“The originally propagated viewthat the Marshall Plan was an altruistic endeavour … has long been dismissed.
“1Instead, “The overwhelming body of literature looks at the Marshall Plan eitherfrom a political and diplomatic or from an economic viewpoint.”2Overall, the Plan was primarily motivated by the former, rather, than the later,albeit both were heavily intertwined. This is because containment and a fear ofSoviet expansion categorised US foreign policy for much of the postwar period,with economic considerations being the method used, to enact this policy ofcontainment. The most convincingargument why the Marshall Plan was a scheme driven primarily by political,rather than economic considerations, is because there was an overwhelming USdesire for containment. Containment is the doctrine used to describe US attemptsto contain the spread of communism, as well as subvert Russian influence, inpostwar Europe. This formed the basis of the Marshall Plan, as President Trumanand his advisors were fearful that Stalin wanted to isolate Eastern Europe fromthe West and implement his communist and totalitarian doctrines in thoseregions. This Western fear stemmed prior to the introduction of the MarshallPlan, with Congress authorising $400 million of aid to Greece and Turkey, aspart of the Truman Doctrine, to combat the prospect of communism fostering inthese countries. Truman in his speech to Congress, in March 1947, stated that “itmust be the policy of the United States to support free peoples who areresisting attempted subjugation by armed minorities or by outside pressures.
“3 TheMarshall Plan was thus required to help contain this spread of communism, as communistregimes were “inhumane, undemocratic, and convoluted and offered an alternativevision of society no right or left-thinking person would desire, rationalise,or tolerate.”4 Therefore,this issue of containment lies at the crux of the Marshall Plan, as the Truman administrationwas overwhelmingly concerned with preventing the emergence and expansion of Sovietsatellite states. However, it has been arguedthat containment should not be seen as the underlying factor behind theMarshall Plan, due to the fact that Britain was a recipient of this aid. Thisis because Britain did not fall within the sphere of communist influence, yet receivedthe most amount of aid.
For example, in the 1945 General Election, the British CommunistParty only won two out of six-hundred and fifty seats, receiving less than one hundredthousand votes overall; thus, highlighting the lack of communist support inpostwar Britain. Furthermore, the Marshall Plan was even offered to the SovietUnion by the American administration. Despite being an empty gesture, if therewas a genuine fear of communism and an overwhelming agenda to contain it, whywould they offer aid, in the first place, to the principal communist state? Joyceand Gabriel Kolko go further and ascertain that the US “cynically manipulated aRussian threat in an effort to fasten economic control over the entire world.”5 TheKolkos argue that “Truman and his advisers deliberately exaggerated andmisrepresented external reality, provoked and invented crises, and spurnedgenuine Russian offers to negotiate a détente,”6 inorder to achieve greater world hegemony. Yet, it would be inconceivable thatBritain, America’s greatest ally in Western Europe, would not receive aid,especially off the back of the harsh winter of 1946-47. This is because Britainfaced an “imminent economic collapse that was only averted by the timely Marshallaid.”7 Furthermore,Ernest Bevin, UK Foreign Affairs Secretary, made the case that “without apowerful and stable Britain, the Soviet Union could assume control of the continent.”8 Similarly,with regards to the extension of Marshall aid to the Soviet Union, this was apurely tactical manouevre, for Truman and his policymakers knew that Stalinwould never accept this aid, thus “letting the Soviet Union bear the onus forwithdrawing.
“9 Furthermore,whilst the United States acknowledged that the Soviet Union weren’t posing animminent threat, the Truman administration were nevertheless intent in protectingand safeguarding the interests and liberties of the European populations,especially in the long-term. Therefore, containment largely provided theoverall incentive for the Marshall Plan. However, the Marshall Plan canalso be explained by a desire for European integration – an economicconsideration.
European integration is a model, which encouraged greaterco-operation and unity between European states, through “setting upinstitutions that coordinated the economies of Europe into a single efficientunit.”10 A”United States of Europe”11 wasrequired, as there had been a fragmentation of Europe into distinct autonomousstates, following the turn of the twentieth-century. Initial attempts, in theaftermath of World War I, to resolve this issue were overwhelminglyunsuccessful. The Treaty of Versailles failed to secure peace and stabilitywithin the region, with Germany again culpable for another major war, justtwenty years later. Rather, European integration was pursued in order to createa framework for the reconciliation of Germany, which would alleviate theeconomic and security concerns of its neighbours, in particular France. This iscorroborated by the Library of Congress, who “circulated a paper discussingEuropean unification as a method of controlling postwar Germany.”12 Insteadof ‘crippling’ Germany, the US maintained that German economic prosperity wouldbe the most effective method in ensuring German co-operation. By includingGermany in their vision of postwar Europe, as well as encouraging Germanrehabilitation, the United States hoped that they would not be resented, likethe ‘Big Three’ were, following the Treaty of Versailles.
