The Marshall Plan: Seventy Years On


James Bond aficionados will no doubt remember the scene in Ian Fleming’s first novel Casino Royale (1953) in which 007 is cleaned out at the baccarat table by the trade unionist and clandestine SMERSH agent, Le Chiffre. Facing the prospect of defeat in not just a card game, but an intelligence operation intended to discredit a key Soviet operative in France, Bond is surprised to be suddenly handed an envelope from his CIA counterpart, Felix Leiter. The attached note reads ‘Marshall Aid. Thirty two million francs. With the complements of the USA’. Leiter’s intervention puts Bond back in the game, and enables him to bankrupt Le Chiffre, destroying his reputation and ultimately contributing to his execution by his Russian masters.

The significance of CIA support in Casino Royale was mirrored in real life by the speech that the US Secretary of State, George C. Marshall gave at Harvard University on 5th June 1947, outlining the European Recovery Program that would provide Western Europe with much-needed economic aid to affect its post-war recovery. The ERP – or the Marshall Plan, as it was dubbed – combined humanitarian aid with grand strategy, and involved employing the economic lever of national power as a weapon in the nascent Cold War. Marshall’s speech, and the policy it inspired, helped establish a tenet of US foreign policy that the current incumbent of the White House seems bent on undermining.

Marshall had taken over the State Department in January 1947, coming to the job with strong credentials. As the former US Army Chief of Staff, he had been Roosevelt’s principal military advisor during WWII, demonstrating a keen awareness of the interaction between politics, diplomacy and strategy. As Mark A. Stoler argues, there is a clear link between his own adoption of the ‘Germany First’ strategy of the Second World War and his subsequent belief that Western Europe’s revival had become an essential US interest.

The ERP was also shaped by the thinking of Marshalls’ deputy (and subsequent successor), Dean Acheson; the Under-Secretary of State for Economic Affairs, William Clayton; Charles ‘Chip’ Bohlen (a Russia specialist and professional diplomat advising Truman on Soviet policy), and the former charge d’affairs of the Moscow Embassy, George F. Kennan, who he appointed as the head of the newly-established State Department Policy Planning Staff. As a result of the ‘Long Telegram’ and the Foreign Affairs article ‘The Sources of Soviet Conduct’, Kennan was regarded in Washington DC as a seer on the USSR, and he became – much to his later discomfort – associated with the policy of containment adopted by the Truman administration. Observing post-war Europe, Kennan noted (see pp.201-228 of this link) that the great European powers had been brought to their knees by WWII; Germany and Italy as defeated Axis powers, France due to occupation, and Britain as a consequence of the economic exhaustion incurred by six years of total war. The USSR’s military presence in the Eastern half of the continent gave Josif Stalin the means to impose openly Communist regimes on Poland, Bulgaria and Romania and to re-annex the Baltic States. Hungary, Czechoslovakia and the Eastern half of Germany were likely to follow suit. Would Stalin stop with just these states in his sphere of influence?

US diplomats and senior military officials concluded that Europe was likely to fall to Communism not because of invasion by the Red Army, but its own critical internal weaknesses. In the case of Germany, the industrialised West (under US, British and French occupation) was cut off from the agricultural and resource-rich East (under Soviet control), presenting Germans under Western allied occupation with a dilemma identified by General Lucius D. Clay, the military governor of the US zone: ‘[the choice is] between becoming a Communist on 1,500 calories a day and a believer in democracy on 1,000’. Greece, which had suffered horrendously from the Axis occupation, was now in a state of civil war between the royalist government and a Communist insurgency. In Italy and France, the Communist Parties had bolstered their popular appeal due to their records of anti-Nazi and anti-Fascist resistance, and there was a clear possibility that pro-Moscow regimes could take power in Paris and Rome through a combination of electoral results and industrial action.

Marshall and his subordinates concluded that the continent was suffering a crisis of morale, and that the US response would have to be as much about rebuilding faith in democracy as facilitating economic reconstruction. Like Leiter’s fictional gift to 007, the ERP was intended to have the psychological effect of persuading West Europeans that the USA was not going to abandon them, as well as the practical one of helping them find a way out of the ruins.

Marshall’s speech was shaped by these considerations, but was mainly a response to the failure of the four occupying powers in Germany to come to any agreement on the country’s future during the Foreign Ministers’ Conference in Moscow (10th March-24th April 1947). The US Secretary of State met Stalin, interpreting the Soviet leader’s nonchalance at the lack of any progress as a sign of deliberate obstructiveness. Marshall concluded that Stalin was playing for time and waiting for the continental economic collapse that would lead desperate Europeans to turn to Communist parties as the only alternative to poverty. On his return home, the Secretary of State declared that ‘the patient is dying while the doctors deliberate’, and he believed that at least one of the four medics was guilty of deliberate neglect.

Yet the ERP, the cure, would not work if the Europeans did not collaborate together in the interests of their common economic revival. Marshall Aid not only involved unifying the allied occupation zones of Germany, but also promoting economic integration across the continent in the interests of shared prosperity and peace. It meant working closely with the British, French and other West European governments and urging them to co-operate with each other. The Secretary of State and his advisors shared the views of Paul-Henri Spaak, Jean Monnet and Maurice Schuman that a common market and integrated economies would not only promote recovery and democracy, but would also create co-operative ties that would make it progressively unthinkable that Europeans would ever go to war with each other. The ERP would provide US money, but it would be French, German, Belgian, Dutch and other politicians and bureaucrats who would work with each other to decide how it would be spent, in stark contrast with the ‘beggar my neighbour’ economic nationalism of the 1930s. In this respect, there was a synergy between Marshall’s speech and the transnational negotiations which led to the signing of the Treaty of Rome between France, the Federal Republic of Germany, Italy, the Netherlands, Benelux and Luxembourg in March 1957.

