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The myth of the Marshall Plan, the Reality of the Ukraine Challenge

by David Ellwood

№ 59/2022 from Jun 08, 2022

The Marshall Plan was based on the conviction that the material dimension, i.e., a higher standard of living, was linked to the mental dimension, i.e., the elimination of the roots of political extremism. With its promise of high productivity and good wages, with the Marshall Plan politics became economics as it had never been before in Europe. Ahead of the SCRIPTS panel discussion “Another Marshall Plan? Myths and Truths 75 years later”, David W. Ellwood explains the information campaign methods backing the Plan, evaluates its success, and outlines the implications for applying a new edition of the Marshall Plan on a post-war Ukraine.

A poster promotes the Marshall Plan 1953 in West Germany.

A poster promotes the Marshall Plan 1953 in West Germany.
Image Credit: Image Credit: Bundesarchiv Bild 183-20671-014, Recklinghausen 1953, Creative Commons (image edited)

What the Americans in Europe in the late 1940s considered the heart of the matter, the great wager they made in bringing confidence and faith in the future back to the Old World with their European Recovery Program (ERP), known as the Marshall Plan, was that given the chance and the choice, ordinary Europeans wanted what ordinary Americans - supposedly - already possessed. Or at the very least they aspired to similar life-styles, social opportunities and getting and spending patterns. Frustrating these legitimate desires, said this point of view, betrayed the fundamental promise of the mass production system acting in an age of mass democracy. Now that democracy had triumphed in World War II, and had even been materially extended in countries where women had finally been given the vote, ruling groups who wished to re-establish their basic legitimacy could no longer put off the encounter with the obvious popular desire for a higher standard of living.

So the old New Deal conviction that full bellies and steady jobs cut the roots of political extremism had evolved, had developed into the view that the young Chicago historian W. H. McNeill expressed when he saw the Marshall Plan arrive in Greece: “If economic conditions could be so improved that every Greek was able to live as well as he had been brought up to expect, it seems probable that the excessive concern and fanaticism which the people now manifest for political parties and programs would diminish.” [1]

The mental, cognitive dimension of the Marshall Plan’s aid challenge was therefore at least as significant as the material one. The conviction was that the shift from relief to structural change and modernisation would take place in individual minds as well as in the farms, factories, shops, offices and government departments.

‘Prosperity Makes You Free’: converting Europeans to the possibilities of modern capitalism

So the Marshall Plan in Europe was never just an abstract affair of economic numbers, such as loans, grants, production, productivity, integration etc., even if these were its key operating tools. Nor was it merely another weapon in America's Cold War anti-Communist crusade. With its mass information campaign, the Marshall Plan effort aimed to get as close as possible to the people it was benefitting, at all levels of society, and particularly in the relations between the citizen and the state. The challenge was to channel attitudes, mentalities, and expectations in the direction Americans understood as democratic progress: ever wider access to the opportunities of material satisfaction.

Based on this conviction, the Marshall Plan evolved into a complete model of investment, production and consumption. Because it provided the means, productivity would eventually emerge as the key concept for getting results. Ever more efficient and cheaper production would be managed scientifically by forward-looking industrialists, and guided on rational economic lines by the State. This would transform the ancient battle between reactionary capitalists and revolutionary workers into a constructive, dynamic relationship, uniting enlightened producers and contented consumers. Growth would resolve all the difficulties, overcome all the challenges, just as in America. With the arrival of the Marshall Plan’s growth concept, with all its accompanying jargon of GNP, GDP, productivity per head and so on, politics became economics in Europe as it had never been before.

The historian Charles Maier has called this epochal development, ”the politics of productivity.” It was expressed in more prosaic terms at the time by one of the directors of the ERP field headquarters in Paris: “What the European worker wants first of all”, he wrote, was “a promise of a larger stake in his country's economy - enough income to enjoy better food, a new suit, a picnic or the movies, less cramped living quarters, a chance to retire when he is old”. [2] Beyond anti-communism, beyond the figures on production and trade, beyond even the vision of a new era of European cooperation, this was the promise of the Marshall Plan in its heyday and it was the task of its great propaganda drive to bring that promise home to Europeans everywhere. The ERP’s Administrator Paul G. Hoffman wrote in his memoirs: “They learned (...) that this is the land of full shelves and bulging shops, made possible by high productivity and good wages, and that its prosperity may be emulated elsewhere by those who will work towards it.” [3]

The operating methods of the information/education/propaganda effort

There is no mystery about the operating principles which the Marshall Plan’s information staff applied in their campaign. They were arrived at fairly quickly and changed little up to the outbreak of the Korean war in 1950. A January 1950 report by the ERP information director in Rome explained: ”Carry the message of the Marshall Plan to the people. Carry it to them directly – it won’t permeate down. And give it to them so that they can understand it.”