Thus, the UnitedStates “made it inevitable that West Germany played a part in the Organisationfor European Economic Co-operation (OEEC),”13 whichwas the financial institution devised by the United States, to coordinate Europeanintegration. Yet, thereintegration of Germany wasn’t the sole reason why the US were deeply vestedin this issue of European integration. This is because “European economicrecovery was also essential to US long-term interests,”14 asit would mean that the “United States would no longer need to act as Europe’s’horn of plenty’.”15There had been a previous European tendency to rely heavily on the UnitedStates, especially with regards to aid, as shown by the Lend-Lease Act (1941).
ThisAct conveyed “$50.1 billion (equivalent to $656 billion today) worth ofsupplies”16 tothe Allies during the war, and allowed Britain to “retain the Lend-Leaseequipment, for just ten cents on the dollar, after the war.”17 Whilst,the United States tried to establish a ‘Reverse Lend-Lease’, in which theywould receive goods and services from the Allies, they only recovered $7.8billion; which wasn’t a tangible return on their $50.1 billion worth of aid. Assuch, the United States decided that European integration was the best policyto help guarantee European economic recovery, which would in turn allow them tolimit their future interventions.
This is because a prosperous Europe would notrequire US aid and involvement, as there wouldn’t be a major war or economiccrisis for them to contend with. However, recent historiography hasindicated that integration was only feverously pursued as it was primarily “amethod of maintaining capitalist relations in Europe and halting Sovietadvantage.”18 TheAmerican administration, under Harry S. Truman, understood that a weak,disintegrated Europe would be more susceptible to the advances of communism. Thiswas particularly the case in early 1947, where communism had already begun tobe fostered in Eastern European countries, such as Hungary, Poland andCzechoslovakia.
Coupled with the forthcoming economic crisis in Western Europe,US policymakers deemed intervention a priority, in order to prevent the”economic, social and political disintegration, which will overwhelm Europe.”19 ThisUS involvement was thus necessary to contain the spread of communism,especially in tumultuous times, in which communism overwhelmingly tends tothrive. Therefore, whilst European integration, in itself, would be beneficialto the United States, economic factors were not the primary motivation of theMarshall Plan. Instead, the Marshall Plan was underpinned by a desire tocontain communism in Europe, above all else.
Walter LaFeber similarly argues thatthe Marshall Plan was driven by economic considerations, albeit with regards todomestic economic imperative rather than European integration. This is because Truman’sadministration understood that if Europe stagnated “Americans would face the lossof their most vital market, causing a return to the 1930s state of affairs,with all its terrible political consequences.”20 Thisargument is corroborated by U.S.
Under Secretary of State for Economic Affairs,William Clayton, who acknowledged that “the immediate effects of a European crisison our domestic economy would be disastrous: markets for our surplus productiongone, unemployment, depression, a heavily unbalanced budget on the backgroundof a mountainous war debt.”21 Yet,this fear of European collapse wasn’t purely hypothetical, as there was theEuropean crisis of 1947, which resulted in a European dollar shortage. Theoutcome of this shortage was that “the world would not be able to continue tobuy U.S. exports at the 1946-7 rate beyond another 12-18 months.”22 Inresponse, the United States relied on the extensive use of counterpart funds,to shorten the dollar gap. Counterpart funds allowed these European countries topurchase US goods and services with their own currency, rather than in dollars,which then went into ERP Special Accounts.
However, not only were America ableto control the use of these funds, “each country also had to set aside fivepercent of their counterpart funds for American use, either to pay for scarcematerials or for American “administrative purposes,”23 thushighlighting the prevalence of US domestic imperative behind the Plan. However, John Killick refutesthe claim that domestic economic imperative formed the basis of the MarshallPlan. This is because he argues that whilst European collapse would have beenserious, it would not have been anywhere as debilitating as the post-World War1 and 1929 depressions. Killick argues that “Exports and aid were a small shareof US GNP. The strength of the underlying domestic consumer demand, and theimprovement in government management techniques made the immediate economicrisks relatively small.”24His argument is corroborated by US GNP, Government Finance, Aid and Employment,1945-55 statistics.25 Thesestatistics illustrate that foreign aid only contributed to 2.6% of GNP in 1947,2.
1% in 1949 and 2.2% in 1950. Similarly, in 1947 the US operated with acurrent account surplus of $11.3 billion (only 5% of GNP),26 whichthen fell to $6.4 billion (2.
5% of GNP) in 1948.27 Therefore,it can be seen that European stagnation would have only affected a small partof the US’s economy, limiting the argument that the Marshall Plan was driven bydomestic imperative. Rather, the Marshall Plan is best explained by an aspirationto contain communism, as according to Clark Clifford, former Special Counsel tothe President, “we weren’t concerned about markets; we were concerned aboutpreventing Soviet control of larger areas of the world than they alreadycontrolled.”28 Overall, whilst the Marshall Plan can’t beviewed as a totally linear scheme, directed solely by one or the other, thePlan was driven, to a greater extent, by political rather than economicconsiderations. This is because, despite the Marshall Plan’s official title ofthe Economic Recovery Program, itwas underpinned by a deep-rooted fear of communism and Soviet expansion.
