HISTORYHISTORY — PAST AND PERSPECTIVE

By 1951 Europe had not only achieved its prewar level of produc- The Marshall Plan tion but its level of industrial produc- tion rose to virtually guarantee pros- The post-WWII Marshall Plan, long touted as the aid plan perity for the future. that reinvigorated Europe, didn’t have as its first priority There it is: The United States, out of the actually helping the citizens of Europe. goodness of its heart, gave five percent of its gross national product with no strings attached to European nations to help them get back on their feet. And it worked! Look! By 1951, Europe had fully recovered! On the surface, Remini appears to be correct, but that does not preclude asking some questions and pointing out some er- rors of commission and omission in his es- tablishment view. For instance, who wrote Marshall’s speech? What were that ghost writer’s intentions? Did he have connec- tions to others behind the scenes who had differing purposes? And did Europe begin to recover because of Marshall Plan aid, or had that recovery begun long before any aid arri ved? And what about the miracle of Germany — known as Wirtschaftswunder , or “economic miracle” — that began on Sunday, June 20, 1948? (This was the day that Germany’s economic director, Ludwig Erhard, eliminated all price controls, which

AP Images unleashed Germany’s economy, entirely in- Bread and building: Wage and price controls installed by the Nazis remained in force after the dependent of any Marshall Plan aid.) And war, resulting in continuing shortages of essentials such as bread. The German economic miracle what about the Marshall Plan’s alleged suc- began only when those controls were lifted, long before the arrival of any Marshall Plan “aid.” cess as creating the justification for decades of additional foreign aid because it had by Bob Adelmann on the American Republic’s early figures, been so successful in reviving Europe? such as Andrew Jackson, Henry Clay, Let’s get some perspective. VE (Vic- hen establishment historians John Quincy Adams, and Daniel Webster. tory in Europe) Day was May 7, 1945. VJ consider the Marshall Plan, its In 2005, Remini was appointed the histo- (Victory over Japan) Day was August 14, W intents and purposes and alleged rian of the U.S. House of Representatives. 1945. President Franklin Roosevelt had successes, they typically make at least two Remini thus serves as the perfect example died on April 12, 1945 and the new presi- errors — one in logic and the other in his- of someone who knows his history but dent, Harry Truman, was sworn into of- tory. First, they assume that since Europe fails to tell all he knows, especially when fice that same day. The national elections began to revive at about the time the Mar- it comes to the Marshall Plan. in November 1946 shifted control of the shall Plan was implemented, then that re- In his “A Short History of the United House of Representatives to the Republi- vival must have been because of the plan, States,” this is what Remini had to say cans, gaining 55 seats compared to the pre- not in spite of it. about the Marshall Plan: vious Congress. The nation was weary of Second, they fail to make any mention war; 418,000 Americans had died in that of the forces in the background that had a Secretary of State, George C. Mar- conflict, and the war had cost the nation much different purpose in mind: specifi- shall, … devised a plan, which he out- $288 billion. In today’s money, that’s near- cally, how to use the Marshall Plan to fur- lined in a speech at Harvard University ly $5 trillion! The very last thing Ameri- ther their internationalist agenda. on June 5, 1947, by which the United cans wanted was any further involvement One example of a “court historian” pro- States would assist European nations in world affairs. They just wanted to get viding his readers with the accepted view to rebuild their shattered economies.... back to whatever “normal” used to be. of the Marshall Plan is Robert V. Remini, Between April 1948 and December It was not to be. The Soviet Union professor emeritus at the University of 1951, the United States contributed a began to flex its muscles when, ignor- Chicago, and author of numerous books little over $12 billion to Europe.... ing the terms of the Potsdam agreement,

