The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative passed in 1948 to aid Western Europe, in which the United States gave over $12 billion (nearly $100 billion in 2018 US dollars) in economic assistance to help rebuild Western European economies after the end of World War II. Replacing the previous Morgenthau Plan, it operated for four years beginning on April 3, 1948. The goals of the United States were to rebuild war-torn regions, remove trade barriers, modernize industry, improve European prosperity, and prevent the spread of Communism. The Marshall Plan required a lessening of interstate barriers, a dropping of many regulations, and encouraged an increase in productivity, as well as the adoption of modern business procedures.
The Marshall Plan aid was divided amongst the participant states roughly on a per capita basis. A larger amount was given to the major industrial powers, as the prevailing opinion was that their resuscitation was essential for general European revival. Somewhat more aid per capita was also directed towards the Allied nations, with less for those that had been part of the Axis or remained neutral. The largest recipient of Marshall Plan money was the United Kingdom (receiving about 26% of the total), followed by France (18%) and West Germany (11%). Some eighteen European countries received Plan benefits. Although offered participation, the Soviet Union refused Plan benefits, and also blocked benefits to Eastern Bloc countries, such as Hungary and Poland. The United States provided similar aid programs in Asia, but they were not part of the Marshall Plan.
Its role in the rapid recovery has been debated. Most reject the idea that it alone miraculously revived Europe, since the evidence shows that a general recovery was already under way. The Marshall Plan's accounting reflects that aid accounted for less than 3% of the combined national income of the recipient countries between 1948 and 1951, which means an increase in GDP growth of only 0.3%.
After World War II, in 1947, industrialist Lewis H. Brown wrote at the request of General Lucius D. Clay, A Report on Germany, which served as a detailed recommendation for the reconstruction of post-war Germany, and served as a basis for the Marshall Plan. The initiative was named after United States Secretary of State George Marshall. The plan had bipartisan support in Washington, where the Republicans controlled Congress and the Democrats controlled the White House with Harry S. Truman as President. The Plan was largely the creation of State Department officials, especially William L. Clayton and George F. Kennan, with help from the Brookings Institution, as requested by Senator Arthur H. Vandenberg, chairman of the Senate Foreign Relations Committee. Marshall spoke of an urgent need to help the European recovery in his address at Harvard University in June 1947. The purpose of the Marshall Plan was to aid in the economic recovery of nations after WWII and to reduce the influence of Communist parties within them. To combat the effects of the Marshall Plan, the USSR developed its own economic plan, known as the Molotov Plan, in spite of the fact that large amounts of resources from the Eastern Bloc countries to the USSR were paid as reparations, for countries participating in the Axis Power during the war.
The phrase "equivalent of the Marshall Plan" is often used to describe a proposed large-scale economic rescue program.
|Other short titles|
|Long title||An act to promote world peace and the general welfare, national interest, and foreign policy of the United States through economic, financial, and other measures necessary to the maintenance of conditions abroad in which free institutions may survive and consistent with the maintenance of the strength and stability of the United States.|
|Enacted by||the 80th United States Congress|
|Effective||April 3, 1948|
|Statutes at Large||62 Stat. 137|
The reconstruction plan, developed at a meeting of the participating European states, was drafted on June 5, 1947. It offered the same aid to the Soviet Union and its allies, but they refused to accept it, as doing so would allow a degree of US control over the communist economies. In fact, the Soviet Union prevented its satellite states (i.e., East Germany, Poland, etc.) from accepting. Secretary Marshall became convinced Stalin had no interest in helping restore economic health in Western Europe.
President Harry Truman signed the Marshall Plan on April 3, 1948, granting $5 billion in aid to 16 European nations. During the four years the plan was in effect, the United States donated $17 billion (equivalent to $198.13 billion in 2018) in economic and technical assistance to help the recovery of the European countries that joined the Organisation for European Economic Co-operation. The $17 billion was in the context of a US GDP of $258 billion in 1948, and on top of $17 billion in American aid to Europe between the end of the war and the start of the Plan that is counted separately from the Marshall Plan. The Marshall Plan was replaced by the Mutual Security Plan at the end of 1951; that new plan gave away about $7 billion annually until 1961 when it was replaced by another program.
The ERP addressed each of the obstacles to postwar recovery. The plan looked to the future and did not focus on the destruction caused by the war. Much more important were efforts to modernize European industrial and business practices using high-efficiency American models, reducing artificial trade barriers, and instilling a sense of hope and self-reliance.
By 1952, as the funding ended, the economy of every participant state had surpassed pre-war levels; for all Marshall Plan recipients, output in 1951 was at least 35% higher than in 1938. Over the next two decades, Western Europe enjoyed unprecedented growth and prosperity, but economists are not sure what proportion was due directly to the ERP, what proportion indirectly, and how much would have happened without it. A common American interpretation of the program's role in European recovery was expressed by Paul Hoffman, head of the Economic Cooperation Administration, in 1949, when he told Congress Marshall aid had provided the "critical margin" on which other investment needed for European recovery depended. The Marshall Plan was one of the first elements of European integration, as it erased trade barriers and set up institutions to coordinate the economy on a continental level—that is, it stimulated the total political reconstruction of western Europe.
Belgian economic historian Herman Van der Wee concludes the Marshall Plan was a "great success":
It gave a new impetus to reconstruction in Western Europe and made a decisive contribution to the renewal of the transport system, the modernization of industrial and agricultural equipment, the resumption of normal production, the raising of productivity, and the facilitating of intra-European trade.
By the end of World War II, much of Europe was devastated. Sustained aerial bombardment during the war had badly damaged most major cities, and industrial facilities were especially hard-hit. The region's trade flows had been thoroughly disrupted; millions were in refugee camps living on aid from United Nations Relief and Rehabilitation Administration and other agencies. Food shortages were severe, especially in the harsh winter of 1946–47. From July 1945 through June 1946, the United States shipped 16.5 million tons of food, primarily wheat, to Europe and Japan. It amounted to one-sixth of the American food supply and provided 35 trillion calories, enough to provide 400 calories a day for one year to 300 million people.
Especially damaged was transportation infrastructure, as railways, bridges, and docks had been specifically targeted by airstrikes, while much merchant shipping had been sunk. Although most small towns and villages had not suffered as much damage, 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 the process.
The only major powers whose infrastructure had not been significantly harmed in World War II were the United States and Canada. They were much more prosperous than before the war but exports were a small factor in their economy. Much of the Marshall Plan aid would be used by the Europeans to buy manufactured goods and raw materials from the United States and Canada
Europe's economies were recovering slowly, as 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%. In Britain the situation was not as severe.
In Germany in 1945–46 housing and food conditions were bad, as the disruption of transport, markets, and finances slowed a return to normality. In the West, bombing had destroyed 5,000,000 houses and apartments, and 12,000,000 refugees from the east had crowded in. Food production was only two-thirds of the pre-war level in 1946–48, while normal grain and meat shipments no longer arrived from the East. The drop in food production can be attributed to a drought that killed a major portion of the wheat crop while a severe winter destroyed the majority of the wheat crop the following year. This caused most Europeans to rely on a 1,500 calorie per day diet. Furthermore, the large shipments of food stolen from occupied nations during the war no longer reached Germany. Industrial production fell more than half and reached pre-war levels only at the end of 1949.
While Germany struggled to recover from the destruction of the War, the recovery effort began in June 1948, moving on from emergency relief. The currency reform in 1948 was headed by the military government and helped Germany to restore stability by encouraging production. The reform revalued old currency and deposits and introduced new currency. Taxes were also reduced and Germany prepared to remove economic barriers.
During the first three years of occupation of Germany, the UK and US vigorously pursued a military disarmament program in Germany, partly by removal of equipment but mainly through an import embargo on raw materials, part of the Morgenthau Plan approved by President Franklin D. Roosevelt.
Nicholas Balabkins concludes that "as long as German industrial capacity was kept idle the economic recovery of Europe was delayed." By July 1947 Washington realized that economic recovery in Europe could not go forward without the reconstruction of the German industrial base, deciding that an "orderly, prosperous Europe requires the economic contributions of a stable and productive Germany." In addition, the strength of Moscow-controlled communist parties in France and Italy worried Washington.
In the view of the State Department under President Harry S Truman, the United States needed to adopt a definite position on the world scene or fear losing credibility. The emerging doctrine of containment (as opposed to rollback) argued that the United States needed to substantially aid non-communist countries to stop the spread of Soviet influence. There was also some hope that the Eastern Bloc nations would join the plan, and thus be pulled out of the emerging Soviet bloc, but that did not happen.
In January 1947, Truman appointed retired General George Marshall as Secretary of State. In July 1947 Marshall scrapped Joint Chiefs of Staff Directive 1067 implemented as part of the Morgenthau Plan under the personal supervision of Roosevelt's treasury secretary Henry Morgenthau, Jr., which had decreed "take no steps looking toward the economic rehabilitation of Germany [or] designed to maintain or strengthen the German economy." Thereafter, JCS 1067 was supplanted by JCS 1779, stating that "an orderly and prosperous Europe requires the economic contributions of a stable and productive Germany." The restrictions placed on German heavy industry production were partly ameliorated; permitted steel production levels were raised from 25% of pre-war capacity to a new limit placed at 50% of pre-war capacity.
