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

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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.


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.


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.

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