34 THE NEW AMERICAN • July 23, 2012 it refused to withdraw its troops states around them as a protective from Iran. Truman had sent his shield. Secretary of State, James By- Not surprisingly, Kennan’s long rnes, to the Moscow Conference telegram was published in the July in December of 1945, asking him 1947 issue of Foreign Affairs mag- to confront Soviet Premier Josef azine, the print mouthpiece for the Stalin on the matter, and when now well-known internationalist Byrnes returned he told Truman Council on Foreign Relations. of his “success.” It turned out Kennan’s influence in cementing that there had been no discussion America’s acceptance of inter- about Iran after all, and Truman ventionism was noted by historian blew up. In a letter to Byrnes, John Lewis Gaddis, who said that Truman wrote: Kennan supported the notion that “only the prospect of an undiffer- Without these supplies fur- entiated global threat could shake nished by the United States, Americans out of their isolation- Russia would have been igno- ist tendencies that remained latent miniously defeated. Yet now among them .” (Emphasis added.) Russia stirs up rebellion and Kennan was certainly up to keeps troops on the soil of her the task of removing those latent friend and ally — Iran.... isolationist tendencies. Near the Unless Russia is faced with end of his life (he died in March an iron fist and strong lan- 2005 at age 101), the establish- guage another war is in the ment journal Foreign Policy (part making. Only one language do of the liberal Washington Post they understand: “how many The Bohlen Plan? George C. Marshall was the front man for empire) called Kennan “the most divisions do you have?” players behind the scenes who wanted to redesign Europe. influential diplomat of the 20th I do not think we should play Marshall’s speech that announ ced his plan was actually written century,” while internationalist compromise any longer.... I am by Charles “Chip” Bohlen. Henry Kissinger said that Kennan tired of babying the Soviets. “came as close to authoring the diplomatic doctrine of his era as Postwar Policymakers involve questions so intricate, so any diplomat in our history.” Kennan was James Byrnes is the first in a long list of delicate, so strange to our form of one of six insiders exposed in the 1986 characters who were heavily involved in thought, and so important to analysis book The Wise Men: Six Friends and the setting post-war foreign policy under the of our international environment that World They Made , which included Tru- new president. Byrnes had deep ties to I cannot compress answers into [a] man’s Secretary of State Dean Acheson, the Progressive movement dating back to single brief message without yielding FDR’s “special envoy” W. Averill Har- the Wilson administration. In fact, Byrnes to what I feel would be a dangerous riman, Truman’s Secretary of Defense had become so close to Wilson that the degree of oversimplification. Robert Lovett, U.S. High Commissioner president would often entrust important I hope, therefore, [that you] will to Germany John J. McCloy, and Soviet political tasks to him rather than to older, bear with me if I submit an answer Ambassador Charles “Chip” Bohlen. Au- more experienced individuals. Years later [in] five parts. thors Walter Isaacson and Evan Thomas Byrnes supported President Roosevelt in described them as the hidden architects his efforts to pack the Supreme Court in Among those “five parts” were Kennan’s behind the Truman Doctrine, the Mar- 1937, and Roosevelt returned the favor by perceptions that the USSR “perceived it- shall Plan, and the entire concept of appointing Byrnes to that court in 1941. self [to be] at perpetual war with capital- Soviet power “containment” that ruled The next on that list of individuals in- ism,” that the USSR would use friendly America’s foreign policy for 40 years. volved in influencing American foreign Marxists residing in the West as allies The authors’ favorable treatment of these policy was George Kennan, deputy chief in that war, that Soviet aggression was “hidden architects” earned high praise of the mission of the United States to the rooted in “historic Russian nationalism from the Council on Foreign Relations, USSR. It was his mission to confirm Tru- and neurosis,” and that its governmental which called it man’s suspicions that the Soviets weren’t structure “prohibited objective or accurate to be trusted, and that only a policy of pictures of internal and external reality.” a sober and straight-forward account “containment” would serve American in- In other words, it was going to be impos- of what actually happened and why.... terests best. In a long telegram to the U.S. sible to deal rationally with the Soviets, so In this context the book does a Treasury Department in February 1946, he the United States would have to “contain” great service. It restores balance to noted that relations with the Soviets their aggressions by building up nation- our recent history, and some sheen to www.TheNewAmerican.com 35 HISTORYHISTORY — PAST AND PERSPECTIVE

