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The '''Marshall Plan''' (officially the '''European Recovery Program''' or '''ERP''') was a system of American economic aid to Western Europe after [[World War II]] that played a major role in the economic recovery, modernization, and unification of Europe. In three years 1948-51 the ERP gave away $12.4 billion (about 5% of the 1948 American GDP of $270 billion) for modernizing the economic and financial systems and rebuilding the industrial and human capital of war-torn Europe, including Britain, Germany, France and Italy and smaller nations.  It required each government to set up a national economic plan, and for the countries to cooperate in terms of financial and trade flows. The money was not a loan and there was no repayment. Washington spent such vast sums because it thought it was cheaper than the rearmament that isolationism or rollback would entail. In the long run, the logic went, a prosperous Europe would be more peaceful, and would make its main trading partner, the US, more prosperous.  

The '''Marshall Plan''' (officially the '''European Recovery Program''' or '''ERP''') was a system of American economic aid to Western Europe after [[World War II]] that played a major role in the economic recovery, modernization, and unification of Europe. In three years 1948-51 the ERP gave away $12.4 billion (about 5% of the 1948 American GDP of $270 billion--comparable to $750 billion out of a $15 trillion U.S. economy in 2009) for modernizing the economic and financial systems and rebuilding the industrial and human capital of war-torn Europe. The aid went to Britain, West Germany, France and Italy and smaller nations outside theSoviet orbit.  It required each government to set up a national economic plan, and for the countries to cooperate in terms of financial and trade flows. The money was not a loan and there was to be no repayment.<ref>The issue of repaying World War I loans had been mess that no one wanted to repeat. Likewise the [[Lend Lease]] during the war usually did not involve repayment.</ref> Washington spent such vast sums because it thought it was cheaper than the rearmament that [[isolationism]] or [[rollback]] policies would entail. In the long run, the logic went, a prosperous Europe would be more peaceful, and would make its main trading partner, the US, more prosperous.  

The Marshall Plan played a major role in the [[Cold War]] by restoring Western Europe to prosperity and strengthening the opponenets of Communism. [[KGB]] Agent [[Harold Glasser]] was one of the original candidates considered to head up the organization.<ref>FBI [[Silvermaster group|Silvermaster file]], Vol. 132, [http://education-research.org/PDFs/Silvermaster132.pdf p. 41.]</ref> With the Marshall Plan the years 1948 to 1952 saw the fastest period of growth in European history, returning many of the devastated countries to stability.  

The Marshall Plan played a major role in the [[Cold War]] by restoring Western Europe to prosperity and strengthening the opponenets of Communism.  With the Marshall Plan the years 1948 to 1952 saw the fastest period of growth in European history, returning many of the devastated countries to stability.  

When the [[Joseph Stalin]], Communist dictator of the Soviet Union refused to participate or allow any of his satellites in eastern Europe participate, the plan became exclusive to western Europe. Europe split along East-West lines that defined the [[Cold War]].  Named after U.S. Secretary of State [[George Marshall]], the plan was designed and operated by State Department officials, especially [[Dean Acheson]] in 1947 and began in 1948 when the Republican-controlled Congress authorized the program and the money. The Marshall Plan ended in late 1951, when it gave way to the Mutual Security Program, which combined economic and military aid.  

When the [[Joseph Stalin]], Communist dictator of the Soviet Union refused to participate or allow any of his satellites in eastern Europe participate, the plan became exclusive to western Europe. Europe split along East-West lines that defined the [[Cold War]].  Named after U.S. Secretary of State [[George Marshall]], the plan was designed and operated by State Department officials, especially [[Dean Acheson]] in 1947 and began in 1948 when the Republican-controlled Congress authorized the program and the money. The Marshall Plan ended in late 1951, when it gave way to the Mutual Security Program, which combined economic and military aid.  

==Origins==

==Origins==

[[Image:Glasserwb.JPG|thumb|400px|right|FBI Memo discussing an inquiry from [[John McCloy]], President of the [[World Bank]] to appoint [[KGB]] Agent [[Harold Glasser]] to head up the Bank's work on the Marshall Plan. He was not appointed.]]Six years of total war in Europe, 1939-1945, brought destruction and economic ruin to both victors and vanquished.  Only the United States emerged from World War II without domestic damage and stronger economically than before the war.  

