by Dr. Carroll Quigley 
ISBN 0913022-14-4
Page 1088
     Dulles refused to recognize the right of anyone to be neutral and 
tried to force all states to join the American side of the Cold War or 
be condemned to exterior darkness. 
Page 1090
     The so-called "missile gap" was a mistaken idea for the U.S. was 
in a condition of "nuclear plenty" and of "overkill capacity" that 
posed a serious problem for the Soviet Union. It was, strangely 
enough, just at that time (end of 1957) that two American studies (the 
Gaither Report and the Special Studies Project of the Rockefeller 
Brothers Fund) suggested the existence of a missile gap or inferiority 
in missile capacity of the United States compared to the Soviet Union 
based on the overemphasis on the "size" of Soviet rocket boosters. In 
this pleasant period of self-deception, the Soviet Union entered upon 
an unofficial international suspension of nuclear bomb testing from 
1958 until 1961. 
Page 1097
     As a result of NASA's $5 billion budget, the educational system 
was brought into the tempestuous atmosphere of the frantic American 
marketplace and was being ransacked from the highest levels down to 
high school and even below for talented, trained, or merely eager 
people. As the demands for such people grew and their remunerations 
and opportunities increased, the substantial minority who were not 
talented, trained or eager found fewer and fewer opportunities to make 
a living and began to sink downward toward a steadily growing lower 
class of social outcasts and underprivileged, the socially self-
perpetuating group of the impoverished. 
Page 1098
     In 1959, Red China began making increasingly unfavorable comments 
about Khrushchev's doctrines of "peaceful coexistence with capitalism" 
and the "inevitable victory of Socialism without war." He ruled out 
the need for war and the Soviet Union was willing to reach complete 
disarmament supervised by mutual controls including aerial 
Page 1101
     As late as 1960, only 38,000 man-days of labor were lost by 
strikes and lockouts in West Germany compared to almost half a million 
in the Netherlands, 3 million in the U.K. and 19 million in the U.S.
     In Germany in 1958, eight great trusts still controlled 75 
percent of crude steel production, 80 percent of raw iron, 60 percent 
of rolled steel, and 36 percent of coal output. 
     The ten percent increase each year in the West German gross 
national product was something that could not be denied or 
Page 1102
     In East Germany in 1960, almost a million farmers were forced 
into less than 20,000 collective farms by methods of violence and 
social pressure similar to those Stalin had used. And the consequences 
were similar: agricultural production collapsed. Shortages of food 
were soon followed by other shortages. 
Page 1103
     Khrushchev's talk about "peaceful co-existence" was sincere and 
he sincerely wished to divert the Communist-Capitalist struggle into 
non-violent areas. Thus he was sincere in his disarmament suggestions. 
Page 1105
     Metternich said, "A diplomat is a man who never allows himself 
the pleasure of a triumph," and does so simply because it is to the 
interest of the stronger that an opponent who recognizes the victor's 
strength and is reasonable in yielding to it not be overthrown or 
replaced by another ruler who is too ignorant or too unreasonable to 
do so. 
Page 1108
     After Russia backed down on the Cuban missile crisis, the White 
House received a long and confused letter from Khrushchev whose tone 
clearly showed his personal panic and, to save his reputation, it was 
not released to the public. The next morning, the Soviet Foreign 
Office published a quite different text, suggesting that a deal be 
made dismantling both the American missile sites in Turkey and the 
Soviet missile sites in Cuba. To those inside both governments, this 
was recognized as a Soviet surrender since they knew that the Turkish 
sites were obsolete and were already scheduled to be dismantled. It 
was rejected by the White House because it would have represented to 
the world a surrender of Turkey. Instead, the White House replied to 
an offer to remove the Russian missiles if we would lift the blockade 
and promise not to invade Cuba.
Page 1109
     The Brazilian cost of living rose 40% in 1961, 50% in 1962, and 
70% in 1963. 
Page 1110
     Latin America is not only poverty-ridden but the distribution of 
wealth and income is so unequal that the most ostentatious luxury 
exists for a small group side by side with the most degrading poverty 
for the overwhelming majority. Four fifths of the population of Latin 
America get about $53 a year, while a mere 100 families own 90% of the 
native-owned wealth of the whole area and only 30 families own 72% of 
that wealth. In Brazil, half of all and is owned by 2.6% of the 
landowners while 22.5% is owned by only 1/2% of the owners. In Latin 
America, at least two thirds of the land is owned by 10% of the 
Page 1111
     As things stood in 1960, infant mortality varied between 20% and 
35% in different countries. 
Page 1112
     While such conditions may rouse North American to outrage or 
humanitarian sympathy, no solution can be found by emotion or 
sentimentality. The problems are not based on lack of anything but on 
structural weaknesses. Solutions will not rest on anything that can be 
done to or for individual people but on the arrangements of peoples. 
Latin American lacks the outlook that will mobilize its resources in 
constructive rather than destructive directions. 
     Obviously, the birthrate must decrease or the food supply must be 
increased faster than the population. And some provision must be made 
to provide peasants with capital and know-how before the great landed 
estates are divided up among them. A more productive organization of 
resources should have priority over any effort to raise standards of 
Page 1113
     We hear a great deal about Latin America's need for American 
capital and American know-how, when in fact the need for these is much 
less than the need for utilization of Latin America's own capital and 
know-how. The wealth and income of Latin America, in absolute 
quantities, is so great and it is so inequitably controlled and 
distributed that there is an enormous accumulation of incomes, far 
beyond their consumption needs, in the hands of a small percentage of 
Latin Americans. Much of these excess incomes are wasted, hoarded, or 
merely used for wasteful competition in ostentatious social display 
largely due to the deficiencies of Latin American personalities and 
     The solution is not to redistribute incomes but to change the 
patterns of character and of personality formation so that excess 
incomes will be used constructively and not wasted. 
Page 1114
     At least half the value of American aid has been wiped away by 
the worsening of Latin America's terms of trade which made it 
necessary for it to pay more and more for its imports at the same time 
that it got less and less for its exports made worse by much of the 
available supply of foreign exchange spent for self-indulgent and non 
constructive spending abroad or simply to hoard their money in New 
York, London or Switzerland. The solution must be found in more 
responsible, more public-spirited, and more constructive patterns of 
outlook, of money flows, and of political and social security. A 
similar solution must be found for social deficiencies like inadequate 
housing, education, and social stability. 
Page 1115
     An Asian despotism is a two-class society in which a lower class 
consisting of nine tenths of the population supports an upper ruling 
class consisting of a governing bureaucracy of scribes and priests 
associated with army leaders, landlords, and moneylenders. The 
essential character of an Asian despotism rests on the fact that the 
ruling class has legal claim on the working masses and possesses the 
power to enforce these claims. 
Page 1119
     Arabic boys grow up egocentric, self-indulgent, undisciplined, 
immature, spoiled, subject to waves of emotionalism, whims, passion, 
and pettiness. Another aspect of Arabic society is its scorn of 
honest, steady manual work, especially agricultural work. There is a 
lack of respect for manual work that is so characteristic of the 
Pakistani-Peruvian axis. The Bedouin outlook include lack of respect 
for the soil, for vegetation, for most animals, and for outsiders. 
These attitudes are to be seen constantly as erosion, destruction of 
vegetation and wild life, personal cruelty and callousness to most 
living things, including one's fellow man, and a general harshness and 
indifference to God's creation. 
Page 1120
     The ethical sides of Judaism, Christianity and Islam sought to 
counteract harshness, egocentricity, tribalism, cruelty, scorn of work 
and one's fellow creatures but these efforts have met with little 
Page 1122
     The method for the reform of Latin America rest in the upper 
class of that society. Such reform can come about only when the 
surpluses that accumulate in the hands of the Latin American oligarchy 
are used to establish more progressive utilization of Latin American 
Page 1123
     The whole system is full of paradox and contradiction. The 
obstacle to progress and hope rests in the oligarchy because it 
controls wealth and power, and also because there is no hope at all 
unless it changes its ideology. 
