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The article discusses the investment trend towards foreign equities in the U.S. securities industry. It says that Kuhn, Loeb & Co. and First Boston Corp. partner with S.G. Warburg & Co. Ltd. to establish Transoceanic Development Corp. while British and Continental stocks are expected to be sold in New York. It tells that reasons behind the trend include the reduction of cold war pressure, the economic growth of Western Europe, and the inclination of developing countries for economic development.

After World War II, the United States assumed the burden of leading the defense of the Free World. Today, although many of our allies are exceedingly prosperous and are technically competent to help in the work of defense, we seem to be most reluctant to part with the notion that "it's all up to us." This habit of thought is an expensive one--as a glance at the defense budget will demonstrate. Also, it may stand in the way of progress and advance both for ourselves and for our allies. In this article, the author argues that we should share the burden of defending the Free World with our allies through the formation of international consortia of industrial companies to design and produce certain widely used defense systems. He points out the fact that this policy has brought us many advantages whenever it has been applied in the past, and he describes the additional advantages it can bring us in the future. He also makes specific suggestions for managing the assignment of contracts to such consortia, a problem that has formerly given a lot of difficulty. [ABSTRACT FROM AUTHOR]

Trade with Russia and her satellite nations is a topic with business, political, and emotional overtones. Because of the importance of the subject, HBR has sponsored this quantitative and qualitative exploration of the pros and cons of such trade, paying particular attention to the experiences of companies engaging in it. The authors are Marshall I. Goldman, Associate Professor of Economics at Wellesley College and Associate of the Harvard Russian Research Center, and Alice Conner, who served as Research Assistant for the International Marketing Institute on this project. [ABSTRACT FROM AUTHOR]

Several letters to the editor in response to articles in previous issues are presented, including "Advances in Financial Management," by Robert H. Baldwin, "False Fears of Disarmament," both in the January-February 1964 issue and "Where Is the Organization Man?" by Lyman W. Porter in the November-December 1963 issue.

The article details an espionage case from the files of the United States Federal Bureau of Investigation (FBI). An American businessman was contacted by a Russian businessman who wanted to recruit him for espionage. The John Smith story includes the persuasive method used by the Russian to exploit business negotiations and why Smith went to the FBI. Topics include background information on the effort of Soviet-bloc intelligence agencies to get information about American industries, the role of the FBI in espionage cases, and suggestions for counteracting the Soviets' recruitment activity. INSET: TRAVEL RESTRICTIONS ON SOVIET-BLOC NATIONALS.

The article mentions systems management and how it can be applied to international economic development. The economic rivalry between communist and free-enterprise countries is a concern of American business. The U.S. approach to economic development has more weaknesses than the Soviet strategy of central planning. However, an alliance between business and government--similar to the systems concept used by the U.S. Air Force to produce weapons systems--could give business an advantage. Topics include the characteristics of systems management, the use of feasibility studies, political and economic benefits for underdeveloped nations and the Free World, and hypothetical examples of economic development projects, as well as public/private sector partnering.

What would arms control mean for the U.S. economy? Aside from its value in preventing nuclear war, how would it affect the federal budget? Businessmen customarily assume that arms control would mean large cuts in military spending, but that is not likely to be the case, argues T. C. Schelling. In fact, defense outlays may even increase. Mr. Schelling is Professor of Economics at Harvard University and a member of the Faculty of the Center for International Affairs. He is the author of "The Strategy of Conflict" (Harvard University Press 1960) and coauthor, with Morton H. Halperin, of the forthcoming Twentieth Century Fund book, "Strategy and Arms Control." [ABSTRACT FROM AUTHOR]

The letters to the editor refer to articles that were published in previous issues of "Harvard Business Review." Readers comment on "Economics for the Nuclear Age," by W. W. Rostow, and "Health Care of the Aged: Who Pays the Bill?," by Gaston V. Rimlinger, which are in the January-February 1960 issue. "Advice for Small Company Presidents" is written by Louis E. Newman and is in the November-December 1959 issue. "How to Assess Investment Proposals" is by Robert H. Baldwin and is in the May-June 1959 issue.

