relatively controlled and
peaceful fashion.

The second engine of change most likely to succeed is
that composed of and related to large, integrated, multi-national
food production, processing and distribution companies. It is
strong where the first engine is weak and weak where the other is
strong. Its economic contributions will appeal to some in govern-
ment and business as well as to those employees and consumers who
receive its benefits; its organizing and stabilizing effects will
be seen as consistent with internal political objectives. Its
problems will come in assuring the groups comprising the first
engine that its purposes are consistent with theirs. For this

to transpire the purposes of both will have to be clear, mutuali-
ties of interest fully developed and new formulas for action
devised.

Both of these engines will encounter stiff opposition
from various elements in the status quo, including larger landowners,
some military and business groups, Communist Parties, and conserva-
tives of many varieties. It does not appear that the present form
of any particular government -- authoritarian, pseudo-democratic
or more or less genuinely democratic -- will itself affect the
outcome of the conflict. The conflict is essentially extra-
governmental and whatever the influence a local government may
bring to bear, it will not be a function of its form but rather of
the interests, power and organization of its own bureaucracy and
those who control it. It is wrong, for example, in Latin America
to identify automatically democracy with change and dictators with
rule of oligarchs. Frequently it is the conservative power holders
who use democracy as a means for maintaining the status quo while
the dictator woos the masses with promises of change. Indeed some
of the most progressive and generous social legislation in Latin
America was introduced by dictators as unsavory as Batista and
Trujillo.

If our predictions are correct, and if the chaotic way
to change can be avoided, the future of Latin America can be seen
in terms of continuing conflict at several different levels. There
will be tension within the two giant combined change engines them-
selves over questions of power, leadership, methods, purpose and
priorities. There will also be conflict between them on these

[10]

matters. Then there will be the most fundamental and serious cleavage between the two engines and the forces of the status quo itself.

It is doubtful that the United States government can substantially affect the final outcome of this revolutionary process. It certainly cannot stop it. Any effort to do so would only increase the already strong urge on the part of Latin Americans to break free from what are seen as humiliating relationships of the past. Indeed any real or suspected opposition to change on the part of the United States will only serve as the external pressure against which internal action, unity and strength can be organized and developed. It would also be the surest way to force engines of change to look for fuel and protection to Cuba and the Soviet Union, even though in many instances they would prefer not to do so. Although the ability of the United States to alter the revolution's ultimate outcome is strictly limited it can, as we have suggested, protect its independence from foreign predators and to some extent influence its course to protect other U.S. interests. For example, perhaps we can assist it so as to minimize the pain and waste of violence. Our ability to do this depends very much on our conception of our interests and our objectives. We have already stated a principal interest in preventing hostile incursions by Cuba, the Soviet Union and China. It is doubtful, however, whether this interest by itself is a sufficient objective of the United States in Latin America. Neither Cuba's efforts nor those of the Soviet Union have been so extensive or successful as to justify their being the sole

pinion of U.S. foreign policy and program. Indeed, it would seem
likely that if this were our only interest, we would fail in its
achievement.

II

The task of identifying interests has become particularly
difficult because of the decline of communism in Latin America.
Communist Party organizations have little power except in Chile;
they are no longer — if they ever were — engines of change and
they are not likely to become such. Furthermore, while the
Soviet Union certainly has the power to force its way into the
hemisphere, it is no longer the war-like threat which it was
before it withdrew its missiles from Cuba in 1962. The decline
or absence of our old enemy in the hemisphere has left us
strangely and suddenly bereft. We are up against the stark
necessity of defining anew for ourselves and others what our
purposes and priorities are; we are faced with the disconcerting
requirement to formulate our ideology, our vision of what is the
good community and a just world.

Some will say that we have done this *ad nauseam*. They
will point to the litany which has proceeded from every hemispheric
meeting for a hundred years defining our objectives as freedom,
democracy and self-determination. But what have these words meant?
How seriously can they be taken? Are they really what has been
important to us? The United States Minister in Guatemala in 1920,
as well as I am sure many other U.S. representatives in many
countries before and since, described Washington's policy as being

"to encourage constitutional government and free elections in Central America."² When one looks at the record of words and action, one cannot be surprised if either our sincerity, our effectiveness or our understanding and use of the English language are called into question. The fact is, however, that we have been able to linger with inexplicit or insincere goals because all concerned in the U.S. and Latin America understood our real objective to be protecting ourselves and our neighbors from Soviet power and control --- from the menace of communism. No matter how frequently we repeated that aid was necessary whether or not there were communists, no one really believed it; and it is probably not surprising to many that the demise of communism has brought with it a curtailment of foreign aid.

Not only was anti-communism understood as our objective, but also it was generally regarded as quite an acceptable one from several points of view. Communism has never been widely popular, identified as it has been with dictators and corruption as much as with social change. The neo-colonialism implicit in Castro's attempt to subvert Venezuela, Guevara's efforts in Bolivia and the Soviet Union's in Chile are inconsistent with the call for national independence. But more importantly as long as anti-communism was plainly the U.S. objective, its aid and assistance could be taken not as charitable gifts offered often with angelic condescension, but rather they could be seen as intimately connected to the self-interest of the United States. Our confusing and ambiguous moralization was excused because the truth behind it was evident, understandable and acceptable. We

did not want communism in Latin America any more than most Latin
Americans did.

Within the United States also anti-communism has been a
very useful objective; it was relatively simple and easy to accept.
There was a broad public consensus that communism was fundamentally
evil and dangerous. Politicians could campaign against it and
Congress could with ease and impunity vote large amounts to pro-
tect the "free world" from its grasp. Indeed it has been so satis-
factory as a target of effort that we have never had to be too
precise about it, nor have we had to concern ourselves with the
fact that it means quite different things to different people.

In its purest form it means nonproprietary communal
living. We have no real objection to that, although we do not
want to practice it ourselves. In this sense, however, it has a
strong basis in religious teaching and a lingering ideological
appeal. By some communism is seen as a variety of socialism, a
system in which a strong and authoritarian government acts some-
times ruthlessly for the benefit of the poor people. Many Latin
Americans, for example, who are anti-communist in an organizational
or political sense are not unsympathetic with it ideologically.
For them communism is understood to be simply the opposite of
capitalism, not the opposite of democracy or liberty or freedom.
Therefore, when we say we are anti-communist many understand us
to be saying in effect that we are pro-capitalist. This causes
difficulty and confusion when we know that for the vast majority
of Latin Americans capitalism means exploitation, imperialism and
abuse; absentee landlords, monopolies, exorbitant return on

investment and worse. Capitalism means, in short, nearly the
opposite of the economic system in the United States which while
non-statist is extremely responsive to the public consensus.³

To Americans, communism has meant an international
conspiracy emanating from Moscow and Peking which destroys the
independence of nations and the liberty and dignity of the in-
dividual. But this position becomes distorted when viewed from
Latin America as the following comment from a non-communist leader
of the revolutionary Left explains:

"In the United States, communism is seen as a
physical menace to the established way of life and the
institutions that have brought a considerable degree of
well-being to the vast majority of citizens.... In Latin
America, however, communism is seen as a means of change,
as a possible solution to an unsatisfactory way of life....
Negative anti-communism, often associated with blind
opposition to change, is habitually fostered by American
foreign policy ... (which has) often worked to the
advantage of communism.

"Democracy has many times been confused with
capitalism, as if the capitalist system were essential to
democracy. The fact is that the majority of the govern-
ments on our continent, wrongly called democratic, have
always been in the hands of financial oligarchs that have
practiced exploitation through capitalism. This democracy
has nothing to do with capitalism as it now exists in
Latin America."⁴

Our difficulty with respect to words and concepts such
as communism, capitalism, democracy and the like has had an odd
effect on our image. To some extent the struggle in Latin America
is one between materialism and ideology. As a result of a series
of misunderstandings, imprecisions, commitments to meaningless
jargon and ideological näivité, we find ourselves strangely identi-
fied with materialism, while Cuba, China, the Soviet Union and their
supporters are identified with spiritual ideology. At the same time
we seem to be unwittingly forcing the ideologists — the radical
Church, Christian Democrats, radicals in general, socialists,
Marxists, communists and revolutionary nationalists — to unite,
although of course they have very little on which to be united.⁵

Now that communism -- that is, the communist organization --
is declining as a real and present danger in Latin America it would
seem that we could realize the confusion caused by the word and
appreciate the fact that to at least some extent we are the ones
breathing air into its collapsing lungs. In my judgment we should
stop using the word entirely. We should call instances of Cuban
or Soviet subversion or aggression exactly that and not shroud
these in an ambiguous cover-all which has an appealing ring to
many who have no use for the imperialistic ambitions of either
Moscow or Havana. But if we are to drop communism from our
ideological rhetoric, then too, we must obviously drop anti-
communism. That will come hard because we will be forced to face
the fundamental contradiction in our objectives which the good
old call to anti-communism allowed us to avoid. This is the
contradiction between change and stability.

In the past we have been able to advocate a wide variety
of radical change while at the same time contributing a good deal
to sustaining the structure which has thwarted change. This we
have done, arguing the necessity of stability, the result of in-
stability being presumably a communist take-over. We have
preached freedom, democracy and self-determination, asserting that
both change and stability were preconditions to the fulfillment
of these political ideals. We have in effect said that we are in
favor of change to the extent that it does not de-stabilize the
existing structure of power. This is an absurdity, unless it is
seen as it has been as a ruse for maintaining the status quo in
the face of communist attacks. Thus because of communism we were
able to avoid facing the hard reality that in much of Latin
America democracy is a euphemism and will remain so until there is
the widespread political organization upon which democracy must
rest. Because of communism we were able, when speaking of self-
determination, to skirt the issue of who is "determining" what
for whom. And because of communism we have been conducting a
policy which has paid lip service to radical structural change
but has in fact sustained the status quo.

### III

With anti-communism gone as a guiding light, we are
left with the unveiled question of where we stand on the radical
change or revolution which is inevitable in Latin America. The
answer again requires a precise identification of our moral,
political and economic interests and a profound ideological

commitment to their fulfillment. With these well in hand, it
becomes possible for us to use our power and resources to promote
our interests.

Let us be clear and frank that the purpose of our policy
is just exactly that — to promote our own interests. An insidious
presumption has lurked behind many of our pronouncements in the
past which seems to imply that we have devised our policy for the
good of the world or for some other nation or community. This is
not only demeaning in the extreme to those whose good we are
theoretically self-ordained to insure; it is an approach which is
doomed to failure. Let us be forthright in declaring that neither
the corporations nor the government of the United States are
philanthropies; let us admit that they have no special hot line
to God; and that they will not know what is best for anyone out-
side of their lawful and legitimate jurisdictions. It must be
made plain and clear foreign objectives, policies and program of
the United States are designed purely and simply to promote the
self-interest of the American people. This is their sole justifi-
cation. Any other view rests on intolerable arrogance and pre-
tentiousness, or even worse, on self-deception. We must leave
it to the United Nations and other such multi-national agencies
(to which we give our strong support) to design objectives,
policies and programs to serve world interests.

It is important to emphasize this point because anyone
who has pondered the matter of change and development which we
are discussing here inevitably runs up against the awful questions:
Why change? For what purpose? By what right do we Americans set

out to change Latin America? I do not believe that the answer can
be: "We are trying to change Latin America for the good of the
Latin American people." I for one do not know what that "good" is.
The peasant in Veraguas is by many standards considerably happier
than some of my neighbors. He doesn't live as long; he is diseased
and hungry; but I am not prepared to say unalterably that he would
be better off in my neighbor's shoes.

* * * * *

There are three sides to our self-interest in causing
change in Veraguas and places like it: moral, political and
economic. Our moral interest lies first in the compulsion of
justice which requires the rich man to give to the poor not for
the benefit of the poor man's body but for the benefit of the rich
man's soul. This is the morality of St. Vincent de Paul who
ordered his disciples to deport themselves so that the poor "will
forgive you the bread you give them."⁶ It is the morality of the
Buddhist who says, "Thank you" to the beggar who receives his
offering and receives in return: "God bless you." We are helping
the poor of this world for our own moral health as a nation.

Secondly, our moral interest is tied to our vision of
the good community. This we laid down emphatically in what is
our one and only statement of national ideology which says that
all men -- not some but all -- have certain rights, including
life, liberty and the pursuit of happiness; that governments are
instituted to "secure these rights"; and that "Whenever any form
of government becomes destructive of these ends, it is the Right
of the People to alter or abolish it, and to institute new

Government..." We have thus said to all people everywhere that in our view they have certain rights. We have further implied that we will help them to secure those rights. It is also implicit, however, in this Declaration that other communities of people must define for themselves the meaning of those crucial words: life, liberty and the pursuit of happiness. We cannot presume to do that. But if these rights are in jeopardy so are our interests. If these rights are being violated and if we are asked to help, we are bound, according to our most solemn founding assertion, to comply as best we can. This we are committed to do again out of self-interest since a threat anywhere to the fundamental values upon which we rest as a nation is a threat to the nation. Needless to say, the questions of balance and judgment which the implementation or fulfillment of this interest entails would try even Solomon. But at this point we are simply laying out the foundation of interest upon which implementation must rest.

In terms of political interests, the chief concern of the United States must be the survival of its citizens; it is thus a chief interest to avoid wars which today more than ever threaten that survival. We, therefore, have an interest of the highest priority in the control of conflict which tends to lead to such wars.

Careful distinctions, however, need to be made between conflict which is legal and illegal, between conflict which is justified, moral and right and that which is not. There are many examples of conflicts which we regard as consistent with the highest human values: our own Revolution and Civil War, the Mexican

Revolution and, indeed, the Cuban Revolution until it betrayed
itself to Soviet domination. These conflicts and others like
them all had something in common: they arose from the efforts
of a particular community to resolve for itself long-standing
problems of justice and power. They were in this sense a neces-
sary part of the process by which nations have been formed the
world over. They were not the result of aggression by a foreign
power. They were thus conflicts totally different and distinct
from those, for example, which were initiated by Napoleon,
Hitler or Stalin. Although it may be hoped that less bloody and
wasteful methods of forming nations may be devised, it seems in-
tolerable to rule out this sort of internal and historically
noble conflict. Indeed if we were to attempt to do so, it
might retard the change which is necessary for development and
in the long run produce even higher and more dangerous levels
of violence.⁷

But nowadays the pure form of such conflict is rare.
We must, therefore, face the possibility that a predatory
foreigner is somewhere off the beach or across the border, seeking
to use the conflict to promote his own ends. Since this is a form
of aggression which could lead to a direct challenge to the safety
and security of the American people, it is in the interest of the
United States to insulate and protect internal, justified conflicts
from such predators. This protection will be neither acceptable
nor effective, however, unless the position of the United States
toward the parties in the conflict is clear and consistent with
our moral values or ideology as they apply in the situation.

