It’s no surprise that foreign aid (USAID) was the first target of Elon Musk’s Department of Government Efficiency (DOGE), since foreign aid yields no immediate return for dollars invested. In other words, foreign aid is not “transactional,” which made it low-hanging fruit for DOGE, despite it’s costing less than one percent of the annual budget.
It’s a big loss. Our 80 years of non-transactional foreign aid has given us an abundance of “soft power.” Unlike hard economic and military power, soft power is intangible, diffuse, cumulative, and only realized over time. It is part of our nation’s long game and includes the immense attractiveness of our universities, our scientific and medical research, our democratic political values, and much else.
Commerce, in contrast to foreign aid, is generally transactional. It operates by the law of quid pro quo, this for that. You give $10 and you get a pair of socks. When it goes well for both parties, commerce is the ultimate model of an orderly set of transactional operations.