munist threat, and the Greek named him as ambassador to the Soviet The nation was weary of war; 418,000 Civil War ended in 1949. But Union. Once Bohlen’s speech was given to build up a border of states by General Marshall, formally launching Americans had died in that conflict, and that would successfully “con- the plan to aid Europe, representatives from the war had cost the nation $288 billion. In tain” the Soviet threat would 16 countries lined up at the feeding trough, take huge amounts of money, creating budgets for reconstruction that today’s money, that’s nearly $5 trillion! The and none of the war-devas- would require between $16 billion and $22 very last thing Americans wanted was any tated economies of France, billion of American money to accomplish. Germany, Italy, or England Initially called the Economic Cooperation further involvement in world affairs. were in a position to help. Act (ECA), but later renamed the European That left the United States as Recovery Program (ERP), the plan ran into its heroes. It may generate a much- the funding mechanism. With the help of stiff resistance in Congress, which debated needed movement to correct revi- two of the “Wise Men,” George Kennan the matter for 10 months. This was enough sionist history. It should be read. and Charles Bohlen, George C. Marshall time for the “Wise Men” and the heads designed and then formally announced his of major corporate and union interests to The first step toward containing the Rus- plan to “aid” Europe in a speech (written persuade the newly elected and firmly non- sians and instituting the yet-to-be-formal- by Bohlen) at Harvard University on June interventionist Congress to change their ized Marshall Plan was the Truman Doc- 5, 1947. minds. President Truman enlisted the help trine, officially announced to Congress by Bohlen was an insider and a “specialist” of Hiland Vatcheller (president of Allegh- the president in March 1947. At that mo- in Soviet affairs almost from the moment he eny-Ludlum Steel), W. Randolph Burgess ment in time, both Greece and Turkey were graduated from Harvard in 1927. He joined (vice-chairman of National City Bank of allegedly being threatened by communist the State Department in 1929, learning Rus- New York), Paul G. Hoffman (president of insurgents supported directly and indirectly sian and joining the staff of the American Studebaker Corporation), and Will Clayton by Stalin. The Greek Civil War of 1946 was embassy in Moscow in 1934. He worked (partner in Anderson, Clayton and Com- raging, and Truman was told that if Greece on Soviet “issues” in the State Department, pany, the world’s largest cotton trading went communist, then Turkey would be accompanying Roosevelt’s special envoy company). next. These two countries controlled both to the USSR, Harry Hopkins, who was a the Bosporus and Dardanelles straits, gate- Soviet spy, on numerous trips to visit Josef Business Backers ways from the Black Sea to the Mediter- Stalin. Bohlen was the focus of unfavor- When the idea of the Marshall Plan began ranean. Truman saw this as a “pincer” able attention by Senator Joseph McCar- to develop in the minds of Kennan and movement that could threaten the West’s thy in 1953 when President Eisenhower Bohlen, Clayton and his business cohorts access to the Middle East’s oil; saw an opportunity. With po- therefore, it was deemed in the tentially billions of dollars of national interest of the United Legacy: George Kennan taxpayer monies in the offing, States to intervene. In a speech was one of “The Six Wise Clayton said: “Let us admit Men” behind the scenes to Congress, Truman echoed who orchestrated the right off, we need markets — the sentiments of Kennan Marshall Plan to further big markets — in which to buy and said that it was now “the their own internationalist and sell.” And so, hoping to policy of the United States to political agenda. The be one of the beneficiaries of support free people who are myth of the Marshall a large cash infusion into Eu- resisting attempted subjuga- Plan’s “success” was the rope, Clayton led the charge tion by armed minorities or by justification for continued to change Congress’ mind, outside pressures.” American international interference. support the budding Marshall aid on the side of the Greek Plan, and, in so doing, also government was enough to implement the “Wise Men’s” rout the communist insurgents, plan to institute the new in- and as a result it was, from that ternationalist American for- point on, considered to be in eign policy. As Jeffrey Tucker America’s interests to inter- noted in the Mises Institute’s vene in other countries’ affairs Free Market newsletter for in the name of fighting Soviet September 1997: communism. Some $400 million in tech- Nothing was left to chance. nical and military aid was ap- Acheson worked with the proved by Congress to Greece established corporate elites and Turkey, which was and the State Department enough to neutralize the com- AP Images to create a supposed grass-