Let us assume, for example, that an internal revolu-
tionary struggle breaks out in Guatemala. The revolutionaries
are composed of small guerrilla bands and students led by ardent
nationalists. Although some of the leaders have been trained in
Cuba, they insist that their purpose is a just Guatemalan community
and that they are not Cuban-controlled. The army, trained and
equipped by the United States, overthrows the constitutional
government in the name of restoring order. Right wing elements
in the army and in Guatemalan business take control of the
government. Civil war ensues. In this instance it is difficult
to contend that one party is more legitimate than the other,
given our promise in the Declaration of Independence. And yet
plainly one side has been greatly benefitted by U.S. assistance.
Our objective in this case would seem clear: to protect the
conflict from Cuban domination, particularly from Soviet domina-
tion through Cuba. We are handicapped in the pursuit of this
policy because of past assistance to the armed forces which tends
to force and make legitimate Cuban aid to the nationalists.
On the other hand some past assistance to the Guatemalan army
can be justified since the state, under the constitutional
government, required police forces to protect the population
from another form of conflict namely, that of the criminal and
the bandit. With the overthrow of the constitutional govern-
ment, however, U.S. military assistance becomes not only il-
legitimate but against our interests.

This brief rationale woven around a crude crisis
scenario leaves many questions unanswered:

Doesn't the army have a head start because of our help and, therefore, aren't the revolutionaries justified in seeking comparable outside help?

On the other hand, doesn't the army retain some of the legitimacy which it derived while it served a "constitutional regime?"

But then is "constitutional government" and what is called "democracy" in states like Guatemala different from rule by oligarchy through the power of the army? What is form and what is substance?

We must leave these questions hanging because they are out of the main focus of this book. Nevertheless they are perhaps helpful in identifying further political interests in those countries which have not yet had their revolution or which are in its throes:

It is our interest to minimize and restrict political, economic or military support and commitment to the status quo. When even the forms of constitutionality are discarded and a condition of active revolution occurs, then all such commitments and support should be stopped.

Likewise it is in our interest to develop and maintain contact with revolutionary groups, seeking to use our resources and influence to promote those which are most consistent with our other moral, political and economic interests. While it is in our general interest to minimize conflict, its necessity at times must be recognized. We must in short qualify ourselves as eligible to protect the independence of the revolution.

[10]

It thus becomes our interest to identify and actively
to assist those engines of change which are moving in a direction
consistent with our larger interests and which are embraced by
what we have called the winning combinations. We must recognize
that to a great extent these engines are today alienated from
us; they feel abandoned by our power and condemned by our
ideology. Much as they fear and resent foreign predators they
are in no mood to be protected from them by us.

It follows then that our interests call for the strict
limitation of U.S. military power and influence to the prevention
of the infiltration of predatory arms and force into Latin America.
Working through the Organization of American States or some other
regional body, the purpose of the military should be to seal off
and protect the process of change within each community without
discouraging the process.

In order to avoid the difficulty and danger inherent in
unilaterally distinguishing between internal lawlessness, legiti-
mate revolution and foreign aggression, military and police
training and assistance should be provided to individual states
only through regional groupings such as the OAS.

Lastly, it is urgently in our interest that avenues of
communication be open and clear between the United States and the
Soviet Union and Cuba, so that each may understand to the fullest
extent the purposes of the other. This is particularly important
with respect to Cuba. In the long run in spite of Castro's
vitriol it seems inevitable that the mutuality of interests between

Cuba and the United States will far outweigh the conflicts of
interests.

Apart from the crisis situations such as the one
hypothetically described in Guatemala, the United States would
seem to have a general interest in promoting the development of
true communities in Latin America. This is especially important
in the unorganized and highly vulnerable rural sectors. But it
is also true on the national and regional level. It is in our
interest to help to form communities, whether they be villages,
provinces or nations, to form and organize in such a way that
they can govern themselves, determine their values and goals
and build the institutions and organizations necessary for a
vigorous, responsive and lasting political system. This says
only that a community is better than a noncommunity. A lone
caboclo in the Amazonian bush, an isolated campesino in the
mountains of Veraguas, is powerless to exercise his will, enjoy
freedom or achieve dignity unless he is part of a community within
which he has influence. A sense of purpose is necessary to form
communities and, therefore, it follows that it is in the interest
of the United States in particular to promote purpose-making in-
stitutions, not in any sense with the objective of directing or
even influencing their selection of purposes, but only with the
objective of helping them to achieve the confidence and the
competence to develop their own purposes. We have seen repeatedly
that the matter of purpose -- and legitimacy -- is at the heart of
Latin America's difficulties.

Lastly, our economic interests are substantial in Latin

America. It receives one-fifth of our exports and accounts for one-third of our income from foreign investments. We are dependent strategically upon the region for oil, copper, bauxite and other minerals as well as for a wide variety of agricultural commodities. U.S. companies have $10 billion invested in Latin America. Their prosperity is important to the millions of Americans who own stock in these companies. Their survival is of interest to the United States government which must be concerned for the economic health of the nation, the strategic needs of the economy and the rights of American citizens.

American economic interests in Latin America are also of the utmost importance to the success of the revolutionary process in the hemisphere. Here, however, we strike an important ambiguity. American enterprise brings a long and familiar list of useful resources, products and techniques to Latin America. It pays big tax bills, employs millions of Latin Americans, invests large amounts of capital, pays good wages, provides relatively good working conditions, introduces needed training and technology, builds local markets and gains access to world markets, expands and diversifies local production, lowers imports and raises exports. In an economic sense we have played both a good and bad role: good in that there obviously have been direct benefits derived from our activities; bad in that our enterprise has perhaps hampered the development of Latin American economic initiative and independent organization. In a political sense the effect of American enterprise is equivocal and increasingly subject to question.

A good case can be made that American companies for the
most part have tended to enrich the oligarchs and solidify the
status quo. They have used their power to build a place for
themselves within the existing power structure. This, of course,
is natural. The American company looking for local partners,
investors or assistance quite naturally looks to those who are
in or near the seats of power. This comes under the heading of
conforming to the environment as one finds it. It also, of course,
means contributing to the maintenance of that environment. When
American companies depart from the conventional ways, as when,
for example, they encourage through fair dealing the growth of
labor unions or when they are able through efficiency or greater
resources to lower prices for the consumer, they are invariably
chastised by the status quo. The oligarchs seek to punish them
and even to exclude them. When the American firm tends to
threaten the existing structures, it encounters strong opposition
in the face of which it is apt to compromise. Anti-U.S. business
attitudes, therefore, in the past have not emanated so much from
the revolutionaries as from the oligarchs in company with their
kept "revolutionaries."

But this is changing. The strong and mutually sus-
taining link between American companies and Latin American
oligarchs are becoming a target for those who would change present
allocations of power. So it is that earlier we drew special
attention to those American enterprises which are entering more
fully into the revolutionary stream, either in remote rural
areas where the oligarchs are less watchful or in company with

the "new managers" who are themselves aware of the necessity of
radical change. The protection of American economic interests
in Latin America depends upon accentuation of this movement so
that the U.S. enterprise becomes increasingly allied with effective
and efficient local engines of change.

The question of control is another factor in whether or
not the list of economic benefits which U.S. companies bring is
also regarded as a political benefit. It is becoming increasingly
unacceptable to Latin Americans generally that large elements in
a national economy should be controlled by outsiders. American
companies realize this and are moving as quickly as they can to
acquire local partners. Thus it was, for example, that in Chile,
Kennecott was quick to accept 51% ownership of its El Teniente
mine by government. But this often is not so simple. IBEC has
had continuing difficulty obtaining Latin American partners who
will stay with an investment during the lean years; they can make
more money quicker doing other things. Furthermore, many U.S.
companies have acquired an oligarch for a local partner; they are
thus back with the earlier vulnerability. And then if majority
ownership in a joint venture rests with the Americans, the issue
of control remains substantially unresolved.

The matter is further complicated by the fact that many
Latin American governments are so eager to bring foreign investors
to their countries that they will offer a wide variety of incentives
without any very clear or explicit criteria about which forms of
foreign investment are in the national interest. Obviously there
are priorities but these are often blurred, sometimes in the interest

of local power holders. Even in Mexico where there are rules
against foreign ownership of businesses, it is not unusual to find
such ownership in fact existing. It is hard to expect the U.S.
investor to resist the attractive offerings of Latin American
governments, to turn down a good deal with a local oligarch, to
understand that dealing "normally" with the status quo is only
effective as long as the status quo is there.

If the revolution is inevitable then the protection of
American economic interests requires that U.S. companies perceive
their revolutionary role in all of its aspects. It requires that
they explore new formulas for sharing control, new ways of allocat-
ing their power, and new criteria for appraising their activities,
all of which must be consistent with the revolutionary process
itself. They cannot wait for governments to tell them what to do.
The governments of Latin America are not the governments of France,
England, Japan or the United States. "Getting along with government"
is not good enough. As we have seen, the revolution in most cases
is going on outside of and in spite of government; certainly it is
not a governmental process. The protection of American economic
interests then depends upon the effectiveness with which American
enterprise can move within the revolutionary circuit; the speed
with which it can create new designs and procedures for becoming
a part of the winning combination of engines of change.

The alternative to American enterprise devising these
new forms for itself is not, in most cases, letting present Latin
American governments do it for them. It is rather the introduction
of hostile governments, probably of a totalitarian variety, which

will introduce a dictatorial system of controls within which
there is little room for private enterprise or initiative. We
must not forget that the Soviet Union and China have shown that
within the space of one generation a backward, unstable and poor
nation can develop unsuspected technical and productive capabili-
ties and achieve a radical social and cultural transformation.
The question is can American enterprise, in its own interest and
in consort with Latin American managers, achieve a comparable
transformation? I believe that it can but not unless it conceives
of itself as being first and foremost an engine of change of
revolutionary proportions. What is more important it can do so
with more justice, economy and efficiency than the totalitarian
models.

It does not seem to me to be arrogant to describe our
interests so broadly. To do less is to underestimate the extent
of U.S. power and resources; to minimize our concern for peace and
to overlook our unequalled capacity to promote it. We might wish
to withdraw and concentrate on rebuilding our somewhat dilapidated
homeland but this is not in the cards. To do so would invite further
deterioration. The familiar insular metaphors come to mind.

In implementing our interests we should not expect or
desire thanks. Rather we should purvey gratitude, hoping but not
assuming that we may receive God's blessing. We are not engaged
in a popularity contest and should not be disheartened if we are
not loved. It is unnatural that we should be. The rich man on
the hill, however benign and beneficient he may be, is rarely
loved: he has to find his security in himself. Frequently,

indeed, anti-Americanism has been a useful device for the
construction of useful movements and organizations. The Mexican
nation is one example. The FEDELAC campesino federation in the
Dominican Republic is another. We can, however, hope that anti-
Americanism when it occurs serves a larger and more useful purpose
than the smashing of an embassy window or the assassination of an
American official.

CHAPTER XIV - BIBLIOGRAPHY

1. The tragedy is double faced: Not only have we cast ourselves in an adverse political posture but even economically we have failed to achieve our goals. In Latin America generally, gross national product, has grown by a smaller percentage in each five-year period from 1950 to 1965.

2. Francisco Garcia Calderon, "Dictatorship and Democracy in Latin America," *Foreign Affairs*, April 1925, p. 469.

3. See Adolf A. Berle, *Power Without Property*.

4. Emilio Maspero, *Revolution, Religion and Reform*, William V. D'Antonio and Frederick B. Pike, ed.; Frederick A. Praeger, New York and Washington, 1964, pp. 172-173.

5. See George C. Lodge, "Revolution in Latin America," *Foreign Affairs*, January 1966, pp. 189-191.

6. Eric Hoffer, *The Ordeal of Change*, Harper and Row, 1952, p. 12.

7. Increasingly the Church in Latin America is speaking of those exceptions when violence becomes necessary to overthrow in-tolerable structures. "We cannot exclude the possibility of some specific situation in which violence against the estab-lished authority may be morally justified," writes Bishop Marcos McGrath in America ("Development for Peace," April 27, 1968). "History provides many such situations that were approved by the Christian conscience...I think it is safe to say that most Christians agreed in conscience with the armed opposition to the Batista regime...."

CHAPTER XV

A COMMITMENT TO CHANGE

"Revolution is a mettlesome horse. One must either
ride it or be trampled to death by it. The Hapsburg
Monarchy and the Czardom have both been trampled to death
within the last half century. But how did a revolutionary-
minded Russian acrobat manage subsequently to vault into
the saddle? He found the saddle vacant; so, by the date
at which the present Russian rider lodged himself there,
the original American rider must have dismounted. Can
the United States recapture her revolutionary birthright?
President Kennedy has proclaimed that as his ambition
for her. Is the United States going to take the leap,
or is she going to stall? Her destiny hangs on her choice;
for to linger dismounted in the arena is to court death —
especially in our day, when the world arena is rapidly
contracting, so that the trampling horse is thundering
round it in ever-narrowing circles."¹

Arnold Toynbee

Those who saw it will never forget it. The fresh snow
shone bright in the Capitol plaza. The January skies were clear
and blue. The new President stood without coat or hat, his voice
ringing in the frosty air: "Let the word go forth from this time

and place, to friend and foe alike, that the torch has been passed to a new generation of Americans -- born in this century, tempered by war, disciplined by a hard and bitter peace, proud of our ancient heritage." The word of John F. Kennedy did indeed go forth and was heard by millions in Latin America who saw in this man a commitment to change and who believed. "To our sister republics south of our border," the President said, "we offer a special pledge -- to convert our good words into good deeds -- in a new alliance for progress to assist free men and free governments in casting off the chains of poverty."

A month later on February 16, 1961, Adolf A. Berle, whom Kennedy had appointed to lead a Latin American task force, defined the U.S. interest as the development of policies and programs which would channel the revolution now going on in Latin America in the proper direction and prevent it from being taken over by the Sino-Soviet bloc.² Richard Goodwin, the President's special advisor on Latin America, called together representatives from all the agencies concerned with Latin America as well as distinguished Latin Americans who were in Washington, and sought their advice. His memorandum to the President began: "Latin America is in a state of crisis. Deep-running currents are bringing about great changes in the economic and social structure. These changes cannot and should not be stopped for they stem from needs which, in the present situation of Latin America, permit no delay." The memorandum recognized that the responsibility for change was up to Latin Americans but that the U.S. could help to bring it about. It also acknowledged that "vigorous state action" was necessary to "overcome the resistance of private groups."³

So it was that on March 13 the Latin American diplomatic corps assembled in the East Room of the White House to hear the young leader of a seemingly awakened United States call "on all the people of the hemisphere to join in a new Alliance for Progress -- Alianza para Progreso -- a vast cooperative effort, unparalleled in magnitude and nobility of purpose, to satisfy the basic needs of the American people for homes, work and land, health and schools -- techo, trabajo y tierra, salud y escuela."

"If the countries of Latin America are ready to do their part ... then I believe the United States, for its part, should help provide resources of a scope and magnitude sufficient to make this bold development plan a success."

