ALTERNATIVE TRADE POLICIES

follow a modified free-trade policy. However, the available
evidence suggests that relatively few businesses would find it
necessary to make major readjustments. Mr. Doumeratzky, a
retired tariff expert of the United States Department of Com-
merce estimates that even if the United States went so far as
to eliminate all tariffs and other import restrictions on goods
produced in western Europe (the area which competes most
directly with us in manufacturing), less than 10 percent of
American industry would be adversely affected. However, the
position of our allies would be strengthened materially.

How seriously would agriculture be affected by the elimina-
tion of quotas and reductions in tariffs? Not long ago, Dr.
D. Gale Johnson of the University of Chicago undertook to
answer this question. He compared job opportunities in agri-
culture under present policies and those that might exist under
a freer trade policy. His conclusion is as follows: “...As a
whole, freer trade would have little or no net direct effect on the
number of job opportunities in agriculture. It is likely that
the losses in job opportunities in sugar, wool, sheep, beef, but-
ter, cheese, fats, and oils would about offset gains in cotton,
tobacco, hogs, corn, fruits, and wheat.”¹ Dr. Johnson also points
out that the prices of certain industrial products needed for
farm production probably would fall under a modified free-
trade policy. The gain from lower prices for industrial products
undoubtedly would more than offset any direct loss to farmers
incurred as a result of the elimination or reduction of trade
barriers.

Not only the demand for goods and services, but also the
demand for direct economic aid to foreign countries would be
affected by a change in our trade policy. Between 1948 and
1951, the United States government spent an average of nearly
five billion dollars a year on foreign economic aid. This money
was used to buy goods and services from the United States,
but we obtained neither goods nor services in return. Had
foreign countries been able to sell their products in this coun-
try, we would have had more goods to share and lower taxes.
Contrary to popular opinion in this country, our friends abroad
do not like to be on Uncle Sam’s payroll. The English shop-

W. Gale Johnson, Trade and Agriculture, John Wiley and Sons, Inc., New York, 1950,
ρ. 52.

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