Page 1124
     World War II, by increasing demand for Latin America's mineral 
and agricultural products, pushed starvation and controversy away from 
the immediate present. Latin American boomed: the rich got richer; the 
poor had more children. A few poor became rich, or at least richer. 
But nothing was done to modify the basic pattern of Latin American 
power, wealth, and outlook. 
Page 1127
     Until the 1952 revolution, the Bolivians, mostly of Indian 
descent, who were treated as second-class persons working as 
semislaves in the mines or as serfs on the large estates, had a per 
capita annual outcome of about $100. As might be expected, the 
majority were illiterate, sullen and discouraged. 
Page 1128
     The Junta was overthrown in 1952. Paz Estenssoro returned from 
exile to become president. Pressure from the tin miners and from the 
peasants forced the new regime to nationalize the mines and to break 
up many of the large estates. Production costs of tin rose above 
market price thus wiping out their foreign exchange earnings. Worse, 
the world price of tin collapsed in 1957. 
     The problems could hardly be handled because of popular pressures 
in a democratic country to live beyond the country's income. The final 
collapse did not occur because of the efforts of President Siles and 
assistance from the United States. 
Page 1129
     If any proof were needed that radical reform for sharing the 
wealth of the few among the many poor is not an easy, or feasible 
method, Bolivia's hard-working Indians, once hopelessly dull, morose, 
and sullen, are not bright, hopeful, and self-reliant. Even their 
clothing is gradually shifting from the older funereal black to 
brighter colors and variety. 
     Few contrasts could be more dramatic than that between the 
Bolivian revolutionary government (in which a moderate regime was 
pushed toward radicalism by popular pressures and survived, year after 
year, with American assistance) and the Guatemala revolution where a 
Communist-inspired regime tried to lead a rather inert population in 
the direction of increasing radicalism but was overthrown by direct 
American action within three years (1951-1954).
     Guatemala is one of the "banana republics." The retail value of 
Latin America's part of the world's trade in bananas is several 
billion dollars a year but Latin America's gets less than 7% of that 
value. One reason for this is the existence of the United Fruit 
Company which owns two million acres of plantations in six countries 
and handles about a third of the world's banana sales. It pays about 
$145 million a year into the six countries and claims to earn about 
$26 million profits on its $159 million investment but this profit 
figure of about 16.6% is undoubtedly far below the true figure. In 
1970, 95% of the land held by United Fruit was uncultivated. 
Page 1130
     Guatemala, like Bolivia, has a population that consists largely 
of impoverished Indians and mixed bloods (mestizos). From 1931 to 1944 
it was ruled by the dictator Jorge Ubico, the last of a long line of 
corrupt and ruthless tyrants. When he retired to New Orleans in 1944, 
free elections chose Juan Jose Arevalo (1945-1950) and Jacobo Arbenz 
Guzman (1950-1954) as presidents. Reform was long overdue and these 
two administrations tried to provide it, becoming increasingly anti-
American and pro-Communist over their nine-year rule. When they began, 
civil or political rights were almost totally unknown and 142 persons 
(including corporations) owned 98% of the arable land. Free speech and 
press, legalized unions, and free elections preceded the work of 
reform but opposition from the United States began as soon as it 
became clear that the Land Reform Act of June 1952 would be applied to 
the United Fruit Company. This act called for redistribution of 
uncultivated holdings above a fixed acreage or lands of absentee 
owners, with compensation from the twenty year 3 percent bonds equal 
to the tax value of the lands. About 400,000 acres of United Fruit 
lands fell under this law and were distributed by the Arbenz Guzman 
government to 180,000 peasants. This was declared to be a Communist 
penetration by Allen Dulles, Director of the CIA, which soon found an 
American-trained and American-financed Guatemalan Colonel, Carlos 
Castillo Armas, who was prepared to lead a revolt against Arbenz. With 
American money and equipment, and even some American "volunteers" to 
fly "surplus" American planes, Armas mounted an attack of Guatemalan 
exiles from bases in two adjacent dictatorships, Honduras and 
Nicaragua." Both these countries are horrible examples of everything a 
Latin American government should not be, corrupt, tyrannical, cruel, 
and reactionary, but they won the favor of the United States State 
Department by echoing American foreign policy at every turn. 
Nicaragua, often a target of American intervention in the past, was 
decayed, dirty, and diseased under the twenty-year tyranny of 
Anastasio Somoza (1936-1956). His assassination handed the country 
over to be looted by his two sons, one of whom became president while 
the other served as commander of the National Guard.
Page 1131
     From these despotic bases, the CIA-directed assault of Colonel 
Armas overthrew Arbenz Guzman in 1954 and established in Guatemala a 
regime similar to that of the Somozas. All civil and political 
freedoms were overthrown, the land reforms were undone, and corruption 
reigned. When Armas was assassinated in 1957 and a moderate elected as 
his successor, the army annulled those elections and held new ones in 
which one of their own, General Fuentes, was "elected." He liquidated 
what remained of Guatemala's Socialist experiments by granting these 
enterprises, at very reasonable prices, to his friends while 
collecting his own pay of a $1 million a year. Discontent from his 
associates led to a conservative army revolt but American pressure 
secured his position. The U.S. could not afford a change of regime 
since that country was the chief aggressive base for the Cuban exiles' 
attack on Cuba at the Bay of Pigs in April 1962. 
     The CIA success in attacking "Communist" Guatemala from 
dictatorial Nicaragua in 1954 was not repeated in its more elaborate 
attack on "Communist" Cuba from dictatorial Guatemala in 1962. In 
fact, the Bay of Pigs must stand as the most shameful event in U.S. 
history since the end of World War II.
     The causes of the Cuban disaster, if we oversimplify, may be 
organized in terms of two intersecting factors:
1) the personality deficiencies of the Cubans themselves such as their 
lack of rationality and self-discipline, their emotionalism and 
2) the ignorance and ineptitude of the American State Department which 
seems incapable of dealing with Latin America in terms of the real 
problems of the area but instead insists on treating it in terms of 
America's vision of the world, which is to day, America's political 
preconceptions and economic interests. 
     Cuba is more Spanish than much of Latin America and only obtained 
its independence in 1898, two generations later than the rest of Latin 
America. Then, for over thirty years, until the abrogation of the 
Platt Amendment in 1934, Cuba was under American occupation or the 
threat of direct American intervention. It fell under American 
economic domination by American investments on the island and by 
becoming deeply involved in the american market, especially for sugar. 
A local oligarchy of Cubas was built up including an exploitative 
landlord group that had not existed previously. 
     With the establishment of the Good Neighbor Policy in 1933 and 
ending the threat of American direct intervention, it became possible 
for the Cubans to overthrow the tyrannical and bloody rule of General 
Machado which had lasted for eight years (1925-1933).
Page 1132
     The opportunity to begin a series of urgently needed and widely 
demanded social reforms under Machado's successor, San Martin, was 
lost when the United States refused to recognize or to assist the new 
regime. As a result, a ruthless Cuban army sergeant, Fuegencio 
Batista, was able to overthrow San Martin and begin a ten-year rule 
through civilian puppets chosen in fraudulent elections, and then 
directly as president himself. When San Martin was elected president 
in 1944, he abandoned his earlier reformist ideas and became the first 
of a series of increasingly corrupt elected regimes over the next 
eight years. The fourth such election for 1953 was prevented when 
Batista seized power once again in 1952. 
     The next seven years were filled with Batista's efforts to hold 
his position by violence and corruption against the rising tide of 
discontent against his rule. 
     One of the earliest episodes in that tide was an attempted revolt 
by a handful of youths, led by 26-year-old Fidel Castro in eastern 
Cuba on July 26, 1953. The failure of the rising gave Castro two years 
of imprisonment and more than a year of exile but at the end of 1956, 
he landed with a handful of men to begin guerrilla operations. 