The room was alive with excitement as the President concluded: "Let us once again transform the American continent into a vast crucible of revolutionary ideas and efforts -- a tribute to the power of the creative energies of free men and women -- an example to all the world that liberty and progress walk hand in hand."⁴

The euphoria was palpable. But within a month cold reality had set in. Bombers of Cuban-exile Brigade Number 2506 were striking Havana and Santiago and the landings had begun at the Bay of Pigs. A few days later Castro proclaimed his greatest victory; the U.S. was humiliated; and the Alliance sullied by the suspicion that its existence depended upon the threat of Castro.

But the gleam soon returned largely because of President Kennedy's forthright admission of error. On August 5, 1961 at the request of the U.S. the OAS convened an extraordinary meeting of

[10]

the Inter-American Economic and Social Council at the seaside
resort of Punta del Este in Uruguay. There was much talk of
the necessity of national planning and Latin American government
officials were glad to see that their U.S. counterparts were no
longer sensitive to the notion of enlarged governmental action as
had been their Republican predecessors. A group of experts was
formed to review national development plans. Che Guevara was there
in green fatigue uniform claiming that the Alliance was nothing but
a reaction to the Cuban Revolution, "a device to domesticate the
peoples of the hemisphere to the orders of imperialism." His
chilling prophecy rang in the delegates' ears: "The Cordillera
of the Andes will be the Sierra Maestra of America."⁵

U.S. Secretary of the Treasury Douglas Dillon pledged
the government of the United States to contribute more than $1
billion a year to the grand cause, adding that Latin America
could expect another $20 billion of foreign private investment
in the next decade. He declared that the purpose of it all was
clear: that the U.S. recognized this was a revolutionary task
and that we are no strangers to revolution.⁶

The Charter of Punta del Este committed the nations of
the hemisphere to 12 radical objectives ranging from redistribution
of national income and comprehensive land reform to expanded edu-
cation, housing and health services. Through it all ran the
strong initiative of the United States that reforms required
profound political, social and economic change.

But the Alliance also had the strong support, indeed
was in many ways inspired by, Latin American revolutionaries,

particularly Eduardo Frei Montalva, President of Chile. For him its promise lay in two factors: "First, it established principles for hemispheric cooperation with a clear ideological orientation expressed by its forthright support for a democratic revolution in Latin America; second, it represented a change in the hitherto prevalent concept of financial and economic assistance given by the United States." It implied a cooperative relationship between the donor and recipient nations.⁷ For Latin Americans like Frei the most significant impact of the Alliance was that for the first time the United States supported revolutionary change. Through inadvertence and design, however, the United States permitted other priorities to displace change on the scale of importance. In particular it failed to confront or to dispose of the contradiction implicit on commitment to change and to stability.

By April of 1967 the dream had failed but the Presidents of the hemisphere met again at Punta del Este to attempt its renewal. This time the United States raised its pledge to $1.3 billion a year from 1967 to 1971. As will be seen from the table below, the bulk of these funds were to come in the form of loans, causing increasing resentment on the part of Latin Americans who were feeling the increasing weight of debt.

It is quite apparent that as 1970 approaches the glorious vision of the Alliance for Progress is blurred and pitted. Surrounded and embittered by mutual suspicion and recrimination, it has failed to produce the change it sought. The unique

U. S. Economic Aid to Latin America
(millions of dollars)

| | 1969 (est.) | 1968 | 1967 |
|:---|---:|---:|---:|
| Aid loans and grants | $270 | $ 527 | $ 545 |
| Export-import bank loans | 200 | 230 | 469 |
| Food for Peace | 180 | 223 | 87 |
| Social Progress Trust Fund* | | 2 | 2 |
| Other U.S. economic aid | 25 | 25 | 23 |
| U.S. contribution to IADB | 300 | 300 | 250 |
| **TOTALS** | **$975** | **$1,308** | **$2,357** |

*Long-term, low interest funds administered by the Inter-American Development Bank.

Source: New York Times, August 1 and September 22, 1968.

dedication of the Alliance to radical change, to revolution, has
been all but smothered. With it has gone the ideological initia-
tive which the United States had seized in 1961.⁸

A serious crisis of confidence exists. Most recently the
House of Representatives reduced the foreign aid budget for Latin
America from the $625 million requested for fiscal 1969 to $270
million, by far the lowest level since the Alliance began. Galo
Plazo Lasso, Secretary General of the Organization of American
States, and two of his senior aides have questioned the "willingness
of the United States to meet its commitments."⁹

Despite the consistency of the objectives of the Alliance
with United States interests as we set them forth in the previous
chapter, it has failed to fulfill or to promote them effectively.

It is time to do something different. Before setting a new
course, however, let us review briefly why and how the Alliance
has failed.

In commenting on the Alliance it is easy for all of us
to succumb to what Albert Hirschman calls *fracasomania* -- "the
urge to proclaim as failure a new undertaking as soon as it is
launched, and before it could possibly yield its intended
benefits." Americans particularly are given to expecting quick
solutions to knotty problems and to cry failure at anything less.
Having this frailty in mind what can we say on the credit side
for the Alliance?

It has unquestionably started a trend of thinking, a
debate perhaps, in the direction of radical change. Vital issues
are being talked about more than before; considerably reform
legislation has been passed; some programs have been begun.
Since 1960 tax revenues have increased some 25%; inflation in
some countries has been restrained; university enrollment in-
creased by 80% and high school enrollment by 110%. The $7
billion of U.S. aid since 1960 has been matched by some $101
billion of Latin American resources. Roads have been laid,
school houses and hospitals built, housing constructed, diseases
cured, food distributed, technical assistance rendered, teachers
trained, and books dispensed. Financial assistance, incentives
and risk guarantees have aided the development of local and U.S.
enterprise in a general way. A substantial portion of AID loans
in this category have been made to banks and other intermediate
credit institutions for sub-lending to business firms, farmers

and others. This is supposed to be "seed" capital. Considerable
loan money has gone for urban housing in a losing effort to keep
up with the flow of people from the countryside to the cities.
Small amounts of funds have gone to engines of change as we have
defined them: the American Institute for Free Labor Development
has channeled money into trade unions, sometimes with a change
effect; the International Development Foundation with AID support
is assisting peasant organizations in Peru, Guatemala and elsewhere;
some change-oriented industries, cooperatives and credit unions
have received help, and some American universities, notably
Harvard, Stanford and Michigan State have been supported to train
new managerial elites. The bulk of U.S. AID funds, however, has
been distributed according to the philosophy implicit in the
Department of State's Year End Review for 1967:

An almost endless pageant of roads, dams, in-
dustrial and commercial buildings, schools, coloniza-
tion projects, power plants and irrigation systems are
eloquent reminders that people bent on self-improvement
are no longer thwarted by handicaps.

A pre-requisite for socio-economic integration
is generally conceded to be the construction of
physical infrastructure works. Hence the drive to
speed the construction that makes possible a better
working partnership of the Alliance nations.

In the first five years of the Alliance, according to
the Department of State, Latin American nations invested $91
billion "toward their own accelerated development." U.S. support

amounted to more than $6.5 billion. Another $1.1 billion came
from Europe; and $2.03 billion from international lending agencies.¹²

Although the policy of the Alliance was to have been
inter-American from the beginning, by default and by design the
United States has taken charge. U.S. domination of the effort has
been only slightly diluted by the Inter-American Committee of the
Alliance for Progress (CIAP). CIAP was formed by the Inter-American
Economic and Social Council in 1963 at the recommendation of former
Presidents Lleras of Colombia and Kubitschek of Brazil to provide
for greater Latin American direction and control of the Alliance.
The United States was given a permanent place on the committee
with six other members representing regional groupings of Latin
American nations. It was stipulated that "a distinguished Latin
American" was to be chairman of the committee. Carlos Sanz de
Santamaría, former finance minister of Colombia, was selected for
the post. CIAP was to be the executive committee of the Alliance
for Progress. Other agencies concerned with Latin American develop-
ment were to advise it. These included the Inter-American Develop-
ment Bank, the panel of nine experts ("the nine wise men") of the
Inter-American Economic and Social Council and the United Nations
Economic Commission for Latin America. The Committee was to
recommend priorities for the allocation of development funds, but
it was not given power to disburse funds. This power remained in
the hands of the lender, principally the United States government.

CIAP has done well so far, producing valuable country
studies, identifying major development problems and recommending
solutions. It has also led discussions with the Development

Assistance Committee of the Organization for Economic Cooperation and Development (OECD) in an effort to increase European, Canadian and Japanese participation in Latin American development. OECD grants and loans amounted to about $100 million annually. Its effectiveness has remained limited, however, by the dominance of the United States, which in April of 1966 provoked the resignation of the nine wise men. The experts complained that bilateral relations between the United States and Latin American governments had replaced an original idea of the Alliance.

CIAP has not been a complete success, but it stands as the best effort so far to make the Alliance the partnership it was supposed to be. Its achievements are a tribute to the distinguished and progressive Latin Americans and North Americans who have composed it.

In spite of the dedication and diligent effort of some of the hemispheres' noblest and ablest men, the results of the Alliance have been sadly disappointing. This we have seen in the course of this book. The revolution which it sought has not occurred; and the revolution which is taking place is proceeding outside and in many ways in spite of its embrace. Indeed on balance one cannot avoid the disturbing conclusion that after the columns are added the total effect of the Alliance has been to solidify the status quo, to entrench the oligarchs, to heighten the obstacles to change.

The reasons are informative:

First, the Alliance immediately confronted the combined opposition of the oligarchs and the communists, who for different

reasons sought the same end. Governments which might have sought
to implement its provisions were thus immediately discouraged
from doing so by the threat of reactionary force on the right and
violence from the left. Other governments lacked even the desire
for change, but willingly accepted the assistance offered. They
made the appropriate pledges but used the funds to maintain
stability and retard the revolution, incidentally corrupting
themselves in the process. Their arguments were principally that
revolution would invite communism and threaten foreign investment.
They thus successfully appealed to the contradiction in U.S.
purpose between stability and change. Eduardo Frei, President
of Chile, wrote that he thought what was lacking was a clear
ideological direction and determination on the part of political
leaders to bring about change. He observed that many Latin
American governments have used the Alliance as a bargaining lever
to get more U.S. aid actually to maintain the status quo; and that
these governments nominally committed themselves to internal
reforms which they later allowed to lie moribund or to be used for
the benefit of those in power.¹³

As a result, the Alliance has found itself generally
allied with the forces of the status quo and not with the engines
of change. The Panamanian government was loathe to allow AID
money to go to Bishop McGrath's project in Veraguas Province --
it was too radical, its people regarded it as a "hotbed of
Christian Democracy." In general, little AID money fuels the
engines of change of the radical Church whether they be in Brazil,
Bolivia or the Dominican Republic. Consistent as these groups are

with the aims of the Alliance, they are clearly in conflict with
the ruling status quo.

Other disillusioned Latin American proponents of the
Alliance have come to see it as a monstrous diversion, forged by
governments to exert pressure on themselves. Having urged social
change, they can say that the will to do it was present but the
obstacles too great.

Implicit in the procedures foreseen by the Alliance is
the notion that experts, technicians and government bureaucrats
have the capacity for revolution. They don't, of course; even if
they did, they would hardly be a match for the skill and force of
the Tolerant Oligarchy.

The second reason for disappointment with the Alliance
relates to the first but rests fundamentally on the failure of
the United States and its officials to understand or to accept
the priority of the Alliance's ideological commitment. We were
somehow unable or unwilling to mean what we said. Our predilection
for pragmatism, taking the path of least resistance, overcame the
flame of purpose which President Kennedy had sought to ignite.
When the teeth of our commitment to the Alliance were felt, we were
unprepared to bite.

AID objectives and programs in Latin America are tied
to the policies and capabilities of local governments. These are
rarely efficient engines of change and as we have seen are generally
unwilling to support those which are. AID, therefore, is hobbled
in its pursuit of change.

In Guatemala in 1966, for example, both the government

and the American embassy had finally come to realize that rural
change -- a sharp increase in peasant motivation and organization --
was a significant national requirement. The guerrillas were
recognized as reflecting a deep-seated and radical political prob-
lem rather than being just another bunch of bandits. So it was
that in that year the AID allocation for rural development was
raised from a negligible amount to $500,000. The Ministry of
Agriculture received most of this, spending it on jeeps, office
equipment and tractors for its Agrarian Reform Institute. An
additional $75,000 was allocated by the Ministry for "special
projects," community centers, water systems and the like, mostly
in rural municipalities. The remainder was used for training
government workers for rural activity with a small amount left
to support the activities of the International Development Founda-
tions, one of the very few U.S. organizations which is skilled and
experienced in motivating and organizing peasants. We do not need
to list again the familiar reasons why all but the last and
smallest of these expenditures were irrelevant to our basic ob-
jective. The fact is that they were.

The case of Panama between 1963 and 1968 is comparable.
There, too, the programs of government and AID, except in the most
superficial sense, failed to fulfill the aims of the Alliance.
They were not aimed primarily at structural change; they were
heavily concentrated in Panama City; they largely ignored the
rural part of the country; they aimed at gathering political
support for the regime in power; they became tainted by corruption.

The aims of the United States as seen in the short run by the
Embassy and the AID mission were not apparently inconsistent
with those of the regime. Primarily concerned with a stable
environment in the immediate vicinity the U.S. felt the con-
centration of funds in the city was justified even though it
was quite apparent that in the long run the urban problem was a
rural one -- one new house was being constructed for every five
rural immigrants. And "getting along with the Panamanians" was
given a clearly higher priority than achieving the purposes of
the Alliance. Our AID program in Panama has thus amounted to a
series of unrelated "projects": housing, water and sewage, in
Panama City; urban savings and loan associations; culverts and
bridges; a sea wall; enlarging the highway from Panama City to
Tocumen Airport; and scattered building efforts throughout the
country which have had little or no connection with existing or
potential engines of change. This is not meant as any special
criticism of U.S. or Panamanian officials involved. They are
both parts of systems which have precluded anything different.

To penetrate this dilemma further we must reconsider
the matter of interests and objectives. We shall do so,
remembering the general U.S. interests set out in the previous
chapter, within the specific context of Veraguas Province which
we now know reasonably well.

II

There is the argument that whatever the objectives of
the United States, our policies and actions in a foreign country

must be controlled by the government in power at any particular time. In a sense this argument is obviously right; it cannot be our purpose to violate the sovereignty of another country. In another sense it is wrong; it surely cannot be our purpose to feed corruption or to perpetuate that which we feel is against our national interest. Too often the above argument is used to justify expenditures of funds for purposes which are irrelevant not only to our national objectives but even in a real sense to those of the country itself, purposes which are purely bureaucratic in nature, formulated by a local governmental administrative unit or interest group which, as we have seen, may have little understanding for or capacity to deal with the problems at hand.

Our AID Mission thus tends to become an extension of the local governmental administration, in a sense nourishing its difficulties and sometimes delaying the establishment of more effective political structures. It is too easy to blame this situation on the local government. We have ourselves to blame if we do not raise the issue to an appropriately high level of decision. To do so, of course, we must ourselves have appropriate objectives, priorities, criteria and commitment.

