Foreign Relations of the United States, 1958–1960, Western European Integration and Security, Canada, Volume VII, Part 1

117. Circular Telegram From the Department of State to Certain Diplomatic Missions⁰

May 17, 1960, 2:27 p.m.

1444. Paris for Embassy and USRO and Tuthill. Depcirtel 1326.¹

1. US opposes Soviet participation reorganization OEEC² for two main reasons. Purpose of new body is continue and expand successful international cooperation begun twelve years ago, and Soviets, who fought original organization, no more in sympathy with purposes than they were then. Even if Soviets sincere in wishing cooperate however different principles internal and external economic affairs on which they operate make it highly unlikely they could cooperate with OECD.

2. Success cooperative efforts OEEC countries attributable largely to their common economic principles and purposes. OECD, like OEEC, is designed inter alia to contribute to development of world economy and promotion of world trade on multilateral, nondiscriminatory basis, to stimulate increased flow of capital to less-developed countries, and to improve coordination of economic policies of member countries.

3. Soviet external economic operations are integral part of wider Soviet political program which is designed to undermine “capitalism” and usher in communist world. These operations are carried on by organs of Soviet State and Communist Party. There is no reason to believe that Soviets have abandoned announced intentions use all available means to weaken free world; and therefore, no reason think they have any sympathy with announced OECD purposes.

4. Even if they wished further these purposes however we doubt that without fundamental changes in whole Soviet system of carrying on economic operations USSR could cooperate with free economies in OECD framework. Fundamental reason is that in USSR economy is not entity separate from though regulated by government but integral part of governmental apparatus. Hence naturally Soviet economy is not run on market principles and cannot be without ceasing be Soviet-type economy. In market, or free, economy, market is prime determinant investment, production, and exchange, although government may and does set limits freedom of choice of businessman or consumer.

But existence these limits does not make market economy into one of Soviet type, where neither limits nor genuine freedom exists but where commands from Party and State embody all basic decisions. Soviet policy has from beginning been concentrate all significant economic decisions in hands of State and Party organs. Soviet propaganda and dogma insist that natural forces of market are inherently evil and have no place in socialist society. Free men consider Soviet system arbitrary, inefficient, and, far worse, destructive of right of free men to free choice. Soviets consider market system abdicates State responsibility to “elemental” market forces and therefore “self-contradictory”, term implying moral as well as logical condemnation.

5. In summary Department opposes Soviet participation in formulating principles of OECD first because cooperation in pursuit of purposes of organization is incompatible with Soviet policy aims and therefore their motive joining appears be deliberately to obstruct attainment aims organization. Secondly even if they acting in good faith, nature Soviet economic system in theory and practice precludes genuine cooperation based on common principles and purposes of economic activity.

Dillon

0. Source: Department of State, Central Files, 374.800/5–1760. Official Use Only. Drafted by Turpin. Sent to the OEEC capitals and Moscow.
1. Circular telegram 1326, April 23, outlined for use with the press the U.S. position on Soviet membership in the OECD. (ibid., 342.40/4–2360)
2. The Soviet Union publicly expressed its interest in joining the OECD on April 21 at the Geneva Foreign Ministers Conference on disarmament.