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Beltway Books: The wealth of nations

Books | Analyzing issues of protectionism, foreign aid, free trade

Issue: "Face Off," Aug. 9, 1997

A strange coalition of right and left is now assaulting the free trade consensus that has dominated U.S. policy since World War II. The new protectionists argue that building walls against imports is the only way to protect jobs and wages.

Melvyn Krauss of the Hoover Institution demolishes such arguments in How Nations Grow Rich. He explains, "There can be no doubt that the prosperity of the industrial nations since World War II has been due largely to global specialization and interdependence." As the wealthiest and most productive nation, the United States has the largest stake in an open international economic order.

A very different menace is posed by the forces of multiculturalism. There is nothing wrong with learning from other cultures, but the movement that dominates America's universities combines moral relativism with political correctness. In The Menace of Multiculturalism, sociologist Alvin Schmidt argues that multiculturalism undermines social stability as well as academic careers. He devotes a chapter to "the multiculturalist purges," particularly the assault on Christianity, which, he warns, "is an attack on civilization itself."

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Leading Christians have jumped into the debate over U.S. policy towards In Strategies for U.S. Relations with China, Heritage Foundation analysts Kim Holmes and James Pryzstup make a strong case for preserving trade with and investment in China. Economic engagement is not sufficient to turn China into a democracy, but the authors argue for its importance in such a transformation.

Foreign aid remains a contentious issue, but the consensus is growing that financial transfers do no good if countries don't promote market reforms. Although Michael O'Hanlon and Carol Graham call for continued assistance to the poorest nations in A Half Penny on the Federal Dollar, they admit that aid is useless where reforms are absent and unnecessary where foreign capital is flowing. More technical and supportive of the role of assistance is Foreign Aid Towards the Year 2000, though even it warns against the tendency to initiate new programs. These are major concessions from the aid community, which once dismissed market economics out of hand.


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