36 the ravaged economies. But buried in the language was its primary purpose: “create a common market free of national trade barriers,” the birth of the now increas- ingly discredited and devolving European Union.

Marshaling Facts Modern historians have not only failed to see the real purposes behind the Marshall Plan but have also lauded its perceived successes. In his highly entertaining book The Politically Incorrect Guide to Ameri- can History , noted revisionist historian Thomas Woods explained what really happened:

The fact is that this program worked AP Images no better than any other government New currency, new life: Business owners wait to exchange their old reichsmark for the new giveaway program. France, Germany deutsche marks installed as part of the currency reform that i ncluded the lifting of wage and price and Italy began their economic re- controls. The changes sparked the German economic miracle, known as Wirtschaftswunder . coveries before any Marshall Plan aid was disbursed. Austria and Greece, roots organization called “Citizens’ bleak as it was for France in 1938. which received sizeable amounts of Committee for the Marshall Plan.” American life as we know it would Marshall Plan aid … began to recover As many as one thousand speakers end forthwith. only as it was being phased out . [Em- representing the group toured the phasis added.] country to whip up support. It also In what stands as one of the most conve- ghost-wrote Congressional testimony nient “accidents” of history, Czechoslo- Some economists saw through the sham. from other organizations on behalf of vakia was seized by the communists in Henry Hazlitt, writing in his weekly col- the aid package. As Averill Harriman February of 1948 — thus “proving” the umn for Newsweek magazine in Novem- told several European ambassadors need for American intervention through ber 1947, warned that what Europe needed during a visit to the British embassy, the Marshall Plan — and Congress caved was not foreign aid dumped onto govern- they haven’t seen anything compared in, passing the ERP overwhelmingly, on ments to be dispersed according to some with the “flood of organized propa- March 31. President Truman signed it into grand central plan developed by govern- ganda which the Administration is law three days later, committing the U.S. ment “experts.” The problem Europe faced about to unloose.” government to “invest” $13 billion of tax- in rebuilding its economies was that the It was left to Will Clayton to make payer monies in “rebuilding” Europe as governments were themselves strangling the economic case. Perversely, he part of Kennan’s plan to defend the United the economy with controls, limits, regu- touted the Marshall Plan as the tri- States against Soviet aggression. In effect, lations, and price controls left over from umph of “free enterprise.” Moreover, the Marshall Plan, as Tucker put it, “was a Hitler’s domination of those countries. he said, if communism comes to Eu- political maneuver to loot American tax- Said Hazlitt: rope, “I think the situation which we payers to keep influential American corpo- would face in this country would be rations on the government dole. The plan’s Europe, in brief, has destroyed the a very grave one.” We would “have legacy was the egregious and perpetual use price mechanism. It does not per- to reorder and readjust our whole of foreign aid for domestic [political] and mit free enterprise to function. Such economy in this country if we lost economic purposes.” a condition, as long as it continues, the European market.” Seen then in the light of the “revision- must nullify any further help that we In the days before the vote, the ist history” decried by Foreign Affairs , it can pour in. As Wilhelm Röpke has claims became more extreme and, is clear what the Marshall Plan was re- pointed out in the English magazine with the media-corporate-banking- ally all about. The plan’s ostensible inten- Time and Tide : “Without a drastic government elite on board, the propa- tions included: 1) meeting the immediate internal reform of the national econ- ganda became ever more hysterical. needs of citizens of those countries rav- omy, to put an end to inflation and We were told that a depression would aged by the recent war for food, medicine, socialist controls, foreign credits can come. The U.S. would be bombed. and housing; 2) rebuilding infrastructure have no lasting effects, just as a man We’d be in another war if the aid such as factories, railroads, and bridges; cannot be kept alive indefinitely by package failed. The situation is as and 3) establishing financial stability in perpetual blood transfusions if the