Batista's regime was so corrupt that many segments of the army and 
middle class were neutral or favorable to Castro's operations. The 
necessary arms and financial support came from these groups although 
the core of the movement was made up of peasants and workers led by 
young middle-class university students. 
     This Castro uprising was not typical because of Castro's 
fanatical thirst for power, his ruthless willingness to destroy 
property or lives in order to weaken the Batista regime, and his 
double method of operation, from within Cuba rather than from abroad 
and from a rural base, the peasants, rather than the usual urban base, 
the army, used by most Latin American rebels. 
     On New Year's day of 1959, Castro marched into Havana. Within two 
weeks, the supporters of the Batista regime and dissident elements in 
Castro's movement began to be executed by firing squad. 
     For a year, Castro's government carried on reforms aimed at 
satisfying the more obvious demands of the dispossessed groups. 
Military barracks were converted into schools; the militia was 
permanently established to replace the regular army; rural health 
centers were set up; a full-scale attack was made on illiteracy; new 
schools were constructed; urban rents were cut in half; utility rates 
were slashed; taxes were imposed on the upper classes; the beaches, 
once reserved for the rich, were opened to all; and a drastic land 
reform was launched. 
Page 1133
     These actions were not integrated into any viable economic 
program but they did spread a sense of well-being in the countryside 
although they curtailed the building boom in the cities, largely 
rooted in American investment, and they instigated a flight of the 
rich from the island to refuge in the U.S. 
     Castro sought to export revolution to the rest of Latin America. 
Arms and guerrilla fighters were sent, and lost, in unsuccessful 
efforts to invade Panama, Nicaragua, Haiti, and the Dominican 
Republic. Failure of these turned him to methods of more subtle 
penetration, largely worked by propaganda and the arming and training 
of small subversive groups, especially where democratic or progressive 
regimes seemed to be developing as in Venezuela or Colombia. At the 
same time, an unsuccessful effort was made to persuade all Latin 
America to form an anti-Yankee front. 
     Although the U.S. had promised in 1959 to follow a policy of non-
intervention toward Cuba, these changes within the island and a visit 
of Soviet Deputy Premier Mikoyan in February 1960 forced a 
reconsideration of this policy. The Mikoyan agreement promised Cuba 
petroleum, arms and other needs for its sugar followed by 
establishment of diplomatic relations with the Soviet Union in May and 
with Red China later in the year. The Soviet embassy in Havana became 
a source of Communist subversion for all Latin America almost at once, 
while in September Khrushchev and Castro jointly dominated the annual 
session of the General Assembly of the U.N. in New York. 
     Castro obtained petroleum for Cuban sugar. When he insisted that 
American-owned refineries in Cuba process this oil, they refused and 
were at once seized by Castro. 
Page 1134
     The U.S. struck back by reducing the Cuban sugar quota in the 
American market which led, step by step, to Castro's sweeping 
nationalization of foreign-owned factories on the island. The United 
States retaliated by establishing a series of embargoes on Cuban 
exports to the U.S. These controversies led Castro into an economic 
trap similar to that into which Nasser had fallen with Egypt's cotton. 
Each nationalist leader committed his chief foreign-exchange-earning 
product (sugar and cotton) to the Soviet Union as payment for 
Communist (often Czech) arms. This tied these countries to the Soviet 
Union and deprived them of the chance to use their own source of 
foreign money for equipment so urgently needed for economic 
improvement. By December when American diplomatic relations with Cuba 
were broken off, the Cuban economic decline had begun and soon reached 
a point where standards of living were at least a third below the 
Batista level except for some previously submerged groups. 
     At the end of 1960, the Eisenhower Administration decided to use 
force to remove Castro. This decision was a major error and led to a 
totally shameful fiasco. The error apparently arose in the CIA and was 
based on a complete misjudgment of the apparent east with which that 
agency had overthrown the Arbenz regime in Guatemala in 1954 by 
organizing a raid of exiles, armed and financed by the CIA, into 
Guatemala from Nicaragua. The CIA analyzed this apparently successful 
coup quite incorrectly,since it assumed that Arbenz had been 
overthrown by the raiding exiles when he had really been destroyed by 
his own army which used the raid as an excuse and occasion to get rid 
of him. But on this mistaken basis, the CIA decided to get rid of 
Castro by a similar raid of Cuban exiles from Guatemala. 
     This decision was worse than a crime; it was stupid. A 
unilateral, violent attack on a neighboring state with which we were 
not at war, in an area where we were committed to multilateral and 
peaceful procedures for settling disputes, was a repudiation of all 
our idealistic talk about the rights of small nations and our devotion 
to peaceful procedures that we had been pontificating around the world 
since 1914. It was a violation of our commitment to non-intervention 
in the Americas and specifically in Cuba. In sequence to our CIA 
intervention in Guatemala, it strengthened Latin American picture of 
the U.S. as indifferent to Latin America's growing demand for social 
     The whole operation, patterned on Hitler's operations to subvert 
Austria and Czechoslovakia in 1938 was bungled as Hitler could never 
have bungled anything. The project was very much a Dulles brothers' 
job and its execution was largely in the hands of the CIA. 
Page 1135
     The plan of invasion of Cuba seems to have been drawn on typical 
Hitler lines: the expeditionary force was to establish a beachhead in 
Cuba, set up a government on the island, be recognized by the U.S. as 
the actual government of Cuba, and ask Washington for aid to restore 
order in the rest of the island which it did not yet control. The CIA 
assured President Kennedy that if matters were allowed to go on as 
they were, Castro would be strengthened in power (which was untrue) 
and that the invasion would be success because of the Cuban people, 
led by the anti-Castro underground, would rise against him as soon as 
they heard of the landing. 
     The executive committee of Cuban refugees in the U.S., mostly 
representatives of the older ruling groups in Cuba, were eager to 
restore the inequitable economic and social system that had existed 
before Castro. They were alienated from the most vigorous anti-Castro 
groups in the Cuban underground who had no desire to turn back the 
clock to the Batista era. The CIA would not cooperate with the anti-
Castro underground because it was opposed to their wish for social and 
economic reform. Accordingly, the CIA launched the invasion without 
notifying the Cuban underground. Then the attack was bungled. 
Page 1136
     This greatly strengthened Castro's prestige in Latin American 
more than in Cuba itself. This in turn permitted him to survive a 
deepening wave of passive resistance and sabotage within Cuba itself, 
chiefly from the peasants to recapture control of the Cuban 
revolutionary movement.
Page 1138
     In May 1961, Castro proclaimed that Cuba would be a socialist 
state but despite his statements, he was not in any way a convinced 
Communist or a convinced anything else, but was a power-hungry and 
emotionally unstable individual, filled with hatred of authority 
himself, and restless unless he had constant change and megalomaniac 
satisfactions. His tactical skill, especially in foreign affairs, is 
remarkable, and shows similarity to Hitler's.
Page 1139
     On the whole, the role of the U.S. in Latin America has not been 
such as to help either patterns or priorities, largely because our 
concern has been with what seems to be useful or better for us rather 
than with what would be most helpful to them. 
Page 1140
     Despite the enthusiasm and energy that make it possible for them 
to overthrow corrupt and tyrannical regimes,it soon becomes clear that 
they have little idea what to do once they get into power. As a 
result, they fall under the personal influence of unstable and 
ignorant men, the Nassers, the Perons, and the Castros who fall back 
on emotionally charged programs of hatreds and spectacular displays of 
unconstructive nationalism that waste time and use up resources while 
the real problems go unsolved. 
