The Marshall Plan

by Benn Steil

  Stalin knew that West Berlin was a hostage he could only kill once. Once it was dead, the rest of Allied-occupied Germany would be beyond his reach, absorbed into the new, hostile western bloc. Given that the priority was to stop the London Program going forward, he would need to restrain his impulse to pull the trigger.

  AT THIS STAGE OF THE Marshall Plan’s development, George Kennan began to marginalize himself. He considered Lippman’s views on America’s obligation to protect its European allies militarily “preposterous.”43 Kennan was alarmed by moves to establish a West German state, even though he had been advocating the country’s division since 1945. He opposed a western military alliance, continuing to lay emphasis on economic recovery as the cornerstone of European security. “Give the Marshall Plan a chance,” he recalled wanting to tell the Europeans. “The economic field [is one] in which we are strong. . . . Let’s not call attention to our [military] weakness by making a big splash about the military situation right now.”44

  These positions raised questions to which Kennan would never offer compelling answers. How would German recovery, which he accepted as necessary for European recovery, proceed without an end to the Soviet veto over reindustrialization and currency reform? How would France and Britain be made to abandon designs for national economic autarky without American guarantees against both German and Soviet aggression? At a minimum, it was becoming apparent that American economic diplomacy would not achieve its ends without a rupture in the Yalta-Potsdam political and security arrangement.

  That Kennan was now oddly positioned to the left of old sparring partners like Lippmann and Clay had one of three possible explanations. The first is that they had misunderstood him—that is, the Kennan of the Long Telegram and “Mr. X.” This was Kennan’s argument now, that containment had never been about setting up military pacts and shutting down diplomacy. But this is not credible. Kennan had in 1947 been forthright in proclaiming the need for Washington to bare its teeth and forgo illusions about the utility of dialogue with Moscow.

  The second is that he had converted his old enemies, but that they had overshot in their converts’ zeal. This position is more plausible, particularly in regards to Clay—a man who preferred to bulldoze barriers, whether they be French or Russian, than maneuver around them. The Soviets had, as Kennan had predicted, shown themselves uninterested in reasoned compromise. They were too suspicious of the West. Clay, Lippman, and other critics of “Mr. X” were now adapting to the new facts on the ground.

  The third explanation is the most compelling: that Kennan was, in spite of his writings, never comfortable with the military as a tool of peacetime diplomacy. He reveled in highlighting logical failings in others, but recoiled at seeing his own logic acted upon. Kennan now argued that democracies were ill-suited to the use of armed forces “tactically” in peacetime. The effort to do so only elevated the level of belligerent feeling toward the enemy, dangerously, in order to justify itself. “It was I who pressed for ‘containment’ and for aid to Europe as a form of containment,” he wrote in private notes. But “I think I was wrong. Not in my analysis of the Soviet position, but in my assumption that this government has the ability to ‘operate’ [tactically] in the foreign field.”45 The experts, like himself, invariably got pushed aside by the military and the politicians.

  This defeatism was a repudiation of his own War College lectures the previous October.46 It was also a staggering admission of strategic failure. It suggested that his own ideal form of containment, the Marshall Plan, could not work without a security element, and that the addition of this element would lead inevitably to war. Of this self-doubting Kennan, Lovett would say, “I liked him more as Mr. X.”47

  In any case, the train had departed and could not be called back. Bohlen, too, had opposed a military alliance, though later came to see it as “simply a necessity.”48 Time would tell whether Kennan’s dark new fears would be justified. But his career as government sage was in its last lap.

