The Marshall Plan: Then and Now

On the morning of June 5, 1947, The New York Times informed its readers that Secretary of State George C. Marshall would be delivering Harvard's Commencement address that afternoon. "He is expected to deliver a speech which perhaps will include an important pronouncement on foreign affairs," the paper reported.

The statement proved correct, though incredibly understated. For the 2185 candidates for Harvard degrees who graduated that day were sent into the world with a message from the country's top diplomat that has had powerful implications on the shape of international relations until the present day. It is appropriate then that the speaker at today's Commencement, which celebrates the 40th anniversary of that pronouncement, be the leader of West Germany--one of the nations most aided by America post-War altruism as embodied in the Marshall Plan.

Sharing the stage in Tercentenary Theatre at the 296th Commencement with such honorands as T. S. Eliot '10 and J. Robert Oppenheimer, the former general unveiled a policy for reconstructing the European nations, devastated by the ravages of World War II. He pledged a commitment of U.S. aid to all European nations in order to combat "hunger, poverty, degeneration and chaos."

The speech provided Europeans with a will to prepare for the future. As German Chancellor Helmut Kohl said in a recent speech, Marshall's words were instrumental in providing Germans with "hope and faith in the future at a time of dire misery."

Scholars of United States international relations hail the plan, and its author, for exhibiting a sense of idealism that was tempered with shrewd diplomacy. They say that the Marshall Plan confirmed that the victorious American government would be committed to pursuing the role of a leader among nations.

But it was not simply an altruistic gesture to help Europe rebuild. Scholars say the plan was a farsighted strategy for building up an American-led European alliance which would be immune to the threat of communist influence.

As Dillon Professor of International Affairs Joseph S. Nye Jr. says, "It was like a poket game in which we had a lot of chips. It was far-sighted to realize that re-distribution of the chips was in our interest."

Thus, while the plan led to the revitalization of Europe and the coming of what has been 40 years of American dominance in world affairs, the Marshall Plan even more than the Truman Doctrine is responsible for confirming the divisions in Europe between East and West which have proven "almost insuperable," foreign policy experts say.

Few in the Commencement Day audience anticipated that such important consequences would flow from the 15-minute address. The speech was well-received by the soon-to-be Harvard graduates, receiving a particularly loud ovation following Marshall's vow to withhold economic assistance from any "governments, political parties or groups which seek to perpetuate human misery in order to profit therefrom politically or otherwise."

While Marshall's plea was the Times' lead story and warranted favorable same-day editorial comment, for the most part the full implications of what has come to be known as the Marshall Plan went unnoticed. In the words of one scholar of the era, it was "a singularly undramatic speech."

Stimson Professor of Law Emeritus Milton Katz '27, who headed the administration of the Marshall Plan's European offices for a period of time, was present for the Commencement address. "I sat there under the sunshine and, I'm ashamed to say. I thought it was very interesting but I was not struck by the overwhelming importance of it," he says.

But Katz soon found himself in the thick of administering a program for rejuvenating Europe that he terms "a high moment in the conduct of American foreign policy."

The speech provided only the rough outline for the program which was to pump into 16 European nations what would be the equivalent today of $60 billion current. The money revived their economies and created an allied Western front which has stood with relative stability for the last four decades.

A corps of young economists--inspired by the theories of John Maynard Keynes--civil servants and diplomats jumped at the opportunity to work for the Europeans from central offices in Paris and Washington. The excitement over the implementation of the plan reflected the nation's belief at the time "that intelligent action can be immensely helpful and not just muck things up," says Professor of History Charles S. Maier, who is currently working on a history of the era.

"In the late 1940's you had just won the war, licked unemployment, and there was no reason to believe that Europe couldn't do the same if it would just pull its socks up," Maier says.

Dean Rusk, who helped with the administration of the policy and later served as President Lyndon B. Johnson's Secretary of State, remembers the experience as "a great adventure."

In many ways the Marshall Plan was the product of perceived lessons from America's lack of involvement in the period leading up to the rise of Nazi Germany and the reasons for that rise.

Following the defeat of Germany in World War I, the United States retreated into an isolationist stance, extracting itself from the international scene. While some believed that Hitler had arisen from the ashes of a German nation treated too harshly by its conquerors nearly three decades before, others believed the relatively lenient enforcement of aspects of the Treaty of Versailles had permitted Germany to again pursue imperialistic aims.