With a communist, although non-Soviet, insurgency threatening Greece, and Britain financially unable to continue its aid, the President announced his Truman Doctrine on March 12, 1947, "to support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures", with an aid request for consideration and decision, concerning Greece and Turkey. Also in March 1947, former US President Herbert Hoover, in one of his reports from Germany, argued for a change in US occupation policy, among other things stating:
There is the illusion that the New Germany left after the annexations can be reduced to a 'pastoral state' (Morgenthau's vision). It cannot be done unless we exterminate or move 25,000,000 people out of it.
Hoover further noted that, "The whole economy of Europe is interlinked with German economy through the exchange of raw materials and manufactured goods. The productivity of Europe cannot be restored without the restoration of Germany as a contributor to that productivity." Hoover's report led to a realization in Washington that a new policy was needed; "almost any action would be an improvement on current policy." In Washington, the Joint Chiefs declared that the "complete revival of German industry, particularly coal mining" was now of "primary importance" to American security.
The United States was already spending a great deal to help Europe recover. Over $14 billion was spent or loaned during the postwar period through the end of 1947 and is not counted as part of the Marshall Plan. Much of this aid was designed to restore infrastructure and help refugees. Britain, for example, received an emergency loan of $3.75 billion.
The United Nations also launched a series of humanitarian and relief efforts almost wholly funded by the United States. These efforts had important effects, but they lacked any central organization and planning, and failed to meet many of Europe's more fundamental needs. Already in 1943, the United Nations Relief and Rehabilitation Administration (UNRRA) was founded to provide relief to areas liberated from Germany. UNRRA provided billions of dollars of rehabilitation aid and helped about 8 million refugees. It ceased operation of displaced persons camps in Europe in 1947; many of its functions were transferred to several UN agencies.
After Marshall's appointment in January 1947, administration officials met with Soviet Foreign Minister Vyacheslav Molotov and others to press for an economically self-sufficient Germany, including a detailed accounting of the industrial plants, goods and infrastructure already removed by the Soviets in their occupied zone. Molotov refrained from supplying accounts of Soviet assets. The Soviets took a punitive approach, pressing for a delay rather than an acceleration in economic rehabilitation, demanding unconditional fulfillment of all prior reparation claims, and pressing for progress toward nationwide socioeconomic transformation.
After six weeks of negotiations, Molotov rejected all of the American and British proposals. Molotov also rejected the counter-offer to scrap the British-American "Bizonia" and to include the Soviet zone within the newly constructed Germany. Marshall was particularly discouraged after personally meeting with Stalin to explain that the United States could not possibly abandon its position on Germany, while Stalin expressed little interest in a solution to German economic problems.
After the adjournment of the Moscow conference following six weeks of failed discussions with the Soviets regarding a potential German reconstruction, the United States concluded that a solution could not wait any longer.
To clarify the US's position, a major address by Secretary of State George Marshall was planned. Marshall gave the address to the graduating class of Harvard University on June 5, 1947. Standing on the steps of Memorial Church in Harvard Yard, he offered American aid to promote European recovery and reconstruction. The speech described the dysfunction of the European economy and presented a rationale for US aid.
The modern system of the division of labor upon which the exchange of products is based is in danger of breaking down. ... Aside from the demoralizing effect on the world at large and the possibilities of disturbances arising as a result of the desperation of the people concerned, the consequences to the economy of the United States should be apparent to all. It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health to the world, without which there can be no political stability and no assured peace. Our policy is not directed against any country, but against hunger, poverty, desperation and chaos. Any government that is willing to assist in recovery will find full co-operation on the part of the United States. 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 was convinced that economic stability would provide political stability in Europe. He offered aid, but the European countries had to organize the program themselves.
The speech, written by Charles Bohlen, contained virtually no details and no numbers. More a proposal than a plan, it was a challenge to European leaders to cooperate and coordinate. It asked Europeans to create their own plan for rebuilding Europe, indicating the United States would then fund this plan. The administration felt that the plan would likely be unpopular among many Americans, and the speech was mainly directed at a European audience. In an attempt to keep the speech out of American papers, journalists were not contacted, and on the same day, Truman called a press conference to take away headlines. In contrast, Dean Acheson, an Under Secretary of State, was dispatched to contact the European media, especially the British media, and the speech was read in its entirety on the BBC.
British Foreign Secretary Ernest Bevin heard Marshall's radio broadcast speech and immediately contacted French Foreign Minister Georges Bidault to begin preparing a quick European response to (and acceptance of) the offer, which led to the creation of the Committee of European Economic Co-operation. The two agreed that it would be necessary to invite the Soviets as the other major allied power. Marshall's speech had explicitly included an invitation to the Soviets, feeling that excluding them would have been a sign of distrust. State Department officials, however, knew that Stalin would almost certainly not participate and that any plan that would send large amounts of aid to the Soviets was unlikely to get Congressional approval.
Speaking at the Paris Peace Conference on October 10, 1946 Molotov had already stated Soviet fears: "If American capital was given a free hand in the small states ruined and enfeebled by the war [it] would buy up the local industries, appropriate the more attractive Rumanian, Yugoslav ... enterprises and would become the master in these small states." While the Soviet ambassador in Washington suspected that the Marshall Plan could lead to the creation of an anti-Soviet bloc, Stalin was open to the offer. He directed that—in negotiations to be held in Paris regarding the aid—countries in the Eastern Bloc should not reject economic conditions being placed upon them. Stalin only changed his outlook when he learned that (a) credit would only be extended under conditions of economic cooperation and, (b) aid would also be extended to Germany in total, an eventuality which Stalin thought would hamper the Soviets' ability to exercise influence in western Germany.
Initially, Stalin maneuvered to kill the Plan, or at least hamper it by means of destructive participation in the Paris talks regarding conditions. He quickly realized, however, that this would be impossible after Molotov reported—following his arrival in Paris in July 1947—that conditions for the credit were non-negotiable. Looming as just as large a concern was the Czechoslovak eagerness to accept the aid, as well as indications of a similar Polish attitude.
Stalin suspected a possibility that these Eastern Bloc countries might defy Soviet directives not to accept the aid, potentially causing a loss of control of the Eastern Bloc. In addition, the most important condition was that every country choosing to take advantage of the plan would need to have its economic situation independently assessed—a level of scrutiny to which the Soviets could not agree. Bevin and Bidault also insisted that any aid be accompanied by the creation of a unified European economy, something incompatible with the strict Soviet command economy.
Soviet Foreign Minister Vyacheslav Molotov left Paris, rejecting the plan. Thereafter, statements were made suggesting a future confrontation with the West, calling the United States both a "fascizing" power and the "center of worldwide reaction and anti-Soviet activity", with all U.S.-aligned countries branded as enemies. The Soviets also then blamed the United States for communist losses in elections in Belgium, France and Italy months earlier, in the spring of 1947. It claimed that "marshallization" must be resisted and prevented by any means, and that French and Italian communist parties were to take maximum efforts to sabotage the implementation of the Plan. In addition, Western embassies in Moscow were isolated, with their personnel being denied contact with Soviet officials.
On July 12, a larger meeting was convened in Paris. Every country of Europe was invited, with the exceptions of Spain (a World War II neutral that had sympathized with Axis powers) and the small states of Andorra, San Marino, Monaco, and Liechtenstein. The Soviet Union was invited with the understanding that it would likely refuse. The states of the future Eastern Bloc were also approached, and Czechoslovakia and Poland agreed to attend. In one of the clearest signs and reflections of tight Soviet control and domination over the region, Jan Masaryk, the foreign minister of Czechoslovakia, was summoned to Moscow and berated by Stalin for considering Czechoslovakia's possible involvement with and joining of the Marshall Plan. The prime minister of Poland, Józef Cyrankiewicz, was rewarded by Stalin for his country's rejection of the Plan, which came in the form of the Soviet Union's offer of a lucrative trade agreement lasting for a period of five years, a grant amounting to the approximate equivalent of $450 million (in 1948; the sum would have been $4.4 billion in 2014) in the form of long-term credit and loans and the provision of 200,000 tonnes of grain, heavy and manufacturing machinery and factories and heavy industries to Poland.
The Marshall Plan participants were not surprised when the Czechoslovakian and Polish delegations were prevented from attending the Paris meeting. The other Eastern Bloc states immediately rejected the offer. Finland also declined, to avoid antagonizing the Soviets (see also Finlandization). The Soviet Union's "alternative" to the Marshall plan, which was purported to involve Soviet subsidies and trade with western Europe, became known as the Molotov Plan, and later, the Comecon. In a 1947 speech to the United Nations, Soviet deputy foreign minister Andrei Vyshinsky said that the Marshall Plan violated the principles of the United Nations. He accused the United States of attempting to impose its will on other independent states, while at the same time using economic resources distributed as relief to needy nations as an instrument of political pressure.
