The Capitalist Challenge: THE ANTI-CAPITALIST ATTITUDE

ONE OF the biggest barriers in the way of foreign investment in the world’s underdeveloped countries is not to be found in the tariff regulations or the laws governing the convertibility of currency. It exists instead in the minds and emotions of those who need foreign investment most. But because they often tend to equate it with 19th century-style colonialism, they are reluctant to accept it.

This point of view, amounting in some instances almost to a sort of folklore, has come to be known as the anti-capitalist attitude. In San Francisco last week, in a succession of thoughtful, analytical speeches, representatives from the underdeveloped nations explained some of the reasons behind the attitude.

Misconceptions & Misunderstandings. “The existence of the so-called anti-capitalist attitude,” said Miguel Cuaderno, governor of the Central Bank of the Philippines, “may be attributed to misconceptions, or to the lack of understanding of the conditions, motives and aspirations of the people in the newly developing countries of the world. Considering the magnitude of the capital needed by underdeveloped areas, it is surprising that some of these less-developed countries appear to be reluctant or even opposed to foreign investment. This attitude has given rise to the belief that these countries are anti-capitalist.”

Cuaderno himself is firmly convinced that free enterprise would bring backward countries more benefits than state-controlled economic systems. “Why, then, it may be asked, should the freedom-loving people of some underdeveloped countries entertain any misgivings about the capitalist or free-enterprise system?” The chief reason, said Cuaderno, is that they remember the years of foreign domination under the colonial system. Actually, said Cuaderno, the underdeveloped countries are not anti-capitalist at all; they are just nationalistic−and understandably so. They want to be the bosses of their own industries. They prefer loans from foreign governments to foreign investments because they see less danger of losing control of their plants. Cuaderno’s own partial solution: foreign investment on a joint-venture basis.

National Pride. Banker Cuaderno was heartily seconded by Minocher Masani, an Independent member of the Indian Parliament, longtime adviser to the famed Tata Sons, Ltd. and one of India’s best-known and most widely respected capitalists. “National pride,” said Masani, “demands that one should catch up, if not with the prosperity of the U.S. or Canada, at least with that of France or Italy. The Asian intellectual casts his eyes around for some method by which his country can pull itself up almost overnight by its bootstraps. Only too often, Communism is not to him the brave new world that the Western Utopians saw in the ’30s, but a practical expedient by means of which a poor nation can ruthlessly mobilize its manpower and resources so as to attain economic strength, military power and, consequently, the esteem of the world.

“Government policies in the countries of Asia and Africa vary a great deal,” Masani said, “but they inevitably reflect fear of losing their newly won independence and impatience to cease being among the world’s forgotten peoples. Sometimes these policies are marked by a certain amount of doctrinaire thinking and preconceptions that are a hangover of a period when power and responsibility were denied to the sons of the soil. Insofar as foreign investment is concerned, the door is open, but it is true that no one waits at the door with open arms.

“It would be unrealistic to ignore the fact that certain acts of the governments of these newly freed countries give rise to diffidence and hesitation among potential investors abroad. So mistakes are being made. But who doesn’t make mistakes? The very basis of democracy is indeed the right of every people to make mistakes and pay for them in the hope that they may not be repeated. You will not, I hope, consider it an impertinence if I ask whether you, who exercise this right so freely in your own country, will wish to deny it to others?”

Insurance Policy. “May I take this liberty of suggesting that every American who invests in countries like mine is, whether he knows it or not, taking out an insurance policy for his children’s benefit? Intercontinental trade and economic cooperation may after all prove to be the best safeguard against the intercontinental missile.

“I myself,” said Capitalist Masani, “hold the view that the country that gives a grant or loan has a right to attach conditions which in its opinion make for honest, efficient and productive use of the assistance. On the other hand, there should be nothing done that appears to question the right of a country democratically to determine the structure of its own industry or economy. Any suggestion that an attempt is made to export a country’s economic philosophy is one that needs to be scrupulously eschewed.”