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What We Got For What We Gave
The American Experience With Foreign Aid
April/May 1978 | Volume 29, Issue 3
By Truman’s standards the money was well spent; but not all Americans were satisfied. Some, like diplomat George F. Kennan, thought the emphasis of the Truman Doctrine was too military. Walter Lippmann, one of the nation’s most farsighted commentators on foreign affairs, predicted that the Truman Doctrine of assisting any nation that claimed it was threatened by Communism would lead the United States to squander its resources all over the world. Liberals were disturbed because the Greek government which survived with American support was a repressive, undemocratic regime.
The criticism of people like Kennan, Lippmann, and political liberals contributed to the next stage in foreign aid: the Marshall Plan. It was obvious in 1947 that Europe had not recovered from the devastation of the war. Some Americans argued that misery and want were the breeding ground of totalitarianism and ultimately of war. Furthermore, a destitute Europe could not buy American products. Accordingly, the State Department developed a plan, announced by Secretary of State George C. Marshall in June, 1947, for European recovery—not simply a set of self-centered national plans, but a coordinated program worked out by the Europeans themselves.
Marshall and his advisers decided that this proposal should not be presented as something directed against Communism and the Soviet Union. In a “calculated risk” they left the door open for Soviet participation. The Russians did send a delegation to a preliminary meeting in Paris, but soon withdrew in a cloud of denunciation of the United States for seeking the economic domination of Europe. Marshall and his colleagues heaved a sigh of relief. Had the Russians not withdrawn, it is unlikely that the American Congress would have appropriated the money necessary for the plan.
Virtually all commentators and historians agree that the Marshall Plan was the great triumph of American foreign aid. The administration and Congress worked smoothly together, even though the one was Democratic and the other under Republican control. Indeed, the leader for the plan in the Senate was Republican Senator Arthur H. Vandenberg, Jr., of Michigan, who had been an isolationist before Pearl Harbor. “This legislation,” said Vandenberg,”… aims to preserve the victory against aggression and dictatorship which we thought we won in World War II. It strives to help stop World War III before it starts. It fights economic chaos which would precipitate far-flung disintegration. It sustains Western civilization. It means to take Western Europe completely off the American dole at the end of the adventure.” In other words, this was foreign aid to end foreign aid.
Throughout 1947 a cluster of special committees built public support among business, labor, education, and women-voter groups. Congress acted in the spring of 1948, and on April 3 the President signed the Economic Cooperation Act. In the next four years the United States contributed $13 billion, less than half the amount which Europeans had originally requested, but enough to fulfill the basic objective of recovery. In 1947 European industrial and agricultural production was hovering around 70 per cent of prewar levels. By the end of the plan in 1952 industrial production was 35 per cent above prewar levels and agriculture 10 per cent above. Great Britain received the most, $3.2 billion; France, $2.7 billion; fifteen others received lesser amounts, with tiny Iceland the least, $29 million.
American aid constituted less than 5 per cent of the gross national products of the participating countries during the period of the plan. But this 5 per cent was crucial. It provided for essential needs, linked disconnected parts of a productive system, and provided incentives for the Europeans to adopt efficient methods on a regional basis.
The high point of American self-satisfaction over foreign aid came in 1949. The Truman Doctrine aid was succeeding in Greece and Turkey. Europe was reviving under the Marshall Plan. The plan’s political companion, the North Atlantic Treaty, was signed in April. A Soviet attempt to disrupt Western policy in Germany through the Berlin blockade had been foiled. The great events of the previous two years seemed to confirm that by linking power and imagination, Americans could do anything.
President Truman, having surprised everyone but himself by winning the 1948 election, was riding high. In his inaugural address he outlined four major aspects of foreign policy: first, support for the United Nations; second, world economic recovery; third, military strength “against the dangers of aggression”; and “Fourth, we must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas.
“More than half the people of the world are living in conditions approaching misery. Their food is inadequate. They are victims of disease. Their economic life is primitive and stagnant. Their poverty is a handicap and a threat both to them and to more prosperous areas.
“For the first time in history, humanity possesses the knowledge and skill to relieve the suffering of these people.”