The Economics and Politics of the World Social Forum: Lessons for the Struggle against ‘Globalisation’

Appendix I: Ford Foundation — A Case Study of the Aims of Foreign Funding

“Someday someone must give the American people a full report of the work of the Ford Foundation in India. The several million dollars in total Ford expenditures in the country do not tell one-tenth of the story.” — Chester Bowles (former US ambassador to India).

In the light of the steady flow of funds from Ford Foundation to the World Social Forum, it is worth exploring the background of this institution — its operations internationally, and in India. This is significant both in itself and as a case study of such agencies.

Ford Foundation (FF) was set up in 1936 with a slender tax-exempt slice of the Ford empire’s profits, but its activities remained local to the state of Michigan. In 1950, as the US government focussed its attention on battling the ‘communist threat’, FF was converted into a national and international foundation.

Ford and the CIA

The fact is that the US Central Intelligence Agency has long operated through a number of philanthropic foundations; most prominently Ford Foundation. In James Petras’ words, the Ford-CIA connection “was a deliberate, conscious joint effort to strengthen US imperial cultural hegemony and to undermine left-wing political and cultural influence.”1 Frances Stonor Saunders, in a recent work on the period, states that “At times it seemed as if the Ford Foundation was simply an extension of government in the area of international cultural propaganda. The Foundation had a record of close involvement in covert actions in Europe, working closely with Marshall Plan and CIA officials on specific projects.”2

Richard Bissell, head of the Foundation during 1952-54, consulted frequently with Allen Dulles, the head of the CIA; he left the Foundation to become special assistant to Dulles at the CIA. Bissell was replaced by John McCloy as head of FF. His distinguished career before that included posts as the Assistant Secretary of War, president of the World Bank, High Commissioner of occupied Germany, chairman of Rockefeller’s Chase Manhattan Bank, and Wall Street attorney for the big seven oil corporations. McCloy intensified CIA-Ford collaboration, creating an administrative unit within the Foundation specifically to liaise with the CIA, and personally heading a consultation committee with the CIA to facilitate the use of FF for a cover and conduit of funds. In 1966, McGeorge Bundy, till then special assistant to the US president in charge of national security, became head of FF.

It was a busy collaboration between the CIA and the Foundation. “Numerous CIA ‘fronts’ received major FF grants. Numerous supposedly ‘independent’ CIA sponsored cultural organizations, human rights groups, artists and intellectuals received CIA/FF grants. One of the biggest donations of the FF was to the CIA-organized Congress for Cultural Freedom which received $ seven million by the early 1960s. Numerous CIA operatives secured employment in the FF and continued close collaboration with the Agency.”3

The FF objective, according to Bissell, was “not so much to defeat the leftist intellectuals in dialectical combat [sic] as to lure them away from their positions.”4 Thus FF funneled CIA funds to the Congress for Cultural Freedom (CCF) in the 1950s; one of the CCF’s most celebrated activities was the stellar intellectual journal Encounter. A large number of intellectuals were ready to be so lured. CIA-FF went so far as to encourage specific artistic trends such as Abstract Expressionism as a counter to art reflecting social concerns.

The CIA’s infiltration of US foundations in general was massive. A 1976 Select Committee of the US Senate discovered that during 1963-66, of 700 grants each of over $10,000 given by 164 foundations, at least 108 were partially or wholly CIA-funded. According to Petras, “The ties between the top officials of the FF and the U.S. government are explicit and continuing. A review of recently funded projects reveals that the FF has never funded any major project that contravenes U.S. policy.”

Such experiences ought to have alerted intellectuals and various political forces to the dangers of being bankrolled by such sources.

FF states (on the webpage of its New Delhi office) that from its inception to the year 2000 it had provided $7.5 billion in grants, and in 1999 its total endowment was in the region of $13 billion. It also claims that it “receives no funding from governments or any other outside sources”, but the reality, as we have seen, is otherwise.

