Modern Europe—as an actual entity, rather than just an idea or some stray fact of geography—was born on June 5, 1947. That's the day that George C. Marshall traveled up to Harvard to stand on the steps of Memorial Church and announce, "The United States should do whatever it is able to do to assist in the return of normal economic health to the world, without which there can be no political stability and no assured peace."
Thus began the Marshall Plan, the effort of the United States to aid the rebuilding of Europe after the Second World War. Clark Clifford and Dean Acheson, advisers to President Truman, had wanted to call it the Truman Plan, but the Democratic president had proved more politically astute: "Anything going up" to Capitol Hill "bearing my name will quiver a couple of times, turn belly up, and die," he told Clifford. "I've decided to give the whole thing to General Marshall. The worst Republican on the Hill can vote for it if we name it after the general."
Historians have tended to view the Marshall Plan skeptically in the long years since the United States poured $13 billion (approximately $140 billion in today's money) into Western Europe from 1948 to 1952. A fairly common analysis in the 1970s and 1980s, for example, echoed the Soviets' claim that the Marshall Plan was the anticommunist blow that helped create the Cold War.
In this line of thought, the Russians could not compete with the wealth of the United States immediately after the defeat of the Nazis. "If American capital is given a free hand in the small states ruined and enfeebled by the war," Soviet foreign minister Vyacheslav Molotov fretted in 1946, "it would buy up the local industries . . . and become the master in these small states." The financial power of the United States forced the Russians to respond asymmetrically. The Soviets would greet the Marshall Plan with an even more intransigent refusal to allow a reunited Germany, for example. Under Stalin's direction, the Russians encouraged communist coups and guerilla movements in Greece and Yugoslavia, and used their military might to dominate the countries of the Eastern bloc.
The fall of Soviet communism brought some reconsideration of the Cold War, even among the historians sympathetic to the USSR and suspicious of America. But the Marshall Plan had hardly recovered its historical place when historical analysis took a second run at it: If the Marshall Plan was no longer thought to be evil, we were now able to see that it was simply ineffective. Far from precipitating the Cold War by rebuilding war-devastated Europe, the Marshall Plan actually accomplished little. The recovery of the Western European states was already underway by the time American cash started arriving in 1948. Seed money from the United States produced little extra growth and tended to be misspent anyway.
Benn Steil, a writer at the Council on Foreign Relations, seems to have had enough of this dismissal. In 2013, he published a fascinating account of 1940s history with The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order. And now he has returned with The Marshall Plan.
Steil has strong views about how we should apply the lessons of the 1940s. He argues, for example, that the Truman administration produced a masterwork of diplomatic realism, understanding what it could and could not accomplish—and thus that we should similarly accept that Russia today has geographical interests that it will not abandon and we should not oppose.
The attraction of The Marshall Plan, however, comes with the history Steil lays out, far more than from the lessons he hopes we draw. Useful history is always suspect history, and pointed history, directed at a current political end, usually ends up dull. Fortunately, Steil has a gift for historical narrative, and it is his telling of the first years after the Second World War, the dawn of the Cold War, that will draw in readers.
Presented by George C. Marshall, then secretary of state, the plan had several fathers. State Department fixtures George Kennan and Charles Bohlen were the government’s most influential analysts of the USSR. Dean Acheson had the president's ear on international finance (and would succeed Marshall as secretary of state). The wealthy Texan William Clayton would lead the diplomatic charge on economic matters.
But then, too, the Republican senator Arthur Vandenberg, chair of the Senate Foreign Relations Committee, deserves credit for the plan. The Republican-controlled Senate was suspicious of anything involving Russia and opposed to anything that Truman wanted to do. Though he had been an isolationist before the war, Vandenberg became convinced that the Second World War derived in part from American failure to ensure economic stability in Europe after the First World War. And he persuaded his fellow Republicans to fund the Marshall Plan's effort to refinance Europe.
Steil notes that a key part of the plan was the astonishingly lax set of requirements for participation. In his Harvard speech—which the Truman administration carefully downplayed in America and publicized in Europe—Marshall had insisted that American financial aid would "not [be] directed against any country," and the communist countries of Eastern Europe were specifically invited to enter into negotiations with the United States. In the event, Stalin forbade it, and when the Czech foreign minister Jan Masaryk pushed against the Soviet dictate too strenuously, he was found dead, a secret-police murder disguised as a suicide.
But the countries that did participate were allowed to vary their economic experiments, from the socialist nationalizations of Great Britain to the capitalistic "economic miracle" of West Germany. German recovery, Steil claims, may be "the single most important and consequential economic contribution of the Marshall Plan."
In the months immediately after Marshall had claimed that American aid would not be directed against the Soviet Union, the European political situation deteriorated. Great Britain was bankrupt and could not defend its imperial possessions or help even Greece, a historical ally, against communist rebels. A 1948 coup left the communists in charge of Czechoslovakia, and the Soviets blockaded Berlin in an attempt to force the Western allies to surrender the city.
The creation of NATO soon followed, and the Cold War took shape despite the original vision of the Marshall Plan. Or perhaps the refutation of Soviet ideology had been the idea all along, and the Russians were right to perceive American aid as ultimately directed toward proving the economic and political superiority of non-Marxist governments.
Regardless, Benn Steil demands in The Marshall Plan that we see the effort as important, significant, and relatively effective. It was not perfect. Nothing human ever is. But the Marshall Plan was a highly idealistic effort that was grounded in hard-headed realism about international relations and the limits of the possible. From George C. Marshall to Dean Acheson, Harry Truman to Arthur Vandenberg, a set of influential Americans discerned that the security of the United States would best be served if the countries that had suffered through the Second World War achieved economic recovery and financial stability. And so America set out to fund modern Europe—not just as an idea or stray fact of geography, but as an actual entity, new-born on the world stage.