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Clay: Herr Erhard, my encouraged the development of free advisers tell me what you enterprise and sound economic pol- Prior to the war, half of Greece’s export have done is a terrible mis- icy. earnings came from tobacco. But as take. What do you say to The truth is that those directing that? postwar U.S. foreign economic poli- Cowen pointed out, during the first year Erhard: Herr General, pay cy had strong interventionist sympa- “The Marshall Plan funded the export no attention to them! My thies: when faced with any problem, of 40,000 tons of American tobacco to advisers tell me the same their instinct was to see a governmen- thing! tal solution.... Europe [and] Greek exports fell to 2,500 Example: for every dollar that tons a year and never recovered.” A few days later Erhard the ECA [Economic Cooperation was confronted by U.S. Administration] gave a foreign gov- Army Colonel Oberst: ernment, that government had to set cause of his hemorrhage is not re- aside an equivalent amount … to be moved.” Oberst: How dare you relax our ra- used for public works, public invest- tioning system, when there is a wide- ments, and similar state projects. Hazlitt was exonerated in his views by spread food shortage? As a result, every US dollar sent to Tyler Cowen in his study The Marshall Erhard: But, Herr Oberst, I have re- a foreign government [forced] that Plan: Myths and Realities , published in laxed nothing. I have abolished it! government to take another from its 1985. Cowen concluded that there were Henceforth, the only rationing ticket own private sector. at least five myths, promoted even today, people will need will be the [new] about the Marshall Plan, which he noted Deutschemark. And they will work The Marshall Plan disrupted and some- was “but a limited success at most”: hard to get those Deutschemarks, just times severely damaged local economies. wait and see. For instance, prior to the war, half of The first myth: The Marshall Plan Greece’s export earnings came from to- was a significant factor in West Eu- Within days the German economy began bacco. But as Cowen pointed out, during ropean recovery to revive. Within the first month produc- the first year “The Marshall Plan funded In nearly every country occupied tion increased by an estimated 50 percent, the export of 40,000 tons of American to- by Germany during the war, the and monthly gains exceeded many later bacco to Europe [and] Greek exports fell stringent system of Nazi economic yearly gains, according to Cowen. to 2,500 tons a year and never recovered.” controls was continued even after the And as far as “sound economic policy” country was liberated. The second myth: The Marshall Plan was concerned, the Marshall Plan funds And in each case, rapid economic growth occurred only after the con- trols were lifted and sound economic policy [was] established. This happened irrespective of the timing [or the] extent of Marshall Plan aid. [Emphasis added.]

In fact, the German economic recovery had nothing to do with any such aid. It had to do with a radical and abrupt return to sound economic principles, and sanity. That return took place on Sunday, June 20, 1948, when Germany’s economic director, Ludwig Erhard (following the advice of his mentor, Wilhelm Röpke), replaced the reichsmark with the deutsche mark, which effectively reduced the money supply by 93 percent, and eliminated the deadly price controls that had inflicted inevitable shortages on the German people. When American advisor U.S. General Lucius AP Images Clay learned about Erhard’s unilateral Manufacturing success: The continuing success of Germany’s economic miracle, which began decision, the following conversation took after WWII, includes Volkswagen. Started under Hitler as the “people’s car,” it is now the second- place: largest motor vehicle manufacturer in the world, with revenues of $200 billion annually.

