Marshall Plan

The **Marshall Plan**, officially called the **European Recovery Program** (ERP), was a United States plan for the rebuilding of Western Europe after World War II. One of the main reasons was to stop the rise of communism and the Soviet Union.

The plan was named after U.S. Secretary of State George Marshall, and was based on work by James Warburg, Lewis Brown, and other people in the U.S. State Department.

The plan ran for four years and started in April 1948. During that period, US$ 13 billion in economic and technical help were given to help the recovery of the countries in Europe that had joined in the Organization for European Economic Co-operation.

By the time the plan ended, the economy of every member state had grown well past pre-war levels.

In recent years, some historians have said that another reason for the plan was to make the United States stronger and to make Western Europe need the Americans. They also say that the United Nations Relief and Rehabilitation Administration, which helped millions of refugees from 1944 to 1947, it also helped European postwar recovery.

### Morgenthau Plan

U.S. Treasury Secretary Henry Morgenthau said that if Europe needed war reparations (money to rebuild what had been destroyed by the war), it should take them from Germany. Morgenthau said that would also stop Germany from ever being rebuilt and threatening to start another war.

World War I reparations had taken money from Germany before World War II.  That did not work, and the companies of other countries could not sell coal and steel, which were being imported for free from Germany.

### Monnet Plan

Jean Monnet of France said that France should control the German coal areas of the Ruhr and Saar and use it to rebuild French industry. In 1946, the occupying powers agreed to put strict limits on how quickly Germany could reindustrialize. Limits were placed on how much coal and steel could be produced.

### Level of industry agreement

The first German industrial plan was signed in early 1946.  The level of industry agreement said that German heavy industry was to be cut down to half of its 1938 levels by destroying 1,500 manufacturing plants.

By the end of 1946, governments could see the problems of the plan, and the agreement was changed several times untill 1949.  However, the dismantling of factories went on until 1950.  Germany had been very important to the European economy for a long time.  A poor Germany held back European recovery since other countries could not sell as much to Germany.  A poor Germany was also expensive for the occupying powers, which had to give Germany food and other things that it needed and could no longer grow or make for itself.  That caused the Morgenthau and the Monnet Plans to be rejected.

The Marshall Plan ended in 1952. Ideas to extend it were stopped because of the cost of the Korean War and rearmament. U.S. Republicans who were hostile to the plan had also gained seats during the 1950 elections.

## Criticism

The Marshall Plan has been described as "the most unselfish act in history," but that may not not be the case. The United States benefited from the plan because part of the agreement for giving aid was that countries had to open up their economies to American companies.

Historical revisionist historians such as Walter LaFeber said during the 1960s and the 1970s that the plan was American economic imperialism and was an attempt to gain control over Western Europe while the Soviets were controlling Eastern Europe.

The American economist Tyler Cowen said that nations receiving the most aid from the Marshall Plan (the United Kingdom, Sweden, and Greece) saw the fewest returns and grew the least between 1947 and 1955. Those nations who received little like Austria grew the most.

When he looked at the West Germany economy from 1945 to 1951, the German analyst and conomiust Werner Abelshauser decided that foreign aid was not needed to start the recovery or to keep it going. Cowen found that the economic recoveries of France, Italy, and Belgium had started before the Marshall Plan. Belgium relied heavily on free-market economic policies after its liberation in 1944, had the fastest recovery, and did not have the severe housing and food shortages that were seen in the rest of Continental Europe.http://www.cato.org/research/articles/vasquez-030509.html

## Related pages

- Alliance for Progress failed Central and South American Marshall Plan.
- GARIOA (Government and Relief in Occupied Areas) The precursor of the Marshall plan aid.
- Morgenthau plan Post-surrender plan for Germany
- The industrial plans for Germany