Six years of total war in Europe, 1939-1945, brought destruction and economic ruin to both victors and vanquished.  Only the United States emerged from World War II without domestic damage and stronger economically than before the war. The armadas of heavy bombers that night and day had blasted every industrial area and transportation center in Europe had done a thorough job; recovery was painfully slow.  Economic output in 1948 was 13% below 1938 levels; in Germany it was 55% lower. America, in startling contrast, was 65% higher.   

The armadas of heavy bombers that night and day had blasted every industrial area and transportation center in Europe had done a thorough job; recovery was painfully slow.  Economic output in 1948 was 13% below 1938 levels; in Germany it was 55% lower. America, in startling contrast, was 65% higher.   

Signs of permanent stagnation were pervasive, coupled with growing frustration and pessimism about the future.  Millions of refugees lived in squalid camps.  Britain had won the war, and it had  received billions of dollars in postwar loans, but its economy was shattered; bread had to be  rationed.  Winston Churchill said Europe was "a rubble-heap, a charnel house, a breeding ground of pestilence and hate."  Conditions were even worse in the Soviet Union, but Stalin’s army and secret police were everywhere and he used the vacuum in eastern Europe expand Soviet his domains influence and control.  By 1946 [[Winston Churchill]] warned that the Soviet Union had drawn an “iron curtain” which divided Europe between rival alliances and ideologies.  Sensing that his dreaded enemy capitalism was collapsing, he Stalin ordered the Communist parties in every country to shift to the left and fight the class enemy.  The danger he saw was that America the American juggernaut would impose its hated values, promoting liberalism, free speech, free elections, and capitalism.  In 1947 the [[Truman Doctrine]] of military support saved Greece from a Communist takeover (and aided Turkey too) , but Americans feared that the Communists had a good chance to seize political power in Italy and France, shutting out American trade, cultural exchanges and political values in a victory for totalitarianism over democracy.   

Signs of permanent stagnation were pervasive, coupled with growing frustration and pessimism about the future.  Millions of refugees lived in squalid camps.  Britain had won the war, and it had  received billions of dollars in postwar loans, but its economy was shattered; bread had to be  rationed.  Former prime minister [[Winston Churchill]] said Europe was "a rubble-heap, a charnel house, a breeding ground of pestilence and hate."  Conditions were even worse in the Soviet Union, but Stalin’s army and secret police were everywhere and he used the vacuum in eastern Europe expand Soviet his domains influence and control.  By 1946 Churchill warned that the Soviet Union had drawn an "iron curtain" which divided Europe between rival alliances and ideologies.  Sensing that his dreaded enemy capitalism was collapsing, he Stalin ordered the Communist parties in every country to shift to the left and fight the class enemy.  The danger he saw was that America the American juggernaut would impose its hated values, promoting liberalism, free speech, free elections, and capitalism.   

 

In 1947 the [[Truman Doctrine]] of military support saved Greece from a Communist takeover (and aided Turkey too), but Americans feared that the Communists had a good chance to seize political power in Italy and France, shutting out American trade, cultural exchanges and political values in a victory for totalitarianism over democracy.   

===Postwar ad-hoc grants and loans===

===Postwar ad-hoc grants and loans===

In addition to the $12.4 billion Marshall plan money, the U.S. gave an additional $20 billion in grants and net credits from 1945 through 1951. They were aimed at short-term needs and did not carry the long-terms modernization goals of the Marshall Plan, but they did pump very large sums into war-torn economies.<ref> Historians who downplay the size of the Marshall money usually ignore the other $20 billion, a sum that had to have some impact.</ref> In 1945-47, before the Marshall Plan started, aid amounted to $13.1 billion.  Postwar relief through the UN (UNNRA) came to $3.5 billion. Britain received a long-term loan of $3.75 billion in 1946. West Germany (that is the Allied-occupied part of the country) received U.S. goods through the GARIOA program (Government and Relief in Occupied Areas) valued at $1.7 billion. Aid to Greece and Turkey began in 1947 with the Truman Doctrine's allocation of $650 million.<ref> See [http://www2.census.gov/prod2/statcomp/documents/1952-12.pdf ''U.S. Statistical Abstract: 1952'' (1953) table 1000 p. 830 online]</ref>