38 THE NEW AMERICAN • July 23, 2012 AP Images Reaching through time and space: The Marshall Plan’s impact on U.S. foreign policy continues to be felt today in the country’s never-ending involvement in other countries’ affairs. At present there are still 68,000 U.S. troops stationed in Germany, long after the ending of hostilities in 1945. were simply government-to-government In this regard, the Marshall Plan sub- trade policy was dominated by re- transfers that encouraged political chica- sidized some U.S. businesses at the strictive, bilateral trading agreements, nery. Noted Cowen: “As more American expense of the U.S. taxpayer. not “Open Door” multilateralism. aid was funneled through the Greek gov- The original Marshall Plan legisla- ernment, graft and corruption increased. tion, for instance, required that at least The Marshall Plan failed, then, to bring Major scandals were being uncovered half of all U.S.-financed ECA goods the publicly stated relief that was used to monthly. It was only in 1953 that Greece be shipped in vessels of American reg- sell the plan to the U.S. Congress, but suc- began to recover — the year when U.S. aid istry with American insurance. ceeded greatly in furthering the goals of was cut to $25 million.” Even Paul Hoffman, head of the the “Wise Men” and their crony capitalist ECA, admitted that this stipulation accomplices. In sum, the Marshall Plan The third myth: The Marshall Plan cost “millions of dollars” because worked against the interests of those who boosted the American economy. American vessels were not always needed help the most, the citizens of the The $13 billion given to the Mar- the cheapest available.... war-torn European continent, as well as shall Plan resulted in the loss of $13 This period also saw the shipment against the U.S. taxpayer. But through their billion worth of goods and services to of 65,000 trucks to Europe, despite close ties to the “Wise Men,” people like the U.S. domestic economy. the dreadful condition of Western Vatcheller, Burgess, Hoffman, and Clayton Europe’s roads and the serious gas turned the Marshall Plan aid into their own Actually the losses to the American tax- shortage. private “chocolate waterfall” of govern- payer were much greater due to slippage, ment aid, and leaving, as Tucker noted: overcharging, fraud, and the failure to ac- Even American oil companies got in on count for aid given prior to the enactment the act. Said Cowen: “When U.S. com- the actual legacy of the Marshall of the Marshall Plan. Current estimates panies started selling Mideast oil through Plan [as] a vast expansion of gov- show that American aid to Europe ap- the ECA, it was sold at the higher price ernment at home, the beginnings of proached $44 billion, or about $420 billion of Texas Gulf oil plus the transport price the Cold War rhetoric that would in today’s money. Cowen further noted of shipping the oil from the Texas Gulf sustain the welfare-warfare state for that “a year after the Marshall Plan began across the Atlantic.... If the Europeans 40 years, a permanent global troop sucking private capital out of the economy, tried to buy their oil elsewhere … they presence, and an entire business the U.S. fell into recession, precisely the would lose the ECA subsidy.” class on the take from Washing- opposite of what its proponents predicted.” ton. It also created a belief on the The fifth myth: American postwar part of the ruling elite in D.C. that The fourth myth: The operation of foreign economic policy was one of it could trick the public into back- the Marshall Plan was not strongly free trade and the “Open Door.” ing anything, including the idea that influenced by domestic U.S. special During this time, only 55 percent government and its connected inter- interests. of U.S. imports [from Europe] were est groups should run the world at The very conception of the Mar- duty-free, and most of the tariffs were taxpayer expense. shall Plan implied that it was partially not trivial.... designed to serve special business in- On manufactured items, the tariff Now that the Marshall Plan can be seen for terests.... ranged as high as 30 to 40 percent what it was, it can accurately be claimed All of the aid channeled through [while] tariffs on minerals and raw to have been a success — for the crony the ECA was linked to purchases of materials were [only] slightly lower.... capitalists and their enablers, the interna- particular U.S. goods and services. Contrary to popular belief, U.S. tionalists. n

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