The marshall plan today model and metaphor

   
Model and Metaphor


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THE MARSHALL PLAN TODAY
Model and Metaphor

Editors

JOHN AGNEW
J. NICHOLAS ENTRIKIN
University of California, Los Angeles


First published in 2004 in Great Britain by
Routledge
11 New Fetter Lane
London EC4P 4EE
and in the USA and Canada by
Routledge
29 West 35th Street
New York, NY 1001
Copyright in collection © 2004 Routledge
Copyright in chapters © 2004 individual contributors
Routledge is an imprint of the Taylor & Francis Group
This edition published in the Taylor & Francis e-Library, 2004.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from
The British Library
ISBN 0-203-50307-4 Master e-book ISBN

ISBN 0-203-58233-0 (Adobe eReader Format)
ISBN 0 7146-5514-7 (cloth)
ISSN 1466-7940
Library of Congress Cataloging-in-Publication Data
A catalog record for this book is available
from the Library of Congress

All rights reserved. No part of this publication may be reproduced, stored in or
introduced into a retrieval system or transmitted in any form or by any means,
electronic, mechanical, photocopying, recording or otherwise, without the prior
written permission of the publisher of this book.


Contents
List of illustrations
Contributors
Foreword: The Marshall Plan Speech
Preface
List of Abbreviations
Introduction: The Marshall Plan as Model and Metaphor
John Agnew and J. Nicholas Entrikin

vii
ix
xiii
xvii
xix
1

Part I: European Recovery
1 Post-World War II western European Exceptionalism: The
Economic Dimension
J. Bradford DeLong

25

2 Europe and the Marshall Plan: 50 Years On

Alan S. Milward

58

3 The Economic Effects of the Marshall Plan Revisited
Dafne C. Reymen

82

4 The Marshall Plan and European Integration: Limits of an
Ambition
Gérard Bossuat

127

Part II: Markets and National Policy
5 As the Twig is Bent: The Marshall Plan in Europe’s
Industrial Structure
Raymond Vernon

155

6 Confronting the Marshall Plan: US Business and European
Recovery
Jacqueline McGlade

171

7 The Marshall Plan: Searching for ‘Creative Peace’ Then
and Now

Paul Bernd Spahn

191


   

vi

Part III: International Cooperation and Globalization
8 The Marshall Plan and European Unification: Impulses and
Restraints
Wilfried Loth
9 The Marshall Plan: a Model for What?
Thomas C. Schelling

217
234

10 From Marshall Plan to Washington Consensus? Globalization,
Democratization, and ‘National’ Economic Planning
241
Stuart Corbridge
Index

270


Illustrations
The following plates appear between pp. 140 and 141.

Plates
1 ‘All Our Colours to the Mast’
2 ‘Western Europe’s Recovery’
3 President Harry Truman signs the Foreign Assistance Act of 1948,
setting into motion the ‘Marshall Plan’ for European Recovery
4 The central figures of the Marshall Plan were (left to right)
President Harry Truman, Secretary of State George
Marshall, Will Clayton and Paul Hoffman
5 ‘Without the Marshall Plan Your Bread Would Be Bare . . .’
6 ‘England: Something for Everybody’
7 Miner’s Homes in Holland
8 ‘The American Bludgeon’ was Russia’s interpretation of America
intruding on the sovereignty of west European economies
9 ‘Can He Block It?’
Figures
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
3.1
3.2
7.1
10.1

Germany: GDP per capita, 1870–1994
France: GDP per capita, 1870–1994
Italy: GDP per capita, 1870–1994
Britain: GDP per capita, 1870–1994
GDP per capita since 1900
Exports plus imports divided by national product
Real investment as a share of GDP
US transfers abroad as a share of GDP
German unemployment, 1949–70
Western European inflation, 1950–96
Days lost to strikes
Allotments and aid received per country
Contribution by Marshal Plan in GNP growth
European Recovery Program recipients
Diagram of the world system during (A) and after (B) the
Cold War