Partly because this dilemma is recognized, our foreign aid is frequently concentrated on material and technical projects which are administratively clean and politically safe. The fact that these projects are sometimes irrelevant to the principal problems is not likely to be considered. It must be remembered that AID's predecessor agencies were firmly committed to the doctrine that they were in business to render technical assistance. In a very positive fashion they shunned what was thought to be "political." With the Alliance for Progress and the attempt to merge AID with the Foreign Service and the structure of our

Embassies abroad this aversion to political considerations was somewhat diluted. But old notions die hard. That it is a preposterous pretense to separate the injection of millions of dollars in what may be called a technical fashion from its political effects is still glossed over in many instances. For example, a road, a bridge, or a hydroelectric station is too often considered to be in and of itself a good thing. Frequently the priority is not fixed on whether the road or the bridge is located properly to bring more of the population into the national political and market system, or whether the hydroelectric station and its output are so arranged as to bring power and light more cheaply to more people.

The matter of school houses raises the same issue but adds another dimension, namely that of transferring our own national experience to environments in which it is irrelevant. The American public school system is regarded as part of the backbone of American democracy. We presume, therefore, that broad public education is in and of itself a good thing and a harbinger of democracy. We seem to forget the unique levels of motivation and opportunities for the use of education which have always characterized the United States. We seem to forget, in short, that we stand almost alone in the world in that we have never known the crippling and deadening effects of feudalism. For education to bring democracy, it must be carefully combined and mixed with motivational elements.

In Veraguas, for example, the problem of education is substantially irrelevant to the number of school houses; it is

rooted in the fact that the campesino sees no special purpose in
having his child in school on time, regularly, year in and year
out. He does not visualize for his child a life that is sub-
stantially different from his own. When, however, 25 campesinos
joined together for that first cooperative effort in San Francisco
and when they discovered that the only person in the village who
could keep the small accounts was the local priest, they recognized
in a remarkably short time the need for education. As never before,
they had their children in school on time and over time. They
built an extension to the school house themselves, and would in
fact have built the whole thing if one had not been there. They
scoured the countryside to insure that their village had the best
school teacher and they even started to consider appropriate
changes in the school's curriculum to make it more relevant to
the children's needs. It would not be excessive to suggest that
CEPAS has been more of a stimulant to education in Veraguas than
has the school system.

Another problem which arises from the imprecision of
our objectives is that we tend to confuse the world about the
purposes of our bountiful aid. Our genuine idealism is received
with cynicism and the worst is suspected, there being no clear,
believable and consistent purpose set forth. No one likes to
receive charity and a nation will go to great and often irrational
lengths to deny that it has.

Further, let us consider the President's Economic Report
of January 26, 1967, which states:

"We will give first priority to fighting the evils of

hunger, disease and ignorance in those free world countries
which are resolutely committed to helping themselves."

Given the enormity of the task and the serious limitations of our contribution, it would seem questionable whether this is a precise statement of our "first priority." It would seem, as we have suggested, that peace, the prevention of a nuclear holocaust, or human survival in general was of higher priority. As can be shown quite dramatically, the maintenance of peace may be quite irrelevant to hunger, disease, and poverty. Both Cuba and Viet Nam, for example, were relatively well off in these three respects. Today, while they may have taken a slump, their threat to world peace does not derive from hunger, disease, or ignorance. The second part of the President's statement raises further questions. How do you tell when a country "is resolutely committed to helping itself," and is that what really counts? The purposes of our aid in Panama, for example, are presumably not unrelated to the maintenance of a stable environment around the Canal. Furthermore, where is the sense or justice in saying that if Latin American governments can't get the rich to pay, the poor will have to suffer?

The U.S. Government, in the face of these dilemmas, has
several alternatives: it can change its objectives so that they
are compatible with current bureaucratic operating procedures of
local governments or it can develop new objectives, fix new
priorities, and design new means for their fulfillment. On the
assumption that the second alternative is the more desirable, then
it becomes necessary to clarify what our new objectives are and to
understand precisely what their implementation entails. Assuming

our new objective is the support of change rather than of the status quo, we have to understand change in the revolutionary sense.

In earlier chapters we have shown that a revolutionary process of structural change is and must be under way in Veraguas and places like it. The political, social, and economic organization of the province is inadequate to meet the needs of the people. Serious structural vacuums exist. Inexorable pressures outside and inside the province are moving, perhaps slowly and obscurely but incessantly, to fill the vacuums and to create new structures. This is a process which we can regard as certain to continue. Obstacles in its way tend to increase its intensity, and thus its potentiality as an invitation to aggression and a threat to peace.

It is, therefore, in the vital interests of the United States to promote the creation in Veraguas -- as our example -- of new political, social and economic structures which can insure the fulfillment of the inevitable revolutionary process without violence, if possible. It is assumed that there are a variety of predatory powers who are eager to exploit the weakness and chaos that accompany such fulfillment.

The successful fulfillment of the revolutionary process and the creation of the necessary new political, social, and economic structures, require the active participation of the people of the province. Theoretically, perhaps, new revolutionary structures could be imposed by the Panamanian government or by some other outside force, but given the realities of the situation this is not likely. There must be pressure within and from the province itself.

Such pressure requires among the people a measure of
confidence, self-respect, hope, and vision which are only
beginning to exist, due mostly to the work of CEPAS-Juan XXIII.
Such pressure requires an ideology, an organic vision of the
problems of Veraguas in its being and in its becoming. It
requires a sense of dignity, an ability to recognize and develop
personal capacities, a sense of power within the environment.
The campesinos must understand that there is an alternative to
the "permanent poverty" which they are currently convinced is
theirs. They must become less oppressed by a concern for sheer
survival, less dependent on escape from that oppression through
alcohol and superstition.

It must be noted that the fulfillment of these require-
ments demands motivation and organization. There is no direct
relation between them and the fulfillment of a material or a
technical need. That is to say, providing the campesino with
food or a road or a social center has no necessary relevance to
the critical factors stated above which are motivational,
spiritual, political, and ideological. In the words of Eric
Hoffer: "You do not win the weak by sharing your wealth with them;
it will but infect them with greed and resentment. You win the
weak only by sharing your pride, hope or hatred with them."¹⁵

The key to the successful fulfillment of the objectives
listed above, which we shall define as "development," is the
sequence which was derived from the problems of the province and
stated earlier. To repeat, this sequence is:

*Agitation* to produce an understanding of the nature of the need and the possibility of its fulfillment, resulting in

*Motivation* to pursue the fulfillment of the need, which produces the means of

*Organization* through which comes political or group power to achieve the need. Finally comes

*Commitment* to the organization, the group, or in other words to the community which has been formed.

The need on which the above sequence is based should, therefore, not necessarily be chosen on the basis of economic or technical criteria. Rather the need chosen should be easily understood by the campesino, important to him, readily dramatized and should require for its fulfillment a feasible, continuing, manageable task within the structure of the environment.

In Veraguas, for example, the need for rice storage facilities was identified as being particularly useful according to these criteria. One of the early CEPAS pre-cooperatives built a bin which allowed members to store their own rice rather than to pay the tienda for this service. The tienda keeper's wife, recognizing perhaps unconsciously or instinctively, the revolutionary political, social, and economic implications of this action, recruited a number of other women in the village and one might burned the bin down. The small and fragile organization could well have crumbled at this point, its members returning to the hopelessness from which CEPAS was seeking to extricate them. But, as it happened, CEPAS was able to encourage them at this critical moment and provide a small supply of concrete blocks with which a new and

better bin could be constructed. The incident was thus converted from an organizational minus into a definite plus, the new organization having confidence that it could not only change its environmental structure but could also withstand attacks upon the new structure.

Obviously, the significance of this event goes far beyond the need for rice storage facilities. From the point of view of our development objectives the rice storage bin was significant in that around it a new organization or political institution was created with the capacity to meet many needs beyond that of storage. This new institution was a creator of new structure, the core of a new community, bringing confidence, power, and hope to those involved. The event also demonstrates the role of the agent of change or development, in this case CEPAS: leadership, competence, access to power (the capacity to provide concrete blocks) and the ability to protect. Finally it demonstrates what is perhaps the most important role of matter in development: to strengthen the growth and power of a community or a political organization, or a development institution. Matter which falls outside such a purposeful receptacle is only accidentally useful to development.

The next objective thus becomes commitment to a community, which brings with it belief in the efficacy of cooperation, loyalty, and allegiance to the community, and a new sense of belonging. A variety of structural changes in political, social, and economic systems, such as the market and credit systems, are also effected.

From this flows the generation of indigenous leadership

and the creation of new, local political and institutional
receptacles which can usefully receive material and technical
aid and make such aid useful for development. Whether these
institutional receptacles are governmental or nongovernmental is
of no real consequence; they must be of the community and in time
will either significantly influence or in fact become "government."

In this way, the campesino develops a positive and
useful identification with the nation. In fact, some might say
that then and then only a real nation begins to exist. Con-
fidence and participation in representative government develop at
the local level while at the national level there emerge adminis-
trative will and capacity to reach, assist, and meaningfully
represent the countryside. Continuing pressure comes to be
exerted on the decision-making processes of the national govern-
ment, with the result that higher priority is fixed on the
problems of places like Veraguas. The motivation and capacity
for rural action on the part of government administrative
officials grows. The campesino's trust in, and willingness to use,
his government increase in turn.

In conjunction with this framework it is possible to set
a number of economic and social objectives which may carry with
them special values. For example, in the Declaration of the
April 1967 meeting at Punta del Este, the several presidents
agreed to "modernize the living conditions of our rural population,
raise agricultural productivity in general, and increase food
production...to promote education for development...to expand
programs for improving the health of the American peoples." If

one considers how these aims are to be accomplished in Veraguas,
the microcosm we are using for a model, the preceding framework
becomes relevant. Food production is a good example. It is
quite plain from all I have said before that the problem of in-
creasing agricultural yield is only partly solved by agricultural
technology. It is also, and substantially, a problem of motiva-
tion and organization; a problem of land title, of the market, of
credit systems; a problem of management, incentives, prices,
economics, politics, and society.

III

Having attempted to clarify the objectives the United
States should recognize in the development of Veraguas and places
like it, let us now examine how they can be used and applied to
determine programs.

Objectives are the measurements by which priorities and
criteria for judging success can be set. If they are effective,
therefore, they provide the basis for selecting between alternative
programs. If they are not effective, such selection is necessarily
haphazard and lacking in continuity and harmony; programs lack
integration and purpose; development becomes marginal. And, as we
have seen, there is sometimes a tendency to undertake programs
because they are readily feasible or for some other reason which
is unrelated to objectives. So it is that sometimes we end up
with a potpourri of projects — roads, schools, housing programs
and the like — which, to be sure, are good in and of themselves,
but which cannot have more than a minor effect on the needs they

attack. Moreover, they may be irrelevant to development since
they are unrelated to the change process which we have established
is vital.

In the case of Veraguas, we shall see how clear ob-
jectives help to clarify the task of program selection, provide
direction for the expansion of projects, and even suggest new
approaches which can be made.

There is no shortage of ideas for the development of the
province. The following list includes some of those which have
been seriously proposed, and serves to underline the importance
of the objective-priority-criteria framework for making develop-
ment decisions set out in the preceding chapters:

1. All-weather roads to open new areas of the province to greater participation in the economy;

2. A study of the mineral and forest resources of the province;

3. A study of the land -- its fertility and appropriate seedings for it -- to be used as a building block for further development;

4. Extension of low-cost electricity to rural areas;

5. Construction of a port;

6. Improvement and expansion of the two agricultural schools in the province to train more students from Veraguas, undertake more experimentation, disseminate more information, and make more assistance available to the people of the province;

7. Provision of more technical and agricultural advice;

8. Encouragement of the land reform agency to proceed with its work of parcelling and selling off government lands so that individuals can become owners of the plots they work;

9. Governmental incentives to enterprises to locate or expand in Veraguas, through tax concessions, long-term loans, etc.;

10. Construction of a center in Santiago to interest passing tourists. The center would house a museum, provide information about the province, including its history and places of particular interest, sell slides, show movies, be an outlet for native crafts, and be the focus of civic activities which it could also help to stimulate;

11. Improvement of the school system by construction of more schools, addition of new teachers, and a reorientation of the education available to make it more relevant to the peasants and their problems; also expansion of the National University's Santiago extension to teach agronomy, economics, and other subjects of immediate use to the people of the province;

12. Development of new industries, such as a rice mill, manufacture of wood and leather furniture, new lines of leather goods, tobacco and coffee processing, a slaughterhouse, or a food processing enterprise;

13. Setting up of new commercial establishments such as a restaurant, office supply store, agricultural machinery store, construction company, repair shop for electrical equipment;

14. Opening a store in Panama City to sell Veraguas goods;

15. Persuading a traveling wholesaler to supply the tiendas in the countryside, reducing distribution costs while providing more variety in consumer goods;

16. Supporting and financing CEPAS-Juan XXIII and the associated cooperatives and organizations.

Let us apply the framework set out above to this list.
We suggest that two projects emerge as being of highest priority:
(1) the careful and imaginative support of CEPAS and its associated groups and (2) the establishment of a food-processing enterprise either in association with CEPAS-Juan XXIII or independently.

The integrative nature of CEPAS and its affiliates is well exemplified by the fact that it could bear directly on all of the proposed ideas listed above. If it were judged desirable to strengthen CEPAS, virtually all of the sixteen projects could be carried out by, with, or through CEPAS. The only limitation apart from funds, would be managerial talent within the CEPAS organization.

CEPAS, as we have seen, deals directly with the campesinos.
One of its aims is, clearly, to develop the capacity of peasants to
deal effectively with the environment, and to help them prosper in
many ways. Increasing and improving the rice harvest is one of
its goals; the introduction of new crops is another. The same
organization that performs these services could provide more
efficient and effective transportation to the nearby cane mill.
Transport of cane is now extremely expensive. As a result,

production, mill profits, and campesino incomes are all low.

The *Juan XXIII* cooperatives could own trucks, using them in
season to haul sugar cane and at other times for general produce.

Wider cooperation between CEPAS-*Juan XXIII* and large-scale
commercial agricultural enterprises could help both groups by
introducing better agricultural techniques and by motivating and
educating the campesinos. CEPAS has already, for instance,
helped a farmer start a successful chicken enterprise. With 100
chickens raised, he is now able to make $10 to $15 a week. CEPAS
has helped him with credit and marketing, standing as an inter-
mediary between him and his environment. It can also communicate
his experience to others who may benefit from it. No less
important is the political and cultural effect which a growing
CEPAS can have, providing confidence, participation, involvement,
access to power, competence, and protection. CEPAS, in short,
fills the structural void in Veraguas in many ways.

It might, therefore, be appropriate for the government
to arrange the introduction into Veraguas of matter and technique --
roads, electricity, better schools, fertilizer -- in harmony with
the aims of CEPAS and its organizations. CEPAS will insure that
the matter has a use, the technique a demonstrator; CEPAS itself
will be nourished.