Although all other Communist European Countries had deferred to Stalin and rejected the aid, the Yugoslavs, led by Josip Broz (Tito), at first went along and rejected the Marshall Plan. However, in 1948 Tito broke decisively with Stalin on other issues, making Yugoslavia an independent communist state. Yugoslavia requested American aid. American leaders were internally divided, but finally agreed and began sending money on a small scale in 1949, and on a much larger scale in 1950-53. The American aid was not part of the Marshall Plan.
In late September, the Soviet Union called a meeting of nine European Communist parties in southwest Poland. A Communist Party of the Soviet Union (CPSU) report was read at the outset to set the heavily anti-Western tone, stating now that "international politics is dominated by the ruling clique of the American imperialists" which have embarked upon the "enslavement of the weakened capitalist countries of Europe". Communist parties were to struggle against the US presence in Europe by any means necessary, including sabotage. The report further claimed that "reactionary imperialist elements throughout the world, particularly in the United States, in Britain and France, had put particular hope on Germany and Japan, primarily on Hitlerite Germany—first as a force most capable of striking a blow at the Soviet Union".
Referring to the Eastern Bloc, the report stated that "the Red Army's liberating role was complemented by an upsurge of the freedom-loving peoples' liberation struggle against the fascist predators and their hirelings." It argued that "the bosses of Wall Street" were "tak[ing] the place of Germany, Japan and Italy". The Marshall Plan was described as "the American plan for the enslavement of Europe". It described the world now breaking down "into basically two camps—the imperialist and antidemocratic camp on the one hand, and the antiimperialist and democratic camp on the other".
Although the Eastern Bloc countries except Czechoslovakia had immediately rejected Marshall Plan aid, Eastern Bloc communist parties were blamed for permitting even minor influence by non-communists in their respective countries during the run up to the Marshall Plan. The meeting's chair, Andrei Zhdanov, who was in permanent radio contact with the Kremlin from whom he received instructions, also castigated communist parties in France and Italy for collaboration with those countries' domestic agendas. Zhdanov warned that if they continued to fail to maintain international contact with Moscow to consult on all matters, "extremely harmful consequences for the development of the brother parties' work" would result.
Italian and French communist leaders were prevented by party rules from pointing out that it was actually Stalin who had directed them not to take opposition stances in 1944. The French communist party, as others, was then to redirect its mission to "destroy capitalist economy" and that the Soviet Communist Information Bureau (Cominform) would take control of the French Communist Party's activities to oppose the Marshall Plan. When they asked Zhdanov if they should prepare for armed revolt when they returned home, he did not answer. In a follow-up conversation with Stalin, he explained that an armed struggle would be impossible and that the struggle against the Marshall Plan was to be waged under the slogan of national independence.
Congress, under the control of conservative Republicans, agreed to the program for multiple reasons. The 20-member conservative isolationist Senate wing of the party, based in the rural Midwest and led by Senator Kenneth S. Wherry (R-Nebraska), was outmaneuvered by the emerging internationalist wing, led by Senator Arthur H. Vandenberg (R-Michigan). The opposition argued that it would be "a wasteful 'operation rat-hole'"; that it made no sense to oppose communism by supporting the socialist governments in Western Europe; and that American goods would reach Russia and increase its war potential. Vandenberg, assisted by Senator Henry Cabot Lodge, Jr. (R-Massachusetts) admitted there was no certainty that the plan would succeed, but said it would halt economic chaos, sustain Western civilization, and stop further Soviet expansion. Senator Robert A. Taft (R-Ohio) hedged on the issue. He said it was without economic justification; however, it was "absolutely necessary" in "the world battle against communism." In the end, only 17 senators voted against it on March 13, 1948 A bill granting an initial $5 billion passed Congress with strong bipartisan support. Congress would eventually allocate $12.4 billion in aid over the four years of the plan.
Congress reflected public opinion, which resonated with the ideological argument that communism flourishes in poverty. Truman's own prestige and power had been greatly enhanced by his stunning victory in the 1948 election. Across America, multiple interest groups, including business, labor, farming, philanthropy, ethnic groups, and religious groups, saw the Marshall Plan as an inexpensive solution to a massive problem, noting it would also help American exports and stimulate the American economy as well. Major newspapers were highly supportive, including such conservative outlets as Time magazine. Vandenberg made sure of bipartisan support on the Senate Foreign Relations Committee. The Solid Democratic South was highly supportive, the upper Midwest was dubious, but heavily outnumbered. The plan was opposed by conservatives in the rural Midwest, who opposed any major government spending program and were highly suspicious of Europeans. The plan also had some opponents on the left, led by Henry A. Wallace, the former Vice President. He said the Plan was hostile to the Soviet Union, a subsidy for American exporters, and sure to polarize the world between East and West. However, opposition against the Marshall Plan was greatly reduced by the shock of the Communist coup in Czechoslovakia in February 1948. The appointment of the prominent businessman Paul G. Hoffman as director reassured conservative businessmen that the gigantic sums of money would be handled efficiently.
Turning the plan into reality required negotiations among the participating nations. Sixteen nations met in Paris to determine what form the American aid would take, and how it would be divided. The negotiations were long and complex, with each nation having its own interests. France's major concern was that Germany not be rebuilt to its previous threatening power. The Benelux countries (Belgium, Netherlands, and Luxemburg), despite also suffering under the Nazis, had long been closely linked to the German economy and felt their prosperity depended on its revival. The Scandinavian nations, especially Sweden, insisted that their long-standing trading relationships with the Eastern Bloc nations not be disrupted and that their neutrality not be infringed.
The United Kingdom insisted on special status as a longstanding belligerent during the war, concerned that if it were treated equally with the devastated continental powers it would receive virtually no aid. The Americans were pushing the importance of free trade and European unity to form a bulwark against communism. The Truman administration, represented by William L. Clayton, promised the Europeans that they would be free to structure the plan themselves, but the administration also reminded the Europeans that implementation depended on the plan's passage through Congress. A majority of Congress members were committed to free trade and European integration, and were hesitant to spend too much of the money on Germany. However, before the Marshall Plan was in effect, France, Austria, and Italy needed immediate aid. On December 17, 1947, the United States agreed to give $40 million to France, Austria, China, and Italy.
Agreement was eventually reached and the Europeans sent a reconstruction plan to Washington, which was formulated and agreed upon by the Committee of European Economic Co-operation in 1947. In the document, the Europeans asked for $22 billion in aid. Truman cut this to $17 billion in the bill he put to Congress. On March 17, 1948, Truman addressed European security and condemned the Soviet Union before a hastily convened Joint Session of Congress. Attempting to contain spreading Soviet influence in Eastern Bloc, Truman asked Congress to restore a peacetime military draft and to swiftly pass the Economic Cooperation Act, the name given to the Marshall Plan. Of the Soviet Union Truman said, "The situation in the world today is not primarily the result of the natural difficulties which follow a great war. It is chiefly due to the fact that one nation has not only refused to cooperate in the establishment of a just and honorable peace but—even worse—has actively sought to prevent it."
Members of the Republican-controlled 80th Congress (1947–1949) were skeptical. "In effect, he told the Nation that we have lost the peace, that our whole war effort was in vain.", noted Representative Frederick Smith of Ohio. Others thought he had not been forceful enough to contain the USSR. "What [Truman] said fell short of being tough", noted Representative Eugene Cox, a Democrat from Georgia, "there is no prospect of ever winning Russian cooperation." Despite its reservations, the 80th Congress implemented Truman's requests, further escalating the Cold War with the USSR.
Truman signed the Economic Cooperation Act into law on April 3, 1948; the Act established the Economic Cooperation Administration (ECA) to administer the program. ECA was headed by economic cooperation administrator Paul G. Hoffman. In the same year, the participating countries (Austria, Belgium, Denmark, France, West Germany, the United Kingdom, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Sweden, Switzerland, Turkey, and the United States) signed an accord establishing a master financial-aid-coordinating agency, the Organization for European Economic Cooperation (later called the Organization for Economic Cooperation and Development or OECD), which was headed by Frenchman Robert Marjolin.
The first substantial aid went to Greece and Turkey in January 1947, which were seen as the front line of the battle against communist expansion, and were already receiving aid under the Truman Doctrine. Initially, Britain had supported the anti-communist factions in those countries, but due to its dire economic condition it decided to pull out and in February 1947 requested the US to continue its efforts. The ECA formally began operation in July 1948.
The ECA's official mission statement was to give a boost to the European economy: to promote European production, to bolster European currency, and to facilitate international trade, especially with the United States, whose economic interest required Europe to become wealthy enough to import US goods. Another unofficial goal of ECA (and of the Marshall Plan) was the containment of growing Soviet influence in Europe, evident especially in the growing strength of communist parties in Czechoslovakia, France, and Italy.
The Marshall Plan money was transferred to the governments of the European nations. The funds were jointly administered by the local governments and the ECA. Each European capital had an ECA envoy, generally a prominent American businessman, who would advise on the process. The cooperative allocation of funds was encouraged, and panels of government, business, and labor leaders were convened to examine the economy and see where aid was needed.
