A Public Service Message from the American Income Life Insurance Company-: ,Executive offices, Waco, TexasBernard Rapoport, Pres. making patriotic speeches before congressional committees. And we should never forget that American history is quite well known in other countries, so that our speeches are likely to fall flat with the neighbors. I may have sounded in these pages as if I were opposed to the American businessman. Far from it. He, too, can contribute, and contribute heavily, to the solution of our problem. But he cannot do it by exhibiting ignorance of American history, or ignorance of world geography, or ignorance of the history of European colonial management. You may be quite sure that those American businessmen who know these subjects are under no illusion that private business can solve this problem. The Stockholder’s Dilemma , But there is one all-compelling reason that gives asilly sound to some of the recent testimony by business representatives. They have been urging that we turn over the World’s most pressing problem to American private enterprise to solve for us. Let me invite the reader once more to play the game of “Let’s pretend” children’s games are often wise. I promise that this time the game will be more cheerful to play. Let’s pretend that you are a stockholder in a big American oil company. And let’s pretend that the management thinks private enterprise should develop the underdeveloped countries. Since your company does a big business in Iraq, that will be a good place for them to begin. Now Iraq, of course, is the ancient Mesopotamia, where the Babylonian and Assyrian and Chaldean civilizations flourished for centuries and passed away. It is a country of rich, deep, alluvial soil, brought down from the highlands by the Tigris and Euphrates rivers. Its crop yields astonished the ancient world as did the crop yields of ancient Egypt, which also came from alluvial river soil. To get those yields, successive governments built and regulated for many hundreds of years a complicated system of irrigation canals. After thousands of years that system was allowed to collapse, and Mesopotamia became a land of flood and drought, of endless marsh and burning desert. Today, except for its oil, which foreigners are extracting from the soil and extracting from the country, Mesopotamia or Iraq is a desperately poor land. The country where cuneiform writing was invented and where an exact astronomical science once flourished is largely illiterate. With the marshes came the mosquito, and with the mosquito came malaria. So now the people of Iraq are mostly sick. The canals, the ancient highways, are gone. What can your oil company do about it? Rebuild the system of canals? If they try it, you had better forget about dividends for .many years to come. Are you willing? You probably invested your savings in their stock because you thought the stock would pay dividends to you out of ‘!the ‘profits the company would make from oil. In fact, J_.’suspect their corporation charter strongly suggested that thiS’would happen. I doubt if it says a word about rebuilding ttieecOnorny of Iraq. Well, then, wouldn’t you be morally justified. in bringing a stockholder’s suit? If you want to help the’ people iniraq build their economy, you still might prefer to do it.’with other funds and perhaps funds of a different amount than the ones you invested in oil stock. I think you would be justified. And I think the courts would agree with you. That is one reason there is very little danger that your investment in oil will be used to rebuild Iraq’s canal system. Of course, the management may already have built a model village with some of your money, where they are pumping out Iraqi oil. But they could argue reasonably in court that well-housed labor is more efficient and hence more profitable than people in hovels. I think the court would again agree. They might even argue that a lot of Iraqis were objecting ‘ that Iraq’s chief natural resource was being piped out of Iraq without visibly improving the lot of the people of Iraq, and they might argue that an attractive workers’ village would be good public relations. I think the court would agree. But it will be a long time before the share of your company’s profits that stays in Iraq will build those canals. Or even Iraq’s share of all the profits of all the foreign corporations likely to operate in Iraq. The Iraqi Communists will suggest that a quicker way to accumulate the capital Iraq needs for basic public works would be to overthrow the present Iraqi government, confiscate your company’s holdings, including the village your investment helped build, and use the oil profits to build the needed canals. To a wretched sick, illiterate population this program might make a good deal of sense unless there is some other capital ready to build the’ canals. If your .oil company extracts ‘oil in Venezuela, the details of this problem will differ, but not the basic problem. Thanks to royalties on oil, the Venezuelan government is one of the only two governments in the world that operate on the gold standard which cannot be said of either Iraq or the United States; but the basic economy of Venezuela is in a very sorry state. One of the penalties a people pays for being poor, sick, and illiterate is that it is unlikely to have a government that can and will develop its basic economy, even if it gets money either from royalties on oil or as a Washington hand-out. The main point is that American corporations, organized and chartered for private profit, are quite unable to get the world economy in motion. Why have their spokesmen been loudly claiming they could and would? Maybe it has been ordinary ignorance of the problem. Maybe it has been a superstition that government should leave all problems of the public interest to private interests to attend to, and that this has been “the American way” which it has not. Maybe they knew they could not do it but feared that, if publib funds did do it, then Americans at home would demand more use of public funds for the same kind of things here. Maybe it was all these things. I simply do not know and I do not believe anybody else knows. In any case some or all of these factors caused us Americans to waste time discussing the problem on the basis of a fundamentally false assumption: that American private enterprise could do the job. The result of that kind of discussion could, and did, lead only to trivial sums of money. Meanwhile we will think more clearly about our problem and therefore discuss it better if we keep two hard facts in mind. First, the American taxpayer will not let Washington take on this job alone, and he is right. Second, the American investor will not let American business take it on, and he is right, too. One World Two Governments The people of the world are alone able to take on what is the main , economic problem of every single national group: the problem of rebuilding their common world economy. They can hope to do it only by the massive use of public funds. America .cannot , do it for them. ,It might, of course, be done under Communist leadership, but that could come only through a Communist revolution. And it would be twisted to meet Russian needs in Russia’s power struggle with America. The nearest thing to a suitable agency that already exists is the United Nations. And the United Nations is the nearest thing that exists only because the people of the world lack a common government.