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THE MARSHALL PLAN By the end of World War II much of Europe was devastated. The region’s economic structure was ruined and the devastation to agriculture left millions starving and homeless. During the war, Axis powers targeted the transportation infrastructure, leaving railways, bridges, and roads in a state of severe disrepair. Much of the civilian merchant shipping industry had also suffered severe damage. Due to the economic strain placed on the European countries during the war, many had exhausted their treasuries.
If not for The United State’s aid in the form of the Lend-Lease program during wartime efforts, this damage would have been much worse and the outcome may have been different. The United States however, did not suffer the same severity of destruction on its own territory. Consequently its massive agriculture and manufacturing base was still intact. For these reasons, The United States saw it necessary to offer goods, services, and monies to any European or Asian country, be it an Allied or Axis power. The U. S. continued providing aid after the war was over. Between 1945 and 1948, the U. S. ent $12 billion in aid to European Nations. The world’s major economies were crumbling and the U. S. realized the global impact. General George C. Marshall introduced a recovery plan in 1947, the European Recovery Plan or ERP. This plan, which later became known as the Marshall Plan, was the primary program for rebuilding and creating a stronger economic foundation for the countries of Western Europe during the post-war era, 1948-1952. The Marshall Plan provided an additional $13 billion in aid to European nations. Post-war relief from the U. S. totaled $25 billion. With a GDP of $258 billion, U.
S. post-war investment in foreign countries totaled 10% of its GDP. For all Marshall Plan participants, the economic output was 35% higher in 1951 than the 1938 pre-war era. Poverty and starvation disappeared and Western Europe began two decades of growth in which it saw a drastic increase in the standards of living. This plan was a key element in European recovery and integration. It erased trade barriers and set up institutions to coordinate a global economy. Efforts were made to model European industrial and business practices using the more efficient American models.
The Marshall Plan and the Bretton Woods system mandated free trade throughout the region. Through these acts, European nations standardized international exchange rates, set up the International Monetary Fund and the International Bank for Reconstruction and Development, which is now part of the World Bank Group. The European Coal and Steel Community which eventually became the European Union has roots in the Marshall Plan. Today, the term “Marshall Plan” has become a metaphor for any large scale government program that is designed to solve a specific social problem.
It is usually used when calling for federal spending to correct a perceived failure of the private sector. The Marshall Plan has played an integral part in establishing a global economy. References http://www. polsci. ucsb. edu/faculty/cohen/inpress/bretton. html http://www. archives. gov/exhibits/featured_documents/marshall_plan/ http://en. wikipedia. org/wiki/Marshall_Plan#Criticism http://en. wikipedia. org/wiki/Marshall_Plan http://en. wikiquote. org/wiki/George_Marshall#Essentials_to_Peace_. 281953. 29