OR: Should we have had a Marshall Plan analogue to deal with the economic fallout of the dissolution of the U.S.S.R? Would such a plan have worked?
Steil: The Marshall Plan has a remarkable legacy, but perhaps the most striking part of it is the endless effort to repeat it.
Just in the last 10 years alone, we've had high-profile proposals from Western statesmen and celebrity philanthropists for new Marshall Plans in Ukraine and Greece and southern Europe and North Africa and the Arab Middle East, as well as Marshall Plans for global warming and global unemployment. But nothing like the Marshall Plan has ever emerged. It's never even been badly imitated.
That doesn't mean that we have not tried the idea of massive reconstruction aid as a means of shaping other countries' politics. We have: it's just worked very badly. In the cases of Iraq and Afghanistan, for example, we have already spent over 50 percent more in current dollars on reconstruction aid in the two countries than we spent on the entirety of Marshall aid. Yet we have virtually nothing to show for it.
The most important reason is the lack of internal and external security in those countries. The Marshall Plan would never have been effective without a military escort, i.e. NATO, to provide this essential physical security to the recipient countries.
In the immediate aftermath of the collapse of the Soviet Union, security was really a fundamental political concern in the country. Russia's security buffer was collapsing very rapidly back to borders that it hadn't seen since the 18th century. And without that sort of security, I don't think it would have been possible to use economic aid as a viable means of shaping Russian politics. In fact, and this I would emphasize very strongly, we were pushing Russia in the other direction.
As you know, President Gorbachev and then President Yeltsin after him relentlessly pressed the United States not to expand NATO eastward. They both emphasized that this would give rise to strong nationalist sentiment in Russia and would set back Russia's political reforms. Yet we did it anyway. We didn't fund it adequately, which I think puts us in an extremely dangerous position today. But we did relentlessly expand NATO right up to Russia's borders. And Vladimir Putin has made absolutely clear that this is the number-one source of tensions, from his perspective, between the United States and Russia.
In a personal conversation that he had with Shimon Peres, which Peres recounted for Tablet magazine in 2016 shortly before he died, Putin emphasized this. He said, "What do the Americans need NATO for? The Soviet Union doesn't exist, the Warsaw Pact was dismantled. Why do they need Georgia in NATO, why do they need Romania in NATO? Do you think I didn't know that Crimea is Russian and that Khrushchev gave it to Ukraine as a gift? I didn't care until they needed the Ukrainians in NATO. What for? I didn't touch them. They wanted to go to Europe, I said great, go to Europe. But why did they need them in NATO?"
This is not the language of an ideologue, this is the language of a pragmatist — and not even a particularly ruthless one, by Russian standards. Gorbachev, for example, agreed with Putin over the occupation of Georgia and the annexation of Crimea.
Not only did we not use economic aid as a tool for trying to shape Russia, we pushed very much in the other direction by expanding NATO.
OR: You wrote an op-ed over the summer arguing that an internationalist outlook on economic matters, as opposed to a nationalist and protectionist outlook, is the real "America First” policy. It’s an intriguing thought — can you expand on it?
Steil: I don't think we should obsess so much about the financial aid element of the Marshall Plan. That had its role in the context of the early post-war years, but there are elements of this thinking about the use of economics in soft power that we have applied very well in a contemporary context.
Perhaps the best example is NAFTA. Put aside for the moment the economic impact of NAFTA and just focus on the political aspect. Relations between the United States and Mexico, at least up until Donald Trump's election, had improved immeasurably over the decade since NAFTA was passed.
There's no doubt that NAFTA played a major role because it was the first time in our two countries' mutual history that from the Mexican perspective, the United States had treated Mexico as a sovereign, independent power whose politics the United States would respect and whose territorial integrity the United States would always respect.
After all, you don't go into a fundamental free trade agreement with a country unless you respect its sovereignty. I think one of the very unfortunate aspects of the current unraveling of NAFTA is going to be a material deterioration in the quality of U.S.-Mexican political relations.
It may very well lead to the election in Mexico of an anti-American firebrand, Manuel Lopez Obrador. Thinking about trade agreements purely in a zero-sum economic way is devastating to our political interest. I think, for example, abandoning the TPP is a gift to China. It's allowing China to shape the rules for economic cooperation in the region, which will eventually, unless we counter it intelligently, lead to China growing its political influence and dominance in the region in ways that are antithetical to our own interests.
OR: Are there other major lessons that contemporary American citizens and policymakers can and should learn from the Plan and its success? Do you think our current administration might pick up on these lessons, given enough time?
Steil: There's clearly a war going on within the administration right now about precisely what the policy meaning of Donald Trump's “America First” vision should be. I think that tension is reflected, for example, in the President's so-called national security strategy.
If you actually read the document, there are elements — they're very hazy — but there are elements of internationalist thinking of the type that we saw in the Marshall Plan. In fact, there are several positive references in the document to the Marshall Plan itself.