27
28
29
30
35
40
44
46
47
47
49
113

115
197
261


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Tables
1.1 Effect of international trade on Western European
post-WWII development
2.1 Net ERP aid received, after trading settlements made with
‘conditional’ aid
2.2 Net total ERP aid received, after trading settlements made
with ‘conditional’ aid and drawing rights
2.3 Additional output growth attributable to the Marshall Plan,
allowing for interaction effects
3.1 Comparison between aid requiring counterpart deposits
and allotments
3.2 Aid requiring counterpart deposits and loans compared to
allotments
3.3 Deposits in counterpart funds and loans compared to
allotments
3.4 Regression equations used for the simulations
3.5a Contribution to growth by the Marshall Plan through the
three traditional channels
3.5b Contribution to growth by the Marshall Plan allowing all
channels to operate
3.6 Impact of aid on investment, current account and

government spending
3.7 Growth equations (1948–1955)
5.1 Foreign manufacturing subsidiaries established by
multinational enterprises in selected areas
5.2 Number of mergers, acquisitions, and joint ventures in
manufacturing industries, 1982/83 to 1992/93
7.1 Funds made available to ECA for European economic
recovery
7.2 European recovery program recipients

41
61
61
63
116
117
118
119
119
120
120
121
161
165
193
196


Contributors
John Agnew is Professor of Geography at UCLA. He served as the

Associate Director of the UCLA Center for European and Russian
Studies. He is author of numerous books and articles on geopolitics
including Political Geography (Arnold), The United States and the World
Economy (Cambridge), and Mastering Space (Routledge) with Stuart
Corbridge.
Gérard Bossuat holds the Jean Monnet Chair of Contemporary History
at the University of Cergy-Pontoise (France). He also chairs the
Department of History and directs a Master ‘Manager of Europe’
project. Professor Bossuat is a member of the Liaison Group of the
Historians within the European Community and of the administrative
staff of the Jean Monnet Foundation in Lausanne, and of the Institut
Pierre Mendes in Paris. He is on the editorial boards of Matériaux pour
l’Histoire de notre temps, Recherche socialiste, and Journal of European
Intégration History. Professor Bossuat’s recent books are Les aides
américaines économiques et militaires à la France, 1938–1960 (Paris),
Comité pour l’histoire économique et financière de la France (2001); Les
fondateurs de l’Europe unie (Paris, 2001); and (with Georges Saunier)
Inventer l’Europe, histoire nouvelle des groupes d’influence et des acteurs
de l’unité européenne, actes du colloque de Cergy-Pontoise des 8–10
November 2001, PIE Peter Lang, 2003.
Stuart Corbridge is Professor of Geography at the London School of
Economics and at the University of Miami. He works mainly on India and
is the author of Reinventing India: Liberalization, Hindu Nationalism and
Popular Democracy (Polity, 2000, with John Harriss). His next book, with
Glyn Williams, Manoj Srivastava and Rene Veron, will be published by
Cambridge University Press in 2004 under the title Seeing the State: How
the Rural Poor Experience Governance and Democracy in India. Besides
India, his main interests are in development studies and international
political economy.
J. Bradford DeLong is Professor of Economics at the University of

California, Berkeley, Co-Editor of the Journal of Economic Perspectives,
and a Research Associate of the National Bureau of Economic


x

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Research. He served in the Clinton Administration as Deputy Assistant
Secretary of the Treasury for Economic Policy. He has written on the
evolution and functioning of markets, the course and determinants of
long-term economic growth, and the making of economic policy. Recent
publications include, ‘The Marshall Plan: History’s Most Successful
Structural Adjustment Programme’, with B. Eichengreen (in R.
Dornbusch et al. (eds), Postwar Economic Reconstruction and Lessons
from the East), ‘Keynesianism Pennsylvania-Avenue Style’, Journal of
Economic Perspectives.
J. Nicholas Entrikin is Professor of Geography at UCLA and former
Associate Director of the UCLA Center for European and Russian
Studies. His writings include works on place and political community in
western Europe and North America as represented in The Betweenness
of Place: Towards and Geography of Modernity (Johns Hopkins), ‘Lieu,
Culture et Démocratie’, Cahier de Géographie du Québec, ‘Political
Community, Identity, and Cosmopolitan Place’, International Sociology,
and ‘Democratic Place-Making and Multiculturalism’, Geografiska
Annaler.
Wilfried Loth is Professor of Modern European History at the
Universität in Essen, Germany. A specialist on the history of the Cold
War, Professor Loth has had several of his books translated and published in English, including The Division of the World: 1941–1955
(Routledge), Stalin’s Unwanted Child: The Soviet Union, the German