Apparently most business executives and government officials expect some easing of world tensions; and while many are cautious about cutting defense expenditures, virtually no one is in favor of spending more to catch up with the Russians. The Editors of HBR feel that failure to appraise the risks involved could have serious consequences for the nation. Hence they have departed from the usual format for "Thinking Ahead" in order to present, first, a statement of the problem as they see it and, then, to throw light on one of the main points at stake, the report of a study made for the National Planning Association in 1957, updated to the present specifically for this purpose by one of its authors, Manuel L. Helzner. [ABSTRACT FROM AUTHOR]

The article presents letters to the editor in response to articles in previous issues, including "Economics for the Nuclear Age," by W. W. Rostow in the January-February 1960 issue, "Can Capitalism Win the Intellectuals?," by Calvin B. Hoover in the September-October 1959 issue, and "American Business and the Piety of Profits," by Lawrence G. Lavengood," in the November-December 1959 issue.

The article discusses a dynamic theory of production and five growth categories in society: the traditional society; transitional society; society in the take-off process; society in the drive to technological maturity; and society at the age of mass consumption. Rapid expansion causes a direct demand for new inputs of capital which consolidates new growth and creates new industries. More economic expansion in the United States is expected when the nuclear arms race is resolved and a decision is made on how to create sustainable development and promote democracy in underdeveloped countries.

This article examines the potential gains and disadvantages for United States business enterprises conducting trade with Communist countries. According to the author, the United States Department of Commerce determines what foreign business enterprises U.S. companies can trade with. The author addresses various barriers that American businesses can face in a communist business environment, as well as several obstacles in the country's foreign trade policies that involve communist nations. Countries described include the Soviet Union, Czechoslovakia, Hungary, Poland, and Romania.

This article considers the impact of democracy on the economy in the United States. The article also discusses the phases of the threat by the Soviet Union, which concerns the United States economy. The purposes of the defense expenditures, shifts in consumer and industrial expenditures, and the failure of democracy in the United States are also discussed. The article suggests that the failure in democracy exists in education, juvenile delinquency, desegregation, agricultural readjustment, and labor monopolies.

The article reports that aeronautics and related technology industries are the main investment force in the United States. Government defense spending and private corporate investment--which increased due to a long lead time in the aeronautics investment process--are supporting a demand for capital. The American economic cycle or "defense cycle" is longer than the previous business cycle, which was based on an investment process cycle of the consumer-goods or automotive industries. Topics include two labor relations practices originating from the growth of the aeronautics industry, demand for skilled servicing technicians, effect of highway programs on economic trends, impact of defense spending on investment inflation, and factors contributing to the Soviets' lead in aeronautics.

"The constant conflict between policy and ideology is something that only the 'pros' talk about, and outsiders, especially business leaders, do not comprehend," J. Anthony Panuch told the Editors, in describing the background of his article. The current furore over our foreign economic aid program provides an appropriate setting for a serious attempt to bring the issue out into the open for businessmen to deal with. Thus A Businessman's Philosophy for Foreign Affairs emerges as a guide for busy executives who, under our "Businessmen's Administration," are forced to consider the direction of the nation's international policies in these turbulent years. At the same time, it offers a look behind the scenes at the dissension over a new approach to foreign aid, which already has made the headlines this spring. [ABSTRACT FROM AUTHOR]

The article explores the Soviet Union's efforts to use their massive economic power to politically control developing countries in their region. One of the most prevalent tactics of the Soviet Union is the recruitment of local leadership for propaganda and organizational duties. For American business to successfully combat the dangers posed by Russia's economic aggression, business leaders must first recognize the strengths of the Soviet Union and the federal government must sponsor a management assistance program.