  AS THE LEGISLATIVE DRAMA OF the Marshall Plan headed into its final act, The New York Times focused on the stakes for Moscow and Washington. “International communism,” correspondent Drew Middleton wrote, was coming off “nearly three years of sweeping success.” The Marshall Plan, however, represented “the most effective political and economic opposition it has encountered since Lenin founded his Communist state nearly thirty-one years ago.” We were therefore “entering a period of a major Communist offensive” to undermine it. Endorsing the administration’s narrative, Middleton said that the plan struck at “the root of Communist influence in Western Europe,” which was “political chaos, economic instability and personal insecurity and fear.” Only the United States, with its unrivaled economic might, could “wield such a weapon.” The Cominform under Zhdanov would undertake to blunt it by instigating “strikes and industrial sabotage,” particularly in Italy, backed up by propaganda, bribes, and threats. This is why the Marshall Plan, “if it is to work in some areas,” he concluded, “must be bolstered by military backing.”49 This refrain was becoming ominously familiar.

  The Senate floor debate from March 3 to 13 took on this dilemma, without resolution. To get the aid bill passed, Vandenberg tried to treat the Marshall Plan narrowly as a “business enterprise” and to defer larger questions regarding the nature of America’s political and military relationship with Europe. Others, however, attacked this approach as unworthy or even irresponsible. Minnesota Republican Joseph Ball insisted that the Russian threat was fundamentally military in character, and that an economic program was therefore inadequate on its own. A military program was necessary to “checkmate the onrolling avalanche of Soviet power—naked, completely ruthless power.”

  Senator Lodge conceded that the Prague coup could never have been prevented through economic aid; but military support was not, he said, a practical alternative, given the strength and proximity of the Red Army. Another approach was needed to deal with the threat of subversion and internal unrest. He left unanswered, however, the question of whether a vote for the ERP implied a willingness to back it up with the threat of force. Arkansas Democrat John McClellan was unsatisfied with this ambiguity, insisting that no one should cast such a vote unless he were also prepared to support a military alliance with western Europe.50

  On March 8, the Senate unanimously approved an amendment to the legislation, named for California Republican senator William Knowland, which blocked export to the Soviet Union or its satellites of all goods whose supply was inadequate to meet the demands of the ERP. A complete ban on exports of oil, machinery, and industrial goods to Russia had the support of over 70 percent of the public, and was opposed by only 16 percent.51 The amendment also required that at least half the aid goods be transported on American ships, to the extent that such were available.

  Senator Taft could once again read the tea leaves, and maneuvered to embrace the inevitable while remaining the voice of disillusioned conservatives. “If I vote for this bill,” he said on March 13, just before the Senate vote, “it will be with the distinct understanding that we are making a one-year commitment. If we don’t want to continue this program after the first year there is no commitment, moral, legal, or otherwise.”52 Five minutes past midnight on March 14, the Senate authorized a one-year $5.3 billion appropriation by a vote of 69 to 17. Thirty-one Republicans voted for—Taft among them—and thirteen against.

  Hoover also did an about-turn from his January 21 letter to Vandenberg, writing to House speaker Martin that no reductions should be made to the appropriation.53 On March 17, Truman made his final plea for speedy House ratification of ERP legislation before a joint session of Congress. The CIA having concluded that a Communist victory in Italy would mean the possibility of Soviet “bases in Sicily and southern Italy [that] would pose a direct threat to the security of communications through the Mediterranean,” and have a “demoralizing effect throughout Western Europe,” Truman was anxious to get a final bill passed before the April 18 poll.54
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br />   In contrast to his “Truman Doctrine” address one year prior, the president this time had no hesitation in naming the villain of the new Cold War. “Since the close of hostilities, the Soviet Union and its agents,” he said, “have destroyed the independence and democratic character of a whole series of nations in Eastern and Central Europe. It is this ruthless course of action, and the clear design to extend it to the remaining free nations of Europe, that have brought about the critical situation in Europe today.” Although “prompt passage of [the European Recovery] program is the most telling contribution” Congress could now “make toward peace,” it was no longer sufficient. “[S]o long as communism threatens the very existence of democracy,” the United States had to be at a much higher state of military preparedness. He called on Congress to enact both universal military training and a restoration of Selective Service—the draft.55

