Marshall Plan

Economic recovery plan instituted by the United States after World War II to rebuild Western Europe as a bulwark against Soviet expansion. At the end of World War II, much of Europe was devastated, its national economies were ruined, and millions were homeless and near starvation in much of the continent. Critical infrastructure such as roads, bridges, railroads, power stations, and communications facilities lay in tatters. The weakened condition of Europe led to U.S. fears of an expansion of Soviet influence into Western Europe. To forestall such an event, and to help revive the effectiveness of U.S. allies in Europe, Secretary of State George Marshall proposed a massive reconstruction plan for occupied Europe.

Marshall announced the plan, officially known as the European Recovery Program, at a speech on June 5, 1947. The following month, a meeting was convened in Paris to discuss specifics of the plan. The Soviet Union and the nations of Eastern Europe were invited, but declined to attend. Soviet leader Joseph Stalin objected to the plan because it called for Europe to be rebuilt following capitalist economic principles. He also rejected U.S. insistence on coordinating the recovery efforts in Western Europe with those in Soviet-controlled Eastern Europe. The plan also met resistance from Republican members of the U.S. Congress, who favored a more isolationist policy toward Europe. However, the Soviet invasion of Czechoslovakia in February 1948 convinced Congress of the need for assistance to Europe. Domestic resistance to the idea collapsed, and President Harry S. Truman signed the Marshall Plan into law on April 3, 1948.

From 1948 to 1951, the United States provided more than $13 billion of economic and technical aid to 16 different European countries. These years saw the fastest period of growth in European history, as industrial output increased by some 35% and agriculture rebounded to surpass prewar production. Standards of [Page 447]living rose dramatically and Western Europe entered a decades-long economic boom. By contrast, the Eastern European nations that did not take part in the Marshall Plan languished in poverty and industrial backwardness. The lack of prosperity in the communist world greatly reduced Soviet influence and the appeal of communism in Western Europe.

Early observers considered the Marshall Plan an unalloyed success, but criticism of the plan began to arise during the 1960s and 1970s. Some critics claimed that the plan was motivated by a desire for U.S. economic control over Europe rather than an altruistic desire to offer aid. Other historians have argued that the Marshall Plan was not the decisive factor in Europe's postwar recovery. They point out that many European countries experienced economic growth before the arrival of aid. They also note that economic recovery actually occurred more quickly among many nations that received less aid.

The current consensus is that although the United States was clearly acting in its own best interests when it instituted the Marshall Plan, the plan did have a significant effect on European recovery. Because of its success, the Marshall Plan is often cited as an example of the beneficial effects of economic assistance and generous postwar treatment of vanquished nations by the victors.

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