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With increasing emotion, developing nations complain that capitalist countries have subjected them to a neocolonialism that keeps them poor. The West, they charge, buys their raw materials cheaply, sells them manufactured goods at prices that are pushed steadily higher by inflation, and discriminates against their exports of manufactured goods.
The developing countries' accusations are exaggerated. Prices of many raw materials have risen at least as much as—and in many cases more than—those of industrial exports. A more valid charge against the capitalist world than systematic exploitation is that it has failed to develop any consistent post-colonial economic strategy at all for dealing with the poor countries. The hostility of many less developed countries is potentially dangerous. Producers of ten commodities—copper, bauxite, iron ore, rubber, coffee, cocoa, tea, pepper, bananas and sugar—have talked of organizing cartels to jack up prices by withholding supplies.
Raw-materials planning can help the industrialized world defuse this danger. The industrial nations are already discussing plans to join in stockpiling enough oil to carry them through any renewed Arab embargo. Yale Economist Richard Cooper proposes broadening the idea to include the steady and coordinated accumulation by many nations of important materials—perhaps starting with natural rubber, copper and other metals.
For the industrial world, that policy would temper inflation by providing some insurance against shortages. When scarcities developed, commodities could be released from the stockpiles to hold down prices and ward off threats of boycott. (There would be little incentive for exporters to hold back supplies in an attempt to raise prices if they knew that their customers already had plenty.)
For developing countries, stockpiling promises to stabilize income from exports. In times of glut, industrial countries would take advantage of reduced prices to replenish their stocks. Poor nations might get less for each ton of copper or rubber, but might sell more and keep total export earnings steady.
The United Nations Conference on Trade and Development is holding a series of conferences this year in Geneva to discuss the stockpiling idea. UNCTAD officials happily anticipate an issue on which, for once, underdeveloped sellers and industrialized buyers might agree.
Dominance of the Corporation
Big corporations account for ever increasing shares of capitalist enterprise, and a good many economists applaud their productive effectiveness, though a variety of other thinkers have judged them to be essentially anticapitalist institutions. Adam Smith thought that the relatively few "joint stock companies" of his day lacked the vigorous entrepreneurial spirit. Marx believed that the corporation was a step away from capitalist individualism and toward the social management of production. The late Joseph Schumpeter, a giant among economists, feared that corporations would rob capitalism of vitality by splitting capitalists into owners who did not manage and managers who did not own; neither group, he thought, would care enough about the system to fight to save it from socialist takeover. That has not happened yet, but the possibility has worried many capitalist thinkers, among them Economist Milton Friedman and