  With the House vote nearing, tempers flared in the chamber on March 25. Some accused Truman of stirring up another war scare to keep himself in the White House. “It’s an election year, brother!” shouted Rep. Clare Hoffman (R-MI). Charles Vursell (R-IL) insisted the money would be better spent “building the strongest air force in the world.” Airpower would deter Stalin, whereas the Marshall Plan would merely encourage him to move his forces westward and pilfer American aid. “When he pulled the iron curtain over Czechoslovakia,” Vursell said, “he pulled it down over 2 billions of our money and equipment.” Now, “if we approve the present bill, we will next be asked to arm Europe. Then will come lend-lease and finally the sending of millions of soldiers with full equipment to fight and die to protect the 16 nations affected by this program.”

  The practical impact of Vursell’s attack on the bill, though, like those of many of his colleagues, was modest. He was still willing to vote for $3 billion (rather than $5.3 billion) in immediate aid, provided there would be no further appropriations.56 But the latter question would, in any case, be decided by a new Congress. Rather than defeat the Marshall Plan, then, Vursell’s argument fed into the growing belief that aid to western Europe could not end with money and goods. It would have to be backed up by a credible, and costly, new American military investment. Indeed, Republicans insisted, over Democratic objections, to having $275 million ($2.75 billion in today’s money) in military aid for Greece and Turkey written into the ERP bill, rather than considered separately (as the Senate had, successfully).57 The Marshall Plan, it now seemed clear, was to be delivered to Europe under military escort.

  But military measures, Reston pointed out, raised difficult wider political questions. If it were now clear that Communists, once they were in government, would not hesitate to use illegal means to seize total power, as they were doing in Czechoslovakia, how was the United States to approach the elections in Italy? Could it afford not to intervene to keep the Communists out of the government? If the answer were no, how could it justify supporting democracy through undemocratic means?

  Reston had no answers.58 But some in the State Department did. Steinhardt told Marshall that the lesson of Prague was that the United States needed to engage in “direct internal interference” in vulnerable parts of Europe “for the purpose of organizing the existing anti-Communist forces effectively.” He acknowledged that interference was “contrary to conventional diplomacy, but we have an opponent who breaks the rules.”59

  The relationship between the Marshall Plan and democracy was muddied from the start by the inclusion of Greece, which had been the fulcrum of the Truman Doctrine. But the House weakened the link further on March 30, just before voting on its version of the ERP bill. Supported by anti-Soviet hawks at the Defense Department, it passed a resolution endorsing Spain’s inclusion. Spanish dictator Francisco Franco commended the House, calling the vote—which succeeded “in spite of the attitude of its president and secretary of state”—a true representation of the feelings of the American people toward his country.

  The House “omnibus” bill also contained $900 million ($9 billion in today’s money) in military aid for China, Greece, and Turkey, and international emergency child relief, on top of the $5.3 billion for Europe. The State Department strongly opposed the supplemental funds, partially on the grounds that they might delay passage of an ERP bill and partly because of diplomatic concerns. “The inclusion of ERP in a bill which also dealt with military aid,” Hickerson wrote to Lovett on March 8, “would inevitably link ERP to potential military action against the Soviet Union or its agents. This would change the whole emphasis of ERP from a program to promote positively European recovery to a program of defense against Soviet aggression.” It might in turn deter “certain countries, notably [neutral] Sweden and Switzerland” from participating. “In that case, we would have engineered a break in the front of non-Communist European cooperation.”60

  Still, the omnibus bill passed in the House on March 31 by a vote of 329 to 74. One hundred seventy-one Republicans voted yes, 61 no; 158 Democrats voted yes, 11 no. The additional funding added by the House would make its way into the final reconciled legislation, although funding for Spain would not. Irked by Communist claims that the United States was “a reactionary force, allied to every undemocratic Government in Europe, from Greece to Spain,” and that the Marshall Plan was aimed at securing bases for war with the Soviet Union, the administration, with Vandenberg’s support, successfully cajoled the House-Senate conference into excluding Spain. Small remaining Senate and House bill differences were quickly resolved, and on April 2 the Economic Cooperation Act (also known as the Foreign Assistance Act) passed by a vote of 318 to 75 in the House and by voice vote in the Senate.61