The Marshall Plan aid was mostly used for the purchase of goods from the United States. The European nations had all but exhausted their foreign exchange reserves during the war, and the Marshall Plan aid represented almost their sole means of importing goods from abroad. At the start of the plan, these imports were mainly much-needed staples such as food and fuel, but later the purchases turned towards reconstruction needs as was originally intended. In the latter years, under pressure from the United States Congress and with the outbreak of the Korean War, an increasing amount of the aid was spent on rebuilding the militaries of Western Europe. Of the some $13 billion allotted by mid-1951, $3.4 billion had been spent on imports of raw materials and semi-manufactured products; $3.2 billion on food, feed, and fertilizer; $1.9 billion on machines, vehicles, and equipment; and $1.6 billion on fuel.
Also established were counterpart funds, which used Marshall Plan aid to establish funds in the local currency. According to ECA rules, recipients had to invest 60% of these funds in industry. This was prominent in Germany, where these government-administered funds played a crucial role in lending money to private enterprises which would spend the money rebuilding. These funds played a central role in the reindustrialization of Germany. In 1949–50, for instance, 40% of the investment in the German coal industry was by these funds.
The companies were obligated to repay the loans to the government, and the money would then be lent out to another group of businesses. This process has continued to this day in the guise of the state-owned KfW bank, (Kreditanstalt für Wiederaufbau, meaning Reconstruction Credit Institute). The Special Fund, then supervised by the Federal Economics Ministry, was worth over DM 10 billion in 1971. In 1997 it was worth DM 23 billion. Through the revolving loan system, the Fund had by the end of 1995 made low-interest loans to German citizens amounting to around DM 140 billion. The other 40% of the counterpart funds were used to pay down the debt, stabilize the currency, or invest in non-industrial projects. France made the most extensive use of counterpart funds, using them to reduce the budget deficit. In France, and most other countries, the counterpart fund money was absorbed into general government revenues, and not recycled as in Germany.
The Netherlands received US aid for economic recovery in the Netherlands Indies. However, in January 1949, the American government suspended this aid in response to the Dutch efforts to restore colonial rule in Indonesia during the Indonesian National Revolution, and it implicitly threatened to suspend Marshall aid to the Netherlands if the Dutch government continued to oppose the independence of Indonesia.
At the time the United States was a significant oil producing nation — one of the goals of the Marshall Plan was for Europe to use oil in place of coal, but the Europeans wanted to buy crude oil and use the Marshall Plan funds to build refineries instead. However, when independent American oil companies complained, the ECA denied funds for European refinery construction.
The US Bureau of Labor Statistics (BLS) contributed heavily to the success of the Technical Assistance Program. The United States Congress passed a law on June 7, 1940 that allowed the BLS to "make continuing studies of labor productivity" and appropriated funds for the creation of a Productivity and Technological Development Division. The BLS could then use its expertise in the field of productive efficiency to implement a productivity drive in each Western European country receiving Marshall Plan aid. Counterpart funds were used to finance large-scale tours of American industry. France, for example, sent 500 missions with 4700 businessmen and experts to tour American factories, farms, stores, and offices. They were especially impressed with the prosperity of American workers, and how they could purchase an inexpensive new automobile for nine months work, compared to 30 months in France.
By implementing technological literature surveys and organized plant visits, American economists, statisticians, and engineers were able to educate European manufacturers in statistical measurement. The goal of the statistical and technical assistance from the Americans was to increase productive efficiency of European manufacturers in all industries.
To conduct this analysis, the BLS performed two types of productivity calculations. First, they used existing data to calculate how much a worker produces per hour of work—the average output rate. Second, they compared the existing output rates in a particular country to output rates in other nations. By performing these calculations across all industries, the BLS was able to identify the strengths and weaknesses of each country's manufacturing and industrial production. From that, the BLS could recommend technologies (especially statistical) that each individual nation could implement. Often, these technologies came from the United States; by the time the Technical Assistance Program began, the United States used statistical technologies "more than a generation ahead of what [the Europeans] were using".
The BLS used these statistical technologies to create Factory Performance Reports for Western European nations. The American government sent hundreds of technical advisers to Europe to observe workers in the field. This on-site analysis made the Factory Performance Reports especially helpful to the manufacturers. In addition, the Technical Assistance Program funded 24,000 European engineers, leaders, and industrialists to visit America and tour America's factories, mines, and manufacturing plants. This way, the European visitors would be able to return to their home countries and implement the technologies used in the United States. The analyses in the Factory Performance Reports and the "hands-on" experience had by the European productivity teams effectively identified productivity deficiencies in European industries; from there, it became clearer how to make European production more effective.
Before the Technical Assistance Program even went into effect, United States Secretary of Labor Maurice Tobin expressed his confidence in American productivity and technology to both American and European economic leaders. He urged that the United States play a large role in improving European productive efficiency by providing four recommendations for the program's administrators:
The effects of the Technical Assistance Program were not limited to improvements in productive efficiency. While the thousands of European leaders took their work/study trips to the United States, they were able to observe a number of aspects of American society as well. The Europeans could watch local, state, and federal governments work together with citizens in a pluralist society. They observed a democratic society with open universities and civic societies in addition to more advanced factories and manufacturing plants. The Technical Assistance Program allowed Europeans to bring home many types of American ideas.
Another important aspect of the Technical Assistance Program was its low cost. While $19.4 billion was allocated for capital costs in the Marshall Plan, the Technical Assistance Program only required $300 million. Only one-third of that $300 million cost was paid by the United States.
Even while the Marshall Plan was being implemented, the dismantling of ostensibly German industry continued; and in 1949 Konrad Adenauer, an opponent to Hitler's regime and the head of the Christian Democratic Union, wrote to the Allies requesting the end of industrial dismantling, citing the inherent contradiction between encouraging industrial growth and removing factories, and also the unpopularity of the policy. Adenauer had been released from prison, only to discover that the Soviets had effectively divided Europe with Germany divided even further. Support for dismantling was by this time coming predominantly from the French, and the Petersberg Agreement of November 1949 greatly reduced the levels of deindustrialization, though dismantling of minor factories continued until 1951. The first "level of industry" plan, signed by the Allies on March 29, 1946, had stated that German heavy industry was to be lowered to 50% of its 1938 levels by the destruction of 1,500 listed manufacturing plants. Marshall Plan played a huge role in post-war recovery for Europe in general. 1948, conditions were improving, European workers exceeded by 20 percent from the earning from the west side. Thanks to the Plan, during 1952, it went up 35 percent of the industrial and agricultural.
In January 1946 the Allied Control Council set the foundation of the future German economy by putting a cap on German steel production. The maximum allowed was set at about 5,800,000 tons of steel a year, equivalent to 25% of the pre-war production level. The UK, in whose occupation zone most of the steel production was located, had argued for a more limited capacity reduction by placing the production ceiling at 12 million tons of steel per year, but had to submit to the will of the US, France and the Soviet Union (which had argued for a 3 million ton limit). Steel plants thus made redundant were to be dismantled. Germany was to be reduced to the standard of life it had known at the height of the Great Depression (1932). Consequently, car production was set to 10% of pre-war levels, and the manufacture of other commodities was reduced as well.
The first "German level of industry" plan was subsequently followed by a number of new ones, the last signed in 1949. By 1950, after the virtual completion of the by then much watered-down "level of industry" plans, equipment had been removed from 706 manufacturing plants in western Germany and steel production capacity had been reduced by 6,700,000 tons. Vladimir Petrov concludes that the Allies "delayed by several years the economic reconstruction of the war-torn continent, a reconstruction which subsequently cost the United States billions of dollars." In 1951 West Germany agreed to join the European Coal and Steel Community (ECSC) the following year. This meant that some of the economic restrictions on production capacity and on actual production that were imposed by the International Authority for the Ruhr were lifted, and that its role was taken over by the ECSC.
The Marshall Plan aid was divided among the participant states on a roughly per capita basis. A larger amount was given to the major industrial powers, as the prevailing opinion was that their resuscitation was essential for general European revival. Somewhat more aid per capita was also directed towards the Allied nations, with less for those that had been part of the Axis or remained neutral. The exception was Iceland, which had been neutral during the war, but received far more on a per capita basis than the second highest recipient. The table below shows Marshall Plan aid by country and year (in millions of dollars) from The Marshall Plan Fifty Years Later. There is no clear consensus on exact amounts, as different scholars differ on exactly what elements of American aid during this period were part of the Marshall Plan.
|Belgium and Luxembourg||195||222||360||777|
|Italy and Trieste||594||405||205||1,204|
Ireland which received 146.2 million USD through the Marshall Plan, received 128.2 million USD as loans, and the remaining 18 million USD as grants. By 1969 the Irish Marshall Plan debt, which was still being repaid, amounted to 31 million pounds, out of a total Irish foreign debt of 50 million pounds.
The UK received 385 million USD of its Marshall Plan aid in the form of loans. Unconnected to the Marshall Plan the UK also received direct loans from the US amounting to 4.6 billion USD. The proportion of Marshall Plan loans versus Marshall Plan grants was roughly 15% to 85% for both the UK and France.
