The Marshall Plan

THE MARSHALL PLAN By the end of World War II much of Europe was devastated. The region’s economic structure was ruined and the devastation to agriculture left millions starving and homeless. During the war, Axis powers targeted the transportation infrastructure, leaving railways, bridges, and roads in a state of severe disrepair. Much of the civilian merchant shipping industry had also suffered severe damage. Due to the economic strain placed on the European countries during the war, many had exhausted their treasuries. If not for The United State’s aid in the form of the Lend-Lease program during wartime efforts, this damage would have been much worse and the outcome may have been different. The United States however, did not suffer the same severity of destruction on its own territory. Consequently its massive agriculture and manufacturing base was still intact. For these reasons, The United States saw it necessary to offer goods, services, and monies to any European or Asian country, be it an Allied or Axis power. The U. S. continued providing aid after the war was over. Between 1945 and 1948, the U. S. ent $12 billion in aid to European Nations. The world’s major economies were crumbling and the U. S. realized the global impact. General George C. Marshall introduced a recovery plan in 1947, the European Recovery Plan or ERP. This plan, which later became known as the Marshall Plan, was the primary program for rebuilding and creating a stronger economic foundation for the countries of Western Europe during the post-war era, 1948-1952. The Marshall Plan provided an additional $13 billion in aid to European nations. Post-war relief from the U. S. totaled $25 billion. With a GDP of $258 billion, U. S. post-war investment in foreign countries totaled 10% of its GDP. For all Marshall Plan participants, the economic output was 35% higher in 1951 than the 1938 pre-war era. Poverty and starvation disappeared and Western Europe began two decades of growth in which it saw a drastic increase in the standards of living. This plan was a key element in European recovery and integration. It erased trade barriers and set up institutions to coordinate a global economy. Efforts were made to model European industrial and business practices using the more efficient American models. The Marshall Plan and the Bretton Woods system mandated free trade throughout the region. Through these acts, European nations standardized international exchange rates, set up the International Monetary Fund and the International Bank for Reconstruction and Development, which is now part of the World Bank Group. The European Coal and Steel Community which eventually became the European Union has roots in the Marshall Plan. Today, the term â€Å"Marshall Plan† has become a metaphor for any large scale government program that is designed to solve a specific social problem. It is usually used when calling for federal spending to correct a perceived failure of the private sector. The Marshall Plan has played an integral part in establishing a global economy. References http://www. polsci. ucsb. edu/faculty/cohen/inpress/bretton. html http://www. archives. gov/exhibits/featured_documents/marshall_plan/ http://en. wikipedia. org/wiki/Marshall_Plan#Criticism http://en. wikipedia. org/wiki/Marshall_Plan http://en. wikiquote. org/wiki/George_Marshall#Essentials_to_Peace_. 281953. 29 The Marshall Plan By the end of WWII the political map of the world was distinctly shaped. The former allies in anti-Hitler coalition entered into the era of ideological, military and industrial confrontation the humanity had never a chance to experience before; a confrontation used to be known as the Cold War with its iron curtain, unprecedented arm race and the support of various regimes including those which built their state doctrine on the ideology of terrorism.The political map of the post-war Europe was divided into two political camps, a pro-Soviet Eastern alliance and the Western Europe exhausted by the bloody war. The natural disasters of 1947-1947 ruined the agricultural infrastructure of some European countries. Especially damaged was transportation infrastructure, as railways, bridges, and roads had all been heavily targeted by air strikes, while much merchant shipping had been sunk.By and large the small towns and villages in Western Europe had suffered little damage, but the destruction of transportation left them economically isolated. None of these problems could be easily remedied, as most nations engaged in the war had exhausted their treasuries in its execution. With the formation of the confronting political camps the urgent political and economic actions were required first of all to reconstruct the economy of the countries opposed to the pro-Soviet block and secondly, to restrain the further expansion of the Soviet Union in Europe.The Marshall Plan (from its enactment, officially the European Recovery Program (ERP)) was the primary plan of the United States for rebuilding the allied countries of Europe and repelling communism after World War II. The initiative was named for United States Secretary of State George Marshall and was largely the creation of State Department officials, especially William L. Clayton and George F. Kennan. 1 In fact the Plan was offered to the Soviet Union if it accepted certain conditions like the changes in the political system and the outer control.It was understood that the conditions suggested by the US Administration would never be accepted by the Soviet rulers. The general idea of the Marshall Plan presupposed the elimination the tariffs, close economic integration and it could be said that the Plan was the beginning of the Euro integration process which is taking place nowadays. The attitude towards the idea of the European reconstruction was rather controversial in America. First of all such foreign policy was new for the United States and changed the foreign policy of the pre-war isolationism.At the same time the lessons of the WWII showed that the global security could not be provided under the isolationism doctrine. The State Department under Harry S. Truman was dedicated to pursuing an activist foreign policy, but the Congress was somewhat less interested. Originally, it was hoped that little would need to be done to rebuild Europe and that the United Kingdom and France, with the help of their c olonies, would quickly rebuild their economies.By 1947 there was still little progress, however. A series of cold winters aggravated an already poor situation. The European economies did not seem to be growing as high unemployment and food shortages led to strikes and unrest in several nations. In 1947 the European economies were still well below their pre-war levels and were showing few signs of growth. Agricultural production was 83% of 1938 levels, industrial production was 88%, and exports only 59%. 