Inorder to combat this, the United States couldn’t outwardly declare that theywere trying to suppress Soviet influence. From their perspective, the politicalcould only be achieved through the economic, as European economic recovery andgreater integration would decrease the chance of communism fostering in thesecountries. This is because communism is most influential when the masses arediscontent, which is predominantly in the case of depression, not economicprosperity. Additionally, whilst the Marshall Plan did result in a boost of theUS economy, US postwar finances were the strongest out of all the participatingcountries and a $13 billion aid package is a significant sum to spend to ‘rejuvenate’their already invigorated economy. Thus, the Marshall Plan was a scheme drivenprimarily by political considerations, with historiography also portraying thatthis communist fear dictated much of the US’s foreign policy, notably in theCold War, for the remaining part of the twentieth century. 1Armin Grünbacher, ‘Cold-War Economics: The Use of Marshall PlanCounterpart Funds in Germany, 1948–1960’, Central European History, No.45(2012), pp.697-716, p.
697.2 Ibid.3 Harry Truman, “Truman Doctrine” (speech, Washington, DC, March 12th,1947), Yale Law. Accessed December 5th, 2017. https://library.
menloschool.org/chicago/speech4 Terry Buss, ‘Marxism Is Wrong, and Thankfully, Dead.’ The Academyof Management Review 18, no. 1 (1993), pp.10-11, p.
10.5 John Gaddis, “The Limits of Power”, New York Times, February 27th, 1972. Accessed December 5th,2017. http://www.nytimes.com/1972/02/27/archives/the-limits-of-power-the-world-and-united-states-foreign-policy.html6 Ibid. 7 Peter Burnham, The PoliticalEconomy of Postwar Reconstruction, (New York, 1990), p.
718 Michael Cox and Caroline Kennedy-Pipe, ‘The Tragedy of AmericanDiplomacy? Rethinking the Marshall Plan’, Journal of Cold War Studies, Vol. 7,No.1 (2005), pp.97-134, p.113.9 Diane Kunz, ‘The Marshall Plan Reconsidered: A Complex of Motives’,Foreign Affairs 76, no. 3 (1997), pp.162-70,p.
165.10 John Provan, “The Marshall Plan and its consequences”, George Marshall Society. AccessedDecember 5th, 2017. https://www.
george-marshall-society.org/george-c-marshall/the-marshall-plan-and-its-consequences/11 Winston Churchill, “Tragedy of Europe” (speech, Zurich, September19th, 1946), Churchill Society. Accessed December 5th,2017. http://www.churchill-society-london.org.uk/astonish.
html12 Michael Hogan, The Marshall Plan.America, Britain and the reconstruction of Western Europe, 1947-1952, (NewYork, 1987) p.28.13 Armin Grünbacher, Reconstructionand Cold War in Germany: The Kreditanstalt für Wiederaufbau 1948-61, (Aldershot,2004), p.6514 Hogan, The Marshall Plan,p.
2615 Grünbacher, Reconstructionand Cold War in Germany, p.6416 William McNeill, America,Britain and Russia: Their Co-operation and Conflict, 1941-1946, (Oxford,1953), p.77817 Kennedy Hickman, “World War II: The Lend-Lease Act”, ThoughtCo.,May 12th, 2017. Accessed December 5th, 2017. https://www.
thoughtco.com/the-lend-lease-act-236102918 Burnham, Political Economy ofPostwar Reconstruction, p.82.19 Ibid, p.71 20 Walter LaFeber, America,Russia and the Cold War, 1945-2006,(Boston, 2006), p.59.
21 Foreign Relations of the United States (FRUS), 1947, Volume III,p.231.22 Ibid.23 Grünbacher, ‘Cold War Economics’, p.69924 John Killick, The UnitedStates and European Reconstruction 1945-1960, (Chicago, 1997), p.90.25 United States, Bureau of the Census, Historical Statistics of theUnited States: Colonial Times to 1970.
26 United States. Federal Reserve Board. (October 19th, 1948).Review of Foreign Developments, p.2. Accessed December 5th, 2017.
http://www.federalreserve.gov/pubs/rfd/1948/98/rfd98.pdf27 Federal Reserve Bank of St. Louis, The United States Balance ofPayments 1946-1960, Vol. 43, No.
3, March 1961, p.5. Accessed December 5th,2017. https://fraser.stlouisfed.org/files/docs/publications/frbslreview/rev_stls_196103.
pdf28 Extract from Oral History Interview with Clark M. Clifford.Assistant to White House Naval Aide, 1945-46; Special Counsel to the President,1946-50. Washington, D.C.
March 16, 1972 by Jerry N. Hess. Accessed December5th, 2017.