Review: When ‘The Marshall Plan’ Helped Plot a New Course for the West

Wall Street Journal [JB personal note: my father worked for "le plan Marshall" in France and knew "Chip" Bohlen quite well.]

Economic aid did not cause a Keynesian miracle but was a diplomatic master stroke, convincing wavering nations to reject the Soviets at the dawn of the Cold War.

By  Paul Kennedy Feb. 9, 2018 4:38 p.m. ET

‘Our policy is directed not against any country or doctrine, but against hunger, poverty, desperation and chaos.” It is difficult to think of any words delivered at any university commencement that had more historical weight than those spoken in the final minutes of George C. Marshall’s speech at Harvard on June 5, 1947.

The venue was carefully chosen as a dignified but noncontroversial place. The speaker was one of the greatest secretaries of state this country ever produced. The words had been crafted and recrafted by some of the most brilliant minds at the State Department and on its Policy Planning Staff. But while key sentences took the high moral ground, there was an urgent political purpose to this declaration by Marshall. He addressed the pressing issue of how to prevent European nations from collapsing into economic ruin and despair, and in some cases suffering a Communist takeover.

Marshall’s speech announced a great act of American statecraft, and marked a significant step away from the prewar, Rooseveltian era of noncommitment in European matters. In this dramatic move, the Truman administration—glumly recognizing it was the only Western country with any money after World War II, shocked by the reports of near-starvation across Europe and desperate to shore up friendly governments—stepped up to the plate.

With an equally frightened American Congress behind it, the government offered huge sums of money to any democratic country in Europe able to come up with a plausible recovery scheme. These countries—and this was a deliberate gesture—could be on either side of the zonal division of Europe established at Yalta; all that was needed was a willingness to produce a rebuilding plan and join in the common effort. America’s aid package was unprecedented in size, threatened no one and therefore ought to have been opposed by no one. Who on earth would want to stop this act of extraordinary generosity? Who could be against the Marshall Plan?

That is, of course, a rhetorical question, because one person would definitely want to stop the scheme: the powerful and increasingly paranoid Joseph Stalin. He feared America’s economic power, was scared stiff of Germans (still) and any future unified Germany, and in fact by this time saw demons everywhere. As Benn Steil details in his brilliant book “The Marshall Plan,” the Soviets had shown ever-greater intransigence throughout 1946 and 1947 in regard to all proposals for the economic rebuilding of Europe and the political reconstitution of the defeated Germany. The exceptions, to be sure, were schemes of theirs that calculated to have all Germany fall into the Eastern orbit.

Setting the ship aright: The winning poster in a 1948 contest to promote the Marshall Plan.PHOTO: LIBRARY OF CONGRESS/CORBIS/VCG VIA GETTY IMAGES

THE MARSHALL PLAN

By Benn Steil
Simon & Schuster, 608 pages, $35

The best and fastest way to counter these Russian ploys, American officials like George Kennan and Charles Bohlen contended, was to deploy economic weapons to a grand-strategical end. Washington now would deftly secure its larger purpose by approaching willing European governments—the British and the French in the lead, but, really, all the rest, all in a position to say “yes”—and inviting them to come up with recovery plans the United States would pay for. Faltering European democracies would be given a great psychological boost, and the generosity of America would be seen in contrast to the Soviet plundering of its zone. Moreover, Mr. Steil tells us, this flow of Marshall Plan aid to Europe would give a nice Keynesian boost not only to Europe but to U.S. firms who sent goods abroad.

Best of all, rather than being a test of East-West military strength, this offer played to America’s superior economic competitiveness. Moscow could either acquiesce to the plan, and see the consequent European recovery anchored into a Washington-centered capitalist order; or it could angrily reject the offer, isolating itself and its reluctant satellites. As we all know, it chose the latter course.

Putting the Marshall Plan into action was anything but simple. The all-important Sen. Arthur Vandenberg had been weaned from his earlier isolationism and helped sell the scheme, but even the Michigan Republican and his political allies could only achieve so much. Until Truman’s surprise re-election in 1948 (and the Democrats’ sweeping victory in both houses of Congress), uncertainty prevailed on the American side. On the European side, there were also great political contests in countries where the Left was strong. Slowly, surely, European voters and governments joined the plan and outlined their requests—all, alas, except those states under the grim control of the Red Army. The more Western states recovered, the more a clumsy Moscow tried further intimidations, like blocking the Berlin access routes, and the more the West united. (Gen. Lucius Clay’s bold effort to airlift food to isolated Allied Berlin was, in Mr. Steil’s telling, also a public-relations coup.) The formation of NATO in 1949 was just around the corner, as the author shows in his closing chapters; the book’s subtitle is, appropriately, “Dawn of the Cold War.”

The story of the Marshall Plan has been recounted many times before, including by those who were its architects and thus, like Dean Acheson, “Present at the Creation.” But Mr. Steil’s is by far the best study yet, because it is so wise and so balanced in its judgments, including, for example, its candid discussion on how much the plan truly boosted the economies of the many recipients (aid amounted to 2.6% of recipient output, he conservatively estimates, and responsible for increased investment accounting for about 0.5% growth [JB note: is a parenthesis missing here?]. Though it was not a miracle, it certainly helped, acting as a “pump primer” to get the local economies going again.

While Mr. Steil’s is an America-centric story, the author has drawn upon research assistants and translators to reach into many archives other than the usual U.S. and British ones: French, German and (for the first time) valuable Soviet sources are used here. The book has an invaluable “Cast of Characters,” a daunting bibliography and a huge 74 pages of notes. It’s quite a tribute it all reads so well.

The maturity and surety of Mr. Steil’s book is nowhere more in evidence than in his final chapter, entitled “Echoes.” The echoes he writes about are the innumerable references to the Marshall Plan that were made in 1989, at the time of the fall of the Berlin Wall, and during the disintegration of the Soviet Union two years later. These lessons were, again, advertised in Secretary of State Madeleine Albright’s speech at Harvard in June 1997, commemorating the 50th anniversary of George Marshall’s address.

The memory of the Marshall Plan is part and parcel of the current debates about how the West ought to handle an insecure and touchy Moscow while giving reassurance to Russia’s weak and worried neighbors. If the author was ever tempted to make slashing, critical comparisons between now and then—between Truman and the “wise men” who surrounded him on the one hand and President Trump and his counsellors on the other, between the enterprising Allied governments of the time and their fumbling European successors nowadays—he resisted it well. There is no sign here either, of Western triumphalism. If anything, the author suggests, the time has come for us to figure out how to bring a post-Cold War Russia into a more harmonious relationship.

Precisely because Mr. Steil is not polemical, it is easier to agree with his measured final conclusions. The Marshall Plan worked because a brilliant group of Americans saw how some specific economic measures could be implemented, practically and fairly swiftly. But the boldness of the gesture stirred men’s minds. An extraordinary alliance between the presidential administration and the American Congress sold the public on the plan. And abroad—well, the Plan was especially fitted to the European circumstances of the time (which is why, Mr. Steil notes, something like it was always highly unlikely to be successful in Iraq or Afghanistan, where the soil for its implantation is lacking.) Finally, the Marshall Plan worked because it married practicality to a grand strategic vision. “Great acts of statesmanship,” Mr. Steil concludes, “are grounded in realism no less than idealism. It is a lesson we need to relearn.”

—Mr. Kennedy, a professor at Yale, is the author of “The Rise and Fall of the Great Powers” and other works.