     A heavy responsibility rests with the United States for this 
widespread failure to find solutions to problems all the way from 
Pakistan to Peru. The basic reason for this is that our policies in 
this great area have been based on efforts to find solutions to our 
own problems rather than theirs; to make profits, to increase supplies 
of necessary raw materials, to fight Hitler, to keep out Communism and 
prevent the spread of neutralism. The net result is that we are now 
more hated than the Soviet Union and neutralism reveals itself as 
clearly as it dares through the whole area. 
Page 1141
     The sole consequence of the Dulles efforts to do the wrong thing 
along the Pakistani-Peruvian axis has been to increase what he was 
seeking to reduce: local political instability, increased Communist 
and Soviet influence, neutralism, and hatred of the U.S. 
     Although the Dulles period shows most clearly the failures of 
American foreign policy in Latin America, the situation was the same, 
both before and since Dulles. American policy has been determined by 
American needs and desires and not by the problems of Latin Americans.   
There are four chief periods in U.S. policy in Latin America in the 
20th century:
1) a period of investment and interventionism (until 1933) and was 
basically a period of American imperialism. American money came as 
investments seeking profits out of the exploitation of the areas 
resources. There was little respect for the people themselves and 
intervention by American military and diplomatic forces was always 
close at hand as a protection for American profits and investments. 
2) the Good Neighbor Policy in 1933 reduced intervention while 
retaining investment.
3) from 1940 until 1947, our efforts to involved the are in our 
foreign policy against Hitler and Japan;
4) since 1947, against the Soviet Union. 
     Both these efforts have been mistakes. 
Page 1142
     That this failure continued into the 1960s was clear in 
Washington's joy at the military coup that ejected the left-of-center 
Goulart government from Brazil in 1964 for that government, however 
misdirected and incompetent, at least recognized that there were 
urgent social and economic problems in Brazil demanding treatment. No 
real recognition that such problems existed was achieved in Washington 
until Castro's revolution forced the realization. 
     The formal agreement for the Alliance for Progress aims and 
attitudes were admirable but required implementation features that 
were not covered in the Charter itself.
     "We, the American Republics, hereby proclaim our decision to 
unite in a common effort to bring our people accelerated economic 
progress and broader social justice within the framework of personal 
dignity and personal liberty. Almost two hundred years ago we began in 
this hemisphere the long struggle for freedom which now inspires 
people in all parts of the world. Now we must give a new meaning to 
that revolutionary heritage. For America stands at a turning point in 
history. The men and women of this hemisphere are reaching for the 
better life which today's skills have placed within their grasp. They 
are determined for themselves and their children to have decent and 
ever more abundant lives, to gain access to knowledge and equal 
opportunity for all, to end those conditions which benefit the few at 
the expense of the needs and dignity of the many." 
Page 1144
     These were fine words but the methods for achieving these 
desirable goals were only incidentally established in the Charter. On 
the whole, it cannot be said that it has been a success. It's 
achievement has been ameliorative rather than structural, and this 
alone indicates that it has not been a success. For unless there are 
structural reforms, its economic development will not become self-
sustaining or even manage to keep up with the growth of population on 
the basis of income per capita. 
Page 1145
     The failure of the Alliance for Progress to achieve what it was 
touted to achieve was a result that it was not intended primarily to 
be a method for achieving a better life for Latin Americans but was 
intended to be a means of implementing American policy in the Cold 
War. This became clearly evident at the second Punta del Este 
Conference in 1962 where Washington's exclusive control over the 
granting of funds was used as a club to force the Latin American 
states to exclude Cuba from the Organization of American States. The 
original plan was to cut off Cuba's trade with all Western Hemisphere 
countries. A two-thirds vote was obtained only after the most intense 
American "diplomatic" pressure and bribery involving the granting and 
withholding of American aid to the Alliance. Even at that, six 
countries, Brazil, Mexico, Argentina, Chile, Bolivia, and Ecuador, 
representing 70% of Latin America's population refused to vote for the 
American motions. 
     The aid takes the form not of money which can be used to buy the 
best goods in the cheapest market but as credits which can be used 
only in the U.S. Much of these credits goes either to fill the gaps in 
the budgets or the foreign-exchange balances which provides the 
maximum of leverage in getting these governments to follow America's 
lead but provides little or no benefit to the impoverished peoples of 
the hemisphere. 
Page 1148
     The post-war agrarian reform redistributed the ownership of land 
by the government taking all individual land holdings beyond 7.5 
acres, all rented land over 2.5 acres, and the land of absentee 
landlords. The former owners were paid with long-term bonds. In turn, 
peasants without land or with less than the maximum permitted amount 
were allowed to buy land from the state on a long-term low-interest-
rate basis. Cash rents for land were also lowered. As a result, Japan 
became a land of peasant owners with about 90% of the cultivated land 
worked by its owners. 
Page 1151
     Agrarian reform has driven Communism out of the rural areas and 
restricted it to the cities, chiefly to student groups.
Page 1153
     Under the Czar, Russia produced great surpluses, especially of 
Page 1159
     Previous to the Land Reform Law of 1950, 10% of families owned 
53% farm land while 32% owned 78% of the land. This left over two 
thirds of such families with only 22% of the land. The first stage in 
agrarian reform had been the "elimination of landlordism." The 
landlords were eliminated with great brutality in a series of 
spectacular public trials in which landlords were accused of every 
crime in the book. At least 3 million were executed and several times 
that number were imprisoned but the totals may have been much higher. 
The land thus obtained was distributed to poor peasant families with 
each obtaining about one-third of an acre. 
     The second stage sought to establish cooperative farming. In 
effect, it took away from the peasants the lands they had just 
obtained. The third stage constituting the basic feature of the "Great 
Leap Forward" merged the 750,000 collective farms into about 26,000 
agrarian communes of about 5,000 families each. This was a social 
rather than simply an agrarian revolution since its aims included the 
destruction of the family household and the peasant village. All 
activities of the members, including child rearing, came under the 
control of the commune. 
Page 1160
     The Communist government was not involved in corruption, self-
enrichment, and calculated inefficiency as earlier Chinese governments 
were and had both greater power and greater desire to operate a fair 
rationing system but the fact remains that the inability of communized 
agricultural system to produce sufficient food surpluses to support a 
communized industrial system at a high rate of expansion is now 
confirmed and the need for all Communist regimes to purchase grain 
from the Western countries confirms that there is something in the 
Western pattern of living which does provide a bountiful agricultural 
Page 1164
     A source of alienation between Moscow and Peking is concerned 
with the growing recognition that the Kremlin was being driven toward 
a policy of peaceful coexistence with the U.S. not as a temporary 
tactical maneuver (which would have been acceptable to China) but as a 
semipermanent policy since Marxist-Leninist theory envisioned the 
advanced capitalist states as approaching a condition of economic 
collapse from "the internal contradictions of capitalism itself." This 
crisis would be reflected in two aspects: the continued impoverishment 
of the working class with the consequent growth of the violence of the 
class struggle in such countries and increasing violence of the 
imperialist aggressions of such countries toward each other in 
struggles to control more backward areas as markets for the industrial 
products that the continued impoverishment of their own workers made 
impossible to sell in domestic market. The falseness of these theories 
was fully evident in the rising standards of living of the advanced 
industrial countries. This evidence of the errors of Marxist-Leninist 
theories was increasingly clear to the Kremlin, although it could not 
be admitted, but it was quite unclear to Peking. 
Page 1165
     Mao Tse-tung, son of a peasant who became wealthy on speculation 
and moneylending was born in 1893 in Hunan province. 
Page 1168
     There are at least half a dozen legal, minor political parties in 
Red China today (1966). These not only exist and are permitted to 
participate in the governing process in a very minor way, but they are 
subject to no real efforts at forcible suppression, although they are 
subject to persistent, rather gentle, efforts at conversion. 