Question and the Founding of the GDR (Macmillan) and Overcoming the
Cold War: A History of Détente, 1950–1991 (Routledge).
Jacqueline McGlade is Associate Dean for Graduate and Academic
Affairs and Associate Professor of History, University of Northern
Iowa. She has published several articles on American aid and post-1945
western Europe including ‘From Business Programme to Production
Drive: The Transformation of US Technical Assistance to Western
Europe’, in Marshall Aid and European Industry (Routledge), NATO
Procurement and the Revival of European Defense, 1950–60 (Palgrave)
and ‘The Big Push: The Export of American Business Education to
Western Europe after World War II’, in Missionaries and Managers:
United States Technical Assistance and European Management
Education, 1945–60 (Manchester).
Alan S. Milward is Senior Research Fellow at St John’s College, Oxford
and Official Historian to the United Kingdom Government. He is




xi

affiliated with The European University Institute and the University of
North London. Professor Milward is the author of numerous books and
journal articles on modern European economic history, including The
Reconstruction of Western Europe: 1945–51 (Methuen) and The Frontier
of National Sovereignty: History and Theory, 1945–92 (Methuen).
Dafne C. Reymen has a Ph.D. in Economics from Stanford University. She is currently working for the ECORYS group, conducting policy
preparatory research, and is Visiting Professor at EHSAL (Brussels,
Belgium).
Thomas C. Schelling is the Lucius Littauer Professor of Political

Economy (Emeritus) at Harvard University and the Distinguished
University Professor of Economics and Public Affairs at the University
of Maryland. He has served in the United States Bureau of the Budget,
the Economic Cooperation Administration in Europe and in the White
House Office of the Director of Mutual Security. Professor Schelling is
a member of both the National Academy of Sciences and the American
Academy of Arts and Sciences. His books include Choice and Consequence (Harvard University Press), Arms and Influence (Yale), and The
Strategy of Conflict (Harvard University Press).
Paul Bernd Spahn is Professor of Public Finance at the Johann Wolfgang
Goethe University in Frankfurt, Germany. He has served as an economic consultant for the International Monetary Fund, the World
Bank, the Commission of the European Union, and numerous governments all over the world. His research interests include public finance,
especially tax policy and coordination, fiscal decentralization, international economics, and economic integration.
Raymond Vernon was the Clarence Dillon Professor of International
Affairs and the Herbert Johnson Professor of International Business
Management at Harvard University. Before joining the faculty at
Harvard he spent a long career in the Securities and Exchange
Commission and the Department of State dealing with issues of postwar
recovery in Japan and Europe. He was a member of the American
Academy of Arts and Sciences and the author of numerous books on
international finance and development, including, Big Business and
the State Changing Relations in Western Europe (Harvard), Beyond
Globalism: Remaking American Foreign Economic Policy (Free Press)
with D. Spar, In Hurricane’s Eye: The Troubled Prospects of Multinational
Enterprises (Harvard). Professor Vernon passed away in 1999.



Foreword: The Marshall Plan Speech
The following is the speech given by Secretary of State George C. Marshall
in which he outlined a program of economic assistance to war-torn Europe.

It became known as ‘The Marshall Plan Speech’.
June 5, 1947, Harvard University, Cambridge, Massachusetts
Mr President, Dr Conant, members of the Board of Overseers, Ladies
and Gentlemen:
I’m profoundly grateful and touched by the great distinction and honor
and great compliment accorded me by the authorities of Harvard this
morning. I’m overwhelmed, as a matter of fact, and I’m rather fearful of
my inability to maintain such a high rating as you’ve been generous
enough to accord to me. In these historic and lovely surroundings, this
perfect day, and this very wonderful assembly, it is a tremendously
impressive thing to an individual in my position.
But to speak more seriously, I need not tell you that the world situation is very serious. That must be apparent to all intelligent people. I
think one difficulty is that the problem is one of such enormous complexity that the very mass of facts presented to the public by press and
radio make it exceedingly difficult for the man in the street to reach a
clear appraisement of the situation. Furthermore, the people of this
country are distant from the troubled areas of the earth and it is hard for
them to comprehend the plight and consequent reactions of the longsuffering peoples, and the effect of those reactions on their governments
in connection with our efforts to promote peace in the world.
In considering the requirements for the rehabilitation of Europe, the
physical loss of life, the visible destruction of cities, factories, mines, and
railroads was correctly estimated, but it has become obvious during
recent months that this visible destruction was probably less serious than
the dislocation of the entire fabric of the European economy.
For the past ten years conditions have been abnormal. The feverish
preparation for war and the more feverish maintenance of the war effort
engulfed all aspects of national economies. Machinery has fallen into
disrepair or is entirely obsolete. Under the arbitrary and destructive Nazi
rule, virtually every possible enterprise was geared into the German war

