Sunday, June 06, 2004

Can the Marshall Plan’s ideas be used against terrorism?

(A translation of a 6/5/2004 editorial by Eric Le Boucher, published in Le Monde)

On this beautiful day commemorating the winning back of liberty, let us be generous with the American, Bush. Let’s play his game—not in order to admit that Bush is right in comparing his war against Saddam Hussein and that of Roosevelt against Adolf Hitler. The former’s goals are ambiguous, even suspect. The latter’s goals were noble. But let’s play Bush’s game in order to recognize that the after-math of the two situations resemble one another: how to reconstruct a ruined land—Europe of yesterday and the greater Middle East of today—in the face of an ally that has become a resolute enemy, whether it be the communism of 1945 or the radical Islamism of 2004.

Let’s plunge ourselves into the economic aftermath of war and the Marshall plan.

Emotion and Reality

If World War I created a terrible blood-letting in the population, World War II was much worse from a social and economic perspective. The Great War had been geographically focused. Bridges, tracks, ports—infrastructures everywhere were destroyed by allied bombardments and by the retreating Germans. Factories were laid waste or stripped of their machines. There were no more seeds or equipment in the fields. The black market, the dearth of coal and of housing, the scarcity of food, the famines in Germany—all of these only compounded the ravages produced by the glacial winter of 1946-7. Economic savings were dried up and financial networks were destroyed. In 1946, one year after the peace, the GDP was not even 70% of that of France in 1936 or 50% of that of Germany.

But one must remember that WWII followed the great crisis of the 1930’s, during which Europe had been overwhelmed by inflation, unemployment, social instability and political impotence. Memories of those times were still fresh in 1945. The people and their leaders lived in fear of a return to those dark years and experienced a feeling of hope mixed with dependence vis-à-vis the Americans.

In fact, as was evident from the retreat, the difficulties were over-estimated. The disaster was real, the recovery would take time, but it would begin before the arrival of American aid from the Marshall funds that would not arrive until 1948. Afterwards, the recovery would be rapid.

Politics and Economics

In Washington, the Republicans had just won the elections on a platform of reducing the federal government, of lowering taxes, of bringing GI’s back home, and of organizing an isolationist trend. There was a direct conflict involving those, such as General George C. Marshall—the former Chief of Staff of the U.S. Army under Roosevelt who then became Secretary of State in January 1947—who believed that America must assist in Europe’s turnaround. Harry Truman gave $250 million to Greece, which risked falling into the hands of Stalin, and Truman propounded a “doctrine:” the containment of the Soviets required economic development. “Economic weapons” would follow the canons. The magazine, The New Republic, summarized the idea in the following terms: “In order to combat communism, we must make sure that Europe has enough to eat for dinner.” Nonetheless—due to the divided opinion in the US—it would take the Americans one year to decide on a course of action. Then, after the “coup of Prague” and the installation of the Communists in that region in February 1947, the Marshall group won the day.

Europe favored economic planning because the damage from the laisser-faire policies of the 1930’s was too evident. Yet America was a strong believer in the marketplace. George Marshall developed a compromise, based on a mix of economic principles, but primarily liberal ones—a model which underlies the current European Union 50 years later. A prerequisite for financial aid was the dismantling of governmental controls and a “mélange that left a greater role for the markets and a lesser role for bureaucratic directives,” according to professors Bradford De Long and Barry Eichengreen.

The Marshall funds became “a powerful tool” in the hands of the governments to convince the population to accept their sacrifices (such as price increases in essential goods) and of maintaining balanced budgets. And, from the beginning, Marshall varied his plan according to the country; yet he addressed Europe as whole and he promoted integration by lifting quotas and trade barriers between European countries. In 1950, the European Payments Union was born, and this Union represented the beginning of the European Union.

Aid & Development

What was the real impact of the Marshall Plan? The common memory is that of a veritable savior, and the Plan has become an obligatory reference whenever a country falls into a crisis. Yet historical distance permits a more nuanced perspective. Thirteen billion American dollars disbursed over the course of four years represented less than 3% of the GDP of Europe. The American money accelerated growth, but it was not the principal motor of that growth.

Nonetheless, the indirect impact was considerable. Since 70% of the funds were disbursed during the first year in the form of food aid and of essential goods, the image of a generous America anchored itself in public opinion. The notion of a European market was given a significant boost, and a number of technical and managerial concepts were imported by the Marshall teams.

The ultimate goal was attained: to placate the strikers and salary demands, to stabilize economic, social and political life in a Europe firmly tied to the West. The European continent would enter the long and prosperous period known as the “Thirty Glorious Years.”

Safety and Mentalities

Europe first entered a period of peace—a sine qua non for economic prosperity. That is, undoubtedly, the first difference between a post-WWII Europe and the Arab-Muslim world of today. There is another difference—that of culture. In 1945, “an entire generation, entering the work force during the crisis of the 1930’s, adopted the objective of reconstructing the economy,” summarized Professor Maurice Lévy-Leboyer (Le plan Marshall, Comité pour l’histoire économique et financière de la France, from a 1991 symposium). Can one say the same of the region stretching from Casablanca to Karachi?

The ideas of 1945 are not transposable. However the notion of using an “economic weapon” to “contain” terrorism is. As is the idea of a shared Arab economic zone. It is the task of the now-unified Europe to elaborate on this concept and to find its own General Marshall.


Anonymous said...

"However the notion of using an “economic weapon” to “contain” terrorism is. ....."
It all depends on how They define terrorism. The US has introduced sanctions against Syria (for obvious reasons) and Europe in true fashion refuses to accept the Syrian involvement in terrorism and if anything is increasing trade agreements with that country.
Le Boucher took something in his Sunday coffee to think that a European George Marshall would be able to give without getting any finacial kickbacks.

Anonymous said...

Oh, what a cute editorial! As long as Americans are dying for Europe, then the goals are "noble." If they die for anyone else or for their own ends, then the goals "are ambiguous, even suspect." The idea of using a Euro-Marshall plan to influence the Middle East only adds to the suspicion that I have had for a while. Chirac, Schroeder, and the rest didn't reject to the Iraq War on moral grounds. They couldn't give a sod how many Iraqis die or even how many prisoners get flogged and photographed in Abu Ghreib. It was all done so the EU could undermine US efforts in the region and the influence that would come from such success. If the great benefactor Europe then steps in with its money, I suppose the Franco-German alliance believes that 60 years from now ceremonies will be held in thanking Europe for giving them their liberty and the European Union will be the only superpower. The euro to Arafat and the selling of weapons to Middle East regimes was a nice touch. "Mais no, Arafat. Do not negotiate with Sharon until it makes Europe look important and the US as useless as tits on a boar." "Do not worry our Syrian and Saudi friends. We will see to it that you are well-armed should the US come to topple your regime too. In return, you must remember who your friends are." Sadly, no one believes me when I tell them that this "unified" Europe is just as much of a threat to the United States as al-Qaeda. "No, they are too wimpy" they say. They tell me I am just being paranoid. But the antagonistic plots and verbal hostility are along the same lines as anything the most radical imam would hope for: it's just that Jihadists have spared the Europeans from having to kill us. Thanks to the Arabs, Europe gets to sit at home with their protest signs and notions that some old buildings and paintings make Europeans more wise and evolved.

Anonymous said...

What a foolish idea. The only way to make economics figuure into this is to reward some societies and not others.

Otherwise all you end up with is a kind of equal notion of entitlement. Aid disconnected from behavior where pavlov'd dog would never stop drooling. It would end up like the "feed some prisoners less" routine which is guarateed to cause internecine warfare.