keeper, for example, knows that American aid helped his
country restore industries damaged during the war, but, like
any individual with a sense of pride, he does not like being
on relief. He knows that England made her place in the world
by trading goods and services with other countries to the ad-
vantage of both buyer and seller, and he would like to restore
this type of mutually advantageous trade. In other words, he
would rather sell goods to America than receive United States
government aid. If the United States had accepted additional
goods and services from abroad valued at only about 2 percent
of all goods and services produced in the United States between
1948 and 1951, our allies would have earned the equivalent
of all the dollars we gave them in the form of direct aid.
American prestige suffers abroad when Congress puts re-
strictions on United States imports. The Communist press plays
this up as evidence of United States hypocrisy. They accuse us
of pursuing what they like to call “imperialist policies” despite
our talk of improving world living conditions. A reduction
in United States trade barriers undoubtedly would give this
country increased prestige with the non-communist nations and
a decisive round in the battle for the moral leadership of the
world. The easing of United States import restrictions might
easily start a trend towards freer trade in other countries, just
as our actions fostered the growth of protectionism during the
early thirties. A general reduction in tariffs, the elimination of
import quotas, and the easing of exchange controls would
permit more international specialization. Each country could
then produce more of the products in which it has a relative
advantage and exchange these goods for things which could be
produced more cheaply in other countries. International spe-
cialization increases the total quantity of goods available for
distribution. With more goods to share, families in all countries
could live better.
The major consequences of following a modified free-trade
policy can be summarized as follows: First, imports into this
country would increase. This would necessitate some readjust-
ments in both agricultural and industrial production. But
many industries would benefit from increased demands for
their products. Second, the United States consumer could ob-
tain a number of products at lower prices. Third, direct eco-
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