(Originally posted in 2012; Revised April 3, 2023)
On April 3, 1948, President Truman signed into law the Economic Recovery Act, better known as the “Marshall Plan.”
Over the next four years, Congress appropriated $13.3 billion for European recovery. This aid provided much needed capital and materials that enabled Europeans to rebuild the continent’s economy.
For the United States, the Marshall Plan provided markets for American goods, created reliable trading partners, and supported the development of stable democratic governments in Western Europe. Congress’s approval of the Marshall Plan signaled an extension of the bipartisanship of World War II into the postwar years.
–“Marshall Plan” (National Archives)
“Foreign aid” is not just “do-gooder” national policy. It is an effective means to influence future outcomes. There is no better example than the program that came to be called the “Marshall Plan.”
On June 5, 1947, Secretary of State George C. Marshall gave Harvard’s commencement address, introducing and justifying the European Recovery Program, which became known as the Marshall Plan.
Marshall (born December 31, 1880) had been the Chief of Staff of the U.S. Army during World War II and Winston Churchill hailed him as the “true organizer of victory.” The plan, part of the Cold War program of “Containment” championed by George F. Kennan, and put forth by President Harry S. Truman, is credited with restoring the economies of post-World War II western Europe. At Harvard, Marshall said:
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. …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.
Conceived by Undersecretary of State Will Clayton and first proposed by Secretary of State Dean Acheson, the Marshall Plan pumped more than $12 billion into selected war torn European countries during the next four years. (The countries participating were Austria, Belgium, Denmark, France, West Germany, Great Britain, Greece, Iceland, Italy, Luxembourg, the Netherlands, Norway, Sweden, Switzerland and Turkey.)
It provided the economic side of President Truman’s policy of “Containment” by removing the economic dislocation that might have fostered Communism in Western Europe. It also set up a Displaced Persons Plan under which some 300,000 Europeans, many of them Jewish survivors of the Holocaust, were granted American citizenship. By most accounts, the Marshall Plan was the most successful undertaking of the United States in the post-war era and is often cited as the most compelling argument in favor of foreign aid.
By most measures, the Marshall Plan must be considered an enormously successful undertaking that helped return a devastated Europe to health. allowing free market democracies to flourish while Eastern Europe, hunkered down under repressive Soviet controlled regimes, stagnated socially and economically.
Marshall was awarded the Nobel Peace Prize in 1953 before his death on October 16, 1959. For more about Marshall, here is a link to the nonprofit Marshall Foundation.
You can read more about the Marshall Plan and the Cold War era in the newly revised and updated edition of Don’t Know Much About History and about the end of World War II in The Hidden History of America at War.