How effective was the Marshall Plan really?

by SavannaJeff

I see that, adjusted for 2020 dollars, the Marshall Plan cost USD 129B and is painted as a plan that almost singlehandedly rebuilt Europe. By comparison, Greece got a EUR 110b bailout and that’s just for one country.

Is the importance of the Marshall plan typically overstated?

DrMalcolmCraig

An important thing to consider when discussing the Marshall Plan (or the European Recovery Plan, if you want to be formal about things) is "What was its purpose?"If you assess the Marshall Plan purely in economic terms - money handed out, steel mills built, etc - then that fails to give the full picture of why it was enacted and what the aims of those to put it together were.

First off, why does it get put into action? Post-1945 - as we know - huge swathes of continental Europe had been devastated by the recent conflict. Millions of people lived in poor housing or transient camps, supply chains were disrupted, energy supplies were problematic in some areas, etc. The winter of 1946-47 is absolutely brutal across Europe, with temperates plummeting to record sustained lows, immense snowfall, and all the issues that brings for a population lacking basic necessities. Particularly affected was the UK. From January 1947 onwards, temperatures plummeted to lows of -21C. In February, it snowed for 26 days out of 28. Factories, mines, and other business were shut, and coal and gas began to run out. The Army and Air Force had to be drafted in to take supplies to communities in Wales, Cumbria, Northumbria, the Scottish Borders, and the Highlands. Things in Europe were hardly any better. Snow blanketed the devastated continent, temperatures hit new lows, and millions of people shivered in tents and badly repaired buildings.

And from early to mid 1946 onwards, the Cold War is really starting to get going. This is important (a fact which will surprise nobody) in the European case, because national communist parties actually look pretty good in this period. Active resistance against Nazi occupation was in the main (although not in all cases) carried out by communists. And it was the Soviet Union that had shed the vast majority of the blood in defeating fascism. In Washington, all of this stuff starts to look like a threat. If people are starving, impoverished, and fearful (so the thinking goes) they may turn to more extreme forms of politics. And as the Cold War emerges, this means communism.

Plus there is the question of Germany. Post-Great War, Germany was pushed to the margins, reviled, burdened with massive reparations, and generally kept outside of international systems. And this was a contributing factor to what happened in the 1920s and 1930s. Thus, it was crucial - from the Truman administration's perspective - that Germany (whole or divided) be integrated into the emerging international order and new international systems.

On June 5th, 1947, US Secretary of State George C. Marshall announced the European Recovery Plan. Countries that accepted US aid were free to decide what to do with it, although American advisors would play a prominent role in national decision-making. Additionally, this was a strategic plan spread over a number of years, not just a single, sudden tidal wave of money.

In April 1948 the ERP is enacted, having been approved by congress. This is kind of important, as congress where not wholly supportive of the ERP until the Prague Coup of early 1948, This saw the loss of the last non-communist democracy in Eastern Europe and finally demolished congressional opposition to the ERP. Moreover, aid was offered to the states of Eastern Europe, but Stalin ordered them all to reject the American offers.

The historian Klaus Schwabe notes that regarding the ERP and the moves towards a more integrated Western Europe, "the goal of unifying Europe promised to offer an attractive and inspiring platform to combat communist propaganda." Reconstruction was seen in Washington as necessary to US security. [1] Furthermore, as William Hitchcock argues "“It [the Marshall Plan] was far more than a foreign aid program. It represented the first stage in the construction of that community of ideas, economic links, and security ties between Europe and the United States we know simply as 'the West'."[2]

Hitchcock (who has done really important work in this area all argues that (and this extended quite is worth a close reading):

Marshall aid did not restart European economic growth, but it allowed European states to continue along a path of industrial expansion and investment in heavy industry upon which they had already started, while at the same time putting into place a costly but politically essential welfare state to which all West European governments were committed. Marshall aid allowed European governments to move with some confidence to effect a transformation in Europe’s economic life, away from the cautious, deflationary 1930s to the Keynesian, high- investment strategies of the 1950s. In this sense, Marshall aid gave Europeans choices that they might not otherwise have had.” [3]

And it's also worth noting that:

"The Marshall Plan’s long-term ripple effects reached out beyond Germany and US alliance policies. The plan also shaped the evolution of internal European politics, the process of European integration, and, by legitimizing a particular economic model of production and consumption, opened the way to the Americanization of Europe.” [4]

So, to answer your original question: was the Marshall Plan as success? Yes, yes it was, if you take it from the point of view of the ways in which contributed to the integration of a defeated Germany into the Western European mainstream and the contribution it made to the evolution of integrated European institutions.

Hope this helps.

Malcolm

Notes

[1] Klaus Schwabe, 'The Cold War and European Integration', Diplomacy & Statecraft, 12:4 (Dec., 2001), 20

[2] William Hitchock, 'The Marshall Plan and the creation of the West', in Melvyn P. Leffler and Odd Arne Westad, The Cambridge History of the Cold War, Vol.1 (Cambridge: Cambridge University Press, 2010), 154

[3] Ibid, 160

[4] Ibid, 170