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PARTISAN REVIEW
two, or three percent larger than perfect price stability allowed, the
situation was manageable so long as the central bankers printed
additional money and supplied additional credit to consumers and
corporations . Nearly every organized group got what it sought in
dollar terms and only slightly less than it hoped in real purchasing
power . The slight inflationary tilt imparted to prices was tolerable
to consumers and actually encouraging to merchants and manufac–
turers who customarily prefer, for obvious reasons, rising to falling
pnces .
During the 1950s and 1960s, the industrialized West (including
Japan) enjoyed still another blessing . The terms of trade-the ratio
of export to import prices-were persistently favorable to the de–
veloped countries . Raw material producers in the Middle East,
Mrica, Malaysia, and Latin America sold oil, tin, rubber, coffee,
copper, chrome, bananas, uranium, cocoa, and bauxite at low prices
to their major customers in the West. Frequently, the customers were
able to place in the bargaining scales threats of military or covert
intervention against radical , nationalistic, or simply greedy politicians
who sought better deals. CIA-sponsored coups against the Mossadegh
government in Iran and the Arbenz regime in Guatemala signaled
the power of industrial buyers over the sellers of mere raw materials.
For their part , the West sold machines, computers, gadgets,
and appliances to the developing nations at high prices arranged
by well-organized cartels , shared monopolies, and oligopolies. One
of the reasons Europeans and Americans got richer was that the Third
World remained poor. One needn't embrace Idi Amin, General
Pinochet , Hafiz Assad, or other noisome Third World types, much
less endorse Arab assaults upon Israel , to recognize that in the
commodity producing lands a strong and substantially justified
emotion of historical grievance is at work.
And, as so often has occurred, domestic harmony was promoted
by the convenient presence of an external threat: the Cold War
menace of the Soviet Union. The reliable threat from the East united
Western Europe and the United States in the NATO alliance,
facilitated the invention of the European Economic Community, and
kept healthy a huge American arms industry. Even before the Yom
Kippur war, this political support to Western harmony was weakened
by American electoral exigencies , for however spurious detente is