The article reports on consumer spending and economic expansion in Great Britain and the Continental countries of Western Europe. Increased buying power among the working classes due to full employment and higher wages, the creation of a European upper working-class, and a trend toward two-earner households are factors leading to a one-class market for consumer goods. Statistics for retail sales of household appliances in Great Britain, Italy, Switzerland, and West Germany, as well as automobile sales, indicate a rise in personal consumption. Topics include installment credit, distribution methods such as chain stores and mail-order, opportunities for American trade and investment in the postwar market, theory of open and closed economies, and Europe's ability to resist communism.

This article presents an overview of the economic conditions and industrialization in the Soviet Union. The article discusses factors that are influencing economic growth, various prospects present for economic expansion, an overview of foreign economic relations and trade, and implications for economic development. The article discusses the economic transition period that has been present in the Soviet Union after the death of Joseph Stalin, who was the General Secretary of the Communist Party in the Soviet Union.

As a result of recent and prospective developments, one is justified in expecting that the connection between different kinds of business activity is loosening up and that the old-fashioned business cycle is slowly being replaced by a number of more of less independent cycles, each with its own timing. These independent cycles will at times reinforce each other, but in the main they will offset one another. Hence, the breakup of the old-fashioned business cycle will make for economic stability. [ABSTRACT FROM AUTHOR]

The article reports on East-West trade and the Free World's interest in Japan as part of a military defense strategy. There is concern about the deficit in Japan's sterling account and balance of payments in 1953. Opposition to Japanese trade with countries in the Communist Bloc is due to the West's trade sanctions and the possibility that economic or political cooperation with communist China could result in a security threat to the United States. Topics include the Japanese export program and American economic aid to Japan.

There has been a growing amount of talk and argument about East-West trade. It has been a subject of dissension in Congress, in the policy-making councils of the political parties, and in Anglo-American relations. As yet, no one has taken the lead in working out a sound "middle way." Is a satisfactory quid pro quo possible? Can we find a policy that will give the West the benefits of East-West trade without increasing the relative military strength of the Communist bloc? [ABSTRACT FROM AUTHOR]

During 1953 it has become evident that the foreign economic policies of both the United States and the USSR are on the verge of great and far-reaching changes. Events are forcing the statesmen's hands. And the crucial question for us is whether we can seize the initiative and shape coming events to our advantage, or whether the Soviets will take the lead. [ABSTRACT FROM AUTHOR]

The article argues that the United States should maintain a strong military policy and provide adequate funding for its armed forces. The fourth postwar phase of American military policy has tactical, strategic, and economic problems. In the era of atomic weapons, Russia's military advantage on land, and unrest due to changes in Russian policy, the U.S. is at risk and vulnerable to attack. Military readiness should be based on seven principles that include good morale and offensive capability. Five requirements for U.S. military policy include overseas bases with allies and informed public opinion. Topics are the NATO coalition in Europe, Communism in the Pacific Ocean area, and the strength of U.S. air and naval forces.

The article examines the United States' restrictive trade policy with Communist-dominated countries. The purpose of the American embargo policy is to stop all trade between East and West, but Western European countries are reluctant to join. The Western bloc are concerned with: traditional trading patterns that make countries dependent on trade with the East; trade with the Soviet Union and Eastern Europe that could alleviate the dollar gap and allow raw materials to be imported from non-dollar areas; and East-West trade that can prevent "price softness" and heavy inventories as well as strengthen commodity prices. Topics include the 1949 Export Control Act, trade with China, and contraband activity.

The article reports on productivity in relation to national security and America's dependence on imports to prevent shortages of essential metals--such as the basic mobilization metals of steel, copper, and aluminum--in the United States. The shortage of scrap steel in the civilian economy is attributed to metal conservation measures by the U.S. government, which is trying to deal with the "have-not" problem in materials availability. The nickel supply needs to be secured for U.S. atomic and jet programs, while the steel industry needs a steady ore supply in order to expand. Topics include the U.S. industrial policy during and the economic impact of World War II and the Korean War, "guns and butter" in a remobilized mixed economy, carbon versus alloy steel, and the military-atomic "nickel budget."