In spite of the fact that AID officials from Panama City
as well as Washington have made frequent visits to Veraguas, have
been duly impressed by the Bishop and his work, and have left a
wake of enthusiasm (with not a few hints of assistance), AID's
assistance as of 1968 to CEPAS and its associated cooperative

Juan XXIII has been modest, to say the least. Total assistance has been two $10,000 loans and some used hardware. As we have noted earlier, a considerable percentage of the Panama aid package for 1967, which totalled about $30 million, has been allocated for urban uses. Bearing in mind the objectives of the United States, the nature of the countryside, especially Veraguas, the most populous of the central provinces, and the future of Panama, there is a question whether the above balance of allocations was well-advised. Similarly it seems doubtful whether much of the $88 million AID commitment made to the Balaguer government in the Dominican Republic during its first 18 months has gone to the engines of change in that country. Certainly none has been received by FEDELAC, the country's most successful campesino organization.

Let us now consider a business investment in Veraguas, using our framework of objectives to reach a decision. While the investment must return a profit, the primary criteria by which we will reach a decision are those related to the objectives of the development discussed earlier. We shall compare and consider two proposals for enterprises in Veraguas which have been considered by AID and others in Panama, one for a slaughterhouse, the other for a more broadly based integrated food-processing industry.¹⁶

The proposed slaughterhouse would process 50 head of cattle per day. It would be situated in Divisa, a small town at the juncture of Veraguas and the neighboring provinces of Cocle' and Herrera. The enterprise would serve these three provinces and

Los Santos Province. A capital investment of $300,000 would be needed, in addition to $100,000 for operating expenses. The slaughterhouse would probably be owned by an already existing cattleman's cooperative.

By using the proposed slaughterhouse instead of existing facilities in Panama City, it is estimated that cattle would save as much as $6 per head in freight charges. Depending on its success, the enterprise could ultimately be expanded to include a sausage kitchen, curing cooler, smokehouse, beef-boning room, and canning facilities.

Locating the slaughterhouse in Veraguas, it is argued, could help increase meat quality by reducing tissue shrinkage of live animals during shipping. It might stimulate the cattleman of the area to produce more and higher quality cattle. It could help create a balance to the slaughterhouse monopoly in Panama City; improve health of the stock by reducing transmission of diseases; unite the cattle producers around a central interest; lower beef prices by selling to a local market which as of now imports most of its beef; help the small farmer who wished to market a few head of cattle; stimulate satellite industries such as meat-packing, freezing, tanning or a blood-meal operation.

The slaughterhouse is a typical business project having both merit and feasibility. It could be a profitable operation, and it might have many of the effects noted above. Measuring it as a development project, however, we find it has serious short-comings.

It would have few of the political or social effects at

which we are aiming. Its economic impact would be limited, since
it would employ a relatively small number of people and influence
only the cattle-owning population of the province. In Veraguas,
the average herd size is 20 head; of the 22,000 farms in the
province, only 2.1% (447 farms) have more than 50 head. The
slaughterhouse would, therefore, have little effect in reaching
the bulk of the province's people, and would have minimal
importance for the small (2-20 head) cattle owner. It would
provide little new motivation or organization and would not
affect existing structures in any appreciable manner. It might
even solidify entrenched power and have a negative effect on
development.

On the other hand, it is likely that the establishment
of a food-processing plant in the province could meet a number of
our objectives. By "food processing," I mean an industry which
produces or buys agricultural products, processes them in some
manner, and then markets them. In Veraguas fruits and juices
such as orange, lime, papaya, apricot, peach, or naranjilla might
be produced. Corn, tomatoes, beans, pineapples, peas or fruits
might be canned. Preserves or marmalades of fruits could be
processed. Soups could be made and packaged. Other products
such as coffee, tobacco, plantain chips, yucca, or cashew nuts
might be processed and sold. Another very real possibility in
this connection would be to assist Juan XXIII in the construction
of the rice mill mentioned earlier.

A food-processing plant of this sort in Veraguas would
employ a number of laborers from the province in its own operations.

It would build on the existing resources of Veraguas: land,
crops, and people. The plant would stimulate supporting
industries and services, such as a marketing organization, new
or better transportation and roads, as well as a more flexible
and available credit supply. Most importantly, a food-processing
plant would affect a great number of people.

From studies of similar industries, we have learned that
an industry that depends upon campesinos for supplies can have
far-reaching influence. The relation between a plant purchasing
raw material from peasants and the peasants is rarely a simple
exchange of cash for goods. Usually a number of political,
social, and economic factors are involved as well. The plant
carries out activities on behalf of the campesinos that would
rarely be expected in the United States. For example, the cane
mills in the interior of Panama, purchasing sugar cane from the
peasants, find themselves doing far more than paying cash for
cane received. The mills make loans throughout the year for
seeding, cleaning, and harvesting the cane; they send out new seed
types, introduce fertilizers, insecticides and herbicides, and
help finance peasants who want to purchase trucks for transporting
cane. They pay trucking costs, including repair and gasoline
bills, and then deduct these charges from the amount due to the
trucker. They then automatically deduct and pay the trucker the
amount he is due from the campesino who sent in his cane. In
some cases, this relationship is restrictive and hampers develop-
ment in rural areas, but this model can be adjusted so as to be
very helpful for development. The proposed food-processing plant

could take on all the functions of the mills, but with enlightened
management it could have a much more striking developmental effect.
For example, whereas the cane mills only provide one "inspector"
to assist and guide 250 peasants, a new firm could have a more
extensive and better trained organization to reach the peasants.
Such a staff trained to work with peasants, to teach about
agriculture, to visit the peasants' fields, to give talks or
even movies in the peasant villages, would have a startling
effect on the agricultural system. Several U.S. food companies
carry on such activities in Latin America very successfully.

Experience in Veraguas suggests that peasants are
susceptible to change, that they desire to improve their lives
but that doubt, lack of knowledge, confidence, and opportunity,
often restrict them. As the experience of CEAPAS shows, with
close attention and supervision, they are responsive to outside
influences. The cost of developing a program such as this would
not seem great compared to the long-term benefits which would
flow from it. Furthermore, such an enterprise could soon
become self-sustaining and profitable.

Food processing by its nature is often a decentralized
industry; it is frequently better located in rural food-production
areas than in urban centers. The industry, therefore, helps to
bridge the rural-urban gap, both in providing a source of employ-
ment to surplus rural labor and in slowing the rural to urban
population flow. By increasing the number of wage earners, it
increases consumer buying power in the countryside, and thus it

provides markets for industries serving rural needs.

To sum up, by virtue of its power and importance relative to what is around it, the food-processing enterprise can have a profoundly beneficial effect on the total organization of the community in which it is located. This is by no means limited to the more efficient production of larger quantities of higher quality food. Its effect can extend as well to the administration of local government, the judicial system, education, skill training, the removal of distortions in the credit and market systems, and the introduction of efficient, low-cost transport.

CHAPTER XV - BIBLIOGRAPHY

1 Arnold Toynbee, *The Economy of the Western Hemisphere*, London, Oxford University Press, 1963; quoted from John P. Powelson, *Latin America: Today's Economic and Social Revolution*, McGraw Hill, 1964, p. 291.

2 Arthur M. Schlesinger, Jr., *A Thousand Days*, Houghton Mifflin Co., Boston, 1965, p. 202.

3 *Ibid.*, p. 203.

4 *Ibid.*, p. 205.

5 William D. Rogers, *The Twilight Struggle*, Random House, 1967, pp. 35-39.

6 *Ibid.*, p. 37.

7 Eduardo Frei Montalva, "The Alliance that Lost Its Way," *Foreign Affairs*, April 1967, p. 439.

8 Ricardo Arias Calderon, a prominent Christian Democrat, described the change as follows in a conversation in Panama City in the summer of 1966: "Kennedy was in a way our last great illusion. With the communist take-over of Cuba our protected world ended. The feeling we had toward Kennedy was largely the result of this fact: the danger of Cuba gave us a feeling of need for protection and we felt that he had new, up-to-date ways of protecting us. Johnson is a cold shower, bringing us back to reality, which is probably a good thing." This comment is particularly relevant to earlier thoughts about the importance of tying policies into perceptible self-interest.

9 *New York Times*, September 22, 1968.

10 Felipe Herrera, President of the Inter-American Bank, "Latin America: Reforms and Regionalism," *New York Times*, September 1968.

11 *New York Times*, October 20, 1968, p. 8E.

12 *Facts on Latin America's Development Under the Alliance for Progress*, April 1967, U.S. Department of States, pp. 1-2.

13 Frei, *op. cit.*, p. 443.

14 In the following I am again drawing on *The Veraguas Report: A Study of the Organization of Change in Rural Latin America* by George C. Lodge and Stephen F. Gudeman, Division of International Activities, Harvard Business School, pp. 49-62.

15 Eric Hoffer, *The Passionate State of Mind*, Harper and Row, 1954, p. 32.

16 Slaughtering cattle is indeed food processing. I draw a distinction here -- perhaps somewhat artificially -- between this particular proposed slaughterhouse which, as we shall see, has a narrow development effect, and the more general, integrated food enterprise which we shall discuss further on.

CHAPTER XVI

NEW STRUCTURE FOR THE REVOLUTIONARY PROCESS

We have viewed the revolutionary process in Latin America,
and have considered its relation to the interests of the United
States. Between the two there is a distance, the dimensions of
which are ill-defined, obscured by traditional misperceptions of
both process and interests. The task is to close that distance.

To do so requires the identification of United States
power and purpose with that combination of change which is at
once most promising and most consistent with our view of the
good community. This is, after all, both the promise of the
Alliance for Progress and the plea of the noblest and best
leadership of Latin America.

The promise has gone unfulfilled and the plea unanswered
partly because of a miscalculation by both North Americans and
Latin Americans of the nature and capability of government. The
architects of the Alliance were by culture and training imbued
with liberal, European-U.S. notion that governments adequately
supplied with matter and technique, can be relied upon almost as
a matter of nature to introduce changes to enhance the public
good. Experience has shown, however, that governments, particu-
larly those in pre-revolutionary or pre-national settings, are
seriously limited in doing so, restricted by both will and
capacity. This restriction derives from two characteristics of
such societies: a majority of the people exist outside of any

significant governmental relationship, beyond its jurisdiction,
reach or interest; and government tends to be the creature of
oligarchic power holders whose controlling interest is in main-
taining the status quo. In the United States limitations on the
capacity of local, state or federal government to change the
Black Ghettos derive from corresponding characteristics.

But governments are not monoliths. They are composed
of many parts, many kinds of flesh and blood. These include
first of all political leaders. Some of them are revolutionary
reformers: Frei, Lleras, Betancourt and the like; others are
technically-oriented "modernists" — Somoza, Costa y Silva,
Ongania. Governments are also bureaucracies which as a rule are
plagued by problems of inertia and commitment to old myths and
conceptualizations of interest. But invariably in their midst
there are those who are committed to change the old ways.
Governments are armies, which themselves include a wide spectrum
of purpose and competence. Governments, too, are composed of
shadows cast by interest groups outside its formal organization:
labor, businessmen, landowners, the Church, for example. So
while it is true that generally in Latin America the complex
whole of government is ineffective as an introducer of change;
it is also true that elements within it have both will and
capacity for change. If these elements are to be successful in
the way that the Alliance for Progress had envisaged they must
be backed and prodded by outside engines of change.

In this regard I recall a conversation with then Prime
Minister Ky of South Viet Nam in 1966. We spoke of the problems

of making South Viet Nam a coherent nation with unifying
purpose. It was apparent that to this end he was eager to
pursue long delayed policies of land and credit reform. He
seemed to understand well that the South was caught in a condi-
tion of revolutionary abortion, stopped half-way through a
revolutionary process, a process which had been completed for
better or for worse in the North. Although those in control of
the South were unwilling to accept the northern model of revo-
lutionary change, they had failed to construct their own revo-
lutionary alternative. Thus, many of the old and worn out
structures of the colonial days lingered on. Furthermore, it
seems painfully clear that the United States actually encouraged
the failure of the South to design a revolutionary alternative.
As early as 1963, Don Van Sung, the Vietnamese patriot, warned us
"By emphasizing anti-communism rather than positive revolutionary
goals and from lack of a better adaptation to the local situation,
the United States has reduced its anti-communist efforts in Viet
Nam to the maintenance of an administrative machine and of an
army."¹

I suggested to Ky that revolutionary organizations in
the countryside were needed which would, for example, break the
hold of absentee Chinese mill owners and French rubber planters
and lay the basis for more equitable ownership of land and the
development of credit and markets for the farmers. The few
organizations which had been working in that direction, such as
the Tenant Farmers Union, had been decimated by Ngo Dinh Diem,
with inadvertent U.S. help. Ky agreed that revolution was a

necessary prerequisite to nationalism, but he said, in effect,
"What am I to do? I am sitting as a rather junior chairman of a
committee of powerful generals which governs this country. They
have far-flung interests. I cannot start the revolution from
where I sit. If it were to start in the provinces, then I could
perhaps be responsive."

I am reminded of Colombia during the late 1920's and
early 1930's when peasants invaded land and seized haciendas,
turning them into cooperatives. The landowners called for
military repression but in this instance the government refused
to become involved, using the pressure of rural violence to force
a land reform law through the legislature.² Ky, however, could
look to no such pressure from the countryside to start the process.
At that time the Peoples' Action Teams were showing some promise
of becoming such engines of change. Composed of young volunteers,
these teams were given an unusually revolutionary brand of train-
ing by a capable and charismatic leader named Capt. Mai. After
training, they were returned to the villages they came from,
prepared to organize and defend that village against all
marauders -- the army of South Viet Nam, the corrupt agents of
Saigon as well as the Viet Cong -- and to develop its political,
economic and social interests. As Captain Mai began to make
progress, he threatened the status quo. In 1966 he was branded
a "socialist" and forced out.³ (Such a sequence is, of course,
common practice in Latin America and has been for decades.)

The most serious aspect of Mai's removal was not so much
that it happened but that the United States failed to perceive that

it was symbolic of the forces and the circumstances which made
the achievement of our objectives virtually impossible. We had
committed ourselves to helping the South Vietnamese build a
nation but we had failed to see the essential revolutionary pre-
requisites for doing so, or at least we had failed to give suit-
able priority to these prerequisites. We also attributed
legitimacy and capacities to the government of South Viet Nam
which it did not have. We supplied it with virtually unlimited
money and material to do what it could not possibly do. We thus
corrupted it and all it touched. Although we used the word
"revolution," we meant rather material inundation: the spewing
forth into an unready countryside vast quantities of matter, from
tin roofs and pigs to school houses and community centers. The
fact eluded us that these things had little to do with the
structural changes which were so necessary for the achievement
of our objectives.⁴

The analogy between Viet Nam and Latin America is
easily strained but in some respects it is clear and pointed.
In both places our vital interests have been regularly and
dangerously frustrated by our failure to perceive the revolu-
tionary precedents required for national organization and
progress and by our naive disposition to judge virtually any
"government" as being capable of effecting those precedents.
This is not to say that we have been unaware of the weakness
and limitations of the governments with which we have been
associated in either Viet Nam or Latin America. Rather we have

been unable or unwilling to conceive of ways of going around them to achieve our objectives, which ironically are in many ways their objectives also.