Ford in India

The FF New Delhi office webpage claims that “At the invitation of Prime Minister Jawaharlal Nehru, the Foundation established an office in India in 1952.” In fact Chester Bowles, US ambassador to India from 1951, initiated the process. Like the rest of the US foreign policy establishment, Bowles was profoundly shocked at the “loss” of China (ie the nationwide coming to power of the communists in 1949). Linked to this was his acute worry at the inability of the Indian army to suppress the communist-led peasant armed struggle in Telangana (1946-51) “until the communists themselves changed their programme of violence”.5 Indian peasants expected that now, with the British Raj gone, their long-standing demand for land to the tiller would be implemented, and that pressure continued everywhere in India even after the withdrawal of the Telangana struggle.

Bowles wrote to Paul Hoffman, then president of FF: “the conditions may improve in China while the Indian situation remains stagnant…. If such a contrast developed during the next four or five years, and if the Chinese continued their moderate and plausible approach without threatening the northern Indian boundary…. the growth of communism in India might be very great. The death or retirement of Nehru might then be followed by a chaotic situation out of which another potentially strong communist nation might be born.” Hoffman shared these concerns, and stressed the need for a powerful Indian State: “A strong central government must be established…. The hardcore of communists must be kept under control…. The prime minister Pandit Nehru greatly needs understanding, sympathy and help from the people and governments of other free [sic] nations.”6

The New Delhi office was soon set up, and, says FF, “was the Foundation’s first program outside the United States, and the New Delhi office remains the largest of its field office operations”. It also covers Nepal and Sri Lanka.

“The fields of activity suggested [by the US State Department] for the Ford Foundation”, writes George Rosen, “were felt to be too sensitive for a foreign (American) government agency to work in…. South Asia rapidly came to the fore as an area for possible foundation activity… Both India and Pakistan were on the rim of China and seemed threatened by communism. They appeared to be important in terms of American policy….”7 FF acquired extraordinary power over the Indian Plans. Rosen says that “From the 1950s to the early 1960s the foreign expert often had greater authority than the Indian”, and FF and the (FF/CIA-funded) MIT Center for International Studies operated as “quasi-official advisers to the Planning Commission”. Bowles writes that “Under the leadership of Douglas Ensminger, the Ford staff in India became closely associated with the Planning Commission which administers the Five Year Plan. Wherever there was a gap, they filled it, whether it was agricultural, health education or administration. They took over, financed and administered the crucial village-level worker training schools.”8

Ford Foundation intervention in Indian agriculture

Given the background of the Chinese revolution and the Telangana struggle, the US priority in India was to find ways to head off agrarian unrest. Thus the first phase of FF’s work was in ‘rural development’. FF was intimately involved in the Indian government’s Community Development Programme (CDP), which Nehru hailed “as a model for meeting the revolutionary threats from left-wing and communist peasant movements demanding basic social reforms in agriculture.” The scheme was to carry out agricultural development with some funds from the Programme and voluntary village labour, thus bringing about what Nehru described as a “peaceful revolution”. At the Indian government’s invitation, FF helped train 35,000 village workers for the CDP.9 By 1960 the Ford and Rockefeller Foundations had between them extended over $50 million on the CDP alone. And by 1971, India, with grants totalling $104 million, was by far the largest recipient of grant aid from the Ford Foundation’s Overseas Development Programme.10 However, such cosmetic efforts neither brought about development nor solved the problem of simmering peasant discontent.

In 1959, a team led by a US department of agriculture economist produced the Ford Foundation’s Report on India’s Food Crisis and Steps to Meet It. In place of institutional change (ie redistribution of land and other rural assets) as the key-stone to agricultural development, this report stressed technological change (improved seeds, chemical fertilisers, and pesticides) in small, already irrigated, pockets. This was the ‘Green Revolution’ strategy. Ford even funded the Intensive Agricultural Development Programme (IADP) as a test case of the strategy, providing rich farmers in irrigated areas with subsidised inputs, generous credit, price incentives, and so on. The World Bank too put its weight behind this strategy.11

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