Page 1170
     French expenditure of $7 billion and about 100,000 lives during 
the eight-year struggle ended at Geneva in 1954. The Geneva agreements 
provided that all foreign military forces, except a French training 
group, be withdrawn from Laos. When the Pathet Lao showed increased 
strength in the elections of May 1958, the anti-Communist group 
combined to oust Premier Phouma and put in the pro-Western Sananikone. 
This government was then ejected and replaced by a Right-wing military 
junta led by General Nosavan in 1960; but within seven months a new 
coup led by Kong Le brought Phouma back to office. Four months later, 
Nosavan once again replaced Phouma by military force. The Communist 
countries refused to recognize this change and increased their 
supplies to the Pathet Lao by Soviet airlift. 
Page 1172
     The Geneva agreement of 1954 had recognized the Communist 
government of North Vietnam dividing the country at the 17th parallel 
but this imaginary line could not keep discontent or Communist 
guerrillas out of South Vietnam so long as the American-sponsored 
southern government carried on its tasks with corruption, favoritism 
and arbitrary despotism. These growing characteristics of the South 
Vietnam government centered around the antics of the Diem family. 
President Diem's brother Nhu was the actual power in the government 
heading up a semi-secret political organization that controlled all 
military and civil appointments. On the Diem family team were three 
other brothers, including the Catholic Archbishop of Vietnam, the 
country's ambassador to London, and the political boss of central 
Vietnam who had his own police force. 
     While the country was in its relentless struggle with the 
Vietcong Communist guerrillas who lurked in jungle areas, striking 
without warning at peasant villages that submitted to the established 
government or did not cooperate with the rebels, the Diem family 
tyranny was engaged in such pointless tasks as crushing Saigon high 
school agitations by secret police raids or efforts to persecute the 
overwhelming Buddhist majority and to extend favors to the Roman 
Catholics who were less than 10% of the population. 
     When Diem became president in 1955, after the deposition of the 
pro-French Emperor Bao Dai, the country had just received 800,000 
refugees from North Vietnam which the Geneva conference had yielded to 
Ho Chi Minh's communists, the overwhelming majority of which were 
Roman Catholics, raising their number to over a million in a 
population of 14 million. Nevertheless, Diem made these Catholics the 
chief basis of his power, chiefly recruiting the refugees into various 
police forces dominated by the Diem family.
Page 1173
     By 1955, these were already beginning to persecute the Buddhist 
majority, at first by harassing their religious festivals and parades 
but later with brutal assaults on their meetings. An attempted coup by 
army units was crushed and the Diem rule became increasingly 
     American military assistance tried to curtail the depredations of 
the Communist guerrillas. The intensity of the guerrilla attacks 
steadily increased following Diem's re-election with 88% of the vote. 
American intervention was also stepped up and gradually began to shift 
from a purely advisory and training role to increasingly direct 
participation in the conflict. From 1961 onward, American casualties 
averaged about one dead a week, year after year. The Communist 
guerrilla casualties were reported to be about 500 per week but this 
did not seem to diminish their total number or relax their attacks. 
     These guerrilla attacks consisted of rather purposeless 
destruction of peasant homes and villages, apparently designed to 
convince the natives of the impotence of the government and the 
advisability of cooperating with the rebels. To stop these 
depredations, the government undertook the gigantic task of organizing 
the peasants into "agrovilles" or "strategic hamlets" which were to be 
strongly defended residential centers entirely enclosed behind 
barricades. The process, it was said, would also improve the economic 
and social welfare of the people to give them a greater incentive to 
resist the rebels. There was considerable doubt about the 
effectiveness of the reform aspect of this process and some doubt 
about the defence possibilities of the scheme as a whole. Most 
observers felt that very little American economic aid ever reached the 
village level but instead was lost on much higher levels. By the 
summer of 1963, guerrillas were staging successful attacks on the 
strategic hamlets and the need for a more active policy became acute. 
Page 1175
     This final crisis in the story of the Diem family and its 
henchmen arose from religious persecution of the Buddhists under the 
guise of maintaining political order. On November 1, 1963, an 
American-encouraged military coup led by General Minh overthrew the 
Diem family. A new government with a Buddhist premier calmed down the 
domestic crisis but was no more able to suppress guerrilla activities.
Page 1178
     The massive economic mobilization for World War II showed clearly 
that there could be an equally massive post-war mobilization of 
resources for prosperity. 
Page 1184
     It is usually not recognized that the whole economic expansion of 
Western society rests upon a number of psychological attitudes that 
are prerequisites to the system as we have it but are not often stated 
explicitly. Two of these may be identified as:
1) future preference and
2) infinitely expandable material demand. 
     In a sense, these are contradictory since the former implies that 
Western economic man will make almost any sacrifice in the present for 
the same of some hypothetical benefit in the future while the latter 
implies almost insatiable demand in the present. Nonetheless, both are 
essential features of the overwhelming Western economic system. 
     Future preference came out of the Christian outlook and 
especially the Puritan tradition which was prepared to accept almost 
any kind of sacrifice in the temporal world for the sake of future 
eternal salvation, willing to restrict their enjoyment of income for 
the sake of capital accumulation. 
     The mass production of this new industrial system was able to 
continue and to accelerate to the fantastic rate of the 20th century 
so that today, the average middle-class family of suburbia has a 
schedule of future material demands which is limitless.
     Without these two psychological assumptions, the Western economy 
would break down or would never have started. At present, future 
preference may be breaking down and infinitely expanding material 
demand may soon follow it in the weakening process. If so, the 
American economy will collapse unless it finds new psychological 
Page 1187
     In Asia, as is traditional along the Pakistani-Peruvian axis, the 
structure of societies had been one in which a coalition of army, 
bureaucracy, landlords, and moneylenders have exploited a great mass 
of peasants by extortion of taxes, rents, low wages, and high interest 
rates in a system of such persistence that its basic structure goes 
back to the Bronze Age empires before 1000 B.C.
Page 1200
     Weapons will continue to be expensive and complex. This means 
that they will increasingly be the tools of professionalized, if not 
mercenary, forces. All of past history shows that the shift from a 
mass army of citizen-soldiers to a smaller army of professional 
fighters leads, in the long run, to a decline of democracy. 
Page 1204
     When Khrushchev renounced the use of both nuclear war and 
conventional violence, and promised to defeat the West by peaceful 
competition, he was convinced that the Soviet Union could out-perform 
the U.S. because it could, in his opinion, overcome the American lead 
in the race for economic development that the Socialist way of life 
would become the model for emulation by the uncommitted nations. 
Page 1213
     In other economies, when additional demands are presented to the 
economy, less resources are available for alternative uses. But in the 
American system, as it now stands, additional new demands usually lead 
to increased resources becoming available for alternative purposes, 
notably consumption. Thus if the Soviet Union embraced a substantial 
increase in space activity, the resources available for raising 
Russian levels of consumption would be reduced while in America, any 
increases in the space budget makes levels of consumption also rise. 
Page 1214
     It does this because increased space expenditures provide 
purchasing power for consumption that makes available previously 
unused resources out of the unused American productive capacity. 
     This unused capacity exists in the American economy because the 
structure of our economic system is such that it channels flows of 
funds into the production of additional capacity (investment) without 
any conscious planning process or any real desire by anyone to 
increase our productive capacity. It does this because certain 
institutions in our system (such as insurance, retirement funds,social 
security payments, undistributed corporate profits and such) and 
certain individuals who personally profit by the flow of funds not 
theirs into investment continue to operate to increase investment even 
when they have no real desire to increase productive capacity (and 
indeed many decry it). In the Soviet Union, on the contrary, resources 
are allotted to the increase of productive capacity by a conscious 
planning process and at the cost of reducing the resources available 
in their system for consumption or for the government (largely 
     Thus the meaning of "costs" and the limitations on ability to 
mobilize economic resources are entirely different in our system from 
the Soviet system and most others. In the Soviet economy, "costs" are 
real costs, measurable in terms of the allotment of scarce resources 
that could have been used otherwise. In the American system, "costs" 
are fiscal or financial limitations that have little connection with 
the use of scarce resources or even with the use of available (and 
therefore not scarce) resources. The reason for this is that in the 
American economy, the fiscal or financial limit is lower than the 
limit established by real resources and therefore, since the financial 
limits act as the restraint on our economic activities, we do not get 
to the point where our activities encounter the restraints imposed by 
the limits of real resources (except rarely and briefly in terms of 
technically trained manpower, which is our most limited resource).
