Was the Marshall Plan an Unqualified Success - Essay Example

Introduction The phenomenal growth of European economy after the Second World War and the factors effectuating this growth have always remained a debatable issue. In the aftermath of the World War II, when all the European countries were struggling to emerge from the economic devastation, the United States offered financial support to the Europe under a plan, called the Marshall plan. This provision of aid on the part of the United States, the Marshall plan, is regarded as the successful factor in driving the post-war West European economic growth. This paper evaluates the significance of Marshall plan in bringing about the economic success of the Western Europe. It also peeps into the state of economic growth in European countries before the commencement of this plan, so as to examine whether or not the Marshall plan was an unqualified success. Post War Europe And The Marshall Plan The economic, social and political state of European countries of had been greatly exhausted as the repercussion of the World War II. Even the most powerful countries, such as Germany, could not escape the devastations of war. The economic growth all over the Europe had stalled and various political factors were hindering the process of economic growth acceleration. Watt illustrates the condition of European countries as, "in the economic field matters were still worse. The economies of France and Germany were in ruins Industrial production was recovering but the volume of exports was nothing like adequate to finance the necessary imports to maintain the rate of recovery. In France and Germany the position was worse still. British recover was far ahead of that in Europe" 1. The desolating economic state did not only hampered the trade and industrial growth of war-striken European countries, but was also threatening for the American capitalism. The United States, rising as the world super power after the World War II, perceived the state of halted trade and investment activities as grievous to its industrial growth. This led the US to devise and implement an aid plan directed towards all the European countries, known as the Marshall plan or the European Recovery Plan. The program was aimed towards driving European cooperation towards enhanced trade, investment and industrial growth, as well as curtailing the political aspects hindering economic stability in the region. Hence, shaping the European economic growth on American foundations. Watt points out that the Marshall plan "was to be a projection of many American ideas and ideals onto a Europe that was in a state of economic and political difficulties"2. The Western Europe, desperately in need of funds and collaboration, quickly accepted the offer and proceeded towards its implementation. Vickers remarks that the "Marshall's speech was welcomed with open arms by all the Western European states, already moving into varying degrees of co-operation"3. Unqualified Success Of Marshall Plan- A Myth Or Reality The Marshall plan is said to have greatly stimulated the economic growth of West European countries after the Second World War. Researchers (such as Mee4 and Wexler5 etc) argue in the favour of Marshall plan to have successfully transformed the course of economic recovery in Europe and led those countries on the track of growth. Wexler goes on to the extent of saying that the Marshall plan was "one of the great economic success stories of modern times"6. Although it is true to the extent that the flow of dollars and US conditions through the Marshall aid accelerated the process of economic and industrial growth in the region, however the plan, exclusively, cannot be termed as an unqualified success in driving this progress. Vickers illuminate this point as, "it is because of the way that the Marshall Plan entered the psyche of post-war politics that there is still a danger of falling prey to the myth of Marshall Aid." 7 The amount of aid provided to the Western Europe during the Marshall plan was not sufficient to the extent that it could bring about the economic development in those countries. Milward also argues that, "Marshall Aid had only a marginal effect on the potential for growth of total economic output in Belgium, Denmark, Sweden and West Germany." 8 The author propounds that Marshall plan aid provided to the West European countries could not be termed as significant in driving capital growth. He suggests that the reconstruction process had actually started before even the aid could be provided to these countries, therefore, Marshall plan had very little role to play in the economy. The grant provided by the United States also differed significantly from country to country. However, what is most obtrusive is that it did not astonishingly reflect the state of their economic demolition. As shown by Vickers, the level of aid granted to the individual European countries under the Marshall plan was severely inconsistent with the degree of devastation in a particular country. Britain was the largest receiver of funds and grants, whereas the destructs of war had striken Germany more than any European country. Despite the deprivation in Germany, it was provided less financial