Marshall Plan: economic recovery and European reconstruction

Marshall Plan

Designing Europe in the Aftermath of World War II: The Marshall Plan and its Lasting Effects

The twentieth century was a period of major change and reorganization in the international geopolitical power structure, as globalization truly got underway via the interconnections of land and marine shipping channels and a truly worldwide network of raw material supplies, manufacturing centers, and consumers. The economic interdependence that grew throughout the nineteenth century -- indeed, since the dawn of the modern age -- create changes in supremacy and dominance in both political and cultural spheres that set tensions on edge between many countries in many parts of the world. This was further exacerbated by the increasing numbers of rebellions that spelled the beginnings of the end of the period of colonization and imperialism that had been the dominant form of building and maintaining international trade networks and so had secured wealth and growth for many European nations.

World War I was the first major military action that occurred as Europe tried to establish a new pecking order and power structure that accounted for the changes in worldwide economic prowess and political control. The aftermath of this First World War, however, saw an increased burden placed on several nations found to be (rightly or wrongly) at fault for the war, and this set the stage for the coming of World War II, following a worldwide depression that increased the senses of desperation and national fervor in several of these countries. There was also, of course, the growing threat of communism.

The stage for World War II, then, was set with two major superpowers in an already tense balance, and Europe in between them facing its own set of internal challenges. Germany's arrogance led to the uniting of the two superpowers in their effort to defeat this country, which was of course ultimately successful, but there was still a major problem left -- Europe had been decimated by the drawn out and bitter warfare. Infrastructure had been damaged, trade relations had -- to put it mildly -- soured between various nations, and national coffers were bare from having run military campaigns for so long. The problems were similar to what had been faced following the First World War, only far more extreme and unbalanced, especially with the Cold War standoff between the United States and the Soviet Union and its effects on different countries in Europe. It was with this backdrop that the Marshall Plan was developed, and to which it was applied in the hope for a more stable world power structure and an advancing European economic sphere.

The Origins

There were two primary sources of inspiration for the Marshal Plan, and both were predominately pragmatic, geared to the continued security and prosperity of the United States as much as they were designed to help stabilize Europe (WiseGeek 2010; LOC 2010). On the one hand, there was the need to stabilize Europe's economies so as to promote continued international trade, as the United States was still very much engaged in manufacturing at that time and needed stable buyers for its goods (Spartacus 2010. Than there was the matter of political expedience.

The communist (or socialist) revolution in Russia had occurred during the First World War, but it was not until the 1930s that stability truly returned to the nation and national growth and power if not public prosperity began to occur on a large scale (NARA 2010). Following the close of the Second World War, one of the major fears in the United States as well as in Western Europe was that the growth of communism -- which was already spreading into Eastern Europe and several pockets in the West -- would halt political and economic progress in the "free" world (WiseGeek 2010; InfoPlease 2010). One of the two primary reasons the Marshall Plan was proposed was to prevent a communist takeover of Western Europe, and its projects were specifically aimed at containing communism.

It was to provide economic as well as political stability, then, that the Marhsall Plan was devised, and it finds its origins for both of these recognized areas of importance in the aftermath of World War I, which saw neither of these things. Germany and several other countries were left destitute following the War, and few European economies were truly thriving; then came the 1930s and the Great Depression and economic stability became a complete thing of the past worldwide (WiseGeek 2010). The economic instability that typified this period led directly to the political instabilities that allowed for the initial spread of communism and of fascism in Europe, which then triggered World War II and the Cold War (Spartacus 2010). Having witnessed only recently and all too keenly what happened without a clear plan for progress and advancement in place, the Marshall Plan was the United States' attempt to install such a plan.

The Plan

Named after Secretary of State George C. Marshall who first advanced the basic tenets of the plan in 1947 (though much of the text of what constitutes "the plan" is attributed to William Clayton and George Kennan), the Marshall Plan began its formation when Marshall told European nations decide what their economic needs were in order for the United States to provide appropriate assistance (WiseGeek 2010; InfoPlease 2010). This also implicitly signaled, of course, that the United States should be ready to provide the assistance requested by European nations, and this was readily agreed to (LOC 2010; NARA 2010). At its heart, then, the Marshall Plan was fairly simple -- give Europe the economic help it needed to restore strong trade infrastructures, and thus to allow the nations of Western Europe to become viable players in the global economic market (Spartacus 2010).

In reality, of course, certain elements of the plan were more complex. Exactly how much money would be given to which countries for precisely what purposes remained a matter of some debate and ongoing adjustment, and a breakdown of the monies that were eventually given to Western Europe by the United States gives some clue as to the exact nature of the Marshall Plan's intentions as well as giving a clear eventual understanding of its effects. Determining who got what was a matter of carefully balancing actions during the war with the dangers of economic and political instability facing individual nations, to develop a plan that would be both useful and have some sense of "fairness" (Spartacus 2010).

