Anniversary of Marshall Plan and lessons for the 21st Century

Today (4/2) is the 67th anniversary of Pres. Truman signing into law what became known as The Marshall Plan.

The idea was pretty simple: Rebuild Europe so it can be economically and politically stable.

The plan was the complete opposite of what happened after World War I and from what a lot of Americans wanted to happen after World War II.

After World War I the Allies destroyed the industrial base of Germany, imposed massive reparations penalties and basically humiliated the Germans. After World War II there was a strong movement to do exactly the same thing one more time. In fact, Stalin did do that in the Soviet controlled areas. Whole factories from East Germany were dismantled and sent to the Soviet Union.

George C. Marshall, Pres. Truman’s Secretary of State, outlined a program to keep the peace by building strong trading partners with the United States. The idea was simple: by providing support to rebuild the industries of Europe, the United States would help stabilize the political and social situation in the region as well. Along the way democracy would strengthen in the region. Allies would rebuild their industrial base and re-establish their democratic institutions. Germany would rebuild under democratic principles, while its industries were rebuilt with safeguards to protect workers and the new democratic institutions. In the end, the whole plane would turn a former enemy into a political and economic partner and strengthen the hands of our Allies.

Needless to say, the Soviet Union did not like the idea. Stalin wanted a weak, divided and chaotic Europe. So much the easier to extend his influence through the local communist parties. (So yes, the Marshall Plan did have the overt purpose of countering communist influences in the area.)

Stalin forced the countries under Soviet control to reject the Marshall Plan help. The communist-controlled unions in Western Europe were ordered to strike at the ports and rail depots to prevent the unloading of Marshall Plan goods. Fortunately for the democracies, pro-democratic unions in those same countries stepped forward — often in pitched battles with the communist unions — to unload and help distribute the goods.

Fast forward to the 21st century and the battle is still the same. This time, instead of providing help and assistance to prevent communist domination of Europe, the battle is to prevent chaos and anarchy in the developing world.

Foreign assistance programs for the developing world have the intent of supporting democratic institutions and of bringing the poor in the world into the middle class. Again, the same idea as in 1948: Promote/Support democratic elements and democracy and help develop new and stronger trading partners.

There is one vital difference between what the Marshall Plan was all about and current development programs.

The Marshall Plan was rebuilding industrial societies. The European countries already had begun the shift from an agrarian society to an industrial one.

Today’s development programs are geared to helping the developing world move from inefficient, small-plot farming to a more efficient and wealthier society.

The Europeans in 1948 already had a high rate of education and educated leaders ready to step up to rebuild their countries.

The developing world today is faced with poorly educated people because of failures by their governments to provide decent education. These countries do not have generations of traditions of democratic institutions. In short, the development programs today have to start by dealing very basic problems of poverty, lack of education and lack of a history of self-rule.

When people call for a Marshall Plan for the developing world, they exhibit their basic lack of understanding what the Marshall Plan was. It is easier to rebuild societies and industries if the traditions of plurality and industrial labor relations are already built into the people. When those factors are missing, the path to development and growth is different and longer.

Just because the battle for development is harder now than it was in 1948 does not mean it should be abandoned or that it should be cut. Growth of the industrial economies depends on finding new markets. Unless the developed world helps the developing world grow, existing industries will have a hard time growing.

So one way to look at support for development programs is straight forward greed. If the U.S. and Europe help other countries out of poverty, that means more potential customers for goods and services.

Another way to look at why support for development programs is important is security. Growing pluralistic economies mean more people have a greater stake in the stability of that economy and society. Increased wealth is one of the surest ways to fight terrorism and violent crime,  as long as everyone has a fair shot at the wealth.

It has always struck me that supporting democratic institutions, economic growth and equitable wealth distribution are the surest paths to global security and economic prosperity.

Lastly, the budget for the US Agency for International Development — long a target of deficit hawks in the GOP — is less than 0.5 percent of the federal budget. With less than a half-penny on the dollar, this agency provides programs and training that helps bring hope to people that they too may soon enjoy the benefits of a growing economy. Cutting this budget will hurt efforts to provide stability and growth to the poorest countries in the world and do little to affect the actual U.S. budget. (I think it was Neil deGrasse Tyson who said of the NASA budget — also just less than 1 percent of the budget — that cutting the NASA budget was like trying to empty space on your computer hard drive by eliminating Wordpad documents instead of all the duplicate videos and JPG files.)

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