Germany, which up until the 1953 Debt agreement had to work on the assumption that all the Marshall Plan aid was to be repaid, spent its funds very carefully. Payment for Marshall Plan goods, "counterpart funds", were administered by the Reconstruction Credit Institute, which used the funds for loans inside Germany. In the 1953 Debt agreement, the amount of Marshall plan aid that Germany was to repay was reduced to less than 1 billion USD. This made the proportion of loans versus grants to Germany similar to that of France and the UK. The final German loan repayment was made in 1971. Since Germany chose to repay the aid debt out of the German Federal budget, leaving the German ERP fund intact, the fund was able to continue its reconstruction work. By 1996 it had accumulated a value of 23 billion Deutsche Mark.
The Central Intelligence Agency received 5% of the Marshall Plan funds (about $685 million spread over six years), which it used to finance secret operations abroad. Through the Office of Policy Coordination money was directed towards support for labor unions, newspapers, student groups, artists and intellectuals, who were countering the anti-American counterparts subsidized by the Communist. The largest sum went to the Congress for Cultural Freedom. There were no agents working among the Soviets or their satellite states. The founding conference of the Congress for Cultural Freedom was held in Berlin in June 1950. Among the leading intellectuals from the USA and Western Europe were writers, philosophers, critics and historians: Franz Borkenau, Karl Jaspers, John Dewey, Ignazio Silone, James Burnham, Hugh Trevor-Roper, Arthur Schlesinger, Jr., Bertrand Russell, Ernst Reuter, Raymond Aron, Alfred Ayer, Benedetto Croce, Arthur Koestler, Richard Löwenthal, Melvin J. Lasky, Tennessee Williams, Irving Brown, and Sidney Hook. There were conservatives among the participants, but non-Communist (or former Communist) left-wingers were more numerous. 
The Marshall Plan was originally scheduled to end in 1953. Any effort to extend it was halted by the growing cost of the Korean War and rearmament. American Republicans hostile to the plan had also gained seats in the 1950 Congressional elections, and conservative opposition to the plan was revived. Thus the plan ended in 1951, though various other forms of American aid to Europe continued afterwards.
The years 1948 to 1952 saw the fastest period of growth in European history. Industrial production increased by 35%. Agricultural production substantially surpassed pre-war levels. The poverty and starvation of the immediate postwar years disappeared, and Western Europe embarked upon an unprecedented two decades of growth that saw standards of living increase dramatically. Additionally, the long-term effect of economic integration raised European income levels substantially, by nearly 20 percent by the mid-1970s. There is some debate among historians over how much this should be credited to the Marshall Plan. Most reject the idea that it alone miraculously revived Europe, as evidence shows that a general recovery was already underway. Most believe that the Marshall Plan sped this recovery, but did not initiate it. Many argue that the structural adjustments that it forced were of great importance. Economic historians J. Bradford DeLong and Barry Eichengreen call it "history's most successful structural adjustment program." One effect of the plan was that it subtly "Americanized" European countries, especially Austria, through new exposure to American popular culture, including the growth in influence of Hollywood movies and rock n' roll.
The political effects of the Marshall Plan may have been just as important as the economic ones. Marshall Plan aid allowed the nations of Western Europe to relax austerity measures and rationing, reducing discontent and bringing political stability. The communist influence on Western Europe was greatly reduced, and throughout the region, communist parties faded in popularity in the years after the Marshall Plan. The trade relations fostered by the Marshall Plan helped forge the North Atlantic alliance that would persist throughout the Cold War in the form of NATO. At the same time, the nonparticipation of the states of the Eastern Bloc was one of the first clear signs that the continent was now divided.
The Marshall Plan also played an important role in European integration. Both the Americans and many of the European leaders felt that European integration was necessary to secure the peace and prosperity of Europe, and thus used Marshall Plan guidelines to foster integration. In some ways, this effort failed, as the OEEC never grew to be more than an agent of economic cooperation. Rather, it was the separate European Coal and Steel Community, which notably excluded Britain, that would eventually grow into the European Union. However, the OEEC served as both a testing and training ground for the structures that would later be used by the European Economic Community. The Marshall Plan, linked into the Bretton Woods system, also mandated free trade throughout the region.
While some historians today feel some of the praise for the Marshall Plan is exaggerated, it is still viewed favorably and many thus feel that a similar project would help other areas of the world. After the fall of communism, several proposed a "Marshall Plan for Eastern Europe" that would help revive that region. Others have proposed a Marshall Plan for Africa to help that continent, and US Vice President Al Gore suggested a Global Marshall Plan. "Marshall Plan" has become a metaphor for any very 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 money was in the form of grants from the U.S. Treasury that did not have to be repaid. The Organisation for European Economic Co-operation took the leading role in allocating funds, and the OEEC arranged for the transfer of the goods. The American supplier was paid in dollars, which were credited against the appropriate European Recovery Program funds. The European recipient, however, was not given the goods as a gift but had to pay for them (usually on credit) in local currency. These payments were kept by the European government involved in a special counterpart fund. This counterpart money, in turn, could be used by the government for further investment projects. Five percent of the counterpart money was paid to the US to cover the administrative costs of the ERP. In addition to ERP grants, the Export-Import Bank (an agency of the US government) at the same time made long-term loans at low interest rates to finance major purchases in the US, all of which were repaid.
In the case of Germany, there also were 16 billion marks of debts from the 1920s which had defaulted in the 1930s, but which Germany decided to repay to restore its reputation. This money was owed to government and private banks in the US, France, and Britain. Another 16 billion marks represented postwar loans by the US. Under the London Debts Agreement of 1953, the repayable amount was reduced by 50% to about 15 billion marks and stretched out over 30 years, and compared to the fast-growing German economy were of minor impact.
Large parts of the world devastated by World War II did not benefit from the Marshall Plan. The only major Western European nation excluded was Francisco Franco's Spain, which was highly unpopular in Washington. With the escalation of the Cold War, the United States reconsidered its position, and in 1951 embraced Spain as an ally, encouraged by Franco's aggressive anti-communist policies. Over the next decade, a considerable amount of American aid would go to Spain, but less than its neighbors had received under the Marshall Plan.
The Soviet Union had been as badly affected as any part of the world by the war. The Soviets imposed large reparations payments on the Axis allies that were in its sphere of influence. Austria, Finland, Hungary, Romania, and especially East Germany were forced to pay vast sums and ship large amounts of supplies to the USSR. These reparation payments meant the Soviet Union itself received about the same as 16 European countries received in total from Marshall Plan aid.
In accordance with the agreements with the USSR, shipment of dismantled German industrial installations from the west began on March 31, 1946. Under the terms of the agreement, the Soviet Union would in return ship raw materials such as food and timber to the western zones. In view of the Soviet failure to do so, the western zones halted the shipments east, ostensibly on a temporary basis, although they were never resumed. It was later shown that the main reason for halting shipments east was not the behavior of the USSR but rather the recalcitrant behavior of France. Examples of material received by the USSR were equipment from the Kugel-Fischer ballbearing plant at Schweinfurt, the Daimler-Benz underground aircraft-engine plant at Obrigheim, the Deschimag shipyards at Bremen-Weser, and the Gendorf powerplant.
The USSR did establish COMECON as a riposte to the Marshall Plan to deliver aid for Eastern Bloc countries, but this was complicated by the Soviet efforts to manage their own recovery from the war. The members of Comecon looked to the Soviet Union for oil; in turn, they provided machinery, equipment, agricultural goods, industrial goods, and consumer goods to the Soviet Union. Economic recovery in the East was much slower than in the West, resulting in the formation of the shortage economies and a gap in wealth between East and West. Finland, which the USSR forbade to join the Marshall Plan and which was required to give large reparations to the USSR, saw its economy recover to pre-war levels in 1947. France, which received billions of dollars through the Marshall Plan, similarly saw its average income per person return to almost pre-war level by 1949. By mid-1948 industrial production in Poland, Hungary, Bulgaria, and Czechoslovakia had recovered to a level somewhat above pre-war level.
From the end of the war to the end of 1953, the US provided grants and credits amounting to $5.9 billion to Asian countries, especially China/Taiwan ($1.051 billion), India ($255 million), Indonesia ($215 million), Japan ($2.44 billion), South Korea ($894 million), Pakistan ($98 million) and the Philippines ($803 million). In addition, another $282 million went to Israel and $196 million to the rest of the Middle East. All this aid was separate from the Marshall Plan.
Canada, like the United States, was damaged little by the war and in 1945 was one of the world's richest economies. It operated its own aid program. In 1948, the US allowed ERP aid to be used in purchasing goods from Canada. Canada made over a billion dollars in sales in the first two years of operation.
The total of American grants and loans to the world from 1945 to 1953 came to $44.3 billion.
It was not large enough to have significantly accelerated recovery by financing investment, aiding the reconstruction of damaged infrastructure, or easing commodity bottlenecks. We argue, however, that the Marshall Plan did play a major role in setting the stage for post-World War II Western Europe's rapid growth. The conditions attached to Marshall Plan aid pushed European political economy in a direction that left its post World War II "mixed economies" with more "market" and less "controls" in the mix.