The hang-up lies principally in the well-worn admonition which is generally given sacred absolutism particularly by the Department of State: It is forbidden to interfere -- except now and then as in the Dominican Republic -- in the internal affairs of another nation and, therefore, U.S. efforts to introduce change whether in Viet Nam or in Latin America must be undertaken by, with and through local governments.

This reasoning rests on a series of assumptions:

1. All Latin American states are also nations.

2. All (except for Haiti and Cuba which are outside our aid program)* have national governments which are presumably representative of the will of the people. That is, all governments are by some such standard legitimate. This assumption must be made because aid and assistance to an illegitimate government would surely be as "interventionary" as aid to a group which might be seeking to change that government.

3. Aid to the government in power does not constitute support of the political party and interests which that particular government represents to the detriment of the opposition. If this were not the case, aid again would be clearly interventionary.

4. All governments have the will and capacity to comply with the terms and conditions of U.S. assistance, not only as set forth

*Mexico, also, of course, is off the aid list but for quite different reasons.

in the Alliance for Progress but as further stipulated by a wary Congress and fearful administrators.⁵

We have seen time and again the fallacies in these assumptions. And yet, we seem to be paralytically locked into their acceptance. The time has come when we must make quite plain to ourselves and others that millions of dollars of aid to a Latin American government may in fact constitute gross intervention on behalf of the groups in power and may be seriously damaging to groups who are not in power. Let us not mince words: any foreign assistance is interventionary in one way or another. In addition, the withdrawal of assistance once granted is also interventionary. (The same goes for investment, incidentally.) By pretending that we can provide aid without interfering in the internal affairs of another country we are in effect interfering haphazardly and thoughtlessly, generally in such a way as to fix and stabilize the established elites. If we are unable to find a way around this dilemma, we are left with the real question as to whether governmental assistance does not in fact do more harm than good, in the long run setting back the processes of change which we have established are essential. Ernst Halperin of MIT has in fact advised Congress that the United States would do well to limit its intervention in Latin America to "the prevention of Soviet bloc gun-running," making clear to the established elites that it "would neither bail them out financially, nor intervene to save their persons and their property." Then, Halperin says, "necessary reforms would certainly be speeded up and saner economic policies adopted."⁶ Appealing as such a policy might be

in its simplicity and economy, it seems to underestimate our vital
interests in Latin America, and overestimate the difficulty and
controversy which a different approach to governments in the
matter of revolutionary change might involve.

A new approach must be based upon a clear perception of
what governments can and must do and what they cannot do. Govern-
ments in Latin America perform a wide variety of essential and
useful services, often with considerable efficiency, and in this
performance they need and should receive increased assistance
from outside sources. National administrative and legal systems
must be sustained, money printed and regulated, public services
rendered, and criminals curbed. Schools, hospitals, roads, dams,
factories, communication systems, and transportation facilities
must be built. Regional commercial, economic, political, and
military agreements and institutions must be formed and strengthened.
Governments are essential for the conduct of these necessary na-
tional and international activities.

We might add incidentally that the more representative
a government is, the more successful it will be in carrying out
these responsibilities, but this is not as simplistic as it is
often made. It does not mean, for example, that so-called
democracies do a better job or indeed are more representative
than so-called dictatorships. We have seen quite consistently that
the trappings of democracy and constitutionality frequently mask
a variety of oligarchy which is hard to distinguish from and
perhaps is even less representative than more latent forms of
authoritarianism.

Governments then -- whether they be good or bad, representative or unrepresentative -- are necessary for many things. Important as they are, however, they rarely can introduce the wide variety of radical change which is required. This change, in fact, in many cases would tend to subvert the very base upon which governments stand. Since U.S. interests require such change, U.S. policy should strive to separate U.S. assistance programs from local governments. It should seek to minimize the use of U.S. power and resources as a means to maintain the status quo. U.S. policy should also seek to make a formal distinction between diplomatic recognition of a regime and approval or disapproval of that regime. We must remove from ourselves the onus of sustaining the obstacles to change. This is as much a moral necessity as it is a political one.

This we must do not only out of loyalty to ourselves and our interests but also out of respect for those many political leaders of Latin America, many of whom were prime movers in the Alliance for Progress, who themselves are keenly aware of the need for radical change of revolutionary proportions. These men often find themselves hobbled by their own governments, restrained in their efforts to introduce change by recalcitrant oligarchs and conservative bureaucrats, both of which groups are bolstered by our aid program. They are also impeded by insufficient organization and pressure for change outside of government.

I

Although the total thrust of a new foreign assistance policy should be directed at the fulfillment of the radical changes

enviaged by the Alliance for Progress, the means to this end
should in the light of the above considerations be seen in two
quite separate programmatic categories.⁷

**Category One:** First, there are the programs of assistance designed to sustain, nourish, and improve existing local growth structures. Essentially supplemental in nature, such programs presuppose the existence of effective local structures capable of converting and directing economic inputs into a coherent purposeful development scheme. They are, therefore, designed to serve and assist local government and those public and private institutions and enterprises which are generally favored by and necessary to government. The following types of programs fall into this category: health, education and public works; routine industrial development; military, police and civil administration training and assistance; trade and tariff arrangements and export development.

Such programs are in essence nonrevolutionary. Although
they may well contribute to the gradual evolution of existing
structures, they are primarily aimed at improving the conditions
of life within existing political, social and economic structures.

Many of the problems which these programs address tend
to be regional in nature. They are related to the commercial,
economic and political integration of the region, to the develop-
ment of international transportation and communication links, to
the preservation of regional order and to the sustained and
balanced regional economic growth.

Programs in this first category are, therefore, best

directed and coordinated by regional representatives and regional
agencies. They are poorly suited for bilateral handling: The
United States is in a poor and distasteful position when it
harrasses and chides Latin American governments to make the most
efficient use of large quantities of assistance (e.g. Chile).
Latin American leadership would be not only better suited for the
task but more acceptable; it would also be more sensitive to
questions of priority, timing, concentration, and focus. I
therefore propose that all programs in this category be carried
out under the direction of the Inter-American Committee of the
Alliance for Progress (CIAP), acting for the Organization of
American States. To implement its programs CIAP would use the
World Bank, the International Development Association, the Inter-
American Development Bank, regional development banks, and such
additional institutions as it may deem necessary. It would co-
ordinate the foreign assistance activities of these institutions.
For this purpose CIAP would have a regional office in each of the
Latin American countries. I shall call this system of programs
the New Alliance for Progress. It would be financed by contribu-
tions from Latin American governments, the United States govern-
ment, and European government members of the Organization for
Economic Cooperation and Development (OECD).

It is apparent that assistance to the engines of change,
which are so essential to the revolutionary process in Latin
America and to the interests of the United States, will not for
the most part fall within this New Alliance. To be sure these

engines might, as they do now, receive valuable technical and
economic injections from their governments or from international
governmental assistance organizations, but we have seen that such
assistance tends to be small, unreliable, and encumbered with
stifling bureaucratic requirements. It is altogether insufficient
for the vital task of change.

**Category Two:** U.S. objectives, therefore, require a
second and quite distinct system of assistance programs to find
and fuel the critical combinations of engines of change so as to
make the revolution as effective, as peaceful, and as useful as
possible. As the first category of programs is to sustain local
growth structures, the second category of programs is to assist
the design and construction of such structures where they do not
exist and to assist new organizations of local power to make
existing structures more consistent with revolutionary imperatives.
It may appear that the two program categories are contradictory.
In a sense they are and must be. Our purpose, however, is to
make the contradiction more precise and manageable. We have seen
that the change vs. stability contradiction exists today; we can
be sure it will exist tomorrow. The vital interests of both the
United States and Latin America lie in designing better ways of
handling it. A first step is to recognize the contradiction
and to define it sharply. Thus we have suggested two distinct
foreign assistance categories. The next step is to plan the
efficient working of each category. Finally, the ultimate test
of statesmanship and civilization is whether the two categories
can be made to proceed in peace with each other. If this can be

achieved, we will have pulled the teeth of violence from the jaws
of revolution.

Second category programs are essentially nongovernmental.
They seek to strengthen those organizations and institutions which
can bring pressure to bear upon government and establish useful
links with it. But they are apart from government and in fact
may often be hostile to the regime in power or to parts of that
regime. They are the critical levers required to make the change
process move, the means by which the programs of Category One are
given new direction, the essential forces required to weave a
lasting and modern political fabric.

Implicit in all that we have said about engines of
change, is that they will and must have purposeful direction.
This direction must be well informed and well founded, guided
by purposes and criteria which are set with objectivity and inde-
pendence, derived from the community itself and not, as so often
in the past, taken artificially from an alien environment. Pro-
grams to assist the development of purpose-making institutions in
Latin America, therefore, fall naturally into Category Two.

These programs as a group are by their nature local;
they are aimed at a particular community, organization, group,
or institution. There will be regional similarities and rela-
tionships in their conduct and close regional cooperation would
be desirable, but we have seen that the workings of our engines
of change are fundamentally rooted in a particular place and a
particular group of leaders and followers. It is not, therefore,
necessary or perhaps even at the moment desirable to place them

under regional supervision or direction. Eventually we can hope
that both program categories can be merged within a new multi-
lateral framework. For the time being Category Two programs will
obviously be controversial; they must be handled with great care
and delicacy, moving experimentally from small to larger under-
takings. Even so this new idea will be attacked; it would never
survive the onslaught of the status quo if it were a part of a
large international bureaucracy.

Congress should establish and fund an American Founda-
tion for the purpose of launching Category Two programs, using a
diversity of nongovernmental groups, institutes, centers, and
organizations, representing a broad spectrum of U.S. interests
and talents each with special capability to work with and assist a
Latin American engine of change or purpose-making institution. I
am here suggesting that we make the most of the pluralism of
American society, accentuating its great and varied strength and
employing it to connect the United States naturally to Latin
American counterparts, presuming great shared enthusiasm.

Before looking in more detail at how the New Alliance and
the American Foundation would function, it is necessary to sketch
quickly radical shifts in the organization of United States foreign
affairs which our new interests and objectives and these resulting
shifts in program demand.

An ambassador of the United States should once again
confine himself strictly to being the representative of the
President of the United States to the government of a foreign
country and nothing more. Partly to allow for this transition,

the Agency for International Development and its foreign
missions should be abolished.

Ambassadorial representation should not imply
approval or disapproval of the regime in power; it should merely
be recognition of an existing state of affairs and condition of
power. Although as the representative of the President the
ambassador would be expected to make known the interests of the
United States, it would not be his function -- as it often is
today -- to seek to change the regime which had received his
credentials.

Today, as superintendent of the AID mission and local
grand master of the Alliance for Progress, the American ambassador
is invariably expected to encourage the regime in power to change
itself in some rather fundamental ways. U.S. (Alliance) assistance
is at least theoretically predicated on such change. The ambassador,
however, is rarely in a position to secure the changes sought even
though they may be promised. He is, therefore, frequently in the
ignominious and pointless posture of allowing money and material
to flow under false pretenses, consoling himself and Washington
with the dictum that he cannot meddle in internal affairs. On
the other hand, if the government happens to be doing what by
Alliance standards are the right things, the U.S. ambassador is
virtually compelled to glow if not to crow about it. So it was
in Chile, for example, that the U.S. embrace of the reformist Frei
government made that government the bloody target of both right
and left, costing the U.S. the good will of the right with little

compensatory gain from the left.

Such a replacement for AID would, of course, have other
desirable effects. The size of U.S. embassies would be reduced
and considerable dead weight on the wrong end of our balance of
payments thus removed. More important, AID's partial replacement
by the New Alliance would shift considerable responsibility for
development planning and initiative back on to Latin American
countries themselves. It would also increase Latin American
self-scrutiny of both the purposes and priorities of development
programs as well as their conduct.

Existing programs and functions of AID, which are con-
sistent with our new formulation of interests and objectives,
would be taken over either by the American Foundation and its
related groups or by the New Alliance. The only AID programs
of importance left orphaned by this scheme are those offering
guarantees, incentives, and assistance to U.S. private invest-
ment in Latin America. These should be expanded and placed
under the supervision of the Department of Commerce in Washington
and commercial attaches abroad. Some of the more experimental
projects in which new entrepreneurial forms would be developed
as engines of change would undoubtedly fall within the preview
of the Foundation and the New Alliance.

A word belongs here about the Peace Corps, undoubtedly
the most successful and rewarding U.S. initiative in the last
decade. But even it stands threatened by the contradiction
inherent in the commitment of the United States to both change
and stability. Operating as they have, with and through local

governments, Peace Corps volunteers in Latin America have felt the futility of attempting to introduce lasting institutional change. To the extent they have succeeded, they have frequently tended to encounter local governmental resistance as well as increasing demands for control by United States ambassadors and embassies. Many in the Peace Corps have resisted embassy encroachment, arguing quite rightly that much of its validity and success derives from the distance it has managed to keep from the conventional U.S. diplomatic bureaucracy. At this writing, however, there are signs that those advocating Peace Corp independence are losing the battle and that embassy "coordination" is becoming increasingly prevalent.

A neat set of alternatives pose themselves under the scheme which I have advocated: the Peace Corps can continue as it is, risking increasing absorption by the traditional embassy structure; it can take a more radical course, emphasizing its commitment to change and become an agency funded through the American Foundation, thereby increasing its distance from both the U.S. and local governments; or it can become an international organization, operating under the aegis of the New Alliance in Latin America and under similar regional auspices in the rest of the world. The first alternative seems to me to be unacceptable; it would almost certainly deny the Peace Corps its singular appeal to youth and its innovative dynamism. The second is undoubtedly impractical; the Peace Corps is too large and extensive to proceed regularly with any real degree of independence from local governments. The third alternative is therefore left as the most

desirable. An internationalized Peace Corps is not a new idea and
the reasoning of this book would suggest that it is a sound one.*

Some may think it odd to suggest such a radical transformation of foreign assistance at a time when the existing program is in jeopardy, and there has been a rebirth of isolationist sentiment in this country. A close look at Congressional attitudes toward foreign aid, however, will show that the most serious and alarming criticism is coming from those who have long been the staunchest supporters of aid. These men are disturbed because foreign aid seems to be failing by its own light to achieve its own prescribed objectives. In fact, as we noted earlier, some feel that it is indeed retarding long-term growth, especially in a political sense. It was congressional initiative -- not that of AID -- which forced foreign assistance administrators to place greater emphasis on political development by adding Title IX to the Foreign Assistance Act several years ago. It is my belief that in this respect many leaders of Congress have been ahead of AID in realizing the necessity for a radically different approach. Whether the new approach is specifically the one I have suggested or a different one, it seems that the will of Congress is coming closer to the conceptions of interests and objectives upon which mine is based.