2It was the objective reality that the United States was the only country the economy of which was not seriously damaged by the war and the bipolar nature of the post WWII world needed some action restraining the Soviet influence. The ruinous effect of the WWII was the fertile soil for spreading the Communist ideas and consequently the influence of the USSR which was not limited by the ideology only but by the growing military, political and economic presence.On June, June 5, 1947 Se cretary of State George Marshall gave the address to the graduating class of Harvard University in which he stated the preparedness of the United States to give the aid to European countries. The most important provision of the speech was that the Europeans should create their own plan of the economic reconstruction and the United States would finance such reconstruction. UK and France considered it necessary to invite the Soviet Union to join the European program of the post war reconstruction.Such appeal to Stalin would exclude possibly hostility from the USSR on one hand but on the other hand it was clear that the USSR would never accept the offer because the Cold War had already started by that time by the Soviet leaders. The major reason the aid was rejected by the Soviet rulers was that the Plan presupposed the creation of the unified European economy which was incompatible with the command economy of Soviet socialism. The US Administration considered the global economic stabi lity to the guarantee of the political stability and security which was stated in Marshall Plan Speech in Harvard.â€Å"It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health in the world, without which there can be no political stability and no assured peace. Our policy is directed not against any country or doctrine but against hunger, poverty, desperation and chaos. Its purpose should be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist†. 3The position of the Soviet Union and it allies towards the Marshall Plan was rather predictable. Soviet rulers considered the Marshall Plan to be an attempt to destroy the Soviet domination in the Eastern Europe. The USSR allies influenced by the USSR, Poland and Czechoslovakia rejected the offered aid. Finland also declined in order to avoid antagonizing the Soviets. The So viet Union's â€Å"alternative† to the Marshall plan, which was purported to involve Soviet subsidies and trade with eastern Europe, became known as the Molotov Plan, and later, the COMECON.4 Some scholars consider the Marshall Plan to be a milestone and even a starting point on the long term global confrontation known as the Cold War. â€Å"Our analysis of the Marshall Plan will show that it was American policies as much as (and perhaps more than) Soviet actions that finally led to the division of Europe and thus to the Cold War itself. Many historians will feel uncomfortable with this conclusion; and it is certainly not a point of view that is popular with American historians, especially now. Nor should this much surprise us.After all, the Marshall Plan has always tended to receive favorable reviews within the United States—partly because few appear inclined to think critically about an act of generosity involving something close to $13 billion;19 partly because in the context of 1947 the Marshall Plan stood in sharp contrast to its shrill predecessor, the Truman Doctrine; and partly because of the huge reputation of George Marshall, whose role in the Marshall Plan was commemorated by the British government with the scholarships that still bear his name. †5Cox and Kennedy-Pipe suggest that the Marshall Plan was one of the major reasons of the division of Europe and it led to the Cold War. But this approach looks like that which is a little bit simplified. The confrontation of the USSR and USA was unavoidable no matter what political processes took place in the post WWII globe. First of all the confrontation was originally programmed in the ideological difference of the two systems. Nowadays we can observe the nominally Communist China and Vietnam integrating in the world market economy.The modern economies of China and Vietnam have nothing common with the traditional communist command economy. It could be said that the ideological basis of the modern China and Vietnam contradicts completely to the traditional communist approach to economy when the market and the competition according to classics of Marxism-Leninism are aimed to exploitation of the working class and prosperity of the ruling class. Nobody knows what kind of confrontation would be if the Marshall Plan were not introduced.One of the possible scenarios could be that the Europe remained in ruins, Soviets gained the unlimited influence and the greater part of Europe would get involved into the crazy arm race without any restrictive factor which would lead to the new global conflict. The Marxian ideologists interpreted the Marshall Plan as the manifestation of the US neo-colonial global policy. â€Å"US imperialism has never had need to operate in the traditional manner of the British, French or German imperialisms. These countries had to acquire direct political possession of the colonial areas in order to control, subjugate and exploit them.American imp erialism, with its overwhelming capacity to produce, has always used economic penetration as its main weapon of gaining economic and political control over another country. †6 The American Marshall Plan was heavily criticized both in the United States and abroad. The opinions ranged from â€Å"the betrayal of the American interests† to â€Å"the attempt of global domination† but there was no any reasonable alternative suggested. The political aim of the Marshall Plan as it was stated above was to restrain the Soviet expansion and influence in the post War Europe and the entire world.The United States and the USSR were two global superpowers which defeated the Hitler block. At