The article discusses the current status and outlook for U.S. economic capacity, in light of possible rearmament in Europe and Communist aggression from Russia or Korea. The U.S. government's projected defense spending to build up military strength can be justified if it is in the interest of national security and does not excessively disrupt the domestic economy. Topics include economic aid to American allies in NATO countries, success of the Marshall Plan, inflationary pressures in the U.S. and Europe, the gross national product (GNP), and private capital formation.

The article discusses the transition of the U.S. economy to peacetime, which is referred to as a "crisis process" because of the potential for war and the focus on developing atomic energy. Industrial capacity and military preparedness in a civilian economy require a deflation of military requirements--a balancing of guns and butter--so that the economy can expand at home and abroad. The current industrial mobilization to meet an expanding economy needs strategic materials--some of which are scarce and must be imported. Topics include the Controlled Materials Plan for military procurement, the distinction between industrial production in the cold war and the clearly defined foreign wars of World War I and II, and the import-export balance.

The article is a shortened, paraphrased speech by Josef Winschuh--with an introduction by Fritz Redlich--which focuses on business leadership in West Germany. Aristocracy has traditionally been the source of business executives, but political trends have changed post-war society and there is new opportunity for the management-elite in the professions and government. The future of German industry depends on its organizing around the idea of private enterprise, rather than free enterprise, increasing consumer and producer demands and mass consumption to improve the economy, and educating future business leaders. Topics include the social status of businesspeople, labor relations, and executive ability.

The article discusses the impact of military expenditures and sustained military readiness on the United States economy, in light of a North Korean attack on South Korea on June 25, 1950 and the potential for Russian aggression in Europe. America needs industrial mobilization, sustained productive capacity, and a supply of superior weapons to protect itself and contribute to European rearmament. At the same time, the U.S. needs to protect its civilian economy from inflationary pressures. Topics include data from the military budget, estimate of the potential labor force and the rate of productivity that affect output, the tax burden of mobilization, price and wage controls, and rationing.

As noted at the beginning of Part I of my discussion, in the September 1950 Number of the REVIEW, the question of the economic life of countries in Russia's orbit is of tremendous significance to all those interested in the future of the world economy, as well as to those interested more particularly in foreign trade or business operations abroad. Accordingly, I have attempted to present today's picture of the economic life of Poland, Czechoslovakia, and Hungary. Those three countries may be considered typical of the Eastern Bloc as a whole, and I know them particularly well as the result of firsthand observation abroad and personal interviews with their people and government officials in 1950 and previous years. [ABSTRACT FROM AUTHOR]

The article reports the outlook for business, in light of a partial mobilization policy for industries in the United States. The military and economic challenges from Russia, Communist China, and North Korea could put a severe strain on America's manpower and materials resources. Participation of non-communist countries in the United Nations gives them solidarity that could impact Russia's international objectives. However, business must be prepared to make short- and long-term decisions during shortages and government controls--such as price, wage, and rationing. Topics include four alternative action plans for the U.S., taxes to support military and civilian needs, government and industry relations in a controlled economy, and World War II economic conditions.

What is the economic life of countries in Russia's orbit? Here is a question of tremendous significance to all those interested in the future of the world economy, as well as to those interested more particularly in foreign trade or other business operations abroad. Take the matter of foreign trade specifically. United States businessmen are losing out to Russia in Eastern Europe. That is perhaps understandable in view of the political situation--but not altogether inevitable, as our more successful British competitors have demonstrated in the same geographical area. Or take the even more fundamental question of the spreading influence of socialism, eastern style. We must know its economic effects if we are to be able to gauge its penetration into other countries which Russia may try to dominate, if we are to counter it peacefully, or if we have to fight it. It is my purpose to present, largely as the result of firsthand observation abroad and personal interviews with people and officials of the countries concerned, a picture of the economic life of Poland, Hungary, and Czechoslovakia in 1950. I have made every attempt to be objective and careful in my presentation of facts and figures. Of course, since much of the substantive material is original, I have not been able to double check everything. I am convinced, however, that the analysis presented is fair and just. The three countries will be discussed together, for the sake of comparison and contrast, as follows: Part I, economic characteristics, including (1) significant background factors, (2) extent of nationalization, (3) role of private business, (4) wages and standard of living, (5) social welfare, and (6) role of trade unions; and Part II, business operations, covering (1) production, (2) construction, (3) agriculture, (4) banking and fiscal policies, (5) foreign debts, and (6) foreign trade. [ABSTRACT FROM AUTHOR]