In addition to the $12.4 billion Marshall plan money, the U.S. gave an additional $20 billion in grants and net credits from 1945 through 1951. They were aimed at short-term needs and did not carry the long-terms modernization goals of the Marshall Plan, but they did pump very large sums into war-torn economies.<ref> Historians who downplay the size of the Marshall money usually ignore the other $20 billion, a sum that had considerable impact.</ref> In 1945-47, before the Marshall Plan started, American aid amounted to $13.1 billion.  Postwar relief through the UN (UNNRA) came to $3.5 billion. Britain received a long-term loan of $3.75 billion in 1946. West Germany (that is the Allied-occupied part of the country) received U.S. goods through the GARIOA program (Government and Relief in Occupied Areas) valued at $1.7 billion. Aid to Greece and Turkey began in 1947 with the Truman Doctrine's allocation of $650 million.<ref> See [http://www2.census.gov/prod2/statcomp/documents/1952-12.pdf ''U.S. Statistical Abstract: 1952'' (1953) table 1000 p. 830 online]</ref>

===Long-term solution===

===Long-term solution===

In 1948 State department official Will Clayton found a long-term umbrella solution, named the “European Recovery Program” or ERP.  He envisioned gigantic American gifts of billions of dollars that would never have to be repaid, combined with specific European initiatives that would put the continent’s industry, transportation, finance and farming on a sound basis. That would promote free trade and a healthy environment for economic and political freedoms, and in the long run, lead to the sort of unity that was eventually reached by the European Union.   

In 1948 State department official Will Clayton found a long-term umbrella solution, named the “European Recovery Program” or ERP.  He envisioned gigantic American gifts of billions of dollars that would never have to be repaid, combined with specific European initiatives that would put the continent’s industry, transportation, finance and farming on a sound basis. That would promote free trade and a healthy environment for economic and political freedoms, and in the long run, lead to the sort of unity that was eventually reached by the European Union.   

* Agnew, John, and J. Nicholas Entrikin, eds. ''The Marshall Plan Today: Model and Metaphor.'' (2004), 274pp; essays by economic historians; [http://www.questia.com/PM.qst?a=o&d=108516906 online edition]

* Agnew, John, and J. Nicholas Entrikin, eds. ''The Marshall Plan Today: Model and Metaphor.'' (2004), 274pp; essays by economic historians; [http://www.questia.com/PM.qst?a=o&d=108516906 online edition]

* Bischof, Günter, Anton Pelinka, and Dieter Stiefel, eds. ''The Marshall Plan in Austria'' (2000) essays by Austrian scholars

* Bischof, Günter, Anton Pelinka, and Dieter Stiefel, eds. ''The Marshall Plan in Austria'' (2000) essays by Austrian scholars

* Burk, Kathleen. "The Marshall Plan: Filling in Some of the Blanks," ''Contemporary European History,'' Vol. 10, No. 2 (July 2001), pp.267-294.  

* Burk, Kathleen. "The Marshall Plan: Filling in Some of the Blanks," ''Contemporary European History,'' Vol. 10, No. 2 (July 2001), pp.267-294.  

* Carew, Anthony. ''Labour under the Marshal Plan'' (1987)

* Carew, Anthony. ''Labour under the Marshal Plan'' (1987), in Britain

* Cox, Michael, and Caroline Kennedy-Pipe. "The Tragedy of American Diplomacy? Rethinking the Marshall Plan," ''Journal of Cold War Studies'' 7.1 (2005) 97-134 in [[Project Muse]], a controversial article that says the Soviet Union's reaction caused it to repress Eastern Europe

* Cox, Michael, and Caroline Kennedy-Pipe. "The Tragedy of American Diplomacy? Rethinking the Marshall Plan," ''Journal of Cold War Studies'' 7.1 (2005) 97-134 in [[Project Muse]], a controversial article that says the Soviet Union's reaction caused it to repress Eastern Europe

** Maier, Charles S. "The Marshall Plan and the Division of Europe." ''Journal of Cold War Studies'' 2005 7(1): 168-174. in [[Project Muse]], a rebuttal saying the ERP was the single event most responsible for confirming the division of Europe, not for initiating that division.  

