A New Marshall Plan for Europe?

As the dust settles after each international catastrophe, many claim that a new Marshall Plan is needed. This European assistance program was championed by the American secretary of state George C. Marshall, chief of staff of the U.S. Army during World War II and future Nobel Peace Prize laureate. But what exactly was it? What’s more, did it actually work? Georges de Menil, a former economics professor at the Ecole des Hautes Etudes en Sciences Sociales in Paris, and the author of an article on the “historical importance of the Marshall Plan” recently published in Commentaire magazine, analyzes the nuances of this American myth.
© Hervé Pinel

France-Amérique: What was the Marshall Plan and why is it still so renowned today?

Georges de Menil: Proposed on June 5, 1947, the European Recovery Program – nicknamed the Marshall Plan by the press – was a vast reconstruction effort and the biggest international aid initiative of all time in terms of the percentage of GDP provided by the donating country – 4.7% in 1948. The initial objective was achieved many times over. As a result, it is unsurprising that the program has become a reference.

Between 1948 and 1952, American aid sent to 16 European countries (the Soviet Union and its satellite nations refused) reached a total of 13 billion dollars – the equivalent of 163 billion today. This was an unprecedented commitment from the United States. What was the motivation behind it?

We have to look for the answer to this fundamental question in two distinct events. Firstly, there was the decision to go to war. As everyone knows, this was only made 19 months after the Nazis invaded France. Pearl Harbor finally sparked an instinctive reaction, driven by national defense and revenge. Secondly, there was the decision to make a sustainable contribution to rebuilding Europe. In 1919, the United States had become more insular following the Treaty of Versailles. Two considerations influenced its decision to adopt an opposing policy in 1947. Firstly, the country had realized the extent of its power and its responsibilities. Without America’s intervention in 1947, Europe would have sunk into poverty and chaos. Secondly, the threat of communist rule over Europe had come to the fore. A potential political consequence of widespread unemployment, lack of heating, and hunger might have been the rise of communist parties, particularly in France, Italy, and Greece. The United States could not stand for it.

Was the Marshall Plan, which was originally a Democratic initiative, adopted without significant dissent from Republicans and public opinion? After all, it was an unprecedented departure from the country’s isolationist tradition.

Truman’s foreign policy was vehemently debated during the presidential election of 1948. Robert Taft, the Republican senator for Ohio, had been against going to war before Pearl Harbor, and was now against the Marshall Plan and the Cold War. But Thomas Dewey, the Republican governor of New York and the leader of the party’s moderate wing, won the Republican nomination. He supported the Marshall Plan and Truman’s policy on the Cold War. Above all, Republican senator Arthur Vandenberg, chairman of the Senate Foreign Relations Committee, played an important role in supporting the Marshall Plan. Everyone in the United States had been shaken by the war, and was favorable towards the restoration of a free-market order in Europe and beyond.

Was the aid decisive in rebuilding Europe? It seems that it had more of a symbolic than a mechanical effect, reassuring investors and the markets about the sustainability of a new, free-market, Atlantic order.

It is hard to separate the economic mechanics from the symbolism. There does not seem to have been a direct link between the amount of aid received by countries and the subsequent extent of their growth. In most cases, growth far surpassed the aid provided. The decisive aspect was the reassurance that Western Europe would not be dominated by their leading communist parties. These groups were – correctly – suspected of being affiliated with Moscow. The restoration of relative freedom in trade terms was also important, as was the support given to a new, federal, capitalist Germany founded on democracy and open to the world. But without the tangible reality of U.S. aid – for example, the provision of coal and wheat – this desire to halt the rise of communism would have failed.

France received the most aid after Great Britain. However, the French benefited more than the British, but far less than the Germans. How can we explain the growth disparities between these three countries?

Many factors influenced these differences in growth, starting with the severity of destruction sustained in the war. The greater the destruction, the greater – and faster – the reconstruction. Germany started behind the others, but built brand new structures and facilities as a result. National political choices were another factor. The Labour government, elected in Great Britain in 1945, nationalized coal mines, electricity production, and public transportation, which hampered productivity and growth. In France, the drive for coordinated modernization proposed by the Monnet Plan in 1946 limited the Malthusian reflex that might have led to nationalization the very same year. In Germany, a similar nationalization program presented by the Social Democratic Party was voted down during the election of August 14, 1949, which was closely won by the coalition led by Konrad Adenauer. Meanwhile, there was also a major contribution to German growth provided by the 13 million capable, determined refugees who arrived from Eastern Europe and the Soviet bloc.

Overall, was the Marshall Plan a political rather than an economic commitment to prevent Western Europe from becoming communist? Was it above all an act of cold war?

The rapidly identified threat of the former Soviet ally’s hegemonic ambitions majorly influenced American strategy. Stalin wanted to dismantle what was left of German industry and use it to rebuild the USSR. As soon as the Truman administration opted to reindustrialize West Germany, conflict was inevitable. The stranglehold on Poland, the 1948 Czechoslovak coup d’état, and the multiple attacks by the Soviets made the division of Europe unavoidable. The Marshall Plan was enacted as this rift became irreversible. The Cold War had a considerable impact on the aid program.

Did the French express any gratitude towards the United States? I remember large, anti-American protests from this time. The widespread strikes by the CGT workers’ union in the fall of 1947 showed a clear risk of the rise of the French Communist Party, which was allied with Soviet politics… Would the United States vote again for a new Marshall Plan, for the reconstruction of Ukraine, for example?

Russia’s arbitrary and brutal attacks are currently feeding a swell of patriotism in the United States. Two military aid programs for Ukraine received overwhelming support in Congress. The latest package of 40 billion dollars was passed on a 368 to 57 vote in the House of Representatives, and an 86 to 11 vote in the Senate. However, the extent of America’s contribution to rebuilding Ukraine when the war is over will depend on European engagement. In 1947, the United States was by far the world’s greatest economic and military power, and the only country capable of maintaining peace in a divided Europe. The geostrategic situation of Europe in 2022 is fundamentally different, although the U.S. is still the only military power capable of defending European independence. However, thanks in part to 75 years of American protection, the collective economic power of the European countries is now comparable to that of the United States. Europe has already taken action in Ukraine, and must continue to do so – the stability of the continent depends on it. It is also in America’s interest to continue providing aid, and it will if the effort is shared.

Why did the Marshall Plan work in Europe while all aid sent to Africa, which is far greater, has failed to get the continent off the ground?

Europe is the fruit of a thousand years of evolving administrative practices and respect for the state of law, which have been achieved through repeated and heroic conflicts, as well as a longstanding, highly educated population. Africa, on the other hand, does not have these advantages.

“L’importance historique du plan Marshall” by Georges de Menil, Commentaire, Summer 2022.


Interview published in the September 2022 issue of France-Amérique. Subscribe to the magazine.