How the Marshall Plan Worked

During a Harvard commencement speech, Secretary of State George Marshall outlined a plan to assist Europe after World War II. Listen in and learn how this 12 minute speech changed the future of Europe in this HowStuffWorks.com podcast.

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Episode Transcript

Speaker 1 (00:00):
Welcome to Stuff You Missed in History Class from how
Stuff Works dot com. Hello, and welcome to the podcast.
I'm editor Candice Keener, joined by staff writer Jane mcgran Hey, Hey, Jane.
I think in today's society it wouldn't be so crazy

(00:23):
if the government issued a statement and said a lot
of our friends are in financial distress, and we're going
to give them a whole bunch of money to bail
them out and make it better. It seems pretty familiar today,
but something exactly like that happened um right after World
War Two. Yeah, And ironically enough, we know that today, uh,
Europe's economy is doing I think a hair better than ours.

(00:44):
We know at least that their unit of currency has
a little bit more punched than the American dollar. But
after World War two ended in n the situation in
Western Europe was really, really dire. We're talking about a
quarter of Germany's housing and the cities was just demolished.
There had been a decline and the gross domestic products.

(01:07):
And when they seemed to be slowly getting their acts
back together, the winter of six was so harsh that
the wheat harvest was completely knocked off. And what's more,
you have Western Europe's neighbors over to the East trying
to tempt them with the fruits of communism and socialism. Yeah,
it's true. And um not to belabor the point of

(01:28):
how bad they were doing over in Europe, but about
a third of the more than a third actually the
European industry was destroyed, which is just sort of crazy
to think about. And a sixty million unemployed, a hundred million,
we're going hungry. And there were a lot of efforts
to try to improve this that didn't it wasn't doing enough.
For instance, United uh Nations tried to help with the

(01:51):
U n r A by offering supplies, but these supplies
were basically food and medical supplies, and this wasn't exactly
helping them get back on the industry back on track, right.
It would sustain them, but not help them thrive and
flourish to pre war levels. And we know that President
Truman had extended the Truman Doctrine, which said that the
United States would offer support to any nation resisting authoritarian regimes.

(02:17):
So that was significant too. But again we're talking about
people who very desperately needed money to get things rolling again.
And so on June five, there was a commencement ceremony
at Harvard and George Marshall was going to be receiving
an honorary doctorate degree from Harvard, and he had been
asked to say a few words, and he sort of

(02:38):
cryptically wrote in a letter that he would say a
few words and maybe more. Yeah, and he his speech.
I read it um when I was preparing for the podcast,
and it's really good. It just lays things out very
clearly for someone to understand. And he what he says
is actually pretty familiar to stuff that you here today
in the news of political speeches, and that he was
explaining how the economic situation was enormously complex and that

(03:02):
the average man on the street couldn't really understand what
was going wrong and how to fix it. And he
laid it all out, and he said the breakdown of
the business structure of Europe. Europe was complete, and basically
explaining that raw materials and fuel were in short supply,
the Europeans machinery for their farming and everything like that
was lacking and worn out. So basically, what you have

(03:22):
in the situation where the farmer he can't buy the
materials he needs for ready money. So what's the good
of selling his produce if he can't buy what he needs?
And Marshall even famously said, our policy is not directed
against any country or doctrine, but against hunger, poverty, desperation
and chaos. And who is anyone to argue with that?

(03:43):
And he chose the perfect forum to do it too. Yeah,
it's interesting people love quoting that, and I think it's
a great quote because it shows that Marshall's trying to
sort of distance himself from the effort, from the argument
that this plan will contain communism. He wants to sort
of distance himself from the politics involved in it and
just sort of focus on the hunger and just the

(04:04):
horrible poverty that was going on exactly. And he knew
that it was going to take a lot of effort
to get people in Washington to get on board with
the Marshall Plan what later came to be known as
the the European Economic Recovery Plan that right, Yeah, and
it was known as the Marshall Plan in the news.
I think I read that Marshall himself didn't really like

(04:24):
calling it the Marshall Plan. Obviously, it was a joint effort.
There were lots of people involved. He didn't exactly write
every word of it. It was known as Marshall's Plan
because he did advocated and and uh campaign for it
so vigorously. Right. So, on that very famous day at
Harvard during the commencement ceremony, he knew who he was
going to be talking to. He was going to be
talking to a captive audience, people who were you know,

(04:46):
pretty friendly and the media. So the idea was to
get them on board with this plan first, and then
any adversaries in Washington. And of course people balked when
they heard the numbers involved with this plan, and the
United States actually asked Europe how much money do you
think you need over how many years to get things
back on track? And Europe had said billion dollars and

(05:10):
they didn't really have a set system as to how
they were going to delineate these funds and how it
was actually going to work to support the European economies.
What the Marshall Plan was doing was saying that thirteen
billion dollars in aid would be given to Western European
countries over the span of four years. And that was
still a pretty tough pill to swallow. Yeah, Marshal after

(05:32):
he got this agreement from from the European countries who
got together to do it. Like Candice mentioned, um it
was it was a part of a condition that the
European countries had to say what they wanted, rather than
the US coming in saying we're gonna give you x amount.
So once that I got figured out, Marshala to come
back to the US and are you in front of
Congress to say for them to pass this this uh
this bill. And so he went on a tour around

(05:54):
the country. In addition to speaking in testimony in front
of Congress, he wanted to win over the public, and
he gave a of speeches promote the plan the unions
like businessmen and farmers, etcetera. And I was reading on
a website that was established for the fiftieth anniversary of
the Marshall Plan, and was a website sponsored by us AID,
And the website was explaining that basically you had two

(06:16):
different camps of people who were opponents of the Marshall Plan.
You had people on the right who thought it was
a type of global new deal, and then he had
people on the other side who thought that the United
States was going to go into Europe and acts like
it was trying to control the countries, trying to colonize them,
trying to impose its powers and its ways of doing things.
But I think that's what's so significant about Marshall being proactive.