Prior to passing and enacting the Marshall Plan, President Truman and George Marshall started a domestic overhaul of public opinion from coast to coast. The purpose of this campaign was to sway public opinion in their direction and to inform the common person of what the Marshall Plan was and what the Plan would ultimately do. They spent months attempting to convince Americans that their cause was just and that they should embrace the higher taxes that would come in the foreseeable future.
A copious amount of propaganda ended up being highly effective in swaying public opinion towards supporting the Marshall Plan. During the nationwide campaign for support, "more than a million pieces of pro-Marshall Plan publications-booklets, leaflets, reprints, and fact sheets", were disseminated. Truman and Marshall's efforts proved to be effective. In a Gallup Poll taken between the months of July and December 1947, it shows the percentage of Americans unaware of the Marshall Plan fell from 51% to 36% nationwide. By the time the Marshall Plan was ready to be implemented, there was a general consensus throughout the American public that this was the right policy for both America, and the countries who would be receiving aid.
During the period leading up to World War II, Americans were highly isolationist, and many called The Marshall Plan a "milestone" for American ideology. By looking at polling data over time from pre-World War II to post-World War II, one would find that there was a change in public opinion in regards to ideology. Americans swapped their isolationist ideals for a much more global internationalist ideology after World War II.
In a National Opinion Research Center (NORC) poll taken in April 1945, a cross-section of Americans were asked, "If our government keeps on sending lendlease materials, which we may not get paid for, to friendly countries for about three years after the war, do you think this will mean more jobs or fewer jobs for most Americans, or won't it make any difference?" 75% said the same or more jobs; 10% said fewer.
Before proposing anything to Congress in 1947, the Truman administration made an elaborate effort to organize public opinion in favor of the Marshall Plan spending, reaching out to numerous national organizations representing business, labor, farmers, women, and other interest groups. Political scientist Ralph Levering points out that:
Mounting large public relations campaigns and supporting private groups such as the Citizens Committee for the Marshall Plan, the administration carefully built public and bipartisan Congressional support before bringing these measures to a vote.
Public opinion polls in 1947 consistently showed strong support for the Marshall plan among Americans. Furthermore, Gallup polls in England, France, and Italy showed favorable majorities over 60% 
Laissez-faire criticism of the Marshall Plan came from a number of economists. Wilhelm Röpke, who influenced German Minister for Economy Ludwig Erhard in his economic recovery program, believed recovery would be found in eliminating central planning and restoring a market economy in Europe, especially in those countries which had adopted more fascist and corporatist economic policies. Röpke criticized the Marshall Plan for forestalling the transition to the free market by subsidizing the current, failing systems. Erhard put Röpke's theory into practice and would later credit Röpke's influence for West Germany's preeminent success.
Henry Hazlitt criticized the Marshall Plan in his 1947 book Will Dollars Save the World?, arguing that economic recovery comes through savings, capital accumulation, and private enterprise, and not through large cash subsidies. Ludwig von Mises criticized the Marshall Plan in 1951, believing that "the American subsidies make it possible for [Europe's] governments to conceal partially the disastrous effects of the various socialist measures they have adopted". Some critics and Congressmen at the time believed that America was giving too much aid to Europe. America had already given Europe $9 billion in other forms of help in previous years. The Marshall Plan gave another $13 billion, equivalent to about $100 billion in 2010 value.
However, its role in the rapid recovery has been debated. Most reject the idea that it alone miraculously revived Europe since the evidence shows that a general recovery was already underway. The Marshall Plan grants were provided at a rate that was not much higher in terms of flow than the previous UNRRA aid and represented less than 3% of the combined national income of the recipient countries between 1948 and 1951, which would mean an increase in GDP growth of only 0.3%. In addition, there is no correlation between the amount of aid received and the speed of recovery: both France and the United Kingdom received more aid, but West Germany recovered significantly faster.
Criticism of the Marshall Plan became prominent among historians of the revisionist school, such as Walter LaFeber, during the 1960s and 1970s. They argued that the plan was American economic imperialism and that it was an attempt to gain control over Western Europe just as the Soviets controlled the Eastern Bloc. In a review of West Germany's economy from 1945 to 1951, German analyst Werner Abelshauser concluded that "foreign aid was not crucial in starting the recovery or in keeping it going". The economic recoveries of France, Italy, and Belgium, Cowen argues, began a few months before the flow of US money. Belgium, the country that relied earliest and most heavily on free-market economic policies after its liberation in 1944, experienced swift recovery and avoided the severe housing and food shortages seen in the rest of continental Europe.
Former US Chairman of the Federal Reserve Bank Alan Greenspan gives most credit to German Chancellor Ludwig Erhard for Europe's economic recovery. Greenspan writes in his memoir The Age of Turbulence that Erhard's economic policies were the most important aspect of postwar Western European recovery, even outweighing the contributions of the Marshall Plan. He states that it was Erhard's reductions in economic regulations that permitted Germany's miraculous recovery, and that these policies also contributed to the recoveries of many other European countries. Its recovery is attributed to traditional economic stimuli, such as increases in investment, fueled by a high savings rate and low taxes. Japan saw a large infusion of US investment during the Korean War.
Alfred Friendly, press aide to the US Secretary of Commerce W. Averell Harriman, wrote a humorous operetta about the Marshall Plan during its first year; one of the lines in the operetta was: "Wines for Sale; will you swap / A little bit of steel for Chateau Neuf du Pape?"
The 1948 Czechoslovak coup d'état (often simply the Czech coup) (Czech: Únor 1948, Slovak: Február 1948, both meaning "February 1948") – in the Communist era known as "Victorious February" (Czech: Vítězný únor, Slovak: Víťazný február) – was an event late that February in which the Communist Party of Czechoslovakia, with Soviet backing, assumed undisputed control over the government of Czechoslovakia, marking the onset of four decades of communist rule in the country.
The coup's significance extended well beyond the state's boundaries as it was a clear marker along the already well-advanced road to full-fledged Cold War. The event alarmed Western countries and helped spur quick adoption of the Marshall Plan, the creation of a state in West Germany, vigorous measures to keep communists out of power in France, Greece and especially Italy, and steps toward mutual security that would, in little over a year, result in the establishment of NATO and the definitive drawing of the Iron Curtain until the Revolutions of 1989.Aid
In international relations, aid (also known as international aid, overseas aid, foreign aid or foreign assistance) is – from the perspective of governments – a voluntary transfer of resources from one country to another.
Aid may serve one or more functions: it may be given as a signal of diplomatic approval, or to strengthen a military ally, to reward a government for behaviour desired by the donor, to extend the donor's cultural influence, to provide infrastructure needed by the donor for resource extraction from the recipient country, or to gain other kinds of commercial access. Countries may provide aid for further diplomatic reasons. Humanitarian and altruistic purposes are often reasons for foreign assistance.Aid may be given by individuals, private organizations, or governments. Standards delimiting exactly the types of transfers considered "aid" vary from country to country. For example, the United States government discontinued the reporting of military aid as part of its foreign aid figures in 1958. The most widely used measure of aid is "Official Development Assistance" (ODA).Allied-occupied Austria
The Allied occupation of Austria started on 27 April 1945 as a result of the Vienna Offensive and ended with the Austrian State Treaty on 27 July 1955.
Subsequent to the Anschluss, Austria had generally been recognized as constituent part of Nazi Germany. In 1943 however, the Allies agreed in the Declaration of Moscow that Austria would instead be regarded as the first victim of Nazi aggression, and treated as a liberated and independent country after the war.
In the immediate aftermath of World War II, Austria was divided into four occupation zones and jointly occupied by the United States, the Soviet Union, the United Kingdom, and France. Vienna was similarly subdivided but the central district was collectively administered by the Allied Control Council.
Whereas Germany was divided into East and West Germany in 1949, Austria remained under joint occupation of the Western Allies and of the Soviet Union until 1955; its status became a controversial subject in the Cold War until the warming of relations known as the Khrushchev Thaw. After Austrian promises of perpetual neutrality, Austria was accorded full independence on 15 May 1955 and the last occupation troops left on 25 October that year.Basket of Bread
Basket of Bread (1945) or Basket of Bread-Rather Death Than Shame is a painting by Spanish Surrealist Salvador Dalí. The painting depicts a heel of a loaf bread in a basket, sitting near the edge of a table. Dalí's use of bread in his paintings is much more than a staple of one's diet. In this case, to understand Dalí's message, one must look at the political context at the time of the painting, his progression as an artist, his societal beliefs and how bread is used in the painting.Charles P. Kindleberger
Charles Poor "Charlie" Kindleberger (October 12, 1910 – July 7, 2003) was an economic historian and author of over 30 books. His 1978 book Manias, Panics, and Crashes, about speculative stock market bubbles, was reprinted in 2000 after the dot-com bubble. He is well known for hegemonic stability theory. He has been referred to as "the master of the genre" on financial crisis by The Economist.Cultösaurus Erectus
Cultösaurus Erectus is the seventh studio album by American hard rock band Blue Öyster Cult, released in 1980. Following an experiment with a more-polished sound on the album Mirrors (released the previous year), this recording marked a return to the band's earlier, heavier sound. The first track, "Black Blade", features lyrics by fantasy and sci-fi writer Michael Moorcock and is about Stormbringer, a black sword wielded by Elric of Melniboné, the most famous character in Moorcock's mythology.