Only by some such new approach can we hope to arouse
the national enthusiasm required to raise the levels of U.S.
foreign assistance to where they should be -- at least 1% of the

*See Seth Tillman, "Peace Corps: A New Way of Playing the Game," staff report to Senate Foreign Relations Committee, unpublished.

gross national product and in time hopefully between 2% and 3%.
Today instead of contributing $2 billion the figure should be
$20 billion -- and this having in mind our own self interest.
Out of the total Latin American aid allocation, it might be
appropriate to consider that 85% would flow through the New
Alliance system with the remaining 15% available for distribution
by the American Foundations. Let us now consider in somewhat
greater detail how these two systems would work in practice.

II

The New Alliance would be composed of an inter-related
and expanded group of regional governmental institutions under the
general and continuing coordination of CIAP, the Inter-American
Committee of the Alliance for Progress. In 1967 CIAP became the
permanent executive committee of the Inter-American branch of the
United Nations' Economic and Social Council as well as the chief
organ of the Organization of American States for the consideration
of all issues having to do with development -- aid, internal reform,
trade and integration. CIAP at the moment appears to be the most
promising form for bringing the ablest Latin Americans into a
position of initiative and control over the development of the
region. Under CIAP's general guidance, U.S. and hopefully
European funds would be channeled into multi-national regional
organizations such as the Inter-American Development Bank, the
World Bank and the OAS itself for distribution in loans and grants
to regional and national development institutions in Latin America.
Special attention should be given to increasing the capacity of

the Inter-American Committee for Agricultural Development (CIDA) to plan, promote and press for rural reform and development. CIDA is one of the more neglected offspring of the Punta del Este Conference. It has conducted the most useful studies of Latin American rural conditions, but has suffered from lack of U.S. support.

The task of insuring that these funds were being used honestly and efficiently would fall upon the international institutions themselves, which experience has shown are hard and tough in this regard -- often more so than U.S. officials can or want to be. This proposal involves an expansion of existing programs which for the most part have worked well, and an extension and strengthening of Latin American control over these programs. The Alliance for Progress would continue as a truer "alliance"; opportunities for regional growth and integrated development independent of United States pressures and influence would be increased; and yet with it all the United States would maintain a useful relationship.

Funds and support from this network of regional institutions would flow much as they do now -- loans, both hard and soft, grants for special projects, technical assistance and training -- to governments and government-blessed institutions. These have included in the past business enterprises as well as labor union cooperative undertakings, ranging from housing to meat packing.

But there would be some important and significant differences under the New Alliance, deriving largely from its regional rather than U.S. character. It would be more appealing to Europeans, perhaps even enticing assistance from the Soviet Union.

Training and technical assistance could be brought from many
countries other than the United States. Israel in particular
has much to offer. It is difficult today for AID to arrange for
Israeli assistance to Latin America for a variety of reasons, not
the least of which are the Arabs. Then, too, regional control of
military and police assistance and training would seem to be a
particularly salutary innovation, removing the United States at
least one step from this sticky area and providing us with
valuable political distance and maneuvering room which we do not
now have.

But perhaps the most important effect of the New
Alliance would be the added impetus which it would give to na-
tional and regional planning and thus to the integration of
Latin America, first commercially and economically and then
politically. We have seen how damaging the close proximity of
the United States and its officialdom can be to Latin American
initiative and purpose-making efforts. We cannot help ourselves --
it is in the nature of things; we are large and powerful and our
breath is heavy. The closer we are to the processes by which
Latin Americans plan, establish priorities, identify their
interests, and determine actions, the more that these processes
will be distorted, dampened, deadened and defeated. We have long
spoken about the necessity of "giving the Latin Americans the tools
and letting them do the job for themselves," but we have rarely
acted accordingly. Our AID programs have become an increasingly
clumsy and self-defeating exercise in almost the opposite direction.
We are fond of using the word "self-help," but it is generally more

a sham than a reality.⁸

With the abolition of AID, supervision of the New Alliance at the country level would be undertaken by regional, internationally-directed personnel. The New Peace Corps would work closely with New Alliance country offices, helping to insure in particular that funds and resources were channeled as effectively and efficiently as possible to the marginal masses who are so generally excluded from the benefits of government programs. Pace Corps volunteers would, in keeping with the argument of this book, put special emphasis on creating the organizations and the motivation required to convert these resources into something of lasting value.

The steps necessary to the achievement of Latin American integration require a measure of self-examination by Latin American leaders and nations that cannot take place if the U.S. is looking over every shoulder. National purposes must be defined; business interests must be identified; careful research and investigations must be carried out; all within a context of considerable fear and ignorance and an atmosphere of delicate sensibilities. Much of the apprehension indeed derives from the fear that integration, once a dream of Latin American leftists, has become the subversive plot of the United States and its corporations to "exploit" the wealth and the people of the hemisphere on a regional rather than a national scale. No progress can be made until the means and resources are available in Latin American hands to assemble the brains, talent, and leadership, and to make the decisions necessary to achieve the essential goal of integration. Senator Jacob Javits

has already suggested the importance of CIAP as the basis for
effective integration machinery.⁹ The New Alliance will have the
vital effect of giving CIAP the importance it needs and deserves.

Emphasizing the regional organization of foreign
assistance would also have its effect on business and investment.
CIAP and the New Alliance as part of their integration planning
could, for example, greatly strengthen and expand the work of multi-
national investment companies such as ADELA. Organized in 1963-1964
to attract world-wide investment capital to Latin America, ADELA
has invested some $70 million of its own capital in a variety of
Latin American development projects. Composed of almost 200
industrial companies, banks, and financial institutions from Europe,
the United States, Canada, and Japan, ADELA is a catalyst for
regional investment and enterprise, attracting increasing outside
investment in its projects. It is a natural ally of CIAP and the
Inter-American Development Bank in carrying forward the steps
necessary to form the Latin American Free Trade Association (LAFTA).

We can see even in this brief review that much important
work can be done by the New Alliance. Its purposes would be very
much those of today's Alliance for Progress; we can hope that it
will find new and better ways to achieve them. But we cannot
expect rapid or radical change to result from its expenditures.
Given the nature of the Latin American environment and the factors
at work within it we cannot expect even the New Alliance to move
the revolutionary process fast enough for the protection of U.S.
and Latin American interests.

It therefore becomes necessary to work the second route

also and to establish the American Foundation.

The reasons for the Foundation would be close to the message of this book: revolutionary change is underway; it is inevitable; it is in many ways essential and morally justified; the interests of world peace and of the United States require that this change be assisted: while it may require some conflict the objective should be clearly to minimize violence. The objective of the Foundation would be to make the revolution peaceful; to make it effective; to make it consistent with the best interests of the United States and Latin America. In order to do so it would seek to bring to bear the material and technical resources of the United States to assist Latin American engines of change and associated purpose-making institutions, particularly universities. The activities of the Foundation would be essentially independent of the United States government and of Latin American governments.

The Foundation would be under the direction of a distinguished Board of Trustees. Members of the board and the Foundation's president would be appointed by the President of the United States and should represent a broad spectrum of North American as well as Latin American interests and points of view. In the initial years a majority of the Board should be U.S. citizens. Members would be selected having in mind their commitment to the purposes of the Foundation. Before critics cry "sham" let it be emphasized here that the Foundation is frankly an instrument of the United States to foster nongovernmental U.S. organizations which have the interest and the competence to find and fuel engines of change in Latin America. It is to be sure

indirectly an instrument of the U.S. government; but it certainly
is not part of it. Indeed much of its validity derives from its
independence of government control. Its purpose is to promote
that change which is in the U.S. -- as well as Latin American --
interest but which the U.S. government cannot promote.*

Acting in accordance with the principles of the Charter
of Punta del Este and subsequent Alliance doctrine, the Foundation
would identify a wide and varied spectrum of U.S. private groups
and organizations -- universities, special centers and institutes,
associations and unions -- which would have special capacity to
identify, reach, and assist Latin American change engines in related
areas of activity. The Foundation would, through grant and agree-
ment, fund the activities of those U.S. institutions which could
best establish a long and constructive relationship with change
and purpose -- making institutions in Latin America -- organizations
of the radical Church, peasant unions, trade unions, universities
and new varieties of local and multi-national enterprises. Many
of these are organizations and institutions which AID cannot
reach at all today, or because of its governmental connection can-
not reach effectively and efficiently. That they are important
has been shown; that they can be reached by the United States is
clear in the many activities of private U.S. groups in the past.

The Center for Rural Development in Cambridge, for
example, has been working in a small way -- with grossly insufficient

*While it seems far-fetched at first blush, the Smithsonian In-
stitute might offer something of an administrative model for the
American Foundation.

funds -- with FEDELAC in the Dominican Republic and FANAL (National Federation of Agricultural Workers) in Colombia. These two peasant organizations, for different reasons, have been receiving no help from AID. FEDELAC wouldn't take it if offered because of its opposition to the government in power and to the United States government for its overwhelming support of that government. FANAL has not been thought important either by AID or by those in the Colombian government with whom AID makes its plans. That it is the only campesino organization in Colombia, a land ridden by rural violence for almost 30 years, apparently has not impressed the planners. The Center, too, has in a small way assisted Bishop McGrath's operations in Veraguas at a time when AID was unable -- because of local political circumstances -- or unwilling to provide any more than token assistance.

The American Institute for Free Labor Development, the International Development Foundation, and the Cooperative League of the United States are examples of private organizations which have been receiving funds from AID to carry on programs of this sort. These organizations have been unnecessarily impeded by their association with the U.S. government; they have from time to time unnecessarily embarrassed the government; they have been far less effective than they might have been if they were untied from government bureaucracy and embassy responsibility and allowed to follow their own natural ways.

AIFLD particularly suffers from being thought of as the tool of the U.S. government. My impression is that its difficulty,

however, comes not so much from the fact that the bulk of its
funds come from the U.S. government through AID, but rather that
AID and the embassy invariably feel required to exert paralyzing
administrative and policy control over it. Partly because of this
attachment, AIFLD has become infected by something of the same
disease that troubles so much of AID: it has a weakness for in-
jecting money and material before receptacles are in place to
insure an institutional effect; it has a way of putting up
buildings, recreation centers and the like for their own sake
without always insuring that wider, deeper and better organiza-
tion of working people results. It has also cut itself off from
contact with a number of the more radical and effective worker
organizations in Latin America, particularly in rural areas. It
is hard to say whether this constriction of its effectiveness
was brought about because of its AID attachment or because of its
own shortsightedness concerning the nature and future of the
radical Christian labor and political movement in Latin America.
It might well be advisable to split AIFLD into several com-
ponents, each concentrating on different areas of labor activities.
This might improve its access and would also diminish its enormity
alongside ORIT (Inter-American Workers' Organization) whose servant
it is in part supposed to be. (ORIT has an annual budget of
$323,000 compared to AIFLD's $5 million.) In any event, we can
safely say that AIFLD, or any organization like it which is
seeking to strengthen Latin American worker organizations, would
do better as an independent entity working under a Foundation
grant than as a government contractor under almost day-to-day

supervision.

The Foundation would assist in the design and establishment of entirely new U.S. groups to promote the change organizations which we have described throughout this book: non-profit and profit corporations for the opening of new lands in such areas as Maranhão, Brazil; turn-key operations undertaken by consortia of U.S. food and agricultural enterprises to be turned over to local managers and interests, including cooperative organizations of the farmers who actually work the land.

Perhaps most important would be the role of the Foundation in making possible direct ties between U.S. and Latin American universities, uncluttered by governmental considerations on either side. The Foundation could at long last halt the futile and mutually debasing efforts of AID and the U.S. government in consort with a number of U.S. universities to make Latin American universities into replicas of our own. The basic problem of the university in Latin America is not that it is dissimilar from its United States counterpart but rather that it has remained detached from and often ignorant of the community in which it exists. The need is not for it to become like its U.S. counterpart but for it to become more relevant to its own community.

Latin America needs above all else the study, the insight, the self-knowledge necessary to formulate its own independent purposes and goals in respect to its universities. These must be arrived at by way of the discipline and detachment which only a great university can provide. It is perhaps presumptuous to suppose that there is any way in which the United States

can help in such an important and precarious venture. But I
believe that our Foundation, working with the best of North
America's universities, could be of great use, perhaps in one
field of education, and one field only: the support of greatly
expanded research by Latin American scholars, with young U.S.
counterparts and assistants, into the real nature and problems of
their respective communities. Latin Americans should not come
to the United States to study their region; we should go there
to learn about their communities with them. American scholars
have a good deal to offer in research: the idea itself, first
of all, actually getting out into the streets, factories and
fields and asking questions. Getting dirty and hot in the pursuit
of knowledge is an unfamiliar notion to many. Then the techniques
of research have been highly developed in recent years in North
America; computer use and advanced methods of inquiry, for
example. All of this is essential to give the engines of change
and the revolutionary process deep and intelligent purpose and
direction, and also to hasten the progress. It is, therefore, of
the highest priority importance. But it is extremely doubtful
that such activities could be carried out under the existing
government-tied AID program with all of its bureaucratic overhead
and political sensitivity.

But what happens, you may ask, when a Foundation-
supported group encounters the status quo in Latin America and
there is a conflict? How do you deal with the inherent problems
of subversion in this suggestion? After all, we are bypassing
government to introduce change to which government may be resistant.

Here is where the great advantage of separation from
the U.S. governmental apparatus -- the embassy and AID -- becomes
clear. Under our proposed scheme of things the Ambassador would
neither have to know about nor feel the slightest responsibility
for Foundation-supported activities in his country of assignment.
He might as a courtesy be informed of them but no more. Let us
see what would actually happen in a hypothetical case:

Let us assume that the Center for Rural Development
with Foundation help has been making good headway in training
organizers with a peasant federation in Latin America. Let us
assume that these organizers in turn as part of their work
establish a series of cooperatives producing tomatoes, corn and
rice. A large U.S. company, with Foundation assistance during the
first year, enters into a 50-50 partnership with the federation in
its entrepreneurial ventures, providing it with technical assistance
and market access domestically as well as internationally. Another
American company negotiates a similar partnership with the federa-
tion to produce cucumbers and manufacture and bottle pickles for
off-season delivery and sale in the United States.

As the federation's income from these ventures grows,
its ability to hire organizers and expand its activities increases.
Organizing drives in the country's coffee areas are beginning and
increased pressure is being brought to bear on the national land
reform institute to break up large land holdings and distribute
them to the peasants as the law promises.

The country's president, a progressive at heart, is
delighted with the progress the federation is making, knowing that

for the first time it is bringing new hope to the farmers in
the country's congenitally troubled countryside. An important
group of landowners, however, are frightened and concerned; they
come to the President to protest the activities of the federation
and in particular to complain about the activities of the U.S.
group working with the organization.

The President has a number of options. Let us assume
he promises to talk to the U.S. ambassador. He does so and the
ambassador quite rightly says that he heard something about what
those Americans were doing but this is a private group; it has
nothing to do with him or with the embassy. Anyway he will look
into it. The President is satisfied with this answer for the time
being; it allows him to keep his oligarchs cool. The ambassador
investigates, reports back to the President, who may suggest that
the activities be reduced somewhat or may in fact at least
secretly wish the organizers Godspeed. If the problem persisted
and all other means to its solution failed, the U.S. group could
be asked to leave the country. (My guess is that this would be a
rare and unlikely outcome.) In the meantime a good deal might
have been accomplished.