The basic thrust then was for a truly mass program using ”every method possible (…) to reach Giuseppe in the factory or Giovanni in the fields’”, or as the ERP Paris office put it, ”slugging it out way down among the masses.” More specifically, ERP information divisions were expected to increase the sense of national identification and participation in the Plan, and to direct special attention to key target groups, particularly trade unionists, agricultural workers, housewives - as managers of the ‘economics of the household’ - and executives in business, industry and the state. They were told to avoid direct confrontation with the massive waves of Communist propaganda directed against the Plan, and above all they were to be respectful of every form of local sovereignty, and avoid accusations that the ERP sought to impose the US free enterprise system on the rest of the world. [4]

When applied on the ground, these methods proved extremely flexible, and no idea seemed too large or daring for the information program. As long as they were directed at workers, managers or employers, the key words everywhere were always mass production, scientific management and, above all, productivity. In each country there were specialized reviews on the subject, joint committees, trips to inspect American factories, conferences and eventually, in some places, even ‘productivity villages’ where model factories and workers’ communities could be seen in action. For other groups in society - state employees, teachers, families, even school-children - the promises were more jobs, higher living standards, peace in Europe through cooperation and trade. With special treatments of these questions for each different communications medium, the information program came to think in terms of tens of documentary films, hundreds of radio programs, thousands of mobile films shows, millions of copies of its pamphlets, and tens of millions of spectators for its exhibitions and films.

Implications for Today

As I and a number of other historians have demonstrated, this form of advertisement and persuasion ran into obstacles everywhere. The complex mechanisms of the Plan were very hard to explain, and the Communists were not the only ones to express noisy doubts about America’s motivations, and especially around the basic proposition of mass production for mass consumption. In Italy, FIAT did believe in that vision, the rest of the Italian industrial class most certainly did not.

What does it mean when we discuss whether the Marshall Plan could serve as a political blueprint and inspiration for the reconstruction of Ukraine, and possibly a post-war Russia?

Today the politics of productivity don’t work; perhaps they only did during the trentes glorieuses, 1945-75. In its way the European Union does correspond to the old Marshall Plan vision of technocractic, transnational economic management aimed at growth. Whether you live in Britain or Italy, not a day goes by without fresh exhortations to boost productivity and therefore promote growth, the alleged solution to all our problems.

But now we know it isn’t. Not only did the Marshall Planners take unlimited cheap energy for granted, they did so also for the dynamics of power in the labour market. The EU discovered that its modernizing methods could certainly revolutionize the economic prospects for countries like Poland and Hungary, but this did not guarantee anything at all about their evolution as liberal democracies. Then again, all western societies progressed to a situation where the service sector came to dominate manufacturing in GNP by a large margin. And in this sector, productivity was much harder to promote: who would want to eat in McDonald’s every day?

But there was another, even greater, difficulty. Even assuming that a productivity gain could be realized in manufacturing, who could be sure that the subsequent cost advantage would be automatically passed on to the workers? The holders of capital could pass it on to their shareholders, or just as likely, to themselves. There was only dynamic which would force them to pass it on: competition, which as Adam Smith long taught us, they all hated.

Compared to the Marshall Planners, the bureaucrats of European integration in all its phases, have proved themselves hopelessly inadequate at communicating the results of their efforts, their achievements. One could experience the entire French election campaign without any sign that France too was one of the beneficiaries of the EU Next Generation Recovery Fund. Who knows anything about the recently concluded Conference on the Future of Europe? The myth of the Marshall Plan was consciously constructed from the start by its operatives, because that was the only way they could guarantee their funding from Congress. Whoever wants to make a lasting impression on Ukraine’s future should start from the same premise.

[1] W.H.McNeill, The Greek Dilemma, Philadelphia and New York: J. B. Lippincott Co., 1947, pp.223-4  

[2] Charles S.Maier, ‘The Politics of Productivity’: Foundation of American International Foreign Economic Policy after World War II’, in Peter J.Katzenstein (ed.), Between Power and Plenty. Foreign Economic Policies of Advanced Industrial States, Madison, 1978; doc. cit in Ellwood, Rebuilding Europe. Western Europe, America and Postwar Reconstruction, London: Longmans, 1992, p.165

[3] Paul G.Hoffman, Peace Can Be Won, Garden City, NY, Doubleday, 1951, p.53

[4] Adapted from Ellwood, ‘What Winning Stories Teach: The Marshall Plan and Atlanticism as Enduring Narratives’, in Marco Mariano (ed.), Defining the Atlantic Community. Culture, Intellectuals and Policies in the Mid-Twentieth Century, London: Routledge, 2010

Prof. David W. Ellwood is a Senior Adjunct Professor at the Europe campus of the Johns Hopkins School of Advanced International Studies. He wrote The Shock of America. Europe and the Challenge of the Century, Oxford University Press 2012. He is a Fellow of the Fondazione Einaudi, Turin.

This is the second contribution to a blog series on the Marshall Plan. Prof. David W. Ellwood has been part of the panel at the public discussion “Another Marshall Plan? Myths and Truths 75 years later” on 10 June 2022 at the Humboldt Lab in Berlin in cooperation with the U.S. Embassy Berlin, the John F. Kennedy Institute at Freie Universität Berlin, and the Humboldt Lab of the Humboldt-Universität zu Berlin.