     These differences between the Soviet and American economies are:
1) the latter has built-in, involuntary, institutionalized investment 
which the former lacks;
2) the latter has fiscal restraints at a much lower level of economic 
activity which the Soviet system also lacks. 
     Thus greater activity in defence in the USSR entails real costs 
since it puts pressure on the ceiling established by limited real 
resources while greater activity in the American defence or space 
effort releases money into the system which presses upward on the 
artificial financial ceiling, pressing it upward closer to the higher, 
and remote, ceiling established by the real resources limit of the 
American economy. This makes available the unused productive capacity 
that exists in our system between the financial ceiling and the real 
resources ceiling; it not only makes these unused resources available 
for the government sector of the economy from which the expenditure 
was directly made but also makes available portions of these released 
resources for consumption and additional capital investment. 
Page 1215
     For this reason, government expenditures in the U.S. for things 
like defence or space may entail no real costs at all in terms of the 
economy as a whole. In fact, if the volume of unused capacity brought 
into use by expenditures for these things (that is, defence and so on) 
is greater than the resources necessary to satisfy the need for which 
the expenditure was made, the volume of unused resources made 
available for consumption or investment will be greater than the 
volume of resources used in the governmental expenditure and this 
additional government effort will cost nothing at all in real terms, 
but will entail "negative" real costs. (Our wealth will be increased 
by making the effort).
     The basis for this strange, and virtually unique, situation is to 
be found in the large amount of unused productive capacity in the U.S. 
even in our most productive years. In the second quarter of 1962, our 
productive system was running at a very high level of prosperity, yet 
it was functioning about 12% below capacity, which represented a loss 
of $73 billion annually. In this way, in the whole period from the 
beginning of 1953 to the middle of 1962, our productive system 
operated at $387 billion below capacity. Thus if the system had 
operated near capacity, our defence effort over the nine years would 
have cost us nothing, in terms of loss of goods or capacity.
     This unique character in the American economy rests on the fact 
that the utilization of resources follows flow lines in the economy 
that are not everywhere reflected by corresponding flow lines of 
claims on wealth (that is, money). In general, in our economy the 
lines of flow of claims on wealth are such that they provide a very 
large volume of savings and a rather large volume of investment, even 
when no one really wants new productive capacity; they also provide an 
inadequate flow of consumer purchasing power, in terms of flows, or 
potential flows, of consumer goods; but they provide very limited, 
sharply scrutinized and often misdirected flows of funds for the use 
of resources to fulfill the needs of the government sector of our 
trisectored economy. As a result, we have our economy distorted 
resource-utilization patterns, with overinvestment in many areas, 
overstuffed consumers in one place and impoverished consumers in 
another place, a drastic undersupply of social services, and 
widespread social needs for which public funds are lacking. 
     In the Soviet Union, money flows follow fairly well the flows of 
real goods and resources, but, as as result, pressures are directly on 
resources. These pressures mean that saving and investment conflict 
directly with consumption and government services (including defence), 
putting the government under severe direct strains, as the demands for 
higher standards of living cannot be satisfied except by curtailing 
investment, defence, space, or other government expenditures. 
Page 1216
     Many countries of the world are worse off the Soviet Union 
because their efforts to increase consumers' goods may well require 
investment based on savings that must be accumulated at the expense of 
     As a chief consequence of these conditions, the contrast between 
the "have" nations and the "have-not" nations will become even wider. 
This would be of little great importance to the rest of the world were 
it not that the peoples of the backward areas, riding the "crisis of 
rising expectations" are increasingly unwilling to be ground down in 
poverty as their predecessors were. At the same time, the Superpower 
stalemate increases the abilities of these nations to be neutral, to 
exercise influence out of all relationship to their actual powers, and 
to act, sometimes, in an irresponsible fashion. 
     These neutrals and other peoples of backward areas have acute 
problems. Solutions do exist but the underdeveloped nations are 
unlikely to find them. 
Page 1221
     A growing lowest social class of the social outcasts (the 
Lumpenproletariat) has reappeared. This group of rejects from the 
bourgeois industrial society provide one of our most intractable 
future problems because they are gathered in urban slums, have 
political influence, and are socially dangerous. 
     In the U.S. where these people congregate in the largest cities 
and are often Negroes or Latin Americans, they are regarded as a 
racial or economic problem, but they are really an educational and 
social problem for which economic or racial solutions would help 
little. This group is most numerous in the more advanced industrial 
areas and now forms more than 20% of the American population. Since 
they are a self-perpetuating group and have many children, they are 
increasing in numbers faster than the rest of the population. 
Page 1229
     The pattern of outlook on which the tradition of the West is 
based has six parts:
1) There is truth, a reality (thus the West rejects skepticism, 
solipsism and nihilism)
2) No person, group, or organization has the whole picture of the 
truth (thus there is no absolute or final authority.)
3) Every person of goodwill has some aspect of the truth, some vision 
of it from the angle of his own experience.
4) Through discussion, the aspects of the truth held by many can be 
pooled and arranged to form a consensus closer to the truth than any 
of the sources that contributed to it.
5) This consensus is a temporary approximation of the truth which new 
experiences make it necessary to reformulate.
6) Thus Western man's picture of the truth advances closer and closer 
to the whole truth without ever reaching it.
     This methodology of the West is basic to the success, power and 
wealth of Western Civilization.
Page 1231
     To the West, in spite of all its aberrations, the greatest sin 
from Lucifer to Hitler, has been pride, especially in the form of 
intellectual arrogance, and the greatest virtue has been humility, 
especially in the intellectual form which concedes that opinions are 
always subject to modification by new experiences, new evidence, and 
the opinions of our fellow men. 
     The most triumphant of these aspects is science, whose method is 
a perfect example of the Western tradition. The scientist goes eagerly 
to work each day because he has the humility to know that he does not 
have any final answers and must work to modify and improve the answers 
he has. He publishes his opinions and research reports or exposes 
these in scientific gatherings so that they may be subjected to the 
criticism of his colleagues and thus gradually play a role in 
formulating the constantly unfolding consensus that is science. That 
is what science is, "a consensus unfolding in time by a cooperative 
effort in which each works diligently seeking the truth and submits 
his work to the discussion and critique of his fellows to make a new, 
slightly improved, temporary consensus." 
Page 1234
     American society in the 1920s was largely middle-class. Its 
values and aspirations were middle-class and power or influence within 
it was in the hands of middle-class people. 
     Most defenders of bourgeois America saw the country in middle-
class terms and looked forward to a not remote future in which 
everyone would be middle-class except for a small shiftless minority 
of no importance. America was regarded as a ladder of opportunity. 
Wealth, power, prestige and respect were all obtained by the same 
standard, based on money. This in turn was based on a pervasive 
emotional insecurity that sought relief in the ownership and control 
of material possessions. 
Page 1235
     Years ago in Europe, the risks (and rewards) of commercial 
enterprise, well reflected in the fluctuating fortunes of figures such 
as Antonio in The Merchant of Venice were extreme. A single venture 
could ruin a merchant or make him rich. This insecurity was increased 
by the fact that the prevalent religion of the day disapproved of what 
he was doing, seeking profits or taking interest, and he could see no 
way of providing religious services to the town dwellers because of 
the intimate association of the ecclesiastical system with the 
existing arrangement of rural landholding. 
