Grandest Strategy

An Interview with Benn Steil

In fact, the State Department came to refer to NATO as "a military ERP." ERP as in European Recovery Program, the official name of the Marshall Plan.

OR: What were the big obstacles the Plan faced at home and abroad?

Steil: Let's start at home. Truman was faced with a hostile Republican Congress that was demanding a peace dividend. There was great skepticism in the country broadly, but particularly within the Republican Party, about the effectiveness of economic aid in the early post-war years.

It's largely been forgotten, but the United States dedicated many billions of dollars in financial aid to Europe and elsewhere in the two years after the end of World War II and before the Marshall Plan was launched. But most of that aid went through a U.N. organization, the UNRRA. It was not under American control. That aid was seen as largely ineffective both in reviving the European economy and in containing an increasingly hostile Soviet Union.

So in order to get this enormous aid plan through Congress, Republicans had to be convinced that this was necessary and it was going to be effective to counter Soviet authoritarianism in Europe. That if we made this commitment to providing massive U.S. aid to the Western Europeans they would be able to defend themselves against Soviet subversion and maintain themselves as strong capitalist democracies.

The hero on the Republican side who made this all possible was the head of the Senate Foreign Relations Committee, Arthur Vandenberg. A one-time isolationist, Vandenberg sacrificed his own presidential ambitions in order to collaborate with Truman and Marshall and to push this massive aid program through Congress. It was really a remarkable story of legislative triumph, one I spend a lot of time detailing in my book.

In terms of foreign policy, this was truly the beginning of the Cold War. It wasn't until Marshall's announcement of this proposed aid plan at Harvard in June of 1947 that Stalin concluded that collaboration with the United States — collaboration on his terms, that is — was effectively over. If he didn't take strong, effective, immediate action to clamp down on Central and Eastern Europe and to make sure that they were not tempted to participate in the Marshall Plan and fall into the U.S. orbit, then he was going to lose this invaluable security buffer he had created for the Soviet Union in the immediate aftermath of the war.

Here’s one example of how consequential Marshall's speech was. In May, just before the speech, Stalin had actually directed a Soviet negotiating delegation to reach agreement with the Americans on the creation of an interim unified government in Korea (provided that sufficient representation would be given to so-called leftist groups in southern Korea).

It was only after the announcement of the Marshall Plan that he ceased cooperation with the Americans entirely. As for the Americans, Marshall had written off cooperation with the Soviets entirely in April of 1947. He had spent six straight weeks negotiating with Stalin and his foreign minister Vyacheslav Molotov in Moscow about the possibility of reunifying Germany and ending the occupation. The discussions ended in complete stalemate and Marshall was convinced at that point that the Soviets were actually trying to precipitate economic collapse not only in Western Germany but in Western Europe more broadly.

At that point he determined that it was fundamentally necessary for the United States to abandon the Yalta-Potsdam vision of cooperation with the Soviet Union and to take firm unilateral action in order to secure Western Europe as part of the democratic capitalist orbit.

OR: Could anyone other than Truman and Marshall and Acheson and Kennan have done this?

Steil: No, I think their personalities mattered very much. The people who were making foreign economic policy in the Truman administration were much wiser and much more capable than those who were doing it in the FDR administration.

The two central players in FDR's regime were Treasury Secretary Henry Morgenthau, who certainly was no economist and was not a great intellect. His plan for post-war Germany, the so-called Morgenthau Plan to deindustrialize it was an utter disaster. It created a humanitarian crisis in Europe.

His deputy Harry Dexter White was, we found out only many decades later, a Soviet agent. He had taken rather astounding actions in order to support Soviet policy ambitions within the United States. The people that Truman empowered to make policy at the State Department after he took over were people who had basically been conscientious objectors during the FDR administration.

You mentioned Dean Acheson and George Kennan. They were certainly major players. George Kennan was the one who framed the Marshall Plan as a geostrategic blueprint, but there were others involved who were extremely important. The one I would highlight most strongly would be Will Clayton, who was General Marshall's Undersecretary for Economic Affairs.

It was Clayton who had the vision of integrating Western Europe economically and politically, effectively federating it in order to make recovery quicker and to institutionalize economic and political cooperation.

I think that Clayton actually deserves quite a bit of credit in terms of being one of the fathers of the European Union. People don't realize, but the French in particular had to be brought into this idea of European federation kicking and screaming. They were as determined as the Soviets, in the immediate aftermath of the war, to extract maximum repatriations from Germany, to rip up its industry and retransplant it into France and keep Germany down as an industrial power so it could never threaten France again.

It was the United States that convinced France that Western Germany's economic recovery was vital to France's own recovery and that the United States could provide France with effective physical security so that they did not need to worry about a revived Germany ever again becoming a threat to France.