In the 250 years since the American colonists began the rebellion that led to their political separation from the British Empire, the post-World War II Marshall Plan, the program of large-scale economic assistance to war-shattered Western Europe, has a good claim to being the most successful international initiative that the independent country they created has ever undertaken. It achieved the immediate goal for which its architects launched it. It also set in motion trends that, in the longer term, changed Europe and the world—and changed them, from the American point of view, very much for the better.
In The Marshall Plan: Dawn of the Cold War, Benn Steil, senior fellow and director of international economics at the Council on Foreign Relations, retells the story of this landmark initiative in colorful, compelling fashion. Drawing on extensive research, including in Soviet archives that have become available in the past quarter century, he describes clearly and explains persuasively the Plan’s origins, the difficulties the American government encountered in carrying it out, and the ways they were able to overcome the obstacles they faced.
Named for the American Secretary of State George C. Marshall, who announced it in a speech on June 5, 1947, the European Recovery Program, as it was formally titled, emerged from three unanticipated and generally unwelcome postwar developments. First and foremost was the disappointment of the hopes that President Franklin D. Roosevelt and other officials had entertained that the wartime cooperation with Joseph Stalin’s totalitarian regime in the Soviet Union would continue once the war was won. By 1947 Roosevelt’s successor, Harry S. Truman, and the rest of the American government understood that this was not to be: Soviet goals in Europe were irreconcilably in conflict with American interests and values.
In the emerging Cold War, the fate of Germany, where the four victorious powers of Britain, France, the United States, and the Soviet Union each had a zone of occupation, became a growing problem. Stalin’s aims were clear: to strip the defeated country of its industrial assets, shipping them to the Soviet Union itself, and to contrive postwar political arrangements that would keep the country united under Moscow’s control. The United States initially lacked such clarity but gradually came to the conclusion that Germany would have to remain divided between the communist and the non-communist sectors for the foreseeable future, and that restoring the Western part as a functioning industrial economy (despite the reservations of its neighbors, based on the uses to which the Nazis had put German industry during World War II) would serve the interests of both the United States and of Western Europe. German economic revival was all the more important because, two years after the end of hostilities on the continent, Europe was destitute, its factories smashed and shuttered and its farms barely producing enough food for the farmers themselves, let alone the urban population.
American officials came to believe that without rapid economic recovery Western Europe would be vulnerable to communist subversion, especially in the two countries with large Communist Parties—France and Italy. Taking advantage of the deep and widespread economic distress, Stalin, who was already well on his way to dominating the countries of Eastern Europe that Soviet troops had occupied while pushing the Nazi armies back to Germany, might be able to extend his dominion all the way to the Atlantic. This would present the United States with what it had gone to war against Hitler to prevent: a Europe united under the auspices of a hostile power.
The Truman Administration therefore decided to launch, on an unprecedented scale, a program of economic assistance, in the form of outright grants rather than loans, to put Western Europe back on its feet. Crucially, it decided to include in the program the Western-occupied zones of Germany, which became the German Federal Republic. The United States offered participation in the Marshall Plan to the Soviet-dominated countries of Eastern Europe as well, confident that Stalin would block this, as he did.
Between June 1947 and April 1948, the Truman Administration proceeded to design a plan for economic aid to Europe and to persuade a Congress hostile to spending taxpayers’ money abroad to authorize it. Simultaneously, the Administration persuaded the European governments, who were jealous of their own sovereign prerogatives and skeptical of cooperating with one another to the extent that the Plan required, to accept it on American terms. The United States established an organization to disburse and monitor the Marshall aid, and furnished a total of $14.3 billion ($130 billion in today’s dollars) by the time the program ended in 1952.
With the receipt of the American grants, Western Europe did begin what became a spectacular economic recovery, especially in Germany. Retrospective studies have found, as Steil recounts in the book’s penultimate chapter, that the Marshall Plan does not deserve all of the credit for the continent’s postwar “economic miracle;” but it certainly contributed to it, not least by helping to create the confidence in the prospects for the the continent’s economic future on the part of European entrepreneurs, farmers, and consumers without which productive economic activity would not have taken place. As the countries of Western Europe recovered and flourished, the popularity of the local communist parties and of the Soviet Union declined. The threat that had animated the Marshall Plan receded. The Plan had another salutary political consequence: It drew the Western countries together in common cause, laying the basis for their coordinated opposition to the Soviet Union in security matters, to which the North Atlantic Treaty, signed in 1949—itself the foundation of the Western military coalition, the North Atlantic Treaty Organization (NATO)—gave expression.