The article refers to the United States' national security interests in the petroleum industry. Two controversies are: the British government's restriction on American-produced petroleum imports and substitution of "sterling" oil from British-Dutch companies; and lobbying groups' efforts in the U.S. to pass legislation that restricts crude-oil and petroleum-product imports. The issues are foreign trade exchange, embargoes, and bilateral trade agreements against U.S. companies in the sterling area. Topics include the petroleum reserves in the Middle East, the Anglo-Iranian Oil Company Ltd., Royal Dutch Shell Group, Standard Oil companies, Socony-Vacuum Oil Company, Gulf Oil Company, data for U.S. oil reserves, Russia's oil fields, and U.S. war requirements.

The article discusses factors that contribute to business conditions in the United States, and predicts a significant expansion in production during the 1950s and a moderate rise in prices. The eleven principle influences on expansion or higher prices include the cold war, maturity of Series E government savings bonds, infrastructure expenditures by state and local government, and a rise in private debt and in labor cost. Five factors that slow business expansion are: increase in the supply of agricultural products; decline in the number of married couples; decline in automobile production; decline in housing construction; and continuation of high tax rates. The net national product will have to increase to $300 billion in order to avoid a higher unemployment rate.

The article refers to business history, the cold war, and the role of business statesmanship in preventing a transition to socialism in the United States. Business leadership takes form in one's occupation and in the realm of ideas. Historically, executives have opposed the labor movement and supported tariff protection. Presently, three rival systems--the religion of Rome, communism of Moscow, and private enterprise in the U.S.--are competing for political and economic leadership. Topics include the systems of petty, mercantile, and industrial capitalism, the apprentice-owner, lawyer, engineer, and professional types of executives, the butterfly wife, seven points in business policy and social relations, and the new model of autocratic fascism that could develop in America.

The article comments on the labor movement in the United States and presents an argument for a nationwide capitalist propaganda campaign to counter Communist propaganda and anti-American pressure groups. Because labor leaders and liberal intellectuals have been proposing social change or a state-controlled economy, Americans need to be re-educated to support self-government, political and individual freedom, competitive private enterprise, and a free economic system. Business should sponsor the nationwide campaign--based on a platform of reasserting civil liberties--which tells workers that they are not being exploited and should not support efforts to create a national welfare state.

The article refers to the cold war and the economic vulnerability of the United States. The postwar economy has full employment, a high-level of production, and the ability to support a $40 billion budget, as well as consider a plan for foreign aid. However, America's free economy could be disrupted by monopolistic practices that affect foreign trade and imports such as food and raw materials. Defensive measures are stock-piling commodities and direct foreign investment by American companies--which is a form of lending and provides some control over essential supply sources. Topics include concern about trade vulnerability in the Western Hemisphere, international business agreements, and methods of attack that involve gold shipments or subversive activity.

The article reports on the National Association of Manufacturers (NAM), its record of self-interest, and capacity for leadership. NAM is an industry representative with a public-relations strategy for influencing industrial opinion, legislation, politics, and public opinion. NAM is concerned that subversive activities will weaken free enterprise and American confidence in economic institutions. During the 1930s, NAM opposed national social policies, did not show any leadership in dealing with unemployment, and established itself as a supporter of the status quo. In the 1940s, NAM supported the removal of price controls and inflationary fiscal policies. Topics include legislation opposed by NAM and the concept of "unit thinking and unit action" in the industrial population.