For those who say this is unrealistic I would only
point out that West German government funds are given to a
variety of nongovernmental institutions and organizations for
development purposes in Latin America. Some of these funds
undoubtedly, for example, end up assisting the organizations of
the radical Church in northeast Brazil. I strongly doubt, however,
that the German ambassador is held responsible by the Brazilian

government for these activities in the Northeast which, from
time to time as we have seen, have caused it considerable dis-
comfort.

U.S. entrepreneurial and investment activity should be
stimulated both by the Foundation and by an expanded package of
incentives and guarantees administered by the Department of
Commerce. Here the Report of the so-called Watson Committee on
Private Enterprise in Foreign Aid is still valid and useful.
This report explored "methods for harnessing the vast nongovernment
sector of the United States to the task of accelerating economic
growth in the less developed countries." It recommended that a
substantially broader role in international development be
assigned to "business, labor organizations, agricultural groups,
professional societies, educational institutions...."¹⁰ To make
the most of increased availability of government assistance for
this purpose, American business will have to widen its sights and
put its ingenuity to work along the lines suggested in Chapter

The essence of this idea is that in our foreign
assistance activities we stop behaving as though we were a statist
monolith like the Soviet Union. Our greatest strength lies in our
plurality of interests, points of view and competences. We should
not and need not stifle our plurality when we seek to achieve our
objectives abroad. Let our natural forces go to Latin America;
they will cause change with, I suspect, more natural smoothness
and economy than Washington can imagine.

In the process we will learn as well. We will certainly
bring back revelations of purpose, understanding of motivation and

organization, which will help us to deal better with our own problems of direction and change. It is not accidental that the Center for Rural Development, for example, has found its experience in rural Colombia and Panama to be of direct relevance and value in the black communities of Harlem, Bedford-Stuyvesant, and Roxbury.

By loosening a broad plurality of American forces in Latin America we will also be better able to avoid the kind of cultural imperialism which monolithic government-centered undertakings tend to spawn. A Christian Democrat friend described this when he said: "I'm not afraid of a communist takeover in Latin America. My major fear is that we will end up as one more hunk of capitalist protoplasm, consuming well, with a higher standard of living but with no purpose in life, with nothing to contribute to the world, a warmed over and inadequate version of the U.S."¹¹ I can see how much of our current AID effort kindles this fear. It is obvious, however, that my friend's lament is entirely consistent with strong currents of thought today in the United States. We should be able to find some answers together to our mutual concerns about the future of man, his communities, and his institutions.

### III

I hold no special brief for this particular combination of change in U.S. foreign assistance programming. I am perfectly prepared to accept the possibility that the Foundation and the New Alliance may be ahead of their time or impractical in some other more substantial way. I have suggested them with a certain dogmatism

because it seems to me clearer and more respectful to the reader
to be forthright -- even if it means being forthrightly wrong.
The point is not so much the specific formula as the change in
national philosophy and commitment which must be confronted.

The argument of the preceding chapters is that America's
crisis-oriented pragmatism is insufficient to deal with the ideologi-
cal challenge presented by the revolutionary world. Our long pre-
occupation with communism has diverted us from using our great
power and resources to lead in the construction of new structures
for a new order. Henry Kissinger advised us well when he wrote:
"The challenge of our time is whether we can deal consciously and
creatively with what in previous centuries was adjusted through a
series of more or less violent and frequently catastrophic upheavals.
We must construct an international order before a crisis imposes
it as a necessity."12 It is not so much a question of techniques
as of attitudes: a willingness to submit to an intellectual and
philosophical flushing out.

The bureaucracies of government and business cannot be
relied upon to perform this task. Neither can we look to the
skills of the specialist and the technician. It will take the
lonely courage of leadership; the imagination of the visionary;
the moral purpose of the philosopher; the manipulation of the
statesman; and the creativity of the prophet.

The challenge to government then is to reorient our
vision of the revolutionary world in general and Latin America in
particular; to connect our moral purpose to that vision; to redesign

our commitments accordingly; to reassess our resources in order
to best meet our commitments; and to realign our bureaucracies
in order to bring those resources to bear in the most effective
manner. For example: It is our interest and purpose to increase
levels of motivation and organization in rural Latin America as a
part of our commitment to revolutionary change. It is also our
interest and purpose to minimize the causes of war. Taking the
case of unrest in rural Guatemala, we can postulate two alternative
ways of proceeding. We could follow or espouse an essentially
coercive policy of military intervention or we could seek the
installation of engines of motivation and organization to achieve
the same purpose. In this case the appropriate engine might be
large-scale, integrated food processing enterprises.

If we consider the bureaucratic implications of these
two alternative courses of action, it is clear that current
domestic governmental structure is such as to favor strongly the
military approach rather than the more novel socio-political one.
This is not because the former would be necessarily judged in-
trinsically better but rather because of the way problems are
normally assigned for solution in the bureaucracy. Habit and
tradition has dictated that the Defense Department holds primary
responsibility for insurgency. This responsibility derives not
so much from conscious current political decision as it does from
historic factors and traditional approaches to violence and
national security. We are not bureaucracically prepared to view
the problem of violence in rural Guatemala in any other way.

This becomes manifest if we think about the second policy

[x]

alternative again, in bureaucratic terms. Food and agriculture
have traditionally been regarded as the jurisdiction of the
Department of Agriculture, with the Agency for International
Development of the Department of State obtaining certain juris-
diction in foreign agricultural activities. Now if the National
Security Council were considering a U.S. policy for operations
in Guatemala, the Department of Agriculture would not be repre-
sented at all and AID's representation would be marginal. Even
if these two bureaucratic entities were members of NSC, they would
be expected to reflect their agricultural interests in technical
rather than political military terms. Thus the possibility of
utilizing food processing instead of guns and airplanes as a means
of achieving our objectives would not even be considered by those
with the power of decision. This automatic limitation of alterna-
tives by virtue of domestic bureaucratic structure can only be
remedied by concerted political action at the highest level.

If a decision were reached that integrated food process-
ing in rural Guatemala offered a more effective way of meeting
long-term interests than military action, then, of course, a wide
range of problems of implementation follow. We are not now geared
to using essentially private entrepreneurial resources in this
area for the achievement of essentially governmental ends. Never-
theless, that such a gearing could be designed and effected seems
obvious; in war-time government and private business have integrated
their activities with outstanding success in such fields as trans-
port, communication and construction, for example.

The fundamental issue in this case boils down to two ques-
tions:

1. How important is it to the government and people of the United States that the food processing industry offer its managerial skills and technical competence to help bring organization, synthesis and integration to disordered communities?

2. What is the order of priority of its doing so?

Presumably if the priority were high enough it could be done on a far larger scale than at present. We have shown that the assessment of priority is hindered substantially by the bureaucratic organization of government. This can only be altered by major initiative on the part of political leadership.

There is also a need for similar initiative and leadership on the part of U.S. industry, particularly food processing. U.S. companies are wary about entering into ill-defined relations with government. They would serve their own interests well, however, if they were to define more sharply the ways in which those interests are in conflict or in harmony with those of the U.S. government, foreign governments, and the revolutionary process. I have suggested that such an analysis would reveal substantially more harmony than might be supposed.

Business leaders of the United States have glimpsed the new challenges confronting them in this regard.

George S. Moore, president of the First National City Bank of New York, has said: "Today's institutions -- banking, business, public or private -- cannot exist in modern society without reacting constructively to the goals of society and the economic, technological, social, and political forces that mold society."¹³

Lamtot du Pont Copeland, president of DuPont, has added
that "business is a means to an end for society and not an end in
itself." Sol M. Linowitz, chairman of the Board of Xerox Corpora-
tion, carried the same thought further when he spoke of business p
problems in the future being one of "identity." "What should a
corporation be?" he asked. "Which goals can it best seek to
pursue? What meaning does it have for people and for the society
of which it is a part?

"My own thesis is this: To realize its full promise in
the world of tomorrow, American business and industry ... will
have to make social goals as central to its decisions as economic
goals...."¹¹

These thoughts are at some variance with the more
traditional notion that maximum profit is the chief goal of
business. It is not that profits are bad or that they are not
essential for the conduct of successful business; it is rather that
they have become less useful as a measure of success or as
criterion for judging long-term corporate growth and stability.
It is not, therefore, that businessmen have become suddenly more
moral or virtuous that they are speaking differently; it is rather
that they are perceiving the necessity of thinking in more
philosophical, indeed ideological, terms about the direction of
business.

As the modern large corporation becomes an increasingly
important and efficient agency for the organization of social and
economic life, it is forced, whether it wants to or not, to choose
between alternative social and economic goals. It is forced to

establish values and priorities which previously it was per-
fectly willing to leave to government or the Church or someone
else. Its power and efficiency are thus driving it into
essentially political goal-setting areas where it has never been
comfortable. Its increasing ability to circumvent the national
state will make even more urgent the requirement for new cor-
porate purposes.

It would seem likely, therefore, that for both government
and business the most urgent needs in the future will be in the
area of philosophy and ideology; of goals, values, and purposes;
of priorities, perception and criteria. Here we may well find
curselves turning to the integral humanism of Jacques Maritain
and to the notions of universal synthesis set forth by Pierre
Teilhard de Chardin.

In *Humanisme Integral*,¹⁵ Maritain speaks of "three
moments or aspects" of modern culture. During the first, which
occurred during the sixteenth and seventeenth centuries, man
sought a unified human order "conceived according to the Christian
pattern inherited from preceding ages, a pattern which became
forced and began to be corrupted." In the "second moment"
(eighteenth and nineteenth centuries) man demanded a culture to
free him from "the superstition of revealed religion and to open
up to his natural goodness the perspectives of a perfect security
to be attained through the spirit of riches, accumulating the
goods of the earth." The "third moment" in which we find ourselves
today witnesses the "materialistic overthrow of values, the
revolutionary moment when man, placing his last end decisively in

himself and no longer able to endure the machine of this world,
engages in a war of desperation to make a wholly new humanity
rise out of a radical atheism." In this third moment, says
Maritain, man in order to rule over nature is forced to "submit
himself more and more to technological and inhuman necessities...
God dies; materialized man thinks he can be man or superman only
if God is not God."

Maritain sees salvation in what he calls "integral
humanism" which is close to what Pitirim Sorokin referred to as
"a new synthesis." He envisages a return to an organic structure
of society implying a new pluralism rather than the unity of the
Middle Ages. He insists on the autonomy of the temporal order
from both science and the Church, having as an objective "the
conquest or realization of freedom... — the freedom of autonomy
of persons, a freedom that is one with their spiritual perfection."
He seeks a society in which lives are regulated not by science but
by wisdom. "We must choose," he says "between the idea of an
essentially industrial civilization and the idea of an essentially
human one, for which industry is really only an instrument and is
therefore subjected to laws that are not its own." Political
and economic planning, therefore, becomes "a science of freedom
proceeding according to the dynamism of means to ends and in con-
tinuity with the nature of the human being."

"Modern civilization is a worn out garment. One cannot
sew new pieces on it. It requires a total and, I may say, sub-
stantial recasting, a transvaluation of cultural principles. What
is needed is a vital primacy:

of quality over quantity,
of work over money,
of the human over the technological,
of wisdom over science,
of the common service of human persons over
the individual covetousness of unlimited
enrichment, and
of the common service of human persons over
the State's covetousness of unlimited power.¹⁶

The thought of Teilhard de Chardin is harmonious. Him-
self both a geologist and a theologian, he attempts a synthesis
between science and religion. Mankind seems to be approaching
"a critical point in social organization," says Teilhard.¹⁷ "The
immense social disturbances which today so trouble the world appear
to signify that Mankind in its turn has reached the stage, common
to every species, when it must of biological necessity undergo the
coordination of its elements."¹⁸

To borrow from Teilhard's image: It is as though we
were beginning to become aware of some vast whirlpool ahead of us,
the ripples of which we are feeling. They forecast and warn that
there must be a synthesis in all things. [A gigantic unity is
being forced by this cosmic vortex.] The barriers of race, nations,
distance, sectors and interests confront inevitable dissolution.
But Mankind is not helpless in this universal grip. He can organize
his response to the irresistible force, using it to magnifying
rather than to frustrate his capability. The way to the inevitable
synthesis is threatened with conflict and turmoil; the ultimate

unity will not come easily. The risk is great that the clashes
it will cause will be so catastrophic as to obliterate all life
in a unity of extinction. A different vision is, however, also
plausible: a vision of Man, growing in perception and love,
organizing with sufficient speed and proper direction so that he
will merge in harmony with the whirlpool's gigantic pull,
strengthened by its forming force into a new and more glorious
unity.

CHAPTER XVI - BIBLIOGRAPHY

1 Edward G. Lansdale, "Viet Nam: Do We Understand Revolution?" *Foreign Affairs*, October 1964, p. 82.

2 Huntington, *op. cit.*, p. 358.

3 See John C. Donnell, "Pacification Reassessed," *Asian Survey*, August 1967, p. 571.

4 See Huntington, *Political Order in Changing Societies*, *op. cit.*, Chapter I.

5 These terms and conditions frequently lead to the understandable charge that we want to do over the foreign country in our image. In reality we very often aim much higher, attempting to endow it with those ideal institutions which we mythologically cherish -- like unfettered private enterprise -- but which we have been unable to sustain.

6 Ernst Halperin, *Statement at Hearings Before the Subcommittee on American Republic Affairs of the Committee on Foreign Relations, U.S. Senate*, March 4, 1968, Center for International Studies, Massachusetts Institute of Technology, pp. 8-9.

7 See Raymond F. Mikesell, *The Economics of Foreign Aid*, Aldine Publishing Co., Chicago, 1968, pp. 257ff., for a penetrating discussion of these two parts from an economic point of view.

8 *Ibid.*, p. 183.

9 Jacob Javits, "Last Chance for a Common Market," *Foreign Affairs*, April 1967, p. 452.

10 *Report of the Advisory Committee on Private Enterprise in Foreign Aid*, Agency for International Development, Washington, D.C., July 1965, p. 1ff.

11 Ricardo Arias Calderon, Conversation, Panama City, July 1966.

12 Henry Kissinger, "Domestic Structures and Foreign Policy," *Daedalus*, Spring 1966, p. 529.

13 *New York Times*, July 3, 1966, pp. 1 and 16.

14 Sol M. Linowitz, "The Demanding Seventies," speech before National Industrial Conference Board, Public Affairs Conference, New York, N.Y., April 21, 1966.

15 Jacques Maritain, *Humanisme Integral* (new ed., Paris: Fernand Aubier, 1947).

16 Quotations from Jacques Maritain, *The Social and Political Philosophy of Jacques Maritain*, Image Books, Doubleday, 1965, pp. 229-274.

17 Pierre Teilhard de Chardin, *The Future of Man*, Harper and Row, 1964; translated from the French by Norman Denny, p. 39.

18 *Ibid*.