The Marshall Plan also triggered two long-term trends that transformed Europe. The American government insisted that the governments of the recipient countries devise plans for economic cooperation in order to qualify for Marshall aid. The spirit and practice of cooperation led France and Germany to merge their coal and steel industries in 1950 to form the European Coal and Steel Community, the direct ancestor of the six-country European Economic Community established by the Treaty of Rome in 1958. The ongoing process of European economic integration had led, by 2018, to the 28-member European Union.
Furthermore, the Marshall Plan, the economic recovery to which it contributed, and the Western European economic integration that followed, helped to determine the ultimate outcome of the Cold War. That global rivalry became, among other things, an economic competition, with each side claiming that its own distinctive method of economic organization could deliver higher economic growth and greater public welfare than that of its adversary. Divided between one state practicing free-market economics and another operating by central planning, Germany offered a clear test of the two systems’ relative merits. Fueled in part by the benefits conferred by the Marshall Plan and European integration, the Western, capitalist German Federal Republic became an economic dynamo, far outpacing the communist-controlled German Democratic Republic to its east. The superior Western economic performance in Germany and elsewhere contributed to the collapse, in the late 1980s and early 1990s, of orthodox communism across Eurasia, from the eastern part of Germany to the Pacific coast of the Soviet Union.
From the perspective of seven decades, the Marshall Plan stands out as the kind of large-scale, important, successful initiative that the government of the United States, now much larger, less agile, and far more polarized than it was then, is no longer capable of carrying out. This steep, unfortunate, and possibly dangerous decline surely has multiple causes.
One of them has to do with personnel. The caliber of the government officials who conceived, designed, sold, and implemented the program was unusually high. Steil supplies brief, vivid portraits of the leading figures: Truman, the machine politician from Kansas City who unexpectedly succeeded Roosevelt in April 1945 and rose to meet the challenges the circumstances of the day presented, and the man Dean Acheson, Secretary of State in his second term, called, in dedicating his memoir to him, “the captain with the mighty heart;” Marshall, an architect of victory in World War II as Chairman of the Joint Chiefs of Staff, the first American general to be awarded a fifth star and a man of extraordinary integrity and dedication to public service; and Acheson himself, a patrician, acerbic, Anglophile lawyer who relished verbal combat with any adversary, whether Soviet, European, or American. The author also depicts figures less well known today but very important at the time, notably Arthur Vandenberg, the Republican Senator from Michigan whose active support for the Marshall Plan gave it an indispensable bipartisan imprimatur in the Congress and the country, and Will Clayton, a Southern cotton broker who, as an official in both the State and Treasury Departments, energetically pressed for an active American economic role in Europe and European economic integration.
Together these Americans and their colleagues bear comparison with the late 18th-century revolutionary generation that founded the United States. The post-World War II generation founded the international order that brought peace, prosperity, and victory over European communism and, in many of its essentials, persists in the second decade of the 21st century.
In partial defense of subsequent generations of policymakers, however, including the current one, it is important to note that in establishing the Marshall Plan, and especially in persuading reluctant and skeptical Americans and Europeans to support and take part in it, the men of the 1940s had an asset that their counterparts in the present day—women as well as men—lack, and fortunately so: a sense of extreme urgency. That sense, in turn, stemmed from the all-too-powerful memory of the war that had just ended. Measured by the number of lives lost and the property destroyed, World War II qualifies as the worst conflict in human history. Those who had survived it were, not surprisingly, willing to go to great lengths, make major sacrifices, and discard long-established ideas and policies in order to prevent another one.
The makers of the Marshall Plan were convinced that the combination of a hostile Soviet Union and an immiserated Europe would, if unaddressed, lead to another great war. They persuaded American and European officials and citizens that this was so and that American economic assistance to Europe was the way to address these problems and thus avoid another catastrophic conflict. In 2018 the American government, whatever it wishes to do, cannot claim that it is responding to a comparable danger.
In the Bertolt Brecht play Life of Galileo, one of Galileo’s students says “Unhappy the land that has no heroes,” to which the great scientist replies, “No, unhappy the land that needs heroes.” Similarly, great emergencies, which is what the senior officials of the American government believed they were facing in Europe in 1947, can produce heroic deeds, and Benn Steil’s account demonstrates that the Marshall Plan qualifies as one. But that is not sufficient reason to wish for such an emergency. Even with all of its problems, the United States is better off without the need for such heroism.