France and the United Kingdom received the most aid, with over two hundred million dollars allotted to each; the United Kingdom was of course one of the staunchest Allies in the War and had been decimated by bombings from the Luftwaffe, and France had also suffered major infrastructure damage as well as political instability following the Vichy government's capitulation to the Nazis (WiseGeek 2010). West Germany also received a fair amount of aid, and this makes it clear where "fairness" met with political expediency in the Marshall Plan; West Germany was largely "at fault" for World War Two, and indeed under traditional treaties and war-ending proposals, the country would have been responsible for large amounts of other nations' war debts, as following World War I (NARA 2010).

The fact that this did not occur is an indicator of the desires of the Marshall Plan and the new way forward that they represented in international politics; retribution was no longer the order of the day, but rather future stability and interdependence was sought (LOC 2010). Austria and Italy were also part of the Axis powers for a time, and also received funds under the Marshall Plan, and at the same time some nations that had suffered very little from direct effects of the war -- countries like Iceland and Sweden -- also received aid (WiseGeek 2010). Clearly, the money spent in the Marshall Plan was not simply about rebuilding Europe following the damage form the war, but about stimulating the economy in Europe overall to create strong global trading partners. This helped Europe, without a doubt, but also helped the United States by leading to increases in peacetime trade.

Direct Impacts

The pragmatic intent that lay at the heart of the Marshall plan can be fairly easily seen in the immediate and lasting effects of the plan. Some of these effects are rather straightforward and obvious from a basic glance back at world history in the second half of the twentieth century; communism, for example, did not spread to Western Europe, was primarily contained in the areas of the world to which it had already spread (Spartacus 2010). This had been one half of the major intentions behind the Marshall Plan to begin with, and history definitely suggests that it was successful in this regard (WiseGeek 2010). The United States benefited form this by having a large part of the world as its economic trading partners and was also more closely allied to these countries through their democratic and politically liberal societies and governments, as opposed to the closed and totalitarian governments as well as the planed economies of communist/socialist states (LOC 2010).

The economic pragmatism that the Marshall Plan demonstrates for the United States is not necessarily as clearly observable form a basic look at history as is the containment of communism. The decades following World War II and the implementation of the Marshall Plan were definitely economically successful fro Europe and for the United States, but how this relates directly to the Marshall Plan and not simply to the end of the war can be difficult to discern. Looking at how the economic growth and development that occurred following the Marshall Plan actually came to be makes its effects and intentions quite clear, however.

American industry had grown hugely during the war, as factories and raw materials in the United States supplied much of what was needed to engage in warfare for the Allied forces, including everything from artillery to textiles (WiseGeek 2010; InfoPlease 2010). Following the war, it was still poised to supply the nations of Europe with needed materials and finished goods while it was undergoing its rebuilding process, meaning that the money given to the nations of Europe by the United States came back to America almost instantly and in even larger magnitudes as Europe purchased everything the United States had to offer (WiseGeek 2010). An examination of the actual language of the Marshall Plan makes it very clear that this effect was understood and predicted at the time that the Plan was designed and implemented, and is a major reason behind the eager spending of the money necessary to bring Europe back to its feet after a series of World Wars.

Ongoing Consequences

The Marshall Plan was actually relatively short-lived; proposed in 1947 and with the first installment of funds distributed in 1948, the last payments made under the plan occurred in 1951 when the United States entered into conflict in Korea (InfoPlease 2010). When all was said and done, the Marshall Plan had truly been in its implementation phase for only three years, and a total of twelve-and-a-half billion dollars had been spent bringing Europe back to economic sustainability and growth in this period (Spartacus 2010). This might not seem like a great amount of time or money, but it was enough to lead to some definite long-term consequences.

One of the major lasting effects of the Marshall Plan was the increase in global economic interdependence that it created. Though this would almost certainly have occurred anyway as the twentieth century and the era of globalization progressed, assuming that Europe had managed to dig itself out of the economic pit that World War II had left it in, the Marshall Plan definitely accelerated this process. The granting of money to Europe by the United States ultimately created a stream of cash flowing from Europe to the United States' production industries (WiseGeek 2010). The bonus to the infrastructure of the European economies that the Marshall Plan represented allowed for Europe's own manufacturing industries to grow, but rather than ending international dependence this simply shifted the balance of trade as the United States became what is now known as a "post-industrial" economy (InfoPlease 2010).

In addition to this new worldwide economic system, the Marshall Plan also helped to usher in the era of American cultural dominance in the world. As Europe used its Marshall plan funds to purchase American goods, American styles and values were necessarily a part of the trade to at least some degree, and the 1950s saw the American fascination with things like the space race and the Wild West grow in popularity worldwide. Though further decades would see things like the British Invasion in pop music and a lessened dependence on American culture as the definitive Western culture, this trend of American dominance has largely persisted even to this day, and this dominance can in a large part be traced to the positioning of the country following the implementation of the Marshall Plan.