  “This measure,” the president said proudly upon signing the Marshall Plan into law on April 3, 1948, “is America’s answer to the challenge facing the free world.” The United States was, he said, in all history “the first great nation to feed and support the conquered.” Truman used a dozen pens to sign the bill, giving one to each of the witnesses from Congress and his administration. Marshall, at a hemispheric conference in Bogotá during the ceremonies, cabled a message calling it “an historic step in the foreign policy of this country.” Hoffman called it “probably as well conceived a piece of legislation as was ever put on the books in the U.S.”62 Given the enormity of the political task, in both Europe and the United States, of translating Marshall’s Harvard speech into an actual legislated program, or even just a down payment on one, it was certainly remarkable that it had been accomplished in a mere ten months.

  “Search back as one may through the annals of the United States or any other power,” pronounced The Economist from London, “there is no record of a comparable act of inspired and generous diplomacy.”63 The Marshall Plan would, Bevin and Bidault said in a joint statement, “give new courage to the free peoples of the world.”64 Attlee called it “an act of unparalleled generosity and statesmanship.”65

  With the critical Italian elections only two weeks away, Togliatti addressed a rally of twenty thousand Italian Communists, denouncing the Marshall Plan and telling the gathered that the Soviets would aid their country. Boos and chants of Lunga vita agli Stati Uniti! (Long live the United States!) drowned him out. On April 17, with 94 percent of eligible voters going to the polls, Italians gave De Gasperi’s coalition 48.5 percent of the vote and an absolute majority of seats in the Chamber of Deputies. The Socialists and Communists, the latter of whom had been happy to campaign on a choice of “Russia vs. America,” saw their combined share drop from 40 percent in 1946 to 31 percent.66 In Paris, Bidault breathed a sigh of relief.

  Back in Washington, Kennan did as well. A Communist victory in Italy, he said, sounding a tad like the domino theorists he disparaged, would have undermined “our whole position in the Mediterranean, and possibly in Western Europe as well.” The result had been a clear demonstration of the Marshall Plan’s powerful psychological effect—psychology being the element in which he had always lodged the better part of his confidence. The United States had accomplished “four-
fifths” of the effect it was after, Kennan later reflected, “before the first supplies arrived” in Europe.67

  It is notable, however, that Kennan was not content to let the Marshall Plan speak for itself. He saw it much as a coach might see an athlete whose odds of victory could and should be boosted with banned substances. In the case of the Italian elections, that substance was the CIA’s first major covert operation. Though its contents are largely unknown, it certainly included a well-funded propaganda blitz to buoy the Christian Democrats and discredit the Communists. Kennan considered it an enormous success—so much so that he now wanted a sustained and systematic covert effort to complement the Marshall program. “Political warfare,” Kennan would write in May, “is the logical application of Clausewitz’s doctrine in time of peace.” More importantly, the Soviets were doing it at a much higher level. Propaganda, support of friendly foreign elements (legal or otherwise), and clandestine operations were no different from economic aid: they all now had to be part of the American diplomatic toolkit.68

  VANDENBERG HAD PAID A HIGH political price for pushing a historic foreign aid package through Congress, forfeiting any chance of winning the Republican nomination. In return, he expected that his man would run the program through the new Economic Cooperation Administration. Clayton and Acheson, the president’s men, would not do. At Acheson’s urging, Truman accepted Vandenberg’s choice: Paul Hoffman.

  Like Clayton, the affable, energetic fifty-seven-year-old Hoffman had impeccable industry credentials, as well as firm backing from business leaders. Like Clayton, he also believed that “the real objective” of the Marshall Plan was “to stop the spread of communism.”69 Unlike Clayton, Hoffman was a Republican.