Today, the Marshall Plan is frequently invoked by people desperate to find solutions to significant problems ranging from the refugee crisis in Syria to poverty in America’s cities. While the Marshall Plan is generally mentioned in these situations because of its unparalleled success in assisting people in need, not many people understand what the Marshall Plan was and the factors that contributed to its successful implementation.
This next sequence of the Marshall Legacy Series, Europe’s Unlikely Recovery, will explore how the idea for the Marshall Plan developed as an alternative after World War II to the harsh terms included in the peace treaty following World War I, how the Marshall Plan evolved from an idea that Marshall proposed in a speech into a fully functioning recovery program, and how Marshall played an important role in ensuring the plan bearing his name was successful.
Aid for Europe
Europe was devastated by years of conflict during World War II. Millions of people had been killed or wounded. Industrial and residential centers in England, France, Germany, Italy, Poland, Belgium and elsewhere lay in ruins. Much of Europe was on the brink of famine as agricultural production had been disrupted by war. Transportation infrastructure was in shambles. The only major power in the world that was not significantly damaged was the United States. Since 1945 the United States had assisted European economic recovery with direct financial aid, and although the newly formed United Nations was also providing humanitarian assistance, conditions in Europe failed to improve.
Secretary of State Marshall
In January 1947, U.S. President Harry Truman appointed George C. Marshall, the architect of victory during WWII, to be secretary of state. After returning from the foreign ministers’ conference in Moscow and witnessing the further deterioration of conditions in Europe, Marshall decided that it was time for the United States to take action. In just a few months, State Department leadership under Marshall with expertise provided by George Kennan, William Clayton and others crafted the Marshall Plan concept, which Marshall shared with the world in a speech on June 5, 1947, at Harvard University. Following his speech Marshall spent the next 10 months traveling the United States to speak to groups to explain why supporting the Marshall Plan was in the best interest of the country. He met with politicians and testified before Congress. Marshall later remarked that while campaigning for the Marshall Plan, “I worked as hard as though I was running for the Senate or the presidency.”
British Foreign Minister Ernest Bevin and French Foreign Minister Georges Bidault responded enthusiastically to Secretary Marshall’s speech. They immediately began preparations for a meeting of all the nations interested in participating in the recovery program. On July 12, 1947, sixteen nations (Austria, Belgium, Denmark, France, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Sweden, Switzerland, Turkey, and the United Kingdom) met in Paris to begin preparing a response to the U.S. invitation for aid. The report outlining the needs of these European countries was submitted to President Truman on September 22, 1947.
The Soviet Union initially expressed interest in participating in the program, but after learning the conditions of participation, it rejected the invitation. Leaders from Czechoslovakia and Poland agreed to attend the initial meeting in Parks, but under pressure from the Soviet Union they soon withdrew their participation joining the countries of Bulgaria, Finland, Hungary, Romania, and Yugoslavia as nonparticipants. The Soviet Union launched a massive propaganda campaign against the Marshall Plan and attacked it as a form of U.S. economic imperialism through which the U.S. sought to exert political pressure on the countries that received aid.
The European Recovery Program (ERP), the official name of the Marshall Plan, was signed into law by President Truman on April 3, 1948. The bill provided $13.1 billion (approximately $143 billion in 2016) in aid to the sixteen participating countries from June 1948 through June 1951. The funding represented approximately 3% of the U.S. National Product over the course of the program and the per capita cost of the program was calculated at $80 ($873 in 2016). The first funds provided food, staples, fuel and machinery from the United States to aid the European nations as they began the process of rebuilding. Later funds were used to strengthen key industries and encourage greater trade among European nations. The program concluded after three and a half years in October 1951.
The Marshall Plan has had a tremendous impact on U.S. and world history alike. It represented a dramatic shift in U.S. foreign policy, which had previously emphasized isolationism as reflected in its noninvolvement in Europe following World War I, to a more active role in world affairs that the U.S. continues to play to this day. The Marshall Plan helped the European nations begin to view one another less as enemies and more as trading partners and as a result there has not been a major armed conflict in Europe since the end of World War II. The Marshall Plan also fostered a spirit of cooperation among the European nations which laid the groundwork for the establishment of the North Atlantic Treaty Organization (NATO) and the European Union.