The Marshall Plan History

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Table of Contents

Introduction
Discussion
Conclusion
Bibliography
Footnotes

Introduction

It is imperative to mention that the Marshall Plan is a program that was conducted in 1948 to address some of the issues that countries that have suffered had to deal with at that time, and the United States believed that an intervention is necessary.¹ Moreover, its role and impact are frequently discussed, and the fact that George Michael has received The Nobel Prize for his efforts also should not be overlooked. It is possible to state that the influence of this initiative is not as significant as many scholars suggest, and it cannot be viewed as the only reason European economies were able to recover. The amounts of money provided were relatively small if compared to the total value of goods in those countries at that time and some of the processes that took place were not considered.

Discussion

It is necessary to understand that publicity has played a critical role in this case, and it has affected the opinions of the population. Moreover, the funds that were received did not even exceed five percent of GNP of those nations. Machado states that “two percent went a long way when used wisely and productively.”² In other words, the author of the book did not consider the importance of quantitative to justify the impact of this program.

Moreover, it is paramount to understand that the resources were spread among many countries, and such small funds may not be viewed as a force that has influenced economic growth. Also, it is important to note that the growth that has followed could not be caused by the Marshall Plan alone because the assistance was rather minor. The biggest problem that countries in Europe had to deal with at that time is that their economic policies were underdeveloped and had to be improved because they were not efficient. The issue is that the governments were used to systems that were established and were not ready to make any significant changes at that time.

Furthermore, economies of these countries were able to grow at rapid rates once such approaches as unreasonable control were eliminated. Financial stability and restoration of liberty were of utmost importance and had a positive impact on the economy. It is necessary to mention that the Marshall Plan could not have led to such processes. Also, many businesses have started to be much more confident and were willing to participate in activities that would help to rebuild countries after the war.

The importance of economic integration also should not be overlooked, and the collaboration was vital. Another aspect that is quite interesting is that the countries that have received the most support were not able to recover until assistance was reduced. Moreover, such countries as Italy and France have started to develop at rapid rates even before the introduction of the plan. The problem that many countries in Europe have to deal with at that time is that they were military-oriented, and it was not an easy task to get used to other approaches.

Carrol states that “Europe was steadily recovering by 1947 but that the United States needed to protect its economy from a return to the prolonged depression of the 1930s.”³ Differently put, this approach could have been used as a way to deliver American products in Europe and establish a particular market dependency. The recovery of Germany is especially fascinating, and many view it as the best example of the effectiveness of the Marshall Plan.

However, the situation is quite similar in this case because the support that was offered was not significant, and was less than five percent of GNP. Another aspect that should not be overlooked is that the economy of the country had to suffer because of such factors as reparations and occupation costs. Furthermore, it must be noted that the policies of the United States have hurt the country. The problem is that approaches that were used by Germany were not efficient and had to be changed. The pressure of Allies was enormous, and it was not an easy task to recover the economy because the country had to deal with such issues as increased taxes and had problems with foreign trade. Moreover, the approach that was used by Ludwig Erhard, a German politician was incredibly efficient and has helped the country to get a better understanding of what needs to be done to recover the economy. He criticized the Plan because he viewed it as incredibly bureaucratic. Also, he was able to ensure that a planning initiative that could have been extremely problematic is avoided.⁴

A free market and reasonable monetary policies should be viewed as primary factors that have led to the development of the country. Also, it is necessary to mention that these processes have started before the Marshall Plan, and economic growth that has been shown was simply enormous. Another aspect that should not be disregarded is that the economy of Belgium was stable, and it has resisted some of the issues that other European countries had to deal with at that time. Moreover, the state had offered credits to others. Also, it is believed that Belgium was one of the first countries that have dealt with the crisis and were able to recover successfully.

It is necessary to understand that this approach was in the interest of the United States because it has helped to build valuable relationships with many countries. The threat of the USSR was viewed as a significant issue that should be addressed, and a military alliance had to be established. Also, another problem that needs to be discussed is that the evidence that is available may not be viewed as sufficient. Moreover, Alvarez-Cuadrado and Pintea mention that “the Plan contributes to no more than one-fourth of a percentage point of additional growth per year between 1948 and 1951.”⁵ Moreover, the author suggests that some of the claims that are made are not backed up by statistics and data was not analyzed. Also, it is noted that the impact on private investments was also not significant, and they have increased only by one percent.

It is imperative to mention that such information is fascinating, and it is entirely possible that European countries would be capable of demonstrating similar growth even without the Plan. On the other hand, the way that ERP has affected political economies also should not be overlooked, and it would not be an easy task to predict what processes would be introduced without an anti-communist perspective. Also, it is necessary to note that growth strategies that the dissimilarity between growth strategies that were adopted by different countries is quite significant. However, it is entirely possible that the period of war may be viewed as an interruption, and free markets would develop even without the support that was offered.