** Maier, Charles S. "The Marshall Plan and the Division of Europe." ''Journal of Cold War Studies'' 2005 7(1): 168-174. in [[Project Muse]], a rebuttal saying the ERP was the single event most responsible for confirming the division of Europe, not for initiating that division.  

* Cromwell, William. "The Marshall Plan, Britain and the Cold War," ''Review of International Studies,'' Vol. 8, No. 4 (October 1982), pp.233-249.  

* Cromwell, William. "The Marshall Plan, Britain and the Cold War," ''Review of International Studies,'' Vol. 8, No. 4 (October 1982), pp.233-249.  

* DeLong, J. Bradford and Barry Eichengreen, eds. ''The Marshall Plan'' (1991). econometric history [http://econ161.berkeley.edu/pdf_files/Marshall_Large.pdf online edition]

* DeLong, J. Bradford and Barry Eichengreen, eds. ''The Marshall Plan'' (1991). advanced econometric history [http://econ161.berkeley.edu/pdf_files/Marshall_Large.pdf online edition]

* Djelic, Marie-Laure A. ''Exporting the American Model: The Post-War Transformation of European Business.'' (1998) 314pp [http://www.questia.com/PM.qst?a=o&d=59181643 online version]

* Djelic, Marie-Laure A. ''Exporting the American Model: The Post-War Transformation of European Business.'' (1998) 314pp [http://www.questia.com/PM.qst?a=o&d=59181643 online version]

* Donovan, Robert J. ''The Second Victory: The Marshall Plan and the Post War Revival of Europe'' (1988).

* Donovan, Robert J. ''The Second Victory: The Marshall Plan and the Post War Revival of Europe'' (1988).

* Leffler, Melvyn P. "The United States and the Strategic Dimensions of the Marshall Plan," ''Diplomatic History,'' Vol. 12, No. 3 (July 1998), pp.277-306.  

* Leffler, Melvyn P. "The United States and the Strategic Dimensions of the Marshall Plan," ''Diplomatic History,'' Vol. 12, No. 3 (July 1998), pp.277-306.  

* McKenzie, Brian Angus.  ''France: Americanization, Public Diplomacy, and the Marshall Plan.'' (2005). 259 pp.   

* McKenzie, Brian Angus.  ''France: Americanization, Public Diplomacy, and the Marshall Plan.'' (2005). 259 pp.   

* Milward, Alan. ''The Reconstruction of Western Europe, 1945-1951'' (1984). Says the economic recovery might have happened anyway

* Milward, Alan. ''The Reconstruction of Western Europe, 1945-1951'' (1984). Major study that argues the economic recovery might have happened anyway

* Milward, Alan S. "Was the Marshall Plan Necessary?" ''Diplomatic History'' 1989 13(2): 231-253.  

* Milward, Alan S. "Was the Marshall Plan Necessary?" ''Diplomatic History'' 1989 13(2): 231-253.  

* Pelling, Henry. ''Britain and the Marshall Plan'' (1988), a light study less useful than Hogan (1989)

* Pelling, Henry. ''Britain and the Marshall Plan'' (1988), a light study; less useful than Hogan (1989)

* Roberts, Geoffrey. "Moscow and the Marshall Plan: Politics, Ideology and the Onset of Cold War, 1947," ''Europe-Asia Studies,'' Vol. 46, No. 8 (December 1994), pp.1371-1386 [http://www.jstor.org/stable/152768  in JSTOR]

* Roberts, Geoffrey. "Moscow and the Marshall Plan: Politics, Ideology and the Onset of Cold War, 1947," ''Europe-Asia Studies,'' Vol. 46, No. 8 (December 1994), pp.1371-1386 [http://www.jstor.org/stable/152768  in JSTOR]

* Schain, Martin, and Tony Judt, eds. ''The Marshall Plan: Fifty Years After'' (2001). essays by scholars [http://www.amazon.com/Marshall-Plan-Transition-European-Studies/dp/0312229623/ref=sr_1_11?ie=UTF8&s=books&qid=1211605361&sr=1-11 excerpt and text search]

* Schain, Martin, and Tony Judt, eds. ''The Marshall Plan: Fifty Years After'' (2001). essays by scholars [http://www.amazon.com/Marshall-Plan-Transition-European-Studies/dp/0312229623/ref=sr_1_11?ie=UTF8&s=books&qid=1211605361&sr=1-11 excerpt and text search]