unprecedented degree of mutually advantageous collaboration—financed, it should be noted, by a substantial injection of US dollars to furnish the initial credit pool.
From a more conventional American perspective, however, free trade and its attendant benefits were themselves a sufficient objective and justification for the ERP programme. The United States had been particularly hard hit by the trading and export slump of the thirties and spared no effort to convince others of the importance to post-war recovery of liberalized tariff regimes and convertible currencies. Like English Liberals’ enthusiasm for free trade in the era before 1914, such American pleas for the unrestricted movement of goods were not altogether un-self-interested.
Nevertheless, this self-interest was distinctly enlightened. After all, as CIA Director Allen Dulles observed: ‘The Plan presupposes that we desire to help restore a Europe which can and will compete with us in the world markets and for that very reason will be able to buy substantial amounts of our products.’ In a few cases there were more immediate benefits: back in the US, organized labour’s backing for the Marshall Plan was secured through the promise that all in-kind transfers from America would be despatched in US-owned ships loaded by American dockworkers unionized in the AFL-CIO. But this was a rare case of direct and immediate advantage. For the most part Dulles was right: the Marshall Plan would benefit the USA by restoring her major trading partner, rather than by reducing Europe to an imperial dependency.
Yet there was more to it than that. Even if not everyone saw it at the time, Europe in 1947 faced a choice. One part of that choice was recovery or collapse, but the deeper question was whether Europe and Europeans had lost control of their destiny, whether thirty years of murderous intra-European conflict had not passed the fate of the continent over to the two great peripheral powers, the US and the Soviet Union. The Soviet Union was quite content to await such a prospect—as Kennan noted in his memoirs, the pall of fear hanging over Europe in 1947 was preparing the continent to fall, like a ripe fruit, into Stalin’s hands. But for American policymakers, Europe’s vulnerability was a problem, not an opportunity. As a CIA report argued in April 1947, ‘(t)he greatest danger to the security of the United States is the possibility of economic collapse in western Europe and the consequent accession to power of Communist elements’.
A Special Ad Hoc group of the State, War and Navy Departments’ coordinating committee spelled the point out more fully in a report dated April 21st 1947: ‘It is important to maintain in friendly hands areas which contain or protect sources of metals, oil and other natural resources, which contain strategic objectives or areas strategically located, which contain substantial industrial potential, which possess manpower and organized military forces in substantial quantities, or which for political or psychological reasons enable the US to exert a greater influence for world stability, security and peace.’ This is the broader context of the Marshall Plan, a lowering political and security landscape in which American interests were inextricably interwoven with those of a fragile and sickly European sub-continent.
The better-informed European recipients of Marshall Aid, notably Bevin and Georges Bidault, his counterpart at the French Foreign Ministry on the Quai d’Orsay, understood this perfectly well. But European domestic interest in the European Recovery Program itself, of course, and the uses to which it was put, varied considerably from country to country. In Belgium, where American assistance was probably least urgently needed, the Marshall Plan may even have had a long-term prejudicial impact, allowing the government to spend heavily on investment in traditional industrial plants and politically-sensitive industries like coal mining without counting the long-term cost.
In most cases, though, Marshall Aid was applied as intended. In the Plan’s first year, aid to Italy was largely devoted to urgently needed imports of coal and grain, together with help for struggling industries like textiles. But thereafter 90 percent of Italian counterpart funds went directly to investment: in engineering, energy, agriculture and transportation networks. In fact, under Alcide De Gasperi and the Christian Democrats, Italian economic planning at the end of the forties rather resembled its east European counterpart, with consumer goods deliberately disfavoured, food consumption held down to pre-war levels and resources diverted to infrastructural investment. This was almost too much of a good thing: American observers became nervous and tried unsuccessfully to encourage the government to introduce more progressive taxes, relax its austere approach, allow reserves to fall and avoid bringing about a recession. Here, as also in western Germany, American Marshal Planners would have liked to see social and economic policies slanted more to the Centre and away from traditional deflationist policies.
In France, Marshall Aid very much served the goals of the ‘planners’. As Pierre Uri, one of Monnet’s associates, later acknowledged: ‘we used the Americans to impose on the French government what we deemed necessary’, ignoring the American desire for liberalization but responding enthusiastically to US exhortations to invest and modernize. ERP dollars—$1.3 billion in 1948-49 and a further $1.6 billion in the next three years— financed almost fifty percent of French public investment under the Monnet Plan during the Marshall years, and the country could never have managed without it. It is thus more than a little ironic that it was in France that the Marshall Plan faced the greatest popular criticism. In mid-1950 only one French adult in three acknowledged having even heard of the Marshall Plan and of these 64 percent declared it to be ‘bad’ for their country!
The Plan’s relatively poor image in France represented a partial public relations success for the French Communists, perhaps their greatest.[20] In Austria the local Communists— backed by Soviet forces still occupying the eastern region of the country—never made any dent in the popularity of Americans and their aid; the latter put food in people’s mouths and this was what mattered most. In Greece the situation was clearer still. In the circumstances of a brutal civil war Marshall Aid, extended to Greece in April 1948, made the difference between survival and destitution. The $649 million of American aid to Greece under the ERP supported refugees and staved off hunger and disease: the mere delivery of mules to indigent farmers made the difference between life and death for thousands of peasant families. In 1950 Marshall Aid was credited with furnishing half of the country’s GNP.
How successful was the European Recovery Program? Western Europe indubitably recovered, and precisely over the period (1948-1951) of the Marshall Plan. By 1949 French industrial and agricultural production both exceeded 1938 levels for the first time. By the same criterion sustained recovery was achieved in 1948 by the Netherlands, in 1949 by Austria and Italy, in 1950 by Greece and West Germany. Of those countries occupied during the war, only Belgium, Denmark and Norway recovered sooner (in 1947). Between 1947 and 1951 the combined GNP of western Europe rose by 30 percent.
In the short-term the chief contribution of the Program to this recovery was surely the provision of dollar credits. These underwrote trade deficits, facilitated the large-scale importation of urgently needed raw materials and thus carried Western Europe through the crisis of mid-’47. Four-fifths of all the wheat consumed by Europeans in the years 1949-51 came from dollar-zone countries. Without Marshall Aid it is not clear how the fuel shortages, food shortages, cotton shortages and other commodity scarcities could have been overcome at a politically acceptable price. For while the economies of western Europe surely
This was a risk most elected governments were understandably reluctant to run. In 1947 the coalition governments of western Europe were trapped and they knew it. It is all very well for us to recognize in hindsight that Marshall Aid ‘merely’ broke a logjam born of renewed demand, that Washington’s new approach overcame a ‘temporary’ dollar shortfall. But no-one in 1947 could know that the $4.6 billion gap was ‘temporary’. And who at the time could be sure that the logjam was not sweeping the fragile European democracies over a roaring cataract? Even if the ERP did no more than buy time, that was a crucial contribution, for time was precisely what Europe appeared to lack. The Marshall Plan was an economic program but the crisis it averted was political.
The longer run benefits of the Marshall Plan are harder to assess. Some observers were disappointed at the Americans’ apparent failure to persuade Europeans to cooperate in integrating their planning as much as they had initially hoped. And it is true that whatever collaborative habits and institutions the Europeans did eventually acquire were only indirectly indebted to American efforts, if at all. But in the light of Europe’s recent past,
