Europe and the devastation of World War II
WWII had left Europe in a worse state of shock and disorder than WWI. The physical destruction was incomparably greater. In WWI trench warfare had thoroughly destroyed limited regions, where as in WWII, bombing had reduced whole cities, especially in Germany, to rubble (Cowie 1993). The so-called strategic bombing had made the productive and logistical centres of the Continent almost non-existent. This meant that goods, even if produced, could not be transported and sold. The war had ruined one of the world’s chief industrial areas and brought its system of industry to the brink of collapse. The dense European population could no longer support itself. The war had essentially destroyed what had taken centuries to create. Town was now cut off from country and people dispersed to live with family members in the country (Donovan 1987). Europe, a world metropolis, a huge continental city, was cut off from the trading areas with which it had exchanged. It had survived on a large and uninterrupted flow of imports, for which now it could no longer afford (Cowie 1993).
The European People
Europe also possessed a politically awakened population. Europeans would not starve or suffer in mute resignation. The European economy, at the very time when it was weakest had to carry out, as promised, the extra burden of social services thus maintaining the welfare state (Maier 1991). Europe, however, was not to be written off. Its combined population exceeded that of either of the superpowers, and even in ruins it still possessed significant physical infrastructure along with a technically skilled population (Ibid). One of the chief post-war questions was therefore the rescue of Europe. Or in practical politics: Who Europe’s rescuer was going to be.
The United States and the Soviet Union
In theory two opposite social poles existed for the recovering European people to choose from. The Soviets representing one, maintained that all capital was owned by the state and supplied to workers as needed, and all interchange was planned out in detail by public authorities in advance (Snellgrove 1981). On the other pole, represented by the USA, capital was owned by private persons, who chose the channels of investment and hence the availability of jobs while interchange took place through the fluctuations of the market (Ibid).
Neither system adopted was in practise socially pure, in fact mixed economies became the rule in many countries, but the fundamental differences remained extremely pronounced (Palmer et al 1971). The drawback in the Soviet system was its lack of freedom, whilst in the American system its lack of or perceived lack of economic security. Americans spent a good deal more time trying to correct the lack of security than the Soviets did in trying to correct the lack of freedom (Ibid).
Many Europeans recalled The Great Depression of 1929, which was caused impart by the cessation of loans from the USA (Milward 1984). Therefore, significant resistance existed to what was viewed as a renewed dependency on American capitalism. Europe like the world’s other great aggregates wanted to preserve its identity and its spiritual independence (Wexler 1983). Between the programs of the two superpowers there was this difference: the Soviets had more to gain by chaos in Europe, and the USA had more to gain by its rebuilding.
The USA in the form of the Marshall Plan sent billions of dollars to relieve the distress of Europe whilst satisfying their humanitarian impulse. They also created markets for their own industries at the American tax payer’s expense and reduced the drift of working class Europeans into the communist camp (Palmer et al 1971). Early in 1948 communists seized power in Prague, ending a democratic coalition government and turning Czechoslovakia completely into a satellite state (Ibid). The Soviets forbade their satellites to participate in the American-sponsored economic reconstruction program, further isolating Eastern Europe (Snellgrove 1981).
The Marshall Plan’s achievements
The main result of the Marshall plan was the industrial revival of Western Europe. It also started the movement towards European economic cooperation, whilst exceeding the boldest anticipations of its sponsors (Wexler 1983). The trend after the WWI toward high tariff and economic rigidity, with the USA leading the way, had culminated in the Great Depression and with it had come a further intensification of economic nationalism (Hogan 1987). With the Marshall plan the trend was reversed. There was now a freer movement of world trade and an almost complete liberalisation of trade between the participating Western European countries. A European ‘payment union’ provided a channel for the conversion of currencies. Industrial production rose dramatically and by 1950 within two years of the inauguration of the plan industrial production in West Germany reached and exceeded pre-war levels and continued upward, by the early 1950s the boom spread to France and Italy and though to a lesser extent to Britain. Western Europeans began to enjoy remarkable prosperity. The economies were growing at unprecedented rates whilst living standards and consumption levels also rose strikingly (Donovan 1987).
The Marshall plan was in a sense revolutionary, it had proposed nothing less than that a wealthy country like the United States should use its economic resources to revive its competitors, it was an act of creative generosity and shrewd statesmanship, a recognition of the mutual interdependence of all members of the world wide economy (Cowie 1993).
Critique
Early students of the Marshall Plan saw it as an unmitigated success of American generosity. However, criticism of the Marshall plan became prominent among historians of the revisionist school during the 1960s and 1970s. They argued that the plan was American economic imperialism and that it was an attempt to gain control over Western Europe, just as the Soviets controlled Eastern Europe (Wexler 1983). Some historians also argue that the Marshall Plan might not have played as a decisive role in Europe’s recovery as originally thought (Ibid). Milward points out that growth in many European countries had already begun to revive before the large-scale arrival of American aid. He also points out that in some cases recovery was fastest among some of the lesser recipients (Milward 1984). While The Marshall Plan eased immediate difficulties and contributed to the recovery of some key sectors, growth from the post-war nadir was largely an independent process (Ibid). European socialist also put forward the argument that a similar amount of reconstruction could have been obtained by nationalising the holdings of wealthy Europeans who deposited their money in American banks during WWII, however, it is absurd to think that such moneys could have ever of be obtained by the Communist governments of the day.
Today the general consensus is that America was acting in its own self interests by aiding Western Europe, however, most believe the plan had an immensely beneficial effect on both Western Europe and the United States and without its implementation the world would be a very different place.
References
Cowie, H.R., The Modern State, Nationalism and Internationalism. Legacies Volume 1: 1993.
Donovan, R.J., The second victory: the Marshall Plan and the postwar revival of Europe. Madison Books, 1987.
Hoffmann, S & Maier, C. The Marshall Plan: a retrospective. Westview Press, 1984.
Hogan, M.J., The Marshall Plan: America, Britain, and the reconstruction of Western
Europe, 1947-1952. Cambridge University Press, 1987.
Kindleberger, C. P., Marshall Plan days. Boston: Allen & Unwin, 1987
Maier, C., The Marshall Plan and Germany: West German development within the framework of the European Recovery Program. Martin's Press, 1991.
Milward, A. S., The Reconstruction of Western Europe, 1945-1951 London 1984
Palmer, R.R & Colton, J. A History of the Modern World. Random House, 1971
Snellgrove, L.E. The Modern World since 1870. Longman Group Ltd, 1981
Wexler, I., The Marshall Plan revisited: the European recovery program in economic
Perspective. Greenwood Press, 1983.