Page 1236
     Credit became more important than intrinsic personal qualities, 
and credit was based on the appearance of things, especially the 
appearances of the external material accessories of life. Old values 
such as future preference or self-discipline, remained, but were 
redirected. Future preference ceased to be transcendental in its aim 
and became secularized. 
Page 1237
     Middle-class self-discipline and future preference provided the 
savings and investment without which any innovation - no matter how 
appealing in theory - would be set aside and neglected. 
     The middle-class character is psychic insecurity founded on lack 
of secure social status. The cure for such insecurity became 
insatiable material acquisition. From this flowed attributes of future 
preference, self-discipline, social conformity, infinitely expandable 
material demand, and a general emphasis on externalized impersonal 
values. The urge to seek truth or to help others are not really 
compatible with the middle-class values. 
Page 1238
     One of the chief changes, fundamental to the survival of the 
middle-class outlook, was a change in society's basic conception of 
human nature. This had two parts to it. The traditional Christian 
attitude was that human nature was essentially good and that it was 
formed and modified by social pressures and training. The "goodness" 
of human nature was based on the belief that it was a kind of weaker 
copy of God's nature. In this Western point of view, evil and sin were 
negative qualities; they arose from an absence of good, not from the 
presence of evil. Thus sin was the failure to do the right thing, not 
doing the wrong thing. 
     Opposed to this view was another which received its most explicit 
formulation by the Persian Zoroaster in the seventh century B.C. It 
came in through the Persian influence on the Hebrews, especially 
during the Babylonian Captivity of the Jews, in the sixth century and 
more fully through the Greek rationalist tradition from Pythagoras to 
Plato. The general distinction of this point of view from Zoroaster to 
William Golding (in Lord of the Flies) is that the world and the flesh 
are positive evils and that man, in at least this physical part of his 
nature, is essentially evil. As a consequence, he must be disciplined 
totally to prevent him from destroying himself and the world. In this 
view, the devil is a force, or being, of positive malevolence and man, 
by himself, is incapable of good and is, accordingly, not free. He can 
be saved in eternity by God's grace alone and he can get through this 
temporal world only by being subjected to a regime of total despotism.
     The contrasts can be summed up thus:
 Evil is an absence of Good;
Evil is a positive entity.
 Man is basically good;
Man is basically evil.
 Man is free;
Man is a slave of his nature. 
 Man can contribute to his salvation by good works;
Man can be saved only by God.
 Self-discipline is necessary to guide or direct;
Discipline must be external and total.
 Truth found from experience and revelation interpreted by tradition;
Truth is found by rational deduction from revelation. 
     Luther, Calvin, Thomas Hobbes, Blaise Pascal and others believed 
that truth was to be found in rational deduction from a few basic 
revealed truths in sharp contrast with the orthodox point of view 
still represented by the Anglican and Roman churches which saw men as 
largely free in a universe whose rules were to be found by tradition 
and consensus. 
Page 1240
     The Puritan point of view led directly to mercantilism which 
regarded political-economic life as a struggle to the death in a world 
where there not sufficient wealth or space for different groups. To 
them, wealth was limited to a fixed amount and one man's gain was 
someone else's loss. That meant that the basic struggles of this world 
were irreconcilable and must be fought to a finish. This as part of 
the Puritan belief that nature was evil and that a state of nature was 
a jungle of violent conflicts. 
     One large change was the Community of Interests which rejected 
mercantilism's insistence on limited wealth and the basic 
incompatibility of interests for the more optimistic belief that all 
parties could somehow adjust their interests within a community in 
which all would benefit mutually. 
     Above all, the middle-class which dominated the country in the 
first half of the 20th century were a small group of aristocrats. 
Below were the petty bourgeoisie who had middle-class aspirations. 
Below these two were two lower classes: the workers and the 
Page 1242
     In America, as elsewhere, aristocracy represents money and 
position grown old, and is organized in terms of families rather than 
of individuals. Traditionally it was made up of those families who had 
money, position,and social prestige for so long that they never had to 
think about these and,above all, never had to impress any other person 
with the fact that they had them. They accepted these attributes of 
family membership as a right and an obligation. Since they had no idea 
that these could be lost, they were self-assured, natural but distant. 
Their manners were gracious but impersonal. Their chief characteristic 
was the assumption that their family position had obligations. This 
"noblesse oblige" led them to participate in school sports (even if 
they lacked obvious talent) to serve their university (usually a 
family tradition) in any helpful way, and to offer their services to 
their local community, their state, and their country as an 
Page 1243
     Another good evidence of class may be seen in the treatment given 
to servants who work in one's home: the lower classes treat these as 
equals, the middle-classes treat them as inferiors, while the 
aristocrats treat them as equals or even superiors. On the whole, the 
number of aristocratic families in the U.S. is very few, with a couple 
in each of the older states. A somewhat larger group of semi-
aristocrats consists of those like the Lodges, Rockefellers, or 
Kennedys,who are not yet completely aristocratic either because they 
are not, in generations, far enough removed from money-making, or 
because of the persistence of a commercial or business tradition in 
the family.
     The second most numerous group in the U.S. is the petty 
bourgeoisie, including millions of persons who regard themselves as 
middle-class and are under all the middle-class anxieties and 
pressures but often earn less money than unionized laborers. As a 
result of these things, they are often very insecure, envious, filled 
with hatreds, and are generally the chief recruits for any Radical 
Right, Fascist, or hate campaigns against any group that is different 
or which refuses to conform to middle-class values. Made up of clerks, 
shopkeepers, and vast numbers of office workers in business, 
government, finance and education, these tend to regard their white 
collar status as the chief value in life, and live in an atmosphere of 
envy, pettiness, insecurity, and frustration. They form the major 
portion of the Republican Party's supporters in the towns of America, 
as they did for the Nazis in Germany thirty years ago.
Page 1244
     Eisenhower himself was repelled by the Radical Right whose 
impetus had been a chief element in his election although the lower-
middle-class had preferred Senator Taft as their leader. Eisenhower 
however had been preferred by the Eastern Establishment of old Wall 
Street, Ivy League, semi-aristocratic Anglophiles whose real strength 
rested in their control of eastern financial endowments operating from 
foundations, academic halls, and other tax-exempt refuges. 
     As we have said, this Eastern Establishment was really above 
parties. They had been the dominant element in both parties since 1900 
and practiced the political techniques of J.P. Morgan. 
Page 1245
     They were, as we have said, Anglophile, cosmopolitan, Ivy League, 
internationalist, astonishingly liberal, patrons of the arts, and 
relatively humanitarian. All these things made them anathema to the 
lower-middle-class and petty-bourgeois groups who supplied the votes 
in Republican electoral victories but found it so difficult to control 
nominations (especially in presidential elections) because the big 
money necessary for nominating in a Republican convention was allied 
to Wall Street and to the Eastern Establishment. The ability of the 
latter to nominate Eisenhower over Taft in 1952 was a bitter pill to 
the radical bourgeoisie.
     Kennedy was an Establishment figure. His introduction to the 
Establishment arose from his support in Britain. His acceptance into 
the English Establishment opened its American branch as well. Another 
indication of this connection was the large number of Oxford-trained 
men appointed to office by President Kennedy. 
Page 1246
     In the minds of the ill-informed, the political struggle in the 
U.S. has always been viewed as a struggle between Republicans and 
Democrats at the ballot box in November. Wall Street long ago had seen 
that the real struggle was in the nominating conventions. This 
realization was forced upon the petty-bourgeois supporters of 
Republican candidates by their inability to nominate their 
congressional favorites. Just as they reached this conclusion, the new 
wealth appeared in the political picture, sharing petty-bourgeois 
suspicions of the East, big cities, Ivy League universities, 
foreigners, intellectuals, workers and aristocrats. By the 1964 
election, the major political issue in the country was the financial 
struggle behind the scenes between the old wealth, civilized and 
cultured in foundations, and the new wealth, virile and uninformed, 
arising from the flowing profits of government-dependent corporations 
in the West and Southwest. 
