Marshall Plan
Categories: Econ
You know what's bad for the economy? Dropping bombs on it. (Actually, that's true pretty much across the board—although we're huge fans of the bath bomb.)
During World War II, Europe had enough explosives dropped on it to make it only slightly more hospitable than the moon. When the war ended, Europe found itself having a tough time recovering, and the world realized that having an entirely devastated continent wasn't in anyone's best interests.
Who'd have thunk it, right?
What Secretary of State George Marshall and others realized was that dire economic conditions generally result in countries turning to communism or fascism. They didn't even have to look that far into the past. After all, folks like Hitler, Mussolini, and Stalin didn't come to power in thriving, rich societies.
So they had a choice: help Europe recover, or watch World War II get an unnecessary and possibly even more brutal sequel. Since Part Threes are always terrible (*cough The Godfather: Part III cough*) the U.S. chose the Marshall Plan.
The Marshall Plan is an umbrella term for two things. The first was a speech Marshall himself gave at Harvard in front of 15,000 people in 1947. This was where he outlined the need for economic action, and more or less what that meant. The other was a series of laws, the Economic Cooperation Act and Foreign Assistance Act, which took the principles of the speech and turned them into policy.
The basics were pretty simple: the U.S. would send a ton of cash to Europe to fix the place up and jumpstart the economy. The big industrial powers would get the most, since that would help the most people, and allies would get preference over enemies. The biggest recipients of cash, therefore, were Great Britain, France, and West Germany, in that order.
The Marshall Plan even offered money to the Soviet Union and their satellite states. Unsurprisingly, they rejected it, since taking the money would mean the U.S. would have influence over them. And since part of the purpose of the plan was to fight communism, it wasn't like a bunch of communists were going to line up for it. They even had their own version of a plan specifically to fight the Marshall Plan: the Molotov Plan.
The Marshall Plan was in effect for four years, from 1948 to 1952, and afterwards was replaced with other foreign aid plans. It was a resounding success. Every single country that got U.S. money had an economy that was better off than it was before the war even started.
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Econ: What is the European Monetary Syst...7 Views
and finance Allah shmoop What is the European monetary system
Or to put it another way where do euros come
from Most currencies cover a single country like the U
S Has the dollar The U K has the pound
of Zambia has the kwacha and so on But one
of the world's major currencies covers an entire region the
euro It's used in twenty three countries throughout Europe nineteen
countries within the European Union and four small ones outside
of the official U from France and Germany to Slovakia
and Luxemburg That's where the euro plays in the sun
When James Bond plays baccarat in Monaco he places his
bets in euros When the Knights of Malta get their
armor repaired well they pay in euros by castle in
France are Chocola in Belgium or sauerkraut in Germany or
whatever it is they eat in Portugal Yeah you're using
euros Despite the fact that it's one of the world's
widest circulating currencies the euro is actually one of the
youngest It hasn't been around for a very long and
by not around that long while we mean like it
wasn't here in the nineteen nineties So while friends dominated
TV and flannel shirts dominated fashion and Britney Spears dominated
TRL while Europe