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Seventy-five years ago this month, Secretary of State George C. Marshall gave a speech at Harvard University on the post-war reconstruction efforts in Europe. The speech led to the creation of the Marshall Plan, named after the World War II hero serving as secretary of state under President Harry S. Truman (and later became his secretary of Defense). Marshall was almost universally revered.
Formally known as the European Recovery Program, the Marshall Plan was the first U.S. government-sponsored foreign assistance initiative. In 1947, Europe remained largely in ruins, transportation was stalled, food was scarce, and there were increasing fears that local communist parties with support from Moscow would take advantage of the situation.
The plan was targeted toward economic recovery and rebuilding institutions in 16 countries and was in effect from April 1948 to December 1951, costing the American taxpayers up to $13.3 billion (amounting to $150 billion in 2020). The Marshall Plan was designed to rebuild Europe and push back against the Soviet Union, creating political and socioeconomic stability needed for these states to sustain democratic and market institutions. In many ways, the Marshall Plan can be described as an act of enlightened self-interest as it created strong and strategically vital partners in Europe while providing key market access to U.S. businesses.
As Benn Steil described in his excellent book, The Marshall Plan: Dawn of the Cold War, Marshall saw an inextricable linkage between issues of security and development, ultimately creating the North Atlantic Treaty Organization (NATO) and the secretariat of the Marshall Plan: the Organization for European Economic Cooperation (which later evolved into the OECD and become a vital organization made up of market democracies).
Emergency workers clear up debris after an airstrike hit a tire shop in the western city of Lviv, Ukraine, on Monday.
Besides helping Europe return to the path of economic self-sufficiency and development, the Marshall Plan also marked the beginning of America’s formal and sustained use of soft power, namely foreign assistance. One of the foremost champions of this approach was Senator Arthur Vandenberg, a Republican from Michigan who served in the United States Senate from 1928 to 1951. Despite being the party’s favored candidate for the presidential nomination in 1948, Sen. Vandenberg chose to stay in the Senate, where he chaired the Senate Foreign Relations Committee and shepherded the Marshall Plan and NATO through the Senate.
Sen. Vandenberg, a former isolationist shaken by World War II and the threat of Soviet Communism, set a new internationalist orientation for the Republican party. At a 1943 conference in the Grand Hotel in Mackinac Islands, MI, Sen. Vandenberg steered Republican leaders to commit to an internationalist vision. Vandenberg’s belief in American leadership in international affairs, peace through strength, and working with allies remained the leading perspective in the Republican party for more than 60 years.
Nearly 75 years later, the United States faces a different but daunting challenge — this time in the form of great power competition with China and Russia. Perhaps it is too strong to say we are in a second Cold War, but China and Russia fill vacuums that the United States leaves behind. Both countries rushed to provide Covid-19 vaccines to developing countries at a time when the West was getting organized on vaccine distribution efforts. Similarly, China has helped developing countries close their digital divide through ZTE and Huawei, although working with these companies means providing data to China. China is now the largest trading partner to more than 100 countries.
While the world is freer, healthier, and more prosperous than 75 years ago, the world still looks to the United States for leadership. Today, developing countries want to access infrastructure (including airports and seaports), close their digital divide, and solve COVID-19, among other challenges. If the West does not offer a compelling and affirmative alternative, many of these countries will take their business to China and Russia. That is why great power competition will not happen in Beijing or Moscow but in Kyiv, Nairobi, Tashkent, Jakarta, or Guatemala City. We need to update our toolkit for a new era and a new world.
Just as at the time of the launch of the Marshall Plan, American diplomacy and soft power matter. American leadership still matters. At the same time, the toolkit and approaches that worked in the Cold War will not work today because the world has changed, and the needs are different. We need to think creatively and update what we offer and how we offer it. We should work toward supporting countries to stand on their own and become global burden sharers just as the countries that received the Marshall Plan’s assistance did.
The Marshall Plan was a political and economic success. Not only did the assistance help restore and increase the production capacity for the countries to pre-war levels, but the Plan also liberalized and boosted the trade between Europe and America and used U.S. government-backed guaranties to help mobilize private capital in Europe and strengthened its markets and private sector. In other words, our monies were a catalyst. For us to prevail again in the long run against China and Russia, we will need non-military power most of all and the 75th anniversary of the Marshall Plan reminds us that we have been here before and can do this again.
Daniel P. Runde is a Senior Vice President at the Center for Strategic and International Studies.