• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

The Marshall Plan rested squarely on an American belief that European economic recovery was essential to the long term interests of the United States.

Extracts from this document...

Introduction

The Marshall Plan rested squarely on an American belief that European economic recovery was essential to the long term interests of the United States. These interests were interdependent and symbiotic in their benefits of which included economic interests. American leaders envisioned an open international economy founded on the principles of liberal capitalism, such as free trade and equal opportunity. But they also linked these principles with democratic forms of government, associated autarkic economic policies with totalitarian political regimes, and assumed that 'enemies in the market place' could not be 'friends at the council table.' 'The political line up followed the economic line up,' as Cordell Hull once put it. 1 American interests dictated an active role in rebuilding Europe, but listing these interests explains neither the full range of American goals or how American policy makers hoped to achieve them. American ambition included economic, political, and strategic interests. The Marshall Planners would replace the old European state system with what they saw as a more practical framework for achieving their policy objectives on the European continent. They would do so by applying the American principle of federalism and using it to create an integrated European economy similar to the one that existed in the United States.2 The strategic assumptions behind this policy held that an integrated economic order, particularly one headed by supranational institutions, would help to control German nationalism, reconcile Germany's recovery with ...read more.

Middle

Commonwealth into a large multilateral market where British exporters had privileged advantages and where payments were made in sterling rather than in dollars. It meant slowing down recovery at home, aggravating the Treasury's already serious dollar drain, and increasing Britain's dependence on American aid. These conclusions, coming from the economic ministries and the Colonial Office, were reaffirmed in a report issued in August by the special committee of experts that Bevin had persuaded the Cabinet to establish the previous January. The Foreign Office would seek to reverse these judgments in the weeks ahead. But given the current opposition, neither Bevin nor the British delegation in Paris could do much to support the French proposal.7 The British economy deteriorated in the second half of 1947. The world wide scarcity of dollars, the fuel and grain shortages that followed the winter crisis, and the rising cost of imports from the United States combined to slow the pace of British recovery and confront the British Treasury with a major dollar crisis. So did the Treasury's decision in July to abide by the terms of the 1946 Anglo-American loan agreement and make sterling convertible into dollars. By early August, Britain's dollar reserves were dwindling at the rate of $176 million a week, a clip that would exhaust the balance of the American loan by October and force the Treasury to draw down its final reserves. ...read more.

Conclusion

but also into a multilateral pattern of international trade.12 There were two of the three conditions attached to the British proposal, the third being an American decision to waive Article 9 of the Anglo-American loan agreement. Article 9 permitted the British to discriminate against American imports only in cases where discrimination benefited 'war-shattered' economies. If left standing, it would force the British to exclude the sterling Dominions from the advantages of the trade-liberalization proposal. The British would have to discriminate in favor of the OEEC countries against the Dominion (as well as against the United States), and this action would disrupt the sterling bloc. Once again, Britain's interests in Europe had to be reconciled with it is commitments to the sterling area.13 The Marshall Plan was a success if judged simply as a program to control inflation, revive trade, and restore production. However, there is little doubt that the Marshall Plan helped to modernize budgetary systems in Western Europe or that it encouraged the spread of indicative economic planning, the rationalization of production, the development of corporative patterns of public-private power sharing, and the conviction that economic growth was the way to improve social divisions. These had been American goals from the start. They were parts of the New Deal synthesis and were pursued with particular vigor through the technical-assistance program, the productivity teams, and the national production centers that Marshall Aid helped to establish. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level UK, European & Global Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level UK, European & Global Economics essays

  1. Peer reviewed

    Discuss how the government might improve the UK's long term economic growth

    4 star(s)

    The government could also look at policies to increase capital growth. This government has been pursuing an economy with low interest rate and low inflation.

  2. A study of Patent system in India in the light of Patent Cooperation Treaty.

    The PCT procedure is different from other system and the officials are keeping on conducting the awareness seminars, so that everyone becomes familiar with the procedure. There are lots of formalities and doubt has been existed, which are as follows; * the period for making the decisions relating to file

  1. International entrepreneurship in Europe

    The author considered the key to the environment, however, are economic structures, in particular other firms. Nation-states are also important as repositories of business practices. Whilst the focus in this book has been on the more tangible aspects of the environment, it has been made clear that local, national and corporate culture are also important determinants of business behavior.

  2. 'Anarchy is what states make of it' (A Wendt) Do you agree?

    In a truly international world with a global market, these threats can often cause states to back down as they can be potentially very damaging for states. International organizations like the E.U which help and benefit its members through aid, trade and development agreements, can force states to comply with

  1. Why has GDP growth been so slow in Somalia?

    Country Brief. Available: http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/SOMALIAEXTN/0,,menuPK:367675~pagePK:14113 11 Mat´┐Żas Vernengo. (2007). Dependency Theory. Available: http://www.econ.utah.edu/~vernengo/papers/princeton.pdf 12Vincent Ferraro. (1996). Dependency Theory: An Introduction. Available: http://www.mtholyoke.edu/acad/intrel/depend.htm 13 Jeff Haynes (1996). Third World Politics: A concise introduction. Blackwell Publishing. 14 Giles Bolton (2007). Poor Story.

  2. Where does the World Trade Organisation fit in the overall scheme of international public ...

    trademarks and copyrights to be applied across the WTO membership, regardless of differences in levels of development. It differs fundamentally from classic GATT-type market access rules, for its short-term effect is to close, not open, markets: strong patent protection in particular increases prices and transfers rents from poorer developing countries

  1. Free essay

    Globalisation and changing career patterns

    This is in stark contrast to previous generations. This new breed of employees are 20-somethings and are referred to as Millennials (Oblinger 2005). Born after 1982, this group will outnumber Generation X and according to sociologists, will have the same impact on our culture as their Boomer forebears.

  2. Hong Kong inaugurated Sir Henry Pottinger as its first governor in August 1841

    Deeply concerned about the opium menace, he maneuverd himself into being appointed Imperial Commissioner at Canton. His express purpose was to cut off the opium trade at its source by rooting out corrupt officials and cracking down on British trade in the drug.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work