The Marshall Plan Myth

The 50th anniversary of the Marshall Plan provided another occasion for the media to celebrate the government's good works. The U.S.'s headlong plunge into global welfarism (nearly $100 billion in current dollars), they said, saved European economies after the Second World War. One reporter, Garrick Utley of NBC, even theorized that Marshall aid explains why East Germany was poor and West Germany rich. 

 

As economist Tyler Cowen has noted, the countries that received the most Marshall Plan money (allies Britain, Sweden, and Greece) grew the slowest between 1947 and 1955, while those that received the least money (axis powers Germany, Austria, and Italy) grew the most. In terms of post-war prosperity, then, it eventually paid to be a political enemy of the U.S. instead of a "beneficiary" of international charity. 

 

But this truth is only news if you think that the Marshall Plan was genuinely intended to help foreign countries. But as with all government programs, it pays returns to look beneath the surface. So what exactly was the point of the Marshall Plan, named for General George Marshall? It's been well-described in the works of historians William Appleman Williams, Gabriel Kolko, Stephen Ambrose, and Alan Milward. 

 

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