xiv

   

machine. Long-standing commercial ties, private institutions, banks,
insurance companies, and shipping companies disappeared through loss
of capital, absorption through nationalization, or by simple destruction.
In many countries, confidence in the local currency has been severely
shaken. The breakdown of the business structure of Europe during the
war was complete. Recovery has been seriously retarded by the fact that
two years after the close of hostilities a peace settlement with Germany
and Austria has not been agreed upon. But even given a more prompt
solution of these difficult problems, the rehabilitation of the economic
structure of Europe quite evidently will require a much longer time and
greater effort than has been foreseen.
There is a phase of this matter which is both interesting and serious.
The farmer has always produced the foodstuffs to exchange with the city
dweller for the other necessities of life. This division of labor is the basis
of modern civilization. At the present time it is threatened with breakdown. The town and city industries are not producing adequate goods
to exchange with the food-producing farmer. Raw materials and fuel are
in short supply. Machinery is lacking or worn out. The farmer or the
peasant cannot find the goods for sale which he desires to purchase. So
the sale of his farm produce for money which he cannot use seems to him
an unprofitable transaction. He, therefore, has withdrawn many fields
from crop cultivation and is using them for grazing. He feeds more grain
to stock and finds for himself and his family an ample supply of food,
however short he may be on clothing and the other ordinary gadgets of
civilization. Meanwhile, people in the cities are short of food and fuel,
and in some places approaching the starvation levels. So the governments are forced to use their foreign money and credits to procure these
necessities abroad. This process exhausts funds which are urgently

needed for reconstruction. Thus a very serious situation is rapidly developing which bodes no good for the world. The modern system of the
division of labor upon which the exchange of products is based is in
danger of breaking down.
The truth of the matter is that Europe’s requirements for the next
three or four years of foreign food and other essential products – principally from America – are so much greater than her present ability to pay
that she must have substantial additional help or face economic, social,
and political deterioration of a very grave character.
The remedy lies in breaking the vicious circle and restoring the
confidence of the European people in the economic future of their own
countries and of Europe as a whole. The manufacturer and the farmer
throughout wide areas must be able and willing to exchange their product
for currencies, the continuing value of which is not open to question.




xv

Aside from the demoralizing effect on the world at large and the possibilities of disturbances arising as a result of the desperation of the people
concerned, the consequences to the economy of the United States should
be apparent to all. It is logical that the United States should do whatever
it is able to do to assist in the return of normal economic health in the
world, without which there can be no political stability and no assured
peace. Our policy is directed not against any country or doctrine but
against hunger, poverty, desperation, and chaos. Its purpose should be the
revival of a working economy in the world so as to permit the emergence
of political and social conditions in which free institutions can exist. Such
assistance, I am convinced, must not be on a piecemeal basis as various
crises develop. Any assistance that this Government may render in the
future should provide a cure rather than a mere palliative. Any government

that is willing to assist in the task of recovery will find full cooperation, I
am sure, on the part of the United States Government. Any government
which maneuvers to block the recovery of other countries cannot expect
help from us. Furthermore, governments, political parties, or groups
which seek to perpetuate human misery in order to profit therefrom politically or otherwise will encounter the opposition of the United States.
It is already evident that, before the United States Government can
proceed much further in its efforts to alleviate the situation and help start
the European world on its way to recovery, there must be some agreement among the countries of Europe as to the requirements of the situation and the part those countries themselves will take in order to
give proper effect to whatever action might be undertaken by this
Government. It would be neither fitting nor efficacious for this
Government to undertake to draw up unilaterally a program designed to
place Europe on its feet economically. This is the business of the
Europeans. The initiative, I think, must come from Europe. The role of
this country should consist of friendly aid in the drafting of a European
program and of later support of such a program so far as it may be practical for us to do so. The program should be a joint one, agreed to by a
number, if not all, European nations.
An essential part of any successful action on the part of the United
States is an understanding on the part of the people of America of the
character of the problem and the remedies to be applied. Political
passion and prejudice should have no part. With foresight, and a willingness on the part of our people to face up to the vast responsibility
which history has clearly placed upon our country the difficulties I have
outlined can and will be overcome.
I am sorry that on each occasion I have said something publicly in
regard to our international situation, I’ve been forced by the necessities