     At issue here was the whole future face of America, for the older 
wealth stood for values and aims close to the Western traditions of 
diversity, tolerance, human rights and values, freedom, and the rest 
of it, while the newer wealth stood for the narrow and fear-racked 
aims of petty-bourgeois insecurity and egocentricity. The nominal 
issues between them, such as that between internationalism and 
unilateral isolationism (which its supporters preferred to rename 
"nationalism") were less fundamental than they seemed, for the real 
issue was the control of the Federal government's tremendous power to 
influence the future of America by spending of government funds. The 
petty bourgeois and new wealth groups wanted to continue that spending 
into the industrial-military complex, such as defence and space, while 
the older wealth and non-bourgeois groups wanted to direct it toward 
social diversity and social amelioration for the aged and the young, 
for education, for social outcasts, and for protecting national 
resources for future use. 
Page 1247
     The outcome of this struggle, which still goes on, is one in 
which civilized people can afford to be optimistic. For the newer 
wealth is unbelievably ignorant and misinformed. 
     The National parties and their presidential candidates, with the 
Eastern Establishment assiduously fostering the process behind the 
scenes, moved closer together and nearly met in the center with almost 
identical candidates and platforms although the process was concealed, 
as much as possible, by the revival of obsolescent or meaningless war 
cries and slogans. 
Page 1248
     The two parties should be almost identical so that the American 
people can "throw the rascals out" at any election without leading to 
any profound or extensive shifts in policy. The policies that are 
vital and necessary for America are no longer subjects of significant 
disagreement, but are disputable only in details of procedure, 
priority, or method: we must remain strong, continue to function as a 
great World power in cooperation with other Powers, avoid high-level 
war, keep the economy moving, help other countries do the same, 
provide the basic social necessities for all our citizens, open up 
opportunities for social shifts for those willing to work to achieve 
them, and defend the basic Western outlook of diversity, pluralism, 
cooperation,and the rest of it, as already described. 
     Either party in office becomes in time corrupt, tired, 
unenterprising and vigorless. Then it should be possible to replace it 
every four years by the other party which will be none of these things 
but will still pursue, with new vigor, approximately the same basic 
     The capture of the Republican National Party by the extremist 
elements of the Republican National Party in 1964 and their effort to 
elect Barry Goldwater with the petty-bourgeois extremists alone, was 
only a temporary aberration on the American political scene and arose 
from the fact that President Johnson had pre-empted all the issues so 
that it was hardly worthwhile for the Republicans to run a real 
contestant against him. Thus Goldwater was able to take control of the 
party by default. 
     The virulence behind the Goldwater campaign, however, had nothing 
to do with default or lack of intensity. Quite the contrary. His most 
ardent supporters were of the extremist petty-bourgeois mentality 
driven to near hysteria by the disintegration of the middle-class and 
the steady rise to prominence of everything they considered anathema: 
Catholics, Negroes, immigrants, intellectuals, aristocrats, 
scientists, and educated men generally, cosmopolitans and 
internationalists and, above all, liberals who accept diversity ad a 
     This disintegration of the middle classes had a variety of 
causes, some of them intrinsic, many of them accidental, a few of them 
obvious, but many of them going deeply into the very depths of social 
existence. All these causes acted to destroy the middle-class by 
acting to destroy the middle-class outlook. 
Page 1250
     In the earlier period, even down to 1940, literature's attack on 
the middle-class outlook was direct and brutal, from such works as 
Upton Sinclair's "The Jungle" or Frank Norris's "The Pit," both 
dealing with the total corruption of of personal integrity in the 
meatpacking and wheat markets. These early assaults were aimed at the 
commercialization of life under bourgeois influence and were 
fundamentally reformist in outlook because they assumed that the evils 
of the system could somehow be removed. By the 1920s, the attack was 
much more total and saw the problem in moral terms so fundamental that 
no remedial action was possible. Only complete rejection of middle-
class values could remove the corruption of human life seen by 
Sinclair Lewis in Babbitt or Main Street. 
Page 1252
     The Puritan point of view of man as a creature of total depravity 
without hope of redemption which in the period 1550-1650 justified 
despotism in a Puritan context, now may be used, with petty-bourgeois 
support, to justify a new despotism to preserve, by force instead of 
conviction, petty-bourgeois values in a system of compulsory 
conformity. George Orwell's 1984 has given us the picture of this 
system as Hitler's Germany showed us its practical operation. Barry 
Goldwater's defeat moved the possibility so far into the future that 
the steady change in social conditions makes it remote indeed. 
Page 1253
     For generations, even in fairly rich families, the indoctrination 
continued because of emphasis on thrift and restraints on consumption. 
By 1937, the world depression showed that the basic economic problems 
were not saving and investment but distribution and consumption. Thus 
there appeared a growing readiness to consume, spurred on my new sales 
techniques, installment selling and the extension of credit from the 
productive side to the consumption side of the economic process. As a 
result, an entirely new phenomenon appeared in middle-class families, 
the practice of living up to, or even beyond, their incomes - an 
unthinkable scandal in any 19th century bourgeois family.
Page 1255
     Middle-class marriages were usually based on middle-class values 
of economic security and material status rather than on love. More 
accurately, middle-class marriages were based on these material 
considerations in fact, while everyone concerned pretended that they 
were based on Romantic love. Even when the marriage becomes a success, 
in the sense that it persists, it is never total and merely means that 
the marriage becomes an enslaving relationship to the husbands and a 
source of disappointment and frustration to the wives. 
Page 1300
     In the old days, the merchant bankers of London controlled fairly 
well the funds that were needed for almost any enterprise to become a 
substantial success. Today, much larger funds are available from many 
diverse sources, from abroad, from government sources, from insurance 
and pension funds, from profits from other enterprises. These are no 
longer held under closely associated controls and are much more 
impersonal and professional in their disposal so that on the whole, an 
energetic man (or a group with a good idea) can get access to larger 
funds today, and can do so without anyone much caring if he accepts 
the established social precedents. 
Page 1303
     Lycurgus renounced social change in prehistoric Sparta only by 
militarizing the society. 
Page 1310
     Tragedy and Hope? The tragedy of the period covered by this book 
is obvious but the hope may seem dubious to many. Only the passage of 
time will show if the hope I seem to see in the future is actually 
there or is the result of mis-observation and self-deception.
     The historian has difficulty distinguishing the features of the 
present and generally prefers to restrict his studies to the 
past,where the evidence is more freely available and where perspective 
helps him to interpret the evidence. Thus the historian speaks with 
decreasing assurance about the nature and significance of events as 
they approach his own day. The time covered by this book seems to this 
historian to fall into three periods: the 19th century from 1814 to 
1895; the 20th century after World War II, and a long period of 
transition from 1895 to 1950. 
     The 20th century is utterly different from the 19th century and 
the age of transition between the two was one of the most awful 
periods in all human history. Two terrible wars sandwiching a world 
economic depression revealed man's real inability to control his life 
by nineteenth century techniques of laissez-faire, materialism, 
competition, selfishness, nationalism, violence, and imperialism. 
These characteristics of late nineteenth-century life culminated in 
World War II in which more than 50 million persons were killed, most 
of them by horrible deaths. 
     The hope of the twentieth century rests on the recognition that 
war and depression are man-made, and needless. They can be avoided in 
the future by turning from the 19th century characteristics just 
mentioned and going back to other characteristics that our Western 
society has always regarded as virtues: generosity, compassion, 
cooperation, rationality, and foresight, and finding an increased role 
in human life for love, spirituality, charity, and self-discipline. 
     On the whole, we do know now that we can avoid continuing the 
horrors of 1914-1945 and on that basis alone we maybe optimistic over 
our ability to go back to the tradition of our Western society and to 
resume its development along its old patterns of Inclusive Diversity. 

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