"Germany coming out of World War I had 85 percent of the land it went into the war with, and its industrial base was intact," says Associate Professor of History Bradford A. Lee. "Germany was demilitarized to a certain degree, but the restrictions were not kept right by Britain and America who ??tired of imposing them."

Pastoralizing Germany

With these events in mind, Henry Morgenthau Jr., the Secretary of the Treasury under President Franklin D. Roosevelt '04, proposed a plan which, in the words of one historian, would "pastoralize" Germany.

The Morgenthau plan "enjoyed a very brief ascendancy," says Maier. "Morgenthau had a privileged access to Roosevelt. When people saw that the war was going to end quickly, Roosevelt briefly entertained the idea."

But as American victory become imminent, the Morgenthau plan to de-industrialize Germany was increasingly at odds with dominant opinion. By 1945 the plan "was only being taken seriously by Morgenthau himself," Lee says.

The Marshall Plan provided the first coherent articulation of what America's role would be, calling on the Europeans themselves to formulate an integrated strategy for recovery. The United States would then provide the necessary resources to meet the European needs.

"It would be neither fitting not efficacious for this government to undertake to draw up unilaterally a program designed to place Europe on its feet economically," Marshall said in his Commencement address. "This is the business of the Europeans."

The strategy of requiring the Europeans to work together to formulate their requests was a particularly shrewd element of the plan, for it forged a strong American-led alliance in Europe that presented a formidable obstacle to possible Soviet encroachment, scholars of the era say.

"The Marshall Plan was the basis for the alliance of Western democracies that has affected the balance of power until now," says Nye.

While the aid was offered to all European nations--including Soviet bloc countries--it was contingent upon each country committing itself to working with each other country, virtually precluding participation by countries under Stalin's control, according to the scholars.

The contingency forced the Soviet nations to in effect either agree to join hands with the U.S. or to commit themselves to go it alone, accelerating an antagonistic course which was already taking shape, historians say.

When the communist bloc turned its back on the plan, the division between East and West--and most notably between East and West Germany--which has persisted to this day was firmly entrenched.

"Whether for better or worse, it was a big step towards the division of Europe," Mater says.

The Marshall Plan was crucial in bringing about "the division of Germany which so far has been a good thing for everyone, except perhaps the Germans," Lee says.

Lee adds that by requiring all the nations to agree to work together in order to get U.S. aid, the Marshall Plan effectively pulled in the French government which had been the most aggressively anti-German of the victorious European nations.

"It was a subtle sort of way of buying the French off by ensuring that German recovery would take place in an integrated European context," Lee says. Historians point to such crafty maneuvering as being exemplary of the genius of the policy.

Of course, the Soviets theoretically could have embraced Marshall's program of aid, a decision which would have changed dramatically the course of current super power relations.

"If the Russians had said `yes,' one might have had a less profound division in Europe. But then, if Stahn had wings he could have been an airplane," says Mater.

But Mater cautions that it would be wrong to view the plan as as a reactionary one, saying that its real audience was the center-left of Europe.

The Marshall Plan today is commonly referred to whenever talk surfaces of lending U.S. aid to support a foreign economy. However, most scholars and former statesmen agree with Dillon Professor of the Civilization of France Stanley Hoffmann, who says that while the Plan was "one of the best initiatives of the U.S.," it does not have "a hell of a lot of relevance for today."

Scholars say that post-war Europe was a special case, far different from Third World regions which are the commonly targeted areas for modern versions of Marshall's vision. To Hoffman the plan was aimed at rebuilding the West, "not laying the ground work for social and economic justice" in Third World nations.

The Marshall Plan worked because it provided much-needed dollars to European nations, which had a history of industrial development, and strong institutional tradition, Lee says.

Mater notes that the notion of applying a Marshall Plan in a Third World context would be misguided. "Development aid is different from the Marshall Plan was because you don't have the infra-structure [already in place]. You can't go into Sierra Leone or Bangladesh and do that," he says.

The foreign policy experts also say that the tremendous financial undertaking would never materialize in the present era. "In the immediate post-war period we were able to come forward with a major effort and spend 3 percent of our Gross National Product for the Marshall Plan. Today we can't get one half of one percent for such purposes," says Rusk.

Still, if the Marshall Plan was firmly rooted in the conditions of its time, many foreign policy experts and diplomatic historians say that today's leaders would do well to take instruction from the spirit guiding Marshall's goals.

As Hoffmann says, today the Soviets "are the ones taking the initiative."