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of the case to enter into rather technical discussions. But to my mind, it
is of vast importance that our people reach some general understanding
of what the complications really are, rather than react from a passion or
a prejudice or an emotion of the moment. As I said more formally a
moment ago, we are remote from the scene of these troubles. It is virtually impossible at this distance merely by reading, or listening, or even
seeing photographs or motion pictures, to grasp at all the real significance of the situation. And yet the whole world of the future hangs on
a proper judgment. It hangs, I think, to a large extent on the realization
of the American people, of just what are the various dominant factors.
What are the reactions of the people? What are the justifications of those
reactions? What are the sufferings? What is needed? What can best be
done? What must be done?
Thank you very much.


Preface
Most of the chapters presented in this book derive from papers presented
at a conference held at UCLA in November of 1997 entitled ‘The
Marshall Plan: Lessons after 50 Years (1947–97) – Through the Cold
War and Toward Unification’. The conference was organized under the
auspices of the UCLA Center for European and Russian Studies
(renamed in 2002 as the UCLA Center for European and Eurasian
Studies). The editors were the then former and current associate directors of the Center and the primary conference organizers. The papers
were revised to form the core of this book, and several additional contributions were invited. The one paper that is presented in its original
conference format is that of late Professor Raymond Vernon.
We would like to thank Professor Ivan Berend, the Director of the
Center, for his leadership and generosity in supporting the conference
and this publication. In addition to Center support, financial assistance for the conference was provided by the Goethe-Institut
German Cultural Center, the University of California Berkeley
Center for German and European Studies, the Kreditanstalt für
Wiederaufbau, and Mr George Gregory. Vera Wheeler, Center

Program Director, and her staff provided greatly appreciated assistance in the planning and organization of the conference. We would
also like to acknowledge the conference participants whose work is
not presented here but whose contributions were essential to the
success of the meeting. They include: Professor Michael Intriligator,
Dr Malinka Koparanova, and the former Czech Foreign Minister Jirí
Dienstbier.
Several people were especially instrumental in the preparation of
this book and are deserving of notice. First and foremost, we would
like to express our gratitude to Carol Medlicott for her invaluable
assistance in preparing the manuscript for publication. Her organizational efficiency, critical eye, and sound judgment were essential to the
successful completion of this project. The UCLA Academic Senate
Faculty Research Grant Program provided funding for her work. The
critical yet encouraging commentary and careful manuscript review
provided by Professor Günther J. Bischof were important to us in
revising both the introduction and the overall thematic organization
of the volume. Lisa Hyde of Frank Cass Publishers and Heidi Bagtazo


xviii

   

of Routledge have been patient and effective editors in facilitating the
transition from manuscript to published volume.
John Agnew
J. Nicholas Entrikin
UCLA


Abbreviations

AMF
AMP
CED
CEEC
COCOM
DOTs
EBRD
ECA
ECSC
EDC
EIP
EPU
ERP
EURATOM
FFMA
FNA
FOA
GAB
GARIOA
GATT
IMF
ISB
ITO
MDAA
MSA
NAM
NATO
NFTC
NICs
NSC

OECD
OEEC
OIG
UNRRA

Jean Monnet Archives
Additional Military Production
Committee for Economic Development
Committee on European Economic Cooperation
Coordinating Committee
Developing and de-colonized countries
European Bank for Reconstruction and Development
Economic Cooperation Administration
European Coal and Steel Community
European Defense Community
European Industrial Projects
European Payments Union
European Recovery Program
European Atomic Energy Community
French Foreign Minister Archives
French National Archives
Foreign Operations Administration
General Agreement to Borrow
Government Aid and Relief in Occupied Areas
General Agreement on Tariffs and Trade
International Monetary Fund
International Settlements Bank
International Trade Organization
Military Defense Assistance Act
Mutual Security Agency

National Association of Manufacturers
North Atlantic Treaty Organization
National Foreign Trade Council
Newly Industrialized Countries
National Security Council
Organization for Economic Cooperation and
Development
Organization for European Economic Cooperation
Overseas Investment Guarantees
United Nations Reconstruction and Rehabilitation
Administration


xx
USDS
USTA&P

   
US Department of State
US Technical Assistance and Productivity
Program


Introduction: The Marshall Plan as Model
and Metaphor
JOHN AGNEW AND J. NICHOLAS ENTRIKIN

