Communism and the Marshall Plan

March 8, 1948

Whenever it is shown that, unless Europe abandons inflation and collectivism, the Marshall Plan is unlikely to bring the economic revival that its supporters expect of it, one of them is sure to reply that it is not to be judged primarily as an economic but as a political plan. Politics is somewhat outside of this column’s province. Yet it has always seemed to me that it is precisely as a political program that the Marshall Plan most obviously falls short. It seems to rest on the pleasant illusion that if we pour enough of the American taxpayer’s money into Europe we need never make the hard diplomatic decisions, or take the unequivocal and unyielding stand, that might otherwise seem the only reply to relentless Russian aggression. It helps to support the fatal assumption that dollars can buy anything, including liberty, democracy, and peace.

Surely the fate of Czechoslovakia and Finland ought to destroy these iridescent illusions forever. It has been officially estimated that the funds we are asked to contribute under the Marshall Plan would be equivalent to 3 to 5 percent of the national production of the sixteen recipient nations. Suppose that the plan had already been in operation, that Czechoslovakia had been a beneficiary under it, and that its living standards had been raised 3 to 5 percent, or even 10 to 20 percent, above the levels that they actually reached. Does anyone seriously think that the present tragedy would have been averted? In fact, as The New York Times has pointed out: “It is an ironic sidelight on postwar history that Russia’s latest prize was put on its feet by nearly a quarter of a billion dollars advanced by the United States.” The theory that Communism takes over poverty-stricken countries, but is powerless elsewhere, no more explains the fate of Czechoslovakia than it does the Wallace vote in the Bronx.

Is it not clear at last that far sterner means than “economic aid” are needed to combat world Communism? At the very least, the fate of Czechoslovakia ought to expose forever the futility of trying to appease Stalin, of “trusting” him, or trying to “do business” with him. Yet we continue to pour goods into one end of Austria while Stalin pulls them out of the other. We are still anxiously trying to get his worthless signature to still more worthless agreements.

As for the purely economic aspects of the Marshall Plan, it is becoming increasingly evident that Europe’s need is less than has been represented. While its need for foodstuffs is still serious, its new crops, expected to be far superior to last year’s, will be harvested five or six months from now. As for most other needs, The New York Times published a dispatch from Geneva on Feb. 2 which declared: “In every case, experts [of the United Nations Economic Commission] have found that the European shortages—both over all and country by country—were much less than the governments alleged and less than expected a few months ago.... It has been known for a long time that several, some think most, countries in Europe now have a greater total of goods and services available for consumption and investment purposes than before the war.”

Another warning comes from Roy Harrod, an economist at Oxford and author of a recent volume called “Are These Hardships Necessary?” In The London Banker for December he writes: “There is a fallacy which has taken root in Europe which may be very dangerous precisely because it has a strong appeal for Americans. This is that large-scale capital reconstruction is necessary for the revival of the economies.... We must seek to disillusion the Americans of the idea that Europe cannot survive unless she embarks upon a large-scale capital modernization program. This is likely to waste American assistance and intensify all the specific difficulties which arise from the inflationary pressure throughout Europe. It will defer recovery in the vital matters of currency reform, the restoration of circulating capital, and the revival of productive effort.”