Aretrospective assessment at mid-century might have suggested that the course of Chinese history between 1900 and 1950 recorded only two events of enduring political significance: the first, the fall of the Ch'ing dynasty in October 1911 and, with it, destruction of the imperial system which had lasted for two millennia; the second, the establishment of the People's Republic of China in October 1949 and, through it, commitment to accelerated modernization and forced industrialization along lines similar to those plotted earlier by the Soviet Union. Simultaneously, assessment of the future might well have concluded, with prescience born of objectivity, that the effect of the Chinese Communist explosion on both Chinese and world politics would merit a major effort on the part of American social science research.

Problems of national security are in no sense novel for the application of economic analysis. Adam Smith, in a well-known passage in The Wealth of Nations, was concerned with the allocation of resources between “defense” and “opulence”—what we would call the problem of the size of the national security budget. There has been great interest among economists, especially during and following the First and Second World Wars, in problems of industrial mobilization during war, including the associated problems of economic stablization. In fact, to many economists during the past generation this set of mobilization problems constituted the economics of defense. Books were published with titles like Economics of Defense that dealt with little else.

Power politics and opportunism go hand in hand. Picking the right time to act involves a clear perception of the alternatives, a close estimate of the risks, and a clever gamble on the odds.

The Russians have shown themselves adept at the game. Their use of force or the threat of force has been unusually astute. They try to move when the deck is stacked in their favor.

The United Nations has made a vital contribution to economic intelligence and analysis through the publications of its Bureau of Economic Affairs as well as those of its regional commissions. The prestige of its professional staff is so high that their pronouncements find a respectful audience all over the world. This well-merited recognition, however, burdens the staff with heavy responsibilities. An academic economist may well indulge in political advice or economic forecasting, even though proficiency in economic theory guarantees neither sound political judgment nor the possession of prophetic gifts. It is different with staff members of a public agency, and especially with those of one of the foremost international institutions. Any advice they give should be based on generally accepted theories and values rather than on controversial hypotheses or partisan opinions. And, since they are as unable to foresee the future as other human beings, they should withstand the temptation to make predictions.