This album also features the first collaboration with British producer Martin Birch (Deep Purple, Fleetwood Mac, Black Sabbath, Iron Maiden), who would also produce the band's following album Fire of Unknown Origin in 1981. The riff to Deep Purple's "Smoke on the Water", a song Birch helped record, is referenced in "The Marshall Plan" - a song not about the World War II scenario, but a reference to the amplifier manufacturer.
While the album did sell more than its predecessor, it stalled at Gold status. However, during this time Blue Öyster Cult was still filling large venues. The tour promoting Cultösaurus Erectus found the band co-headlining sports arenas in the United States with Black Sabbath as part of the Black and Blue Tour (see Black and Blue).
The album cover features a part of the painting Behemoth's World by British artist Richard Clifton-Dey. The cover art was also used for the 1991 video game Ork.Economic Cooperation Administration
The Economic Cooperation Administration (ECA) was a U.S. government agency set up in 1948 to administer the Marshall Plan. It reported to both the State Department and the Department of Commerce. The agency's first head was Paul G. Hoffman, a former leader of car manufacturer Studebaker; he was succeeded by William Chapman Foster in 1950. The rest of the organization was also headed by major business figures such as Arthur A. Kimball (who was a key contributor to the ECA's founding) as well as David K.E. Bruce (who worked at the Office of Strategic Services in Europe during World War II).
The ECA had an office in the capital of each of the 16 countries participating in the Marshall Plan. In theory the ECA served as joint administrator of the Marshall Plan development projects in each European country. In practice, local officials knew far more about what was needed than ECA representatives, who developed a management strategy of listening to local officials and allowed them to set priorities for reconstruction assistance.It was succeeded by the Mutual Security Agency in 1951, one of the predecessor to the United States Agency for International Development.George Marshall
George Catlett Marshall Jr. (December 31, 1880 – October 16, 1959) was an American statesman and soldier. He rose through the United States Army to become Chief of Staff under presidents Franklin D. Roosevelt and Harry S. Truman, then served as Secretary of State and Secretary of Defense under Truman. Winston Churchill lauded Marshall as the "organizer of victory" for his leadership of the Allied victory in World War II, although Marshall declined a final field leadership position that went to his protege, later U.S. President, Dwight D. Eisenhower. After the war, as Secretary of State, Marshall advocated a significant U.S. economic and political commitment to post-war European recovery, including the Marshall Plan that bore his name. In recognition of this work, he was awarded the Nobel Peace Prize in 1953.Born in Uniontown, Pennsylvania, Marshall graduated from the Virginia Military Institute in 1901. After serving briefly as commandant of students at the Danville Military Academy in Danville, Virginia, Marshall received his commission as a second lieutenant of Infantry in February, 1902. In the years after the Spanish–American War, he served in the United States and overseas in positions of increasing rank and responsibility, including platoon leader and company commander in the Philippines during the Philippine–American War. He was the Honor Graduate of his Infantry-Cavalry School Course in 1907, and graduated first in his 1908 Army Staff College class. In 1916 Marshall was assigned as aide-de-camp to J. Franklin Bell, the commander of the Western Department. After the United States entered World War I, Marshall served with Bell while Bell commanded the Department of the East. He was assigned to the staff of the 1st Division, and assisted with the organization's mobilization and training in the United States, as well as planning of its combat operations in France. Subsequently, assigned to the staff of the American Expeditionary Forces headquarters, he was a key planner of American operations including the Meuse-Argonne Offensive.
After the war, Marshall became an aide-de-camp to John J. Pershing, who was then the Army's Chief of Staff. Marshall later served on the Army staff, commanded the 15th Infantry Regiment in China, and was an instructor at the Army War College. In 1927, he became assistant commandant of the Army's Infantry School, where he modernized command and staff processes, which proved to be of major benefit during World War II. In 1932 and 1933 he commanded the 8th Infantry Regiment and Fort Screven, Georgia. Marshall commanded 5th Brigade, 3rd Infantry Division and Vancouver Barracks from 1936 to 1938, and received promotion to brigadier general. During this command, Marshall was also responsible for 35 Civilian Conservation Corps (CCC) camps in Oregon and southern Washington. In July 1938, Marshall was assigned to the War Plans Division on the War Department staff, and later became the Army's Deputy Chief of Staff. When Chief of Staff Malin Craig retired in 1939, Marshall became acting Chief of Staff, and then Chief of Staff, a position he held until the war's end in 1945.
As Chief of Staff, Marshall organized the largest military expansion in U.S. history, and received promotion to five-star rank as General of the Army. Marshall coordinated Allied operations in Europe and the Pacific until the end of the war. In addition to accolades from Churchill and other Allied leaders, Time magazine named Marshall its Man of the Year for 1943. Marshall retired from active service in 1945, but remained on active duty, as required for holders of five-star rank. From December 15, 1945 to January 1947 Marshall served as a special envoy to China in an unsuccessful effort to negotiate a coalition government between the Nationalists of Chiang Kai-shek and Communists under Mao Zedong.
As Secretary of State from 1947 to 1949, Marshall advocated rebuilding Europe, a program that became known as the Marshall Plan, and which led to his being awarded the 1953 Nobel Peace Prize. After resigning as Secretary of State, Marshall served as chairman of American Battle Monuments Commission and president of the American National Red Cross. As Secretary of Defense at the start of the Korean War, Marshall worked to restore the military's confidence and morale at the end of its post-World War II demobilization and then its initial buildup for combat in Korea and operations during the Cold War. After resigning as Defense Secretary, Marshall retired to his home in Virginia. He died in 1959 and was buried with honors at Arlington National Cemetery.German Marshall Fund
The German Marshall Fund of the United States (GMF) is a nonpartisan American public policy think tank and grantmaking institution dedicated to promoting cooperation and understanding between North America and Europe.
Founded in 1972 through a gift from the West German government on the 25th anniversary of the Marshall Plan, GMF contributes research and analysis on transatlantic and global issues; convenes policy and business leaders at international conferences; provides exchange opportunities for emerging American and European leaders; and supports initiatives to strengthen democracies. GMF focuses on policy, leadership, and civil society.GMF is headquartered in Washington, D.C., and has offices in several European cities.Global Marshall Plan
The Global Marshall Plan is a plan first devised by former American Vice-President Al Gore in his bestselling book Earth in the Balance, which gives specific ideas on how to save the global environment.
Gore states: "The model of the Marshall Plan can be of great help. For example, a Global Marshall Plan must focus on strategic goals and emphasize actions and programs that are likely to remove the bottlenecks presently inhibiting the healthy functioning of the global economy. The new global economy must be an inclusive system that does not leave entire regions behind. The new plan will require the wealthy nations to allocate money for transferring environmentally helpful technologies to the Third World and to help impoverished nations achieve a stable population and a new pattern of sustainable economic progress. To work, however, any such effort will also require wealthy nations to make a transition themselves that will be in some ways more wrenching than that of the Third World."
Source: Earth in the Balance, page 297-301
Global Marshall Plan: Five strategic goals
"In my view, five strategic goals must direct and inform our efforts to save the global environment":
stabilizing of world population
the rapid development of environmentally appropriate technologies
a comprehensive change in the economic "rules of the road" by which we measure the impact of our decisions on the environment
negotiation & approval of a new generation of international agreements
a cooperative plan for educating the world's citizens about our global environment.The idea is based on the post-WWII Marshall Plan that saw the United States send billions of dollars to European nations to rebuild their war shattered economies.
In order to further the idea of a GMP and to coordinate the various initiatives, NGOs, scientists, activists and groups in the field of development cooperation and global social justice the Global Marshall Plan Initiative was founded by members of the Club of Rome, the Club of Budapest, the Eco-Social Forum Europe, ATTAC and other organisations in Frankfurt, Germany in 2003. The two main objectives are to find new ways and sources of financing in development cooperation, predominantly pursuing the Millennium Development Goals of the UN and the worldwide propagation of the eco-social market economy, which is considered to be one of today's key strategies of initiative. The *Green Marshall Plan* is a policy initiative developed by Canadian greens Constantine Kritsonis and Craig Hubley. It offers a basis for global central banks to *bail out the planet* by creating new money to pay for green infrastructure. Here below it is presented as a policy proposal for the Green Party of Canada. A) The right to create money belongs to the citizens, but has been "contracted out" to irresponsible entities that have participated in creating a vast ecological debt.
B) Money creation that helped caused the ecological debt must be used to help repay that debt. If the money creation rights are more flexible and can be exploited to reverse ecological damage and restrict expansion of emissions, then we have a moral duty to use them for that immediately because we are at the tipping point of a runaway greenhouse effect.
C) With green infrastructure projects come new jobs, a larger tax base and savings from efficiency that will expand the economy. Green infrastructure paid by new money prevents resistance from those otherwise forced to pay for it.
D) The *risk-reward ratio" of reducing carbon vs inflation risk is in favour of reducing carbon. No claim that green money creation in and of itself guarantees inflation is credible. Countries engaged in large scale quantitative easing (QE) have not experienced problem inflation. Nor have countries like South Korea that focused its 2008-9 stimulus on energy efficiency measures.
