The Marshall Plan – II

An Analysis of Its Aims and Limitations

(May 1948)

From Fourth International, Vol.9 No.3, May 1948, pp.79-82.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

We know that the American administration has already conceded to the point of view of Republican leader Vandenberg for reducing the sum of 22 billion dollars, which figures in the report of the Sixteen, to 17 billions. On the basis of this figure, Truman has asked Congress to grant the sum of 6,800 million dollars for the first fifteen months of operation of the Marshall Plan. But even this reduced sum is still not assured. There is, in fact, a strong tendency in a section of Congress to bring this aid down to 4 billion dollars for the first twelve months of application of the plan, that is to say, to about one-half the dollar deficit forecast by the report of the Sixteen for the year 1948.

On the other hand, Senator Taft has come out for a reduction to 3 billion dollars. Even if Congress votes the optimum sum asked by Truman, the latter remains considerably less than that anticipated in the report of the Sixteen, and which constituted the final basis for the possibility (according to the report) of attaining the economic level of 1938 by the end of 1951.

Directed and Controlled Aid

Washington expects to make Western European economy not into an independent economy which will develop in accord with its own interests and consequently in competition with American economy, but into an economy complementary to its own.

In order to arrive at this result, the American leaders lay down a series of conditions which must be fulfilled in exchange for American aid. Some of these have already clearly appeared in recent agreements concluded with France and Italy, on the occasion of granting the “interim” credits necessary for fighting the economic crisis in these countries until the Marshall Plan is applied. Washington will, in the first place, have the right to direct inspection over the utilization of granted aid, and will be able to suspend it for any nation which does not comply with its directives.

Thus the famous Section 5 of the American law on “interim” aid granted to France following the Franco-American pact signed by Bidault and J. Caffery on January 2, 1948 stipulates:

SECTION 5. (Paragraph A). – The governments benefiting from American aid agree to make effective use of every product supplied ...

(Paragraph C). – The benefiting governments agree to give complete and continuing publicity by all possible methods (including the governmental press and radio) in order to make known to consumers the destination, source, nature and quantity of products furnished.

(Paragraph D). – The benefiting governments agree to submit to the American government all information relative to the method of distribution and the utilization of the products.


Elsewhere, Washington designates the goods, with the quantities which must be bought in the United States, as well as goods whose production must not be undertaken by the benefiting countries.

The Case of Germany

In the case of Western Germany where American economic penetration, exploiting the extreme weakness of the native bourgeoisie and the difficulties of British imperialism, has acquired a scale far greater than elsewhere, the measures undertaken to raise the level of German production and to start its economy working, go hand in hand with a set of Draconian decrees which aim to direct and to control the economic revival of Germany in accord with the strict interests of American big businessmen.

Whereas before the war Germany exported mainly finished products, today it exports mainly raw materials. The latter constitute 99% of the exports originating from the British zone (of which 81% is coal, lumber being in second place). In return, whereas Germany imported mainly raw materials (67% of the total in 1932), these imports amounted to only 17% in 1946.

The Anglo-Americans have adopted a series of measures designed to paralyze all branches of German industry capable of competing with their own production. This is particularly true for the electrical, chemical and dye industries, for which the present exchange rate in relation to the dollar, arbitrarily determined for each product by the occupying authorities, prevents any possible competition with American firms.

This policy, inherent in the entire conception of the Marshall Plan, presents a striking contrast with the Dawes Plan which, after the first war, permitted an independent revival of Germany, thanks to American credits.

Another example of the economic enslavement of Western Europe inherent in the Marshall Plan is that presented by the suggestions made by the American administration and experts to the Sixteen, regarding the reconstruction of the European merchant fleet between now and the end of 1951. Washington finds the objective in the report of the Sixteen too “ambitious” and “advises” (it will impose when the Marshall Plan is applied) recourse either to the purchase of Liberty ships built during the war, or to shipment by American vessels.

The Political Counter-Part of “Aid”

The political conditions which accompany the granting of funds from the Marshall Plan are no less rigid and brutal.

