The Marshall Plan

By Benn Steil, Oxford University Press, 624 pages, £25

Political deals, to paraphrase the 19th-century poet John Godfrey Saxe, are like sausages: the more we know about how they are made, the less we respect them. Those who feel queasy about our diet of Brexit for breakfast, Brexit for lunch and Brexit for dinner might take solace from this: it is not just the Brexit negotiations that look messy when viewed up close. Saxe’s dictum is true for all important political processes, even those with the best of reputations.

Take the Marshall Plan, for instance — the postwar programme of American financial aid that is often credited with saving Europe from economic ruin and civil war. This is the subject of an excellent new book by Benn Steil, a prize-winning American economist. As Steil demonstrates, the Marshall Plan dominated the news in 1947 and 1948 almost as much as Brexit dominates the news today. And, as with Brexit, the process was never smooth. It caused arguments pretty much everywhere it was mentioned: between Republicans and Democrats, between the US State Department and the War Department, between France and Britain, and even between Europe and America. The horse-trading that took place between all of these groups was every bit as unsavoury as the negotiations today in Downing Street, Westminster and Brussels.

Steil unpacks all of these various squabbles blow by blow. He begins with the biggest disagreement of them all: the diplomatic impasse between America and the USSR. In March 1947, these two superpowers were engaged in a furious debate over how to treat defeated Germany. The Soviets wanted to strip the country of everything of value, in order to pay for the damage it had caused during the war. The Americans, however, quickly came to realise that punishing Germany too hard would inevitably drag the rest of Europe down too. Since the US taxpayer was already pouring money into the continent to stop people from starving, they saw no reason to extend the crisis any further.

The Marshall Plan was the result of the collapse in these Soviet-American talks. US policymakers, led by George Catlett Marshall, decided that if the Soviets would not agree to a recovery programme, then America would have to introduce one unilaterally.

They would stop punishing their zone of Germany, and instead try to nurse it back to some kind of political and economic health. They would champion the reorganisation of Europe in order to promote greater co-operation and trade. They would stimulate European reconstruction with a massive injection of money — $13.2 billion, or about $130 billion in today’s money. And along the way, they would freeze out both the Soviet Union and the communist parties it supported.

As with all political gambles, this one created a huge amount of controversy. Objections to the Marshall Plan — or the European Recovery Program, as it was officially known — came from every direction. The Soviets, naturally, hated it, calling it an attempt to “reorder the whole of Europe to America’s advantage”. Many Western Europeans were equally worried. They suspected that the enormous bounty on offer would come with strings attached: American access to their markets, American military bases on their territory, and American meddling in domestic policies. For example, when American officials hinted that Britain might only receive Marshall Aid if it redirected its resources towards coal production instead of house building, it looked suspiciously like Westminster was being forced to sell its sovereignty to Washington. In America too, debate raged as to whether the programme was worthwhile, or even fair. Why should Americans pay huge sums of money to rebuild the industrial capacity of their competitors? Why should they help Europe and not China? And if the Soviets hated the idea so much, might this reckless plan not lead to another war?

The programme was sold to Americans on the idea that it was necessary to defeat communism, but even this caused controversy. Many politicians feared that the plan played right into communist hands by confirming their narrative that America was trying to “colonise” Europe. Some, like Ohioan Congressman Frederick Smith, thought that, as a centralised state programme, the Marshall Plan was itself a form of communism.

Steil’s account picks its way through all of these arguments and counter-arguments with a quiet skill. There are no shocks or revelations here, but Steil’s mastery of both the sources and the narrative is exemplary. He reveals the inside of the sausage machine in all its messy detail, and the result is not so much sickening as fascinating.

As we slowly disentangle ourselves from the European Union — an institution that is itself one of the major legacies of the Marshall Plan — those who are tired of hearing about Brexit should take heart. What might seem like a tedious cycle of squabbling, back-biting and political brinkmanship is actually just the everyday workings of democracy. It might not be pretty, but as this book shows: let’s not judge our sausages until they are cooked.

–The Telegraph Group Limited, London 2018

Keith Lowe’s The Fear and the Freedom is published by Viking.