Friday, 27 January 2017

Lesson for Trump: why not try generosity? It actually pays

It’s ironic that generosity and opening up to others can sometimes be as beneficial to the nation offering the gifts as to those receiving them.

Truman and Trump
The Statesman and ... the Donald
The winter of 1946-7 was desperately hard, with some of the lowest temperatures on record. For Europe, devastated by war, that was catastrophic. For the vanquished, inevitably – Germany with much of its urban landscape reduced to rubble and huge numbers of homeless among the worst hit – but victors too were suffering, with Britain still having to cope with rationing and struggling to bear the burden of war debts far beyond its resources.

At that time, Britain was still trying to pretend it could play a world role (echoes of today). It had, for instance, forces still deployed in Greece and Palestine. But Clement Attlee’s government began to realise that it was going to have to take a more realistic view of the weight of its (unlike Theresa May’s) . It warned the United States that it would have to start scaling down some of its military commitments, including in Greece.

The reaction of the Truman administration then in power in Washington was astounding and exemplary.

For better or for worse, it decided that resistance to Soviet influence in Greece and Turkey had to be maintained, and that it would therefore shoulder the burden itself, to the tune of $400m.

Far more to the point, it chose to use the newly appointed Secretary of State George C. Marshal, who chaired the chiefs of staff during World War 2, to investigate the state of the economies throughout Europe and to come to their assistance. This was the start of Marshall Aid. It came to over $12bn, corresponding to ten times that amount today.

Much of the money went to the erstwhile and newly-defeated enemy, Germany.

As Truman put it, “We are the first great nation to feed and support the conquered. We are the first great nation to create independent republics from conquered territory: Cuba and the Philippines. Our neighbours are not afraid of us. Their borders have no forts, no soldiers, no tanks, no big guns lined up.”

We’d have to question just how relaxed countries near the US truly felt. The giant to their North had shown itself perfectly prepared to flex its muscles and use its force to have its way, and they must have been a great deal more suspicious than Truman’s sanguine words suggest. Even so, it was an extraordinary act, to fund a defeated foe instead of taking from it. After all, at the conclusion of the First World War, well within living memory of most adults at the time, an intolerable burden of reparations had been imposed on Germany. That had undoubtedly been a contributing factor to the renewed world war twenty years later.

Marshall aid was an admirable and unprecedented act that deserves congratulations for that fact alone.

It was remarkable for far more than that, though. By allowing Europe to emerge from its ruins, and helping Germany, in particular, become prosperous and successful again, the US guaranteed itself good trading partners from which it too would benefit. It ensured that its presence and influence in the old Continent would remain as strong as ever, at least in the Western areas. Overall, it gave a huge stimulus to the world economy from which all nations, including the US, profited.

Generosity and strategic vision went hand in hand.

Now roll forward 70 years.

Faced with undoubtedly significant economic problems, Donald Trump has decided to use not generosity to advance his cause, but isolationism. He has decided not to try to win the support and trust of neighbouring nations, specifically Mexico, but to wall them off. Where Truman had boasted that Mexicans had needed no fortresses against the US, Trump will build a wall against them.

Trump plans to make Mexico pay for the wall, by taxing imports into the US. In reality, this means that US importers will pay for it. Even so, it will do great damage to Mexico. Far from making it a wealthy and successful nation he is, therefore, taking steps that will undermine its economy and weaken it as a trading partner.

He’s threatening similar action against other nations, notably Germany.

His is the opposite view to Truman’s. He wants walls, not openness. He wants trade barriers, not free business. He wants to take money, not offer it.

Marshall aid was astonishingly successful, stimulating the sustained boom of the post-war years.

It seems obvious that the opposite policy will have precisely the opposite effect.

But then, Trump probably doesn’t waste too much time learning stuff from history. Not even that of his own lifetime.

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