The article mentions economic controls such as rationing that were in effect during World War II, relations with iron curtain countries, and the United States postwar economy. In a time of diplomatic tension and uncertain peace, the economic problems are contingency planning for military readiness, a cyclical boom with full employment, government debt and taxes, trade unionism, and high cost of living. The American public supports democratic processes, but could be challenged by ideological imperialism, as well as semantics and psychology in Soviet propaganda. Topics are the outlook for the declaration of a shooting war, the American objective of universal peace, optimism about economic recovery in Europe, inflation or deflation, and executives' tasks.

The article discusses power politics and the vulnerability of the United States to economic penetration from unfriendly countries. Four purposes of economic penetration are: to weaken the political and military advantage of a rival nation; to develop a self-sufficient economy via control of essential materials sources or technological advances; to integrate the economies of satellite countries so they cannot maintain separate political policies; and to expand foreign trade. Topics include the "Old Colonial System" of the colonies providing raw materials to the mother country, potentialities of economic warfare, the German cartels, criticism of cross-licensing agreements, military autarchy, government corporations, foreign investment and loans, and Third Reich politics.

The article refers to the cold war and discusses American economic and political history during the 1929 depression. The stock market crash in the United States was preceded by optimism from economists and the Hoover Administration, which predicted an industrial revolution. After the arrival of Black Tuesday and a change in industrial policy under the Roosevelt Administration, the federal government began to take over for the deficiencies in the business system, which tried to maintain the status quo. Topics include the English bankers' philosophy, analogies with the Medieval Church and Reformation, use of the Sherman Act to counter a trend toward the concentration of power and wealth, and the monopoly in government contracting during the war period.

The article refers to the Bretton Woods Articles of Agreement and Soviet Russia's postwar policy on international trade and finance. The Soviet Union criticizes the American White Plan, which would create an international stabilization fund, and the British economic theory in the Keynes Plan, which would establish an international clearing union--both plans support credits in postwar trade. Soviet economists are concerned with the stability of exchange rates and the purchasing power of money in individual countries, as well as the possibility of inflation in capitalist countries. Topics include gold as a medium of international exchange, Russian interest in the Far East, and factors contributing to the business alliance between the Soviet Government and American financiers.

The article focuses on the protection of private enterprise in the United States and the concerns about collectivism and the cold war. The principle ideas are that the Federal Government should take an active role in labor-management relations, reform the tax system, and promote business conditions that are conducive to competition and international trade. Business is also responsible for keeping the economy dynamic through innovation and new product development, regularizing employment, and controlling sales expenditures. Topics include a tendency for instability in the American system of capitalism and the need for economic literacy in the general public.

The article speculates on the United States government's role in the postwar export trade. The objectives of government intervention are keeping America's position as a military power and world peacekeeper, meeting obligations in international markets, and supporting free enterprise and full employment policies. Limited regulation and government assistance to exporters might restrict the trend toward statism. The United States Commercial Co. (USCC) could facilitate government participation in foreign trade and surplus disposal abroad. American trade policy will focus on supply allocation and price control, surplus disposal, expert subsidies, and international commodity agreements. Topics include laissez faire policy, protectionism in foreign countries, and blacklisting of firms.

Knowing each person's deep concern for peace, the author of this article attempts to strike a current balance sheet in the cold war. He also stresses our need for a new declaration of moral purposes. [ABSTRACT FROM AUTHOR]

The article discusses the issue on the impact of the Cold War on the business of the Wall Street industry during the Geneva convention in Switzerland. It mentions that most businessmen agreed on the hindrance of the war on most corporate earnings. It states that the market had declined slightly, and the interest for peace stocks, such as finance companies and confectionary, were increasing.

The article offers information regarding the impact of the increasing tension in the cold war. It mentions that increasing tension in the cold war will be most likely to experience by the foreign policy maker and business leaders in the U.S in terms of uneasiness of allies to the U.S. policy and the price increase of raw materials. It states that planning should be done by businessmen due to the inability to forecast the impact of the increasing tension with accuracy.