The eviction of the Stalinists from governmental posts in all countries benefiting from “aid” is preparation for the formation of a political and military bloc of the Sixteen under American leadership. Realization of this bloc would involve a series of measures such as have already been enunciated, for example by Forrestal, American Secretary of Defense. He “hopes” that his department “would be assigned the coordination of the armed forces of the sixteen countries benefiting from the Marshall Plan” (Statement of January 15, 1948). Forrestal did not hesitate to add that he was “certain that General Marshall had in mind to ask the European nations to grant military bases for American forces in return for economic aid.”

It is true that the brutality of this second statement provoked a denial from Marshall, who is anxious not to shock the “psychological sovereignty” (sic) of the European nations. This will not prevent the Secretary of State from taking up the matter again through classical secret diplomacy. Walter Lippman insistently advises a return to this medium in order to soften the “psychological” shocks that the “old soldiers,” “politicians,” and “diplomats” of Truman’s America have provoked so often during the year.

The Reactions of the West European Bourgeoisie

It is understandable under these conditions, that the bourgeoisie of the benefiting countries, with the British and French bourgeoisies taking the lead, are trying to resist and that they consider the “fundamental problem” now is “not to give the lender any occasion to interfere in (our) national affairs” (Editorial of the newspaper Le Monde, January 17, 1948).

Within the framework of such preoccupations arises the project, for instance, of a new Conference of the Sixteen, prior to application of the Marshall Plan, and above all, the project for the creation of a permanent organization for European economic cooperation, under the Anglo-French leadership if possible.

But it is far more probable, on the contrary, that an American directorate will centralize and directly control the entire application of the Marshall Plan. This will apply even in the case when, for the sake of appearances, in order not to deal too great a shock to “psychological” sovereignty, an organ of European leadership will be interposed. The controversies now taking place in the U.S. Congress around the administration and application of the Plan demonstrate clearly that this time, in contrast with what happened after the first war, America intends to exercise strict control over use of the credits which it grants. This is the result of a fundamental change in the structure of the capitalist world which has completely upset its former relative equilibrium. The United States needs the entire world market, and any real revival of another capitalist power would precipitate its own crisis.

On the other hand, and for the same reasons (abnormal growth of American capitalism, and continued contraction of the markets available to other capitalist powers) the project for permanent economic cooperation of the European capitalist countries must fail because of their reciprocal antagonisms. Each is waging a sharper struggle than ever before in order, above all, to secure its own maximum revival, within the limits of the Marshall Plan. This appears clearly in the violent conflict which broke out between London and Paris over the question of devaluation of the franc.

In all respects the situation of the West European bourgeoisie is such that despite the risks of losing the last vestiges of its independence and despite all possible endeavors not to abandon these completely, it cannot get along without American aid, subject to the conditions imposed by Washington. The “clear-thinking ministers” like Cripps, Mayer, Bidault, de Gasperi, etc., have already grasped that fact, and having “drawn the lesson of the economic developments which have arisen from the war” (Le Monde, January 17, 1948), they conform with increasing servility to Yankee demands.

The Soviet Bureaucracy and the Marshall Plan

The Soviet bureaucracy opposes the Marshall Plan because of the latter’s economic, political and military implications, which go counter to its own international policy, to its interests in the “buffer-zone,” to the security of the USSR itself. It strives to prevent the success of this Plan in two ways. First, by ordering the Stalinist parties of the European capitalist countries within the Plan to further social agitation and the struggle of the masses for their demands. We have seen this tactic applied in the recent great struggles in France and Italy, and are now witnessing this same development in Germany. Second, by accelerating, through the conclusion of treaties and the elaboration of “plans,” the economic incorporation of the various countries in Europe under its influence into a closed sphere as immune from Western influence as possible, and centered upon the USSR.