The ERP had a further purpose; to confound the Soviets. Stalin’s world-view was based on the presumption that the capitalist allies were bound to fall out after WWII because of their competing economic interests. It never occurred to him that the USA, Britain and other Western European states could band together either to promote a continental recovery or – in September 1949 – a transatlantic military alliance. Furthermore, Stalin miscalculated when the US government made it clear that all European states could apply for ERP aid. He could have called Marshall’s bluff by welcoming participation, leaving the Secretary of State with the awkward task of selling economic assistance to Eastern Europe to Congress. Instead, Stalin ordered all states within the USSR’s sphere of influence to reject the ERP. This not only included countries where Soviet clients were in power, but also Czechoslovakia, whose President, Eduard Benes, and Foreign Minister, Jan Masaryk, believed that their country had managed to become both an ally of the USSR while retaining its sovereignty.

However, during bilateral discussions with Moscow on 9th July 1947 Stalin ordered the Czechoslovak government to pull out of the Paris conference on the ERP. Moscow subsequently responded by establishing the Cominform (September 1947) to enforce ideological conformity on Europe’s Communist Parties, and Yugoslavia’s resentment over the imposition of Soviet authority contributed to the rift between Stalin and Tito the following year. In February 1948 the Czechoslovak Communist Party seized power in a coup in Prague, and four months later Stalin ordered that the land routes between Western Germany and the Allied enclaves into Berlin should be blocked. In addition, the ‘little Stalins’ in Eastern Europe followed their master’s example by purging their own parties, imprisoning and executing any who were likely to challenge the ‘Moscow line’. Soviet propaganda blamed the USA and its allies for using Marshall Aid as a means of dividing Europe. Yet aside from the Communist parties and their ‘fellow travellers’ the consensus in the West was that it was Stalin who had split the continent in half.

So what can we draw from the ERP in retrospect? Firstly, when politicians campaigning for Britain to leave the European Union reacted with shrill outrage when the former President Barack Obama spoke in favour of the UK’s continued membership, the more historically-literate of them (notably the prominent Leave campaigner, and current Foreign Secretary, Boris Johnson) should not have been so surprised. Support for European integration – and indeed for British participation in that process – has been a tenet of US foreign policy since Truman’s administration. This did not mean that relations between Washington DC and the EU (formerly the European Economic Community/European Community) have always been harmonious. Richard Nixon and Henry Kissinger started to see European integration as a potential source of political rivalry, and Ronald Reagan was frustrated that the EEC’s member states (including the UK) refused to strengthen sanctions on the Soviet bloc as a result of the Polish crisis of 1981. Nonetheless, until 20th January 2017 US policy on Europe and the evolution of the EU has remained consistently supportive.

Secondly, the provision of US dollars did not mean that the Truman administration was intent on controlling the ERP. European governments would decide how Marshall Aid would be spent, even if this meant adopting models of state intervention and social welfare that were alien to US domestic politics. To take one example, ERP aid to Britain did not come attached with demands that Clement Attlee’s government abandon its plans for the welfare state and the nationalisation of key industries. The USA did force the Dutch to concede independence to Indonesia by threatening to withhold Marshall Aid in 1949, but this was not the norm as far as the management of the ERP was concerned, and certainly was not comparable to the imposition of Stalinism experienced by the unluckier half of the continent from 1948 to 1953.

Thirdly, and from a ‘soft power’ perspective, the ERP was excellent propaganda for the USA even if it was offered for strategic and self-interested reasons. Marshall Aid was accompanied by covert and (for subsequent scholars) subversive methods of reinforcing US influence, whether this involved the Central Intelligence Agency’s financial assistance to the Christian Democrats during the Italian elections of 1948, or its clandestine ties with European anti-Stalinist politicians, trade unionists and intellectuals such as those associated with the Congress for Cultural Freedom. European Communist Parties were also quick to denounce the ERP as a cynical ploy to bribe the masses to back bourgeois lackeys of the US militarists. Nonetheless, for Greek peasants receiving food aid and avoiding famine, or for German workers seeing the beginnings of their country’s Wirtschaftwunder, the power-political motives behind the Marshall Plan were an irrelevance. This was Uncle Sam’s altruism in action, and this was largesse that Uncle Joe either couldn’t – or wouldn’t – do anything to match.

Finally, and in contrast with the current POTUS’s view that US-European relations work on the basis of some protection-racket, the main principle behind Marshall’s speech and the ERP was that the USA’s role in Europe’s defence and economic revival was enlightened self-interest. Economic instability and crippling poverty undermined democracy and facilitated dictatorship – from the extreme right in the 1930s, and the opposite side of the political spectrum after 1945. A continental war, or the dominance of Europe by an adversary of the USA, represented a severe threat to America’s essential interests. Dollars spent on the ERP would keep the US’s enemies at bay, empower its friends, and frustrate Soviet expansion. It also represented a more economically efficient means of pursuing national policy objectives than the expense of blood and treasure that would be incurred by intervention in a third European war. The Marshall Plan represented the subtle use of economic power in the guise of humanitarian aid. Indeed, one could almost call it an example of the ‘art of the deal’.

Image: One of a number of posters created to promote the Marshall Plan in Europe, via Wikimedia commons.

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