Questdons For the Record— McDougaU* page 5 



the contract system of military pxKrurement during the Napoleonic Wars, as 

 opposed to the French arsenal or tribute system of war finance. 



However, British industrialization is not a model for other nations 

 for the very reason that it was first. More useful analogies are drawn from 

 the later industrializatiDn cf other countries playing "catch-up". And what 

 we find is that Germans, Americans, Japanese, and others benefitted from 

 Britain's free trade policy and from large influxes of British capitaL As 

 economic historian Alexander Gershenkron theorized, the more backward a 

 country, the more the state played a role in forcing industrialization. Tsarist 

 and Communist Russia are the best examples. But industrialization proceeded 

 quickly, and at the lowest cost in human misery, in liberal and relatively 

 free market societies like the United States. These were the very nations in 

 which government investment in R&D and plant were lowest! The same is 

 certainly true for Asian countries since World War IL Free enterprise and 

 receptivity to private foreign capital have pro^aered Taiwan, South Korea, 

 Singapore, etc., while planned economies such as China and India have 

 lurched back and forth, at great human cost, despite large government R&D 

 efforts. Of course, in those countries much R&D spending has gone for the 

 military. The desire to play Great Power politics seems to be the greatest 

 barrier to the wise use of R&D funds, but that desire also seems to be an 

 inevitable by-product of post-colonial self-assertion. 



American policies to replicate our own development by 

 transferring capital and technology to the Third World have largely failed. 

 This has been due in part to perverse policies, waste, and corruption in the 

 target countries, in part to tragic fLuctoations in commodity prices, 

 e^)ecialLy oil, and in part to the misapplied generosity of the U.S. itself. 

 Govemment-to-^ovemment loans were not the model for our own 

 industriaUzation (although they were in the Tsarist Russian case), and they 

 have not worked in the Third World. SiixuHarLy, transfer of high technology 

 in hopes of helping Third World countries "leapfrog" the early stages of 

 industrialization is inappropriate in most cases, socialLy dest abiliz ing, and 

 poUticalLy counter-productive (if the locals grow bitter at what they 

 perceive as "unfulfilled American promises." Prononents of LANDSAT (a 

 winderful tooU, for instance, promised tremendous benefits in such areas as 

 malaria control, fishing, erosion control, or scientific agriculture. But in 

 many countries the entire social structure and cultural patterns would have 

 to be uprooted in order to implement reforms based on LANDSAT-derived 

 data. The very technology that helps us to "view" the earth without national 

 boundaries also blinds us to stubborn local conditions. We are reaping a 

 bitter fruit of Third World acrimony in such forums as UI^ISPACE in part 

 because of our over-promising in the 1960s. 



Past disappointments shouM not prevent us from doing what we 

 can to meet local needs with R&D and tech transfer, but once again we 

 shouM not expect too much from such cooperation. Making pnvate 

 international loans and encouraging free enterprise is the best approach, but 

 political conditions often make that impossible. In sum, we cannot do for 

 others what they will not or cannot do for themselves. We are not THAT 

 powerful— and Third World peoples wouM resent us even more if we were. 