The Stalinists, particularly the French Stalinists, present the Marshall Plan as essentially a “military” plan directed “against the USSR.” They conclude that the role assigned by the United States to Germany is to make the latter “an arsenal and a barracks,” its plants having “a role as war plants,” and with the United States preparing to utilize all Germany as a “base of operations against Eastern Europe”. [4] This is false. The evolution of American strategy, based on atomic weapons and on naval and aerial power, makes it of no interest whatever to America to turn Germany into an arsenal, for it is within immediate reach of the Red Army, and the latter could, in the event of war, occupy and utilize it in the space of several hours. The strategic interest of a Germany, and a Western Europe in general, under American control, is above all economic and political. The United States counts on the power of disintegration and liquidation that would be exerted on the entire Soviet “buffer-zone” by a bloc of countries revived thanks to American aid.

The Marshall Plan is, of course, part of the perspective of the ever possible war with the USSR. But the road to war must pass through the detour first – absolutely necessary in the immediate future – of an economic consolidation, as the pre-condition for the political consolidation of capitalist Western Europe.

A success of this kind could, in the event of war with the USSR, procure not so much bases for the United States, as millions of armed men, necessary for the effective support of the American army. But the Western European bourgeoisie could not begin to think of mobilizing these men so long as its position was not stabilized.

The opposition of the Soviet bureaucracy to the Marshall Plan is not a principled opposition. Its attitude would change if American imperialism were at the present stage to show a disposition towards compromise.

For this reason, the mobilization of the masses by the Stalinists does not aim to bring about the revolutionary overthrow of capitalism in the countries of the Plan, but only to exert pressure, in the direction of a compromise with the Soviet bureaucracy, upon the American bourgeoisie, and upon the national bourgeoisies in Europe. The Soviet bureaucracy knows, moreover, that the attempt to consummate an economic break between West and East is impossible. It is impossible, in the course of a few years, to divert trade rooted in a fixed structure of European economy. Western Europe has absorbed the essentially agricultural surplus of the East, while the latter absorbed a large part of the surplus of industrial production of the West.

Requirements of the USSR’s own revival will prevent it for a long time from being able to supply the needs in capital and industrial products of the “buffer-zone” countries. Consequently, the latter have to choose between stagnation in poverty and an intensification of their exchange with the West. The latter, moreover, will hardly be able to grapple with the task of carrying out the Marshall Plan if it gives up trade with the East. This is clearly indicated in the report of the Sixteen.

Thus, economic development in Western as well as Eastern Europe, far from making a break easy, compels, on the contrary, an intensification of economic exchange. This fact clearly emerges in the statistics of European trade for 1947. which show continuous increases over the corresponding figures for 1946, despite the diplomatic break.

What May Be Expected from the Plan

For reasons analyzed throughout this article, the Plan cannot by itself restore the pre-war economic level of Western Europe, nor the economic equilibrium which was the basis for this level. These have been destroyed by the new economic relations between the United States and the rest of the capitalist world resulting from the war. Nevertheless the Plan will exert an indisputable influence over immediate economic and political developments.

To the degree that the United States, even with the limited credits of between 15 and 17 billion dollars for the period 1948-51, will cover the immediate food requirements of the European countries and free them from paying for American imports out of their own resources, it will suppress the sharp and catastrophic character that the economic deterioration of Western Europe could assume.

The European bourgeoisie will profit from this respite in order to maneuver with greater ease in a “cold” offensive against the standard of living of the proletarian and petty-bourgeois masses, an offensive facilitated by the policy of the reformists and Stalinists. American aid will unquestionably help in achieving a partial success for the deflationist policy followed by the Italian and French governments under Christian-Democratic leadership. Sheltered by vital American imports which will be guaranteed for a certain period, the European bourgeoisie will revive its agricultural economy with a more rapid rhythm and will try to re-equip and modernize its industrial apparatus to the limit.

This economic conjuncture can, on the political arena, prove favorable to the “third force,” the alliance between the socialists and the center bourgeois parties, as against an offensive by the extreme-right and the neo-fascist movements (RPF in France, neo-fascist movements in Italy).