## References

- Arkes, Hadley. _Bureaucracy, the Marshall Plan, and the National Interest._ Princeton, N.J: Princeton University Press, 1972.
- Agnew, John and J. Nicholas Entrikin, eds. _The Marshall Plan Today: Model and Metaphor._ Routledge. (2004) online version
- John Bledsoe Bonds; _Bipartisan Strategy: Selling the Marshall Plan_ Praeger, 2002 online version
- Bothwell, Robert. _The Big Chill: Canada and the Cold War._ Canadian Institute for International Affairs/Institut Canadien des Affaires Internationales Contemporary Affairs Series, No. 1. Toronto: Irwin Publishing Ltd., 1998.
- Crafts, Nicholas, and Gianni Toniolo, eds. _Economic Growth in Europe Since 1945._ Cambridge University Press, 1996.
- Djelic, Marie-Laure A.; _Exporting the American Model: The Post-War Transformation of European Business._Oxford University Press, 1998 online version
- Chiarella Esposito; _America's Feeble Weapon: Funding the Marshall Plan in France and Italy, 1948 – 1950,_ Greenwood Press, 1994 online version
- Fossedal, Gregory A. _Our Finest Hour: Will Clayton, the Marshall Plan, and the Triumph of Democracy._ Stanford, CA: Hoover Institution Press, 1993.
- Gaddis, John Lewis. _We Now Know: Rethinking Cold War History._ New York: Oxford University Press, 1997.
- Grogin, Robert C. _Natural Enemies: The United States and the Soviet Union in the Cold War, 1917 – 1991._ Lanham, Md.: Lexington Books, 2001.
- Hogan, Michael J. _The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947 – 1952._ Cambridge: Cambridge University Press, 1987.
- Matthias Kipping and Ove Bjarnar; _The Americanisation of European Business: The Marshall Plan and the Transfer of Us Management Models_ Routledge, 1998 online version
- Mee, Charles L. _The Marshall Plan: The Launching of the Pax Americana._ New York: Simon and Schuster, 1984.
- Milward, Alan S. _The Reconstruction of Western Europe, 1945 – 51._ London: Methuen, 1984.
- Schain, Martin, ed. _The Marshall Plan: Fifty Years After._ New York: Palgrave, 2001.
- Stueck, William Whitney, ed. _The Korean War in World History._ Lexington, Ky.: University Press of Kentucky, 2004.
- Rhiannon Vickers; _Manipulating Hegemony: State Power, Labour and the Marshall Plan in Britain_ Palgrave Publishers, 2000 online edition
- Wallich, Henry Christopher. _Mainsprings of the German Revival._ New Haven: Yale University Press, 1955.
- Wasser, Solidelle F. and Michael L. Dolfman; "BLS and the Marshall Plan: The Forgotten Story: The Statistical Technical Assistance of BLS Increased Productive Efficiency and Labor Productivity in Western European Industry after World War II; Technological Literature Surveys and Plan-Organized Plant Visits Supplemented Instruction in Statistical Measurement," _Monthly Labor Review,_ Vol. 128, 2005
- Wend, Henry Burke; _Recovery and Restoration: U.S. Foreign Policy and the Politics of Reconstruction of West Germany's Shipbuilding Industry, 1945 – 1955._ Praeger, 2001 online version

## Further reading

- John Gimbel "_The origins of the Marshall plan_" (Stanford University Press, 1976). (reviewed here)
- Greg Behrman _The Most Noble Adventure: The Marshall Plan and the Time When America Helped Save Europe_ (Free Press, 2007)

## Other websites

- The German Marshall Fund of the United States
- Economist Tyler Cowen questions the conventional wisdom surrounding the Plan
- Truman Presidential Library online collection of original Marshal Plan documents from the year 1946 onwards
- The Marshal Plan documents collection at MCE
- Marshall Plan from the National Archives
- Excerpts from book by Allen W. Dulles
- United States Secretary of State James F. Byrnes famous Stuttgart speech, September 6, 1946 The speech marked the turning point away from the Morgenthau Plan philosophy of economic dismantlement of Germany and towards a policy of economic reconstruction.
- Marshall Plan Commemorative Section: Lessons of the Plan: Looking Forward to the Next Century
- U.S. Economic Policy Towards defeated countries  April, 1946.
- "Pas de Pagaille!" , Time magazine July 28, 1947
- "The Marshall Plan as Tragedy," comment on Michael Cox and Caroline Kennedy-Pipe, "The Tragedy of American Diplomacy? Rethinking the Marshall Plan," both published in the Journal of Cold War Studies, vol. 7, no. 1 (Winter 2005) (text of comment on pdf.pdf) ) (text of original article on pdf.pdf) )
- Luis García Berlanga's critique of the Marshall Plan in a classic Spanish film: Welcome Mr. Marshall!
- Marshall Plan Still Working, 60 Years Later Cincinnati Enquirer December 10, 2006