(06:39):
He didn't just offer people helping hand and say hey,
I'm gonna scoop you up. He made the countries do
the work and say how exactly they were going to
formulate their own plans once they had the financial assistance
to do so. Yeah, and the isolation has had a point.
I mean, obviously we had this tradition in America ever
since Washington's speech, the we shouldn't get entangled in foreign affairs,

(07:01):
and and the isolationists were afraid of this happening, and
so were the Soviets actually, and that's definitely yeah, the
Soviets were very scared of this. Initially, um, the US
was going to include the uss are in this aid,
but the Soviets pulled themselves really early in the plan
because they didn't They saw this whole plan is basically
the US trying to exert its own influence over Europe,

(07:23):
and they didn't want to be involved in it. They
didn't want to be controlled by us holding their purse strings,
basically right. And I think the Soviets trying to think
from their perspective for a minute here. You know, their
country had been ravaged as well, and according to the
the ideal principles of communism, speaking just theoretically here for
a moment, the idea to work for the common good,

(07:43):
to share what resources there were. It wasn't a terrible idea.
It's just that communism and practice as we know, didn't
work out so well for the Soviet Union. And I
think that these ideologies were filtering west. And we know
for sure that there were communist uprisings and check a
slavaw uck, yeah, and then even a small one in
France and Italy, and there was one that uprose in Greece,

(08:06):
and the Greek government was so fast and strong to
squel chip that that's what really got the United States
thinking we should be helping out Western Europe. They are
making an effort to contain communism, and we do need
to give them aid. Yeah. And there was a series
known as the Domino theory that when one country felt
under communist rule, that the surrounding neighboring countries would succumb
to it. Basically that the influence would spread um geographically.

(08:30):
And you have to think, because these countries are so
tightly packed together on the European continant, they're trading with
each other, you know, they're all passing through one another.
They're all in a really bad situation. So it was
entirely plausible that that could happen. But in Washington, I
think a pretty big development came when a Senator named
Arthur Vandenberg, he was a chairman of the Foreign Relations Committee.

(08:52):
He got on board with the Martial plan, and he
was known for being someone who took a strict isolationist policy,
and he was quoted as saying, in the name of peace, stability,
and freedom, it deserves prompt passage, in the name of
intelligent American self interest and envisions a mighty undertaking worthy
of our faith. And that presented a unique perspective, the

(09:16):
idea that if you are truly an intelligent, hard working
American who wants to see the fruits of your labor,
you're gonna want to piece Europe back together because in
the end it's going to benefit you know. And that's
the kind of math that Americans like to hear. Am
I right, Yeah, that's true, and it's important to note
some of the hard things that even you know, everyone
was will intention they didn't want to see this hunger

(09:37):
and poverty go on in Europe. But at the same
time Marshall had to answer questions to Congress, like can
American farmers even supported? Do do we have the facilities
we have to sustain ourselves and Europe? So ultimately the
plan was put into practice and it was meant to
continue for four years, and I actually got shut down
a little early on December thirty, first ninety one, because

(09:59):
that's when the Korean War really took off, and also
Europe was showing such improved progress that the United States
felt like it was time to sort of shut it down,
and we'd at that moment established a precedent of the
United States foreign relations. Yeah, and it's curious some of
the reverberating effects of the martial plans, some good, some

(10:22):
not so good. For instance, the Soviets, when they pulled
out UM, they started offering their own version, called the
Molotov Plan to their eastern blocks, and they sort of
lifted the curtain or the the iron curtain, the famous
UM term that refers to their control of the Eastern
Block nations, and so US offering this martial plan to

(10:42):
try to contain communism also contained communism in that block
in a way. But there are some really good effects
as well. I mean, arguably the martial plans at the
stage for military cooperation of things like the European Union
and North Atlantic Treaty Organization. Definitely, and we saw West
Germany starting to rearm again, to restock its arsenals and

(11:05):
to read build its housing, and um, no European nations
ever fully succumbed to communism. And then we see that
the gross domestic product is back up, industries are producing again,
and so overall the Martiall Plan will not fully realized
in its length and its original parameters. It was a success,

(11:25):
and Marshall went on to be awarded the Nobel Prize too. Yeah,
and there's very few things that I think we can
say about, you know, these political plans in the twentieth
century that there were huge success Like, nobody ever says
that about anything but the Martial Plan. Yeah, it was.
It was a pretty huge success. And ironically enough, if
you look at today and um right now as we're
recording this podcast, we know that the g twenty summit,

(11:46):
is is occurring um over in Europe, and conditions in Europe,
like we said, are arguably a little better than they
are the United States. We had said back during the
time of post World War two that we wouldn't talk
to a nation to who were involved communism, and now
one of the biggest players and the world economy is China,
a communist nation. So it's really important, I think, to

(12:08):
know the history of foreign relations and foreign aid so
that we can understand the choices in the events that
are happening around us today and how significant it was,
for instance, when Nixon started recognizing China and even under
the communist rule exactly was huge compared to the hell
soon after this was the after the Martial Plan. And
I think there comes a point when you have to say,
I don't agree with your politics, but I can't deny

(12:30):
any longer that you're making a huge contribution in the
world markets. So we tackle modern issues like this on
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(12:52):
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If you want to be more about the Marshall Plan,
or World War two, or any of the communist leaders
who tried to shut down the Marshall Plan, be sure
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(13:13):
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