Named after United States Secretary of State George Marshall (U.S. Army Chief of Staff during WWII), the Marshall Plan (European Recovery Program)  had bipartisan support in Washington.

An American initiative to assist Western Europe with recovery after WWII, the Marshall Plan gave ~$13 billion in aid to promote reduction of  interstate barriers and excessive regulations as well as to encourage business productivity, labor unions and modern business procedures.

Marshall Plan

Eastern Bloc Countries

Although 18 European countries received benefits from the plan, the USSR refused to participate and blocked the involvement of Eastern European countries under its control. In order to combat the effects of the Marshall Plan, the USSR developed its own economic plan – the Molotov Plan which created an economic alliance of socialist countries.

Criticism of the Marshall Plan

Historians, such as Walter LaFeber described the plan as economic imperialism by the USA, and an attempt to gain control over Western Europe, much as the USSR controlled the Eastern Bloc countries.

Economist Wilhelm Röpke criticized the plan for subsidizing a failing system and thereby hindering transition to a free market system.

Journalist Henry Hazlitt argued in his book Will Dollars Save the World? that economic recovery requires savings, capital accumulation and private enterprise –  not large cash subsidies.

In his book The Age of Turbulence, Alan Greenspan (Former US Chairman of the Federal Reserve Bank) gave credit to German Chancellor Ludwig Erhard for Europe’s economic recovery – not the contributions of the Marshall Plan.

In the end, the Marshall Plan did promote integration of European economies in a mixture of public and private economic sectors similar to that which existed in the USA. This reorganization also proved to be a boon for American investment.