Better energy efficiency, reduced fuel use and reduced pollution abatement must reduce long term costs. That "reduces" inflation, as inflation is measured against a basket of actually used goods. If we require less fuel, and get more for less, then actual value received for money is increased.
Created money creating genuine progress across whole societies reduces expenditures otherwise required for the same amount of genuine progress.
E) Ratified Green Party of Canada policy exists that Greens advocate the Bank of Canada return to a prominent role in creating money. (policy code G10-P24) That means, among other measures, creating *additional* money.
F) The ecological or natural capital of the biosphere, or indeed any ecosystem within it, is the root of all wealth.
G) Green MPs in England have asked the Bank of England to consider green QE. Mark Carney, the Bank's governor has stated a scenario where that may happen. Greens in at least Canada, the UK, Australia, New Zealand, the USA, France, Germany, Italy, other EU nations are urging similar measures. G7 and G20 and BRICS countries are also updating their policies to respond to V-20 and COP21 concerns. Canadian Greens should be among this chorus.
Be It Resolved: Green MPs and the GPC will advocate for Bank Of Canada money creation to offer interest free (or sovereign interest level) loans and grants for green infrastructure and efficiency projects. Such projects may include the creation of for profit crown corporations that build own and operate infrastructure and efficiency projects. Green MP's and the GPC will advocate The Bank of International Settlements support all central banks under its structure engage in sovereign coordinated Green Marshall Plans.
Be It Further Resolved, A royal commission will be established to determine the feasibility of creating such crown corporations in given fields of expertise and offer a plan for a virtually carbon free Canada. The royal commission would create specific objectives and operating procedures for the green crown corporations. Grants to crown corporations will take preference over any grants to private interests. One example of a green project, which could be owned by a crown corporation: fast electric vehicle charging stations for EVs.See: http://nb.referata.com/w/index.php?title=Green_Marshall_Plan&action=editGreek economic miracle
The Greek economic miracle is the period of sustained economic growth in Greece from 1950 to 1973. During this period, the Greek economy grew by an average of 7.7%, second in the world only to Japan.Joanne Herring
Joanne King Herring (born July 3, 1929) is an American socialite, businesswoman, political activist, philanthropist, diplomat, and former television talk show host. Hailing from Houston, Texas, she is best known for influencing policy through her long association and political relation with the President of Pakistan Zia-ul-Haq (1977–88). Herring also served as the honorary consul at the Consulate-General of Pakistan based in Houston; she is also the recipient of the Jinnah Medal, one of Pakistan's highest honors.Throughout the 1980s, Herring almost single-handedly created the entire United States support for the Mujahideen in Afghanistan by assisting the U.S. Representative Charlie Wilson to persuade the U.S. government to train and arm the Mujahideen resistance fighters to fight in the Soviet–Afghan War, which began in 1979 known as Operation Cyclone. These events inspired the book Charlie Wilson's War: The Extraordinary Story of the Largest Covert Operation in History; Herring is portrayed by actress Julia Roberts in the 2007 film Charlie Wilson's War. Since the September 11 attacks, Herring has stated that she "did not make al-Qaeda" and that she "cannot predict the future."Herring remains very active in social circles in Houston and regularly contributes to and participates in benefits to help American troops and the Afghan people. Her second book, Diplomacy and Diamonds: My Wars from the Ballroom to the Battlefield, was released on January 1, 2011.OECD
The Organisation for Economic Co-operation and Development (OECD; French: Organisation de coopération et de développement économiques, OCDE) is an intergovernmental economic organisation with 36 member countries, founded in 1961 to stimulate economic progress and world trade. It is a forum of countries describing themselves as committed to democracy and the market economy, providing a platform to compare policy experiences, seek answers to common problems, identify good practices and coordinate domestic and international policies of its members. Most OECD members are high-income economies with a very high Human Development Index (HDI) and are regarded as developed countries. As of 2017, the OECD member states collectively comprised 62.2% of global nominal GDP (US$49.6 trillion) and 42.8% of global GDP (Int$54.2 trillion) at purchasing power parity. OECD is an official United Nations observer.In 1948, the OECD originated as the Organisation for European Economic Co-operation (OEEC), led by Robert Marjolin of France, to help administer the Marshall Plan (which was rejected by the Soviet Union and its satellite states). This would be achieved by allocating United States financial aid and implementing economic programs for the reconstruction of Europe after World War II. (Similar reconstruction aid was sent to the war-torn Republic of China and post-war Korea, but not under the name "Marshall Plan".)In 1961, the OEEC was reformed into the Organisation for Economic Co-operation and Development by the Convention on the Organisation for Economic Co-operation and Development and membership was extended to non-European states. The OECD's headquarters are at the Château de la Muette in Paris, France. The OECD is funded by contributions from member states at varying rates and had a total budget of €374 million in 2017.Paul G. Hoffman
Paul Gray Hoffman (April 26, 1891 – October 8, 1974) was an American automobile company executive, statesman, and global development aid administrator. He was the first administrator of the Economic Cooperation Administration, where he led the implementation of the Marshall Plan from 1948-1950.Policy Planning Staff (United States)
The Policy Planning Staff (sometimes referred to as the Policy Planning Council, the Office of Policy Planning or by its in-house acronym S/P) is the principal strategic arm of the United States Department of State. It was created in 1947 by renowned Foreign Service Officer George F. Kennan at the request of Secretary of State George Marshall to serve "as a source of independent policy analysis and advice for the Secretary of State." Its first assignment was to design the Marshall Plan.
Past directors include George F. Kennan, Anne-Marie Slaughter, Jake Sullivan, Dennis Ross, Gregory B. Craig, Paul Wolfowitz, Paul Nitze, and Richard Haass, and past members include Zbigniew Brzezinski, Sandy Berger, Kori Schake and Michael Armacost. At least 14 past members of the Policy Planning Staff have served as Ambassadors.The Staff is headed by the Director of Policy Planning. The current head is Kiron Skinner.SS St. Lawrence Victory
The SS St. Lawrence Victory (MCV-735) was a type VC2-S-AP2 Victory-class cargo ship built for the United States during World War II. The ship was built as part of the Emergency Shipbuilding program by Permanente Metals Corporation in Yard 2 of the Richmond Shipyards in Richmond, California. Launched in March 1945, the St Lawrence Victory delivered supplies for the Pacific War. After the war, it served as a relief ship delivering supplies to Europe under the Marshall Plan. Damaged by a sea mine in 1947, it was salvaged by Yugoslavia then changed hands several times in private use before it was scrapped in 1973.United States foreign aid
United States foreign aid is aid given by the United States government to other governments. It does not include money from private charitable organizations based in the United States, or remittances sent between family members. There are two broad categories: military aid and economic assistance. The Congressional Research Service divides it into five categories: bilateral development aid, economic assistance, humanitarian aid, multilateral economic contributions, and military aid.Foreign aid recipients include developing countries, countries of strategic importance to the United States, and countries recovering from war. The government channels about half of its economic assistance through a specialized agency, the United States Agency for International Development (USAID). Government-sponsored foreign aid began a systematic fashion after World War II; there were numerous programs of which the largest were the Marshall Plan of 1948 and the Mutual Security Act of 1951-61.
Military aid is frequently provided to foreign countries experiencing civil war, and natural resource rich countries experience civil war more frequently than countries that do not have natural resources. Therefore, resource rich countries are significantly more likely to receive foreign aid. Foreign aid is generally unpopular with the general public, with a 2017 poll finding 57% favor a cut and 6% who want increased aid. On the other hand, foreign aid has bipartisan support in Congress, and most Americans overestimate foreign aid as a share of the total federal budget. In the past, less than 1% of the national budget went to foreign assistance. As of fiscal year 2017, foreign aid between the U.S. State Department and USAID totaled $50.1 billion, or just over 1% of the budget.W. John Kenney
William John Kenney (June 16, 1904 – January 16, 1992) was United States Assistant Secretary of the Navy 1945-46, Under Secretary of the Navy 1947-49, and the operating chief of the Marshall Plan from 1950 to 1952.Wirtschaftswunder
The term Wirtschaftswunder (German: [ˈvɪʁtʃaftsˌvʊndɐ] (listen), "economic miracle"), also known as the Miracle on the Rhine, describes the rapid reconstruction and development of the economies of West Germany and Austria after World War II (adopting an ordoliberalism-based social market economy). The expression referring to this phenomenon was first used by The Times in 1950.Beginning with the replacement of the Reichsmark with the Deutsche Mark in 1948 as legal tender (the Schilling was similarly re-established in Austria), a lasting period of low inflation and rapid industrial growth was overseen by the government led by West German Chancellor Konrad Adenauer and his Minister of Economics, Ludwig Erhard, who went down in history as the "father of the German economic miracle." In Austria, efficient labor practices led to a similar period of economic growth.
The era of economic growth raised West Germany and Austria from total wartime devastation to developed nations in modern Europe. At the founding of the European Common Market in 1957 West Germany's economic growth stood in contrast to the struggling conditions at the time in the United Kingdom.