the same time as it was stated above they have basic system ideological differences which in their essence were incompatible. The United States and the USSR were destined to confrontation due to such differences. The first post – war political initiative of the USSR was the creation o f the pro-Soviet block in Europe. Germany, Italy and Japan were destructed and demoralized to oppose the growing Soviet influence. The spread of the Soviet influence created the real threat to the entire world.What is more, the situation looked like paradox because the United States assisted to strengthen the position of its ideological opponent in the world. Due to its geopolitical position the United States could not provide the symmetric political presence in Europe. The Great Britain ran its traditional isolationist policy. France was not economically and politically strong enough to oppose the Soviet influence. â€Å"If Russia came to control Europe and Asia, this control could be founded only on communist dictatorships maintained against the will of the majorities of the peoples.The mere existence of a great free country like our own, to which anti-Soviet forces could gravitate, would then be a major danger (even more than it is today) to the security of the Soviet political structure. For this reason, the Russians would inevitably focus the full force of their economic and military power upon the destruction of our society, with a view to establishing here a regime subservient to themselves which would make no further trouble for them. They would hope that in this way the conscience of the world could be finally silenced†. 7Such attitude towards position of Russia was a little bit exaggerated especially when Mr. Kennan said about the direct Russian aggression against the United States but still it indicated the real threat of Russian influence in the world. It is worth reminding that Mr. Kennan spoke about the Soviet threat to American society in 1948 when there were only two dominating military and political forces in the world, the USA and the USSR, one of which started forming the military and political block risking the superpower global balance. It is worth noting that the initial confrontation of the superpowers was the battle for minds.The Europeans with their destructed economies had the options to choose either the ideology of Communism with its dictatorship and command economy or find the way to rehabilitate their post-war economies on the basis of free market and the United States entered this battle for the sake of the Europeans. The post-war situation is similar to that of nowadays when the United States faces the problem of battling the global terrorism including the economic measures. As Gordon O. F. Johnson notes â€Å"Today we are fighting for the minds of those throughout the world who are inclined to support and sympathize with international terrorists.Just as the aim of the Marshall Plan was to â€Å"drain the swamps† where communism was drawing support, so we today must â€Å"drain the swamps† where international terrorism recruits and draws its support. †8 The outcomes of the Marshall Plan are of great significance for Europe and entire world. The most important of them is that the United States and the civilized community introduced and implemented the unprecedented tool of collective reconstruction. It is worth mentioning that the post-war European economies were rehabilitated by the Europeans themselves with the assistance of the United States.The essence of the Marshall speech at Harvard was that the European countries were supposed to reconstruct their countries themselves and the United States was not supposed to interfere into this process. That is, the United States provided only the tools for reconstruction without imposing any dictatorship. Another important outcome of the Marshall Plan was that the former enemies in the World War II succeeded to join their efforts in building the new Europe taking away the political, economic and ideological disagreements of the former enemies in the bloodiest war of the human history.The Marshall Plan apart from its economic value became the factor consolidating Europe. â€Å"The objective of the Marshall Plan wa s not to solve the problem of poverty by handouts and welfare systems, but rather to foster successful enterprises which would create productive jobs with a genuine future. Jobs and a strong middle class were key to fighting communism. They were key for Europeans to rebuild from the rubble and offer hope for their youth who were the most susceptible to the message of international communism. †8The history of the mankind knows a lot of examples when the political and economic actions were imposed from outside. The Marshall Plan gave the brilliant example when the effective assistance program had the local character. It was taken as fair and sincere action because of its transparency and the complete lack of the outer dictatorship. It had a great ideological value as well indicating that people of the countries which were completely destructed by the devastating war were able to rehabilitate their economies and rebuild their home countries. Citation 1. Wikipedia 2. Ibid 3.Text o f the Marshall Plan Speech 4. Wikipedia 5. Cox and Kennedy-Pipe 6. Homer Paxon 7. George F. Kennan 8. Gordon O. F. Johnson 9. Ibid Bibliography †¢ Marshall Plan, Wikipedia, available at http://en. wikipedia. org/wiki/Marshall_Plan#searchInput, retrieved 9. 11. 2006 †¢ Text of the Marshall Plan Speech, available at http://www. marshallfoundation. org/marshall_plan_speech_harvard. html#top, retrieved 9. 11. 2006 †¢ Cox and Kennedy-Pipe, The Tragedy of American Diplomacy? Rethinking the Marshall Plan, available at http://www. polisci. ucla. edu/faculty/trachtenberg/cv/jcws(marshall%20orig). pdf, retrieved 9.11. 2006 †¢ Homer Paxon Marshall Plan: Road to Conquest Analysis of the American Way of Imperialism, From New International, Vol. 14 No. 5, July 1948, pp. 138-143. , available at http://www. marxists. org/history/etol/newspape/ni/vol14/no05/paxon. htm#top, retrieved 9. 11. 2006 †¢ George F. Kennan on the Strategic Background, available at http://www. marshal lfoundation. org/marshall_plan_information. html, retrieved 9. 11. 2006 †¢ Gordon O. F. Johnson, Lessons for Today from the Marshall Plan, CIPE. ORG Feature Service: Technical Paper Series January 2002, available at CIPE. ORG, retrieved 9. 11. 2006.