Marshall Plan

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MARSHALL PLAN

Between 1948 and 1951 the European Recovery Program—or as it is commonly called, the Marshall Plan—restored post-war Western Europe's agricultural and industrial productivity by providing nearly $15 billion in U.S. economic assistance. The plan is named after Secretary of State George C. Marshall, who proposed it in a commencement speech at Harvard University on June 5, 1947.

George C. Marshall (1880–1959) gained military recognition in World War I (1914–1918) as the chief tactical officer of the first American division to go into action in France. He was named chief of staff of the U.S. Army in 1939, making him a four star general and the head of the army throughout World War II (1939–1945). During the war, he planned the amphibious invasions of North Africa and of Normandy, France; his achievements were heralded by the leaders of the United States and its allies. Marshall retired from the army in November 1945, but in 1947 President Harry S. Truman appointed him secretary of state.

Shortly after his appointment, Marshall attended a conference in Moscow with British, French, and Soviet leaders to discuss Germany and Austria's future. Europe was physically and economically devastated in the wake of World War II; food, fuel and raw materials for production were in desperately short supply. Businesses had been destroyed through loss of capital, nationalization, or physical obliteration, and confidence in local currencies was badly shaken. Observing the economic collapse of Europe and recognizing the Soviet Union's intention to take advantage of that collapse to spread communism across Europe, Marshall returned from the conference determined to restore the European economy.

On June 5, 1947, during a commencement address at Harvard University, Marshall stated, "It is logical that the United States should do whatever it is able to do to assist in the return of nominal 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." Marshall proposed that European nations determine their needs and suggest a plan for American economic assistance for their recovery.

In response to Marshall's announcement, sixteen Western European countries met in Paris a month later to form the Organization for European Economic Cooperation and to assess and agree on their needs. Although Marshall had claimed that the plan was "not directed against any country or doctrine," from the start the United States attached conditions to their aid that would be unacceptable to the Soviet Union. Thus, while the Soviet Union and the Eastern Europe countries under its control were invited to participate, the Soviet Foreign Minister walked out of the talks. The Western European nations eventually drafted a request for $16 to $22 billion to stimulate economic recovery by 1951.

Back in the United States, the Marshall Plan was debated in Congress. To ensure its passage, Marshall worked closely with congressional committees and made promotional speeches throughout the United States. Congress agreed to Truman's $17 billion request to aid Europe. In April, 1948, Truman signed an act that established the Economic Cooperation Administration (ECA) to administer the program. The ECA's primary goals were to elevate European economic production, support European currency, and assist with international trade. Its other intention was to restrain the spreading Soviet influence in Czechoslovakia, France, and Italy. Paul G. Hoffman (1891–1974) was appointed ECA's chief administrator. Later that year the participating countries—Austria, Belgium, Denmark, France, West Germany, Great Britain, Greece, Iceland, Italy, Luxembourg, the Netherlands, Norway, Sweden, Switzerland, Turkey, and the United States— signed the agreement that instituted the Organization for European Economic Cooperation (later called the Organization for Economic Cooperation and Development) as the head coordinating agency.

The Soviet Union strongly opposed the Marshall Plan and refused to participate; a few other Eastern European countries criticized or ignored it. The Soviets prevented Poland and Czechoslovakia from participating, despite their desire to do so. Stalin accused the United States of trying to use its money to lure Eastern European nations away from Soviet influence. He ordered all Communists to resist U.S. imperialism and established the Cominform, an international Communist information bureau. Stalin's most drastic response to West Germany's participation in the Marshall Plan was the 1948–1949 Berlin blockade, an unsuccessful attempt to force the United States and its allies to evacuate West Berlin.

Completed in 1951, the Marshall Plan greatly contributed to the economic restoration of Europe. At its end, nearly $15 billion in recovery aid had been channeled into Western Europe. Many countries' agricultural and industrial productivity was higher than they had been before World War II. His efforts in preventing famine and political chaos through the Marshall Plan earned George C. Marshall a Nobel Peace Prize in 1953.

Some revisionist historians have contested that the Marshall Plan did not demonstrate American altruism, arguing that assistance to Europe prevented the United States from falling into its own economic decline by providing a market for U.S. capital goods. According to revisionists, the Marshall Plan also let the United States rebuild the Western European economy to mirror the American economy, providing a more compatible environment for U.S. investment.