In a 1947 address at the Harvard University Commencement, Secretary
of State George C. Marshall outlined the idea, later enshrined in the
Truman Administration’s European Recovery Program, of reconstructing a devastated Europe only just emerging from World War II through

the infusion of US aid on a massive scale. The Marshall Plan would
eventually cost between 12 and 13 billion dollars before being subsumed
by US defense spending on NATO and support for a variety of bilateral
aid programs in the early 1950s. The Marshall Plan was indeed by many
measures a successful international aid program, which like most such
programs had more than purely philanthropic aims. Among other
things, a devastated Europe was an invitation to Soviet political meddling, an opportunity for rebuilding export markets for US businesses,
and a chance to experiment with creating an open world economy that
would not experience repetition of the economic and political disasters
of the previous twenty years.
Evocative speeches at timely moments played a major role in defining
and reorienting ‘Europe’ after World War II. One was Winston
Churchill’s ‘iron curtain’ speech at Westminster College in Missouri in
1946. Another was George Marshall’s speech at Harvard in 1947 offering American aid and advice in rebuilding a shattered continent. A third
was Robert Schuman’s speech in Paris in 1950 proposing common
European control over coal and steel resources. These speeches, perhaps
because they were relatively short and eloquent, captured the popular
imagination of the time. They shifted thinking by creating a new conventional wisdom. With hindsight they seem like founding moments of what
has happened since. The fact that two were given in the United States
points to both American centrality to Europe’s future and the interweaving of destinies that was already under way.
Scholars have long debated the extent to which the Marshall Plan
of 1947 actually contributed to the postwar growth and prosperity of
western Europe and the degree to which it was an unprecedented act of


2

   

state altruism or an example of American imperialism. Indeed, scholarship on the consequences of the Marshall Plan has gone through several

identifiable stages. Accounts of the Marshall Plan as the major cause of
postwar European recovery were challenged by the revisionist counterfactual analysis of Alan Milward (1984), and Milward’s conclusions
have in turn been questioned by Barry Eichengreen and Marc Uzan’s
(1992) econometric analysis reasserting the positive impact of the plan
through its critical and timely support of basic market systems in fragile
European national economies. These and other interpretive disagreements highlight the troublesome data issues associated with Marshall
Plan scholarship, in which seemingly straightforward claims, such as the
amounts of aid received by participating countries, are matters of continual reassessment and argument.
What appears beyond dispute, however, is that the plan had two
major impacts, irrespective of either its quantitative effect or its motivation. One was the political–psychological boost its massive economic
assistance gave to a recovering Europe. The other was its undoubted contribution to the divergence in political–economic paths of western and
eastern Europe. After Stalin’s rejection of the plan as an example of
unmitigated American imperialism, the funds and the American ideas
for how they should be spent poured into western Europe where they
influenced the course of both ideology and institutions over the next 50
years. Indeed, it is not too far-fetched to suggest that the opening up of
national boundaries to trade and investment implicit in the plan’s
approach and the conjoining of private and public initiatives within the
plan helped lay the groundwork for later European unification and the
decisive choice of the US side by western Europe in the emerging Cold
War between the United States and the Soviet Union.
Since 1989, the reinvigoration of European unification and the collapse of the Soviet Union have created a sense of a new European age,
of a unifying Europe looking to the future rather than a divided Europe
mired in the past. Recent events, such as the dreadful and continuing violence in the former Yugoslavia, the cataclysmic economic implosion of
Russia, and the emergence of significant cleavages among members of
the European Union with respect to acceptance of key policies on population mobility and currency unification, and foreign policy cleavages
over the war in Iraq, remind us of the fragility of what has been achieved.
At the same time they suggest the need for greater international coordination to combat a renewal of political and economic fragmentation. Yet
the seemingly compulsive progress of integration within the European
Union and the convulsive collapse of the Cold War world also recall the

European past, particularly the years immediately after World War II,


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3

when Europe was divided between east and west, and what these years
signify both in terms of the trajectory of western Europe thereafter and
the relevance of that experience for the assimilation of the east into the
project of European unification.
In particular, the spirit of integration represented by the European
Union can be traced to the immediate postwar years when a group of
western European political leaders, such as Monnet, Schuman, De
Gasperi, and Adenauer, combined a vision of an integrating Europe
with support for an American plan of economic recovery and institutional reform. This initiative was directed as much at preventing a recurrence of the Depression of the 1930s as at minimizing the likelihood of
a return of the national animosities that had produced the two world
wars. As such it closely matched contemporary American imperatives.
Along with the military commitments of the United States to western
Europe in the form of NATO, designed to frustrate Soviet ambitions
beyond the sphere of influence agreed to by the Allies (the United States,
Britain and the Soviet Union) at the Yalta conference in 1945, the most
important material and symbolic economic commitment of the US
government took the form of the Marshall Plan, designed to limit the
political success of indigenous Communist parties by pointing to
American financial support and the absence of any Soviet equivalent,
stimulating European economic growth to help American exports, and
creating (in conjunction with the Bretton Woods Agreement on currencies of 1944) a world economy in which the competitive protectionism of
the 1930s would be a thing of the past.
The Marshall Plan has become the centerpiece of claims about what

distinguished the aftermath of World War II in Europe from that of
World War I, particularly the limited emphasis on reparations from a
‘guilty’ Germany and the necessary role in this played by the United
States government, and the specific American contribution to western
European economic growth and prosperity in the 1950s and 1960s. It has
also become a model or rhetorical device for exhorting planned external
intervention elsewhere, more recently for eastern Europe and the former
Soviet Union, and most recently for Afghanistan and Iraq, to do what
the Marshall Plan is alleged to have done so successfully for western
Europe after World War II. More than fifty years after the introduction
of the Marshall Plan, therefore, the plan still lives on but now as a model
for organizing the transition from state socialism to open market economies. As Barry Eichengreen (2001, 141) has noted, the Marshall Plan
was a unique response to a particular historical circumstance, but
‘Marshall’s key insight, that a market economy needs institutional and
policy support to function effectively, is as timely today as 50 years ago.’


4

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Two related themes, the Marshall Plan as a force for western
European economic recovery and political integration and as a model for
the later world economy and the recent transition economies, form the
conceptual axis for the organization of this volume. The Marshall Plan
looms large in general debates about the origins of the Cold War and the
globalization of the world economy under American auspices. It has
recently assumed an intellectual and political importance out of all proportion to what its initiators seem to have had in mind. Since the end of
the Cold War the Marshall Plan has taken on a mythic role in political
rhetoric and in debates among scholars that is deserving of close attention. The purpose of this book is to begin such a reevaluation by incorporating examination of the impact of the plan, its legacy for European

integration, its emergence as a model for the transition from state socialism, and its founding as a vital underpinning of the globalizing world
economy which accompanied the mutual development of the Cold War
western world’s American and European halves.
The book consists of 10 chapters by authors from a range of disciplines – from economics and history to political science and human geography – and a diversity of national backgrounds – from French and
British, to German and American. They combine to tell a collective narrative that extends well beyond a specifically ‘American story’ of the
Marshall Plan and its consequences. The book also offers a mix of views
from leading authorities on the Marshall Plan, including Alan Milward,
Raymond Vernon, Wilfried Loth, Gerard Bossuat, and Thomas Schelling,
and a group of younger, noteworthy scholars, such as J. Bradford De
Long, Stuart Corbridge, Dafne C. Reymen, and Jacqueline McGlade.
The continuity of the Marshall Plan as a metaphor and model for
beneficent external intervention to aid in economic transformation
under conditions of socio-economic collapse is one feature that distinguishes this book from others on the Marshall Plan or aspects of it that
have appeared since 1980. The other feature is its focus on the longerterm impacts of the Marshall Plan, including that of its effect on
European unification. Most previous studies fit under one of three
rubrics. In the first category are volumes of memoirs, recording the
origins and working of the plan from the point of view of participants.
The volumes published in celebration of the 35th and 40th anniversaries
of the plan are of this type (Hoffman and Maier, 1984; Clesse and Epps,
1990). The second category consists of studies of the politics of the plan
in relation to single countries (for example, Bischof, Pelinka and Stiefel,
2000; Maier and Bischof, 1991; Whelan, 2000) or the role of individual
political figures, such as Dean Acheson, in its formulation (for example,
Chace, 1998). The third, and final, are books that have emphasized the