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At 40, Marshall Plan still a `miracle' of generosity, cooperation

Winston Churchill called it ``the most unsordid act in human history.'' Harry Truman praised it as ``one of America's greatest contributions to the peace of the world.''

Even now, the Marshall Plan, 40 years old today, stands out as the crowning achievement of one of the most creative eras in American diplomacy.

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In 1947, Europe still lay in ruins, two years after V-E Day. World War II had left its cities, factories, and farms destroyed. Trade and commerce had ground to a halt. Communication links were shattered. Millions remained homeless. Political instability threatened.

In Washington, concerned Truman administration officials worried that the Soviet Union, already on the ascendancy in Eastern Europe, would seek to exploit the vulnerability of Western Europe.

Frustrated with the failure of diplomacy and still reluctant to resort to military means, Truman officials turned to economic power to contain the threat of Soviet expansionism.

On June 5, 1947, in a Harvard commencement address, Secretary of State George Marshall outlined an ambitious plan to pump billions of American dollars into Europe's economy to speed recovery and insulate Western Europe from Soviet subversion.

What followed was an economic miracle that, even today, seems remarkable. (The Marshall Plan as seen from Germany, Page 11.)

``In the 40 years since the end of World War II the Marshall Plan stands out by common consent as the most conspicuous success in the conduct of American foreign policy,'' says Milton Katz, who succeeded W.Averell Harriman as European administrator of the Marshall Plan in 1951. ``Europe is what it is today in considerable degree because the Marshall Plan made the revival of Europe possible.''

Part of $13.3 billion approved by an initially reluctant Congress was used to provide humanitarian relief to Europe.

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But the lion's share of the Marshall Plan - close to $60 billion in today's terms - was used to finance US imports needed to get European production started again. Marshall Plan funds were also used for technical training, as hundreds of European managers and technicians traveled to American farms and factories to learn the latest production techniques.

Insisting that Europe's economic reconstruction was the ``business of the Europeans,'' Marshall outlined a plan that, in effect, made Europeans the architects of their own recovery program.

In July 1947, five weeks after Marshall's Harvard address, representatives of 16 European nations convened in Paris to ascertain their own needs and to determine how to allocate Marshall Plan funds.

Barely four years later, when the Marshall Plan expired, the West European economy was largely transformed. Agricultural production was back to, in some cases actually above, immediate prewar levels. New harbors and roads were speeding commerce. Raw materials and industrial production were up.

Scholars say one key to the Marshall Plan's success was that it forced Europeans to abandon nationalistic trade practices. By demanding cooperation to achieve recovery, the Marshall Plan fostered the economic integration that eventually led to the creation of the European Common Market.

Experts also point to the psychological boost the Marshall Plan gave to war-weary Europeans:

``It was not only the infusion of money, it was the spirit of the Marshall Plan that gave everybody hope,'' says Russell Hemenway, a former Marshall Plan administrator who is the director of the National Committee for an Effective Congress. ``It gave people who were worn down an aspiration for the future. Among the great results of the Marshall Plan, that may have been the most important.''

The Marshall Plan is acknowledged as the consummate example of enlightened self-interest in American diplomacy. It not only relieved the plight of postwar Europe but did it in a way that served US foreign and domestic policy interests.

A revitalized Western Europe became a buffer against Soviet expansionism. Meanwhile, the program became a boon to US farmers, manufacturers, and shippers, helping speed the transition at home to a peacetime economy.

Since 1947 the spirit of the Marshall Plan has been invoked repeatedly - usually without success - as a prescription for dealing with global or regional problems. In 1984, for example, the Kissinger Commission called for a Marshall Plan to deal with the causes of poverty and political instability in Central America.

At one level, experts say, the lessons of the program are transferable.

``The Marshall Plan experience taught that the execution of such a program depends on two factors: cooperative relations with the nations [targeted for help], plus deep and wide support at home - in short, a bipartisan foreign policy,'' says Mr. Katz, now a Harvard law professor.

But even with strong bipartisan backing, many experts say, it is unlikely any US program could duplicate, say in Africa or Asia, the kind of economic miracle that occurred in Europe after the war.

Despite the widespread devastation inflicted by World War II, Europeans still had the managerial and organizational skills needed to translate contributions of US dollars and technical help into self-sustaining prosperity. In the end, the framers of the Marshall Plan had the easier task of reconstructing - rather than creating - a viable economy.

``What made the Marshall Plan [work] was that the money was well placed and well spent,'' says former Ambassador Lucius Battle, a one-time aide to Dean Acheson, who, after he succeeded General Marshall as secretary of state, presided over the final years of the Marshall Plan. ``It went to an economic base that already existed instead of starting from scratch.''

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