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Labor Action, 13 February 1950


Sam Feliks

Two Dilemmas of the Marshall Plan:
ECA Conflicts Show Up in Economics


From Labor Action, Vol. 14 No. 7, 13 February 1950, p. 2.
Transcribed & marked up by Einde O’Callaghan for ETOL.


The methods used by the United States to organize capitalist Europe in the life-and-death struggle with Stalinism indicates the methods of U.S. domination. The dependence of Western Europe on U.S. exports made this the task of U.S. foreign policy – the Truman Doctrine, the Marshall Plan and the North Atlantic Pact.

Thus while Western Europe is to be organized as an ally in the next war, it cannot be alowed to achieve too much independence. The danger of Western Europe developing into a rival of the major imperialism is an ever-present danger for American capitalism. This is not only necessary from a political point of view, but also for the economic stability and hegemony of the U.S. itself. It is essentially through Europe’s economic subservience that the U.S. is able to establish its own military and political hegemony.

From the U.S. point of view the drive for the “integration” of Western Europe is to be manifested on all levels: the recently concluded Military Aid Program treaties, the Churchillian Council of Europe and the proposals for a European currency union. And in all areas the U.S. has set itself up as the arbiter of the meaning of “integration.”

Behind “Integration”

It is in the decisive economic area that the conflicts in interests in Western Europe begin to show themselves. The failure of ECA Administrator Paul Hoffman to push through a currency-union scheme points to the serious differences that have developed between a British and Scandinavian bloc on the one hand and the U.S. on the other, and in general between the U.S. and all of Western Europe.

It was at the week-long meeting of the European Marshall Plan Council ending on February 1 that the cracks in the Western European superstructure became most revealing. It also provided a demonstration of how the U.S. means to “integrate” Western Europe. At this point we might ask “socialist” supporters of ERP: If ERP is so beneficial to Western Europe, then why the reluctance to “integrate” being shown by the social-democratic governments of the North?

Paul Hoffman went to Paris late in January to put forward the ECA proposal for a clearing of the European currencies. But with him went some important “reservations” – laid down by the U.S. National Advisory Council on international financial and monetary problems – which defined the operation of imperialism. The NAC, the top U.S. governmental agency on international finance, stipulated the maintenance of the policy of non-discrimination in trade, and insisted that nothing shall be done to interfere with the power of the International Monetary Fund.

Peculiar “Liberalization”

Behind the verbiage of official language stands a conflict that threatens to tear the guts out of the Marshall Plan. The plan for a clearing union submitted by Western Europe contained the potential for the breaking-away of that area from domination by the American colossus. Specifically the clearing union planned to penalize those countries that built up persistent dollar deficits. Thus clearly it would be adding an impetus to direct trading AWAY from the dollar area, that is to cut imports from the U.S. As a last resort the currency union would be empowered to devalue the currency of the persistent debtor.

At this point the reservation on the Monetary Fund comes in. The U.S. is the largest contributor to the fund and thus has the largest voice in its policy decisions, and any scheme to undermine the authority of the fund would be a step in undermining U.S. control of international finance.

The non-discrimination reservation is of particular interest in that if is a bald attempt to force Western Europe to keep open its markets to U.S. exports. Specifically it was the Department of Agriculture which raised the objections. It feared that the tremendous farm surpluses if has accumulated would be barred from foreign markets. Thus with the sterling area embracing a large food-producing area outside of Europe, and with European currencies freely convertible into sterling and not into dollars, the Marshall Plan countries might try to satisfy their food requirements outside of the U.S.

The U.S. pundits of “liberalized trade” thus offer as their peculiar definition of liberalized trade: adequate export markets abroad, protected if necessary by restrictive trade agreements and protection of the U.S. home market from foreign competition.

Two Dilemmas

The U.S., while shouting about European import restrictions and trade discrimination, carries out .a policy which typifies the worst examples of these practices. For instance, there is an ironclad embargo placed on the import of butter; sugar is imported according to quotas assigned to different nations; the International Wheat Agreement assures the U.S. a certain level of exports; recently U.S. Steel raised domestic prices and cut export prices (the discriminatory practise of dual pricing); and potatoes are now being dumped abroad for one cent a hundred pounds.

The U.S. finds itself now on the horns of two dilemmas. Both indicate the character of the plans for “integration,” as utopian in concept and reactionary in content. One is that in order to close the dollar gap Western Europe must either restrict imports from the U.S. or increase exports to the U.S. Neither can be accomplished without a drastic effect on the U.S. if it is to be successful in its purpose.

The other is the necessity for some kind of “integration” dictated by the cold war. Really to carry out. an “integration” program would mean cutting off Western Europe from dependence on the U.S. Not to carry it out means that Western Europe is going to be continually dependent on U.S. “aid” of one type or another.

The real danger is that a EUROPEAN as opposed to an AMERICAN currency union might enable Western Europe to declare its economic independence. It might lead to the establishment of a third economic sphere in addition to the Stalinist and American. The political consequences of this are far-reaching, and is feared by both the American and Stalinist imperialist camps.

These tendencies toward Western European independence, as miserable and as hesitant as thay are, run head-on into Washington’s plans. The stability of the American economy and the dictates of the cold war determine these plans, and not the needs of Western Europe. The only democratic alternative is an independent Western Union as proposed by Independent Socialists.

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