On the international arena, it can exert an influence in the direction of promoting a compromise between the USSR and the United States. Such a compromise could appear increasingly necessary due to an intensification of economic exchange between the West and the East, or due to the need therefor. A process of this sort is not excluded, in the event a different series of factors does not intervene. The main ones would be:

  1. Resistance of the masses to the offensive against their standard of living, which the bourgeoisie is compelled to pursue. This resistance may upset the very basis for the climate of “social peace,” which is indispensable for the success of the plans of the bourgeoisie.
  2. Rapid attainment of an economic blind alley after a period of revival of the productive forces, resulting from the extreme reduction of the market available to the European countries for trade.
  3. Outbreak of the crisis in the United States during the period 1948-51.

Regarding this last contingency, it is important to remember that maintenance of American exports at the present level and their development, if possible, play an important role in the effort which is being made to postpone the outbreak of the crisis in the United States. From that arises another effect, no less important, of the Marshall Plan. Truman, in his statement of January 14, has already pointed out the danger to the continuity of “American prosperity” arising from the decline of exports. But a decline of this sort would be inevitable in the event of a cessation of credits to foreign countries or even an important reduction. By 1946, a year during which net exports of goods and services reached 10 billion dollars, about half the figure for 1947, this relatively small part of the gross national product, which rose to about 205 billion dollars for the same period, already represented quite an important fraction of the gross increase in private capital evaluated at about 38 billion dollars annually [5]:

“The continuously increasing excess of exports over imports is one of the causes contributing to the maintenance of American production at a very high level, to almost complete employment of the labor force, and is preventing’ the outbreak of a decline in prices.” [6]

In addition, these exports, by including a very large proportion of agricultural products for the starved countries of Europe and the world, effectively contribute to maintaining the high purchasing capacity of the American farmers, which in turn promotes the absorptive capacity of the domestic market.

For the Socialist United States of Europe

The Marshall Plan brings no solution to the fundamental crisis of European capitalism nor does it change the descending spiral of European economy whkh began with the First World War. On the contrary. While eliminating momentarily the catastrophic character that the European economic situation could take without the contribution of vital American imports, the Marshall Plan underscores the enslavement of Europe and the decline of its economy.

The only solution which can permit the productive forces of Europe to resume their upward march is a genuine organic fusion of European economy which would make possible national planning in the interests of the masses. This is possible only in the framework of the Socialist United States of Europe, in close collaboration with a regenerated USSR.

All the projected measures of economic cooperation by the bourgeoisie prove either illusory or absolutely ineffective. The way in which the report of the Sixteen is conceived is a perfect illustration. Even a European customs union, if the mutual antagonisms among the various national bourgeoisies could be overcome, would have to struggle today against the disorder of prices and exchange in each of the participating countries, since the lowering of customs tariffs has only a minor importance in relation to these questions. The fundamental problem of unification, as Trotsky said, is of an economic character, not only from the standpoint of trade, but from the standpoint of attacking production as well. It would be necessary to proceed by planning European economic development as a function of natural resources and with the objective of constantly increasing the well-being of the great masses. Artificial barriers should no longer separate coal from iron. The system of electrification should be developed independently of frontiers, conforming to natural and economic conditions. The railroads of Europe should be united into a single network, etc. Such goals are beyond the possibilities of the bourgeoisie.

To the babbling about European economic “cooperation and unification” by bourgeois politicians who can scarcely conceal their surrender to the projected economic and political enslavement of Europe by Yankee imperialism; and to the “plan,” bureaucratically conceived and executed in the countries of the Soviet “buffer-zone” for the benefit of a privileged native social minority, and above all for the benefit of the Soviet bureaucracy itself, we counterpose socialist planning by the masses and for the masses, in the framework of the Socialist United States of Europe.


4. The German Plan of Marshall (Democratie Nouvelle, December 1947).

5. Etudes et Conjuncture (Economie Mondiale), No.13, June 1947. Publication of the French National Institute of Statistics.

6. Ibid., p.14.

Michel Pablo

Marxist Writers’

Updated on: 11 April 2009