On the other hand, many other positive aspects also should not be overlooked. For instance, some scholars think that the process would take much longer if the support and assistance were not offered. Also, it is important to understand that the United States did not only provide financial aid, and the provision of food and other vital resources also should not be overlooked. Also, it is necessary to mention that the military capabilities of Europe have also increased significantly, and it has an enormous impact on the economy in most cases. Moreover, it is paramount to understand that tremendous amounts of investments were quite important. However, it can be seen that many regions were able to recover without any support, and this aspect needs to be taken into account.

The problem is that it is entirely possible that a significant percentage of those funds were used to support other activities. For instance, communist parties were forced to leave the governments in such countries as Italy and France, and it is possible to state that there were other motives besides the support of economies.⁶ Also, many scholars suggest that the impact of new economic approaches was vital and was much more important than financial aid. However, it can be seen that the situation was not the same in many countries. Sorensen and Rudiger state that “American involvement was limited to encourage those political and economic forces best suited to undertake and implement the Plan’s policies.”⁷ Furthermore, the strength of the political spectrum should not be disregarded, and it is a factor that needs to be considered in such cases.

Also, it is important to note that tariffs and quotas were especially problematic and could have been addressed to promote free trade. Also, the import from European countries has been reduced in later years, and it may be viewed as a particular contradiction because it was stated that the primary objective of this program was to increase European prosperity. Another core aspect that should not be overlooked is that some think that the initiative has hurt the economy of the United States because several barriers were present. Moreover, it is necessary to note that the situation in Europe at that time was unique, and the Marshall Plan should not be regarded as the most efficient approach in such cases.

Conclusion

In conclusion, it is imperative to note that it is evident that the impact of the Marshall Plan is frequently exaggerated. The reasoning behind this statement is that such amounts of money were not sufficient to cause such dramatic changes. Also, it is believed that many countries were on the way to recovery before the introduction of the initiative. Moreover, Germany was hurt by most policies, but it has shown enormous progress.

It may not be an easy task to take all the aspects into consideration to determine an actual impact that ERP had on the economies. However, it is evident that it may not be viewed as the only reason European countries were able to recover, and numerous pieces of evidence may be listed to support this perspective. The impact on the political economy also may be hard to evaluate, but it is important to understand that most policies at that time were already well-developed. Moreover, the level of understanding of free markets was critical, and most had experience in this area. Overall, it is necessary to understand that the government was capable of using resources that were provided to ensure that recovery processes that have started after the war are prolonged.

Bibliography

Agnew, John, and Nicholas J. Entrikin. The Marshall Plan Today: Model and Metaphor. Abingdon, UK: Psychology Press, 2004.

Alvarez-Cuadrado, Francisco, and Mihaela A. Pintea. “A Quantitative Exploration of the Golden Age of European Growth.” Working Paper, Florida International University, 2008.

Carroll, Francis M. “Ireland and the Marshall Plan, 1947-57 (Review).” New Hibernia Review 1 (2002): 149–151.

Harman, Chris. A People’s History of the World: From the Stone Age to the New Millennium. New York, NY: Verso Books, 2008.

Machado, Barry F. In Search of a Usable Past: The Marshall Plan and Postwar Reconstruction Today. Lexington, VA: George C. Marshall Foundation, 2007.

Mierzejewski, Alfred C. Ludwig Erhard: A Biography. Columbia, SC: University of North Carolina Press, 2005.

Sorensen, Vibeke, and Mogens Rudiger. Denmark’s Social Democratic Government and the Marshall Plan 1947-1950. Copenhagen, DK: Museum Tusculanum Press, 2001.

Footnotes

John Agnew and Nicholas J. Entrikin, The Marshall Plan Today: Model and Metaphor (Abingdon, UK: Psychology Press, 2004), 9.
Barry F. Machado, In Search of a Usable Past: The Marshall Plan and Postwar Reconstruction Today (Lexington, VA: George C. Marshall Foundation, 2007), 32.
Francis M. Carroll, “Ireland and the Marshall Plan, 1947-57 (Review),” New Hibernia Review 1 (2002): 150.
Alfred C. Mierzejewski, Ludwig Erhard: A Biography (Columbia, SC: University of North Carolina Press, 2005), 76.
Francisco Alvarez-Cuadrado and Mihaela A. Pintea, “A Quantitative Exploration of the Golden Age of European Growth” (Working Paper, Florida International University, 2008), 20.
Chris Harman, A People’s History of the World: From the Stone Age to the New Millennium (New York, NY: Verso Books, 2005), 76.
Vibeke Sorensen and Mogens Rudiger. Denmark’s Social Democratic Government and the Marshall Plan 1947-1950 (Copenhagen, DK: Museum Tusculanum Press, 2001), 83.

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