support than the Britain indicating the significance of British economic growth in American interest. Vickers further states that, "the Marshall Plan was concerned with American markets rather than European recovery for its own sake." 9 The 'unqualified success' of the Marshall plan also tends to be attributed to the successive economic development witnessed in the European countries after the Marshall plan era. Hence, arguing that the European growth had come to a severe halt after the Second World War, the progress observed in the Western region is regarded to be an outcome solely of the Marshall plan. Watt, on the other hand, argues that the economic potency of "Western Germany, Italy, France, and Austria, the fantastic growth rates in investment and consumption, the towering gold and dollar balances these countries control today are the work of the 1950s rather than the Marshall Plan period." 10 Therefore, it would be exaggeration to reckon the Marshall plan as the sole factor contributing to the post-war European development. Moreover, the European economic progress had already started even before the implementation of the Marshall plan. Eichengreen et al. propounds that, "taking annual averages, European Industrial production (excluding Germany) was 14% higher in 1947 than in 1946." 11 Hence, if the conditions were improving overall in the Europe before the provision of aid by the United States, it would have continued even if there had been no Marshall plan, albeit at a slower pace. Vickers also point out that, "in Britain, it seems likely that without the Marshall Plan, the same kinds of developments would have taken place, but more slowly." 12 The countries provided with the Marshall aid were required to comply with the US terms and conditions. In this way, even though the European countries were able to strengthen their economy, they had to pay a price in terms of US intervention in their domestic affairs. Wallace comments that "the West European state system was rebuilt after the Second World War on the basis of compromised sovereignty; compromised by the conditions the American Administration attached to the Marshall Plan aid." 13 It is not true to regard the Marshall aid as the cornerstone for European economic boom, however it did serve to be an accelerator of the growth process. Milward acknowledges that, "in France and Germany Marshall Aid was used to circumvent the weaknesses of the private capital market and the difficulties posed by controls over government finance." 14 Junker adds that, "Marshall Plan gave them [Germans] the chance to take responsibility for their own future and to become members of the community of nations again."15. Under this perspective, the significance of Marshall plan cannot be disregarded as being a failure. The aid provided by the United States under the Marshall plan was nevertheless successful in contributing to the well being of the Western European region. Conclusion This paper discusses the impact of Marshall plan on the post-war economic development of the Western European countries and evaluates its success or failure in bringing about the rapid economic progress in the region. The Marshall plan is considered as an unqualified success because of the rapid economic progress witnessed in the post-war Europe after its implementation. However, it is also observed that although Europe's economic growth was affected but it had not completely stalled after the World War II. The implementation of the Marshall plan accelerated this progress. Furthermore, the grant provided under this program was also not sufficient to accommodate the Europe's economic growth. Therefore, it can be said that Europe 's economy would have boomed even if there had not been any Marshall aid, although the growth would be considerably slow. In the light of the above discussion, it can be concluded that the Marshall plan was successful in accelerating the economic growth of the country, however it cannot be considered as an unqualified success in this regard. This is for the reason that Europe had already been progressing economically even before the plan could be implemented. Hence, the plan was not exclusively responsible to transform the devastated state of Europe' economy into a boom. Bibliography Eichengreen, Barry; Uzan, Mare; Crafts, Nicholas and Ilellwig, Martin. The Marshall Plan: Economic Effects and Implications For Eastern Europe And The Former USSR, (Economic Policy, 1992), 7(14), pp. 13-75 Junker, Detlef (eds.). United States and Germany in the Era of the Cold War, 1945-1990: A Handbook. (Cambridge University Press, NY (2004) Mee, Charles, The Marshall Plan: The Launching of the Pax Americana. (Simon and Schuster, New York, (1984) Milward, Alan S. The Reconstruction of Western Europe 1945-51, (London, Routledge, (1992) Vickers, Rhiannon. Manipulating Hegemony, (Palgrave Publishers, NY (2000) Wallace, William. The Sharing Of Sovereignty: A European Paradox. (Political Studies, 1999), XLVII, pp. 503-521 Watt, Donald. The American Impact On Europe, (The Political Quarterly 1963), 34(4): pp. 327-338 Wexler, Imanuel. The Marshall Plan Revisited: The European Recovery Program in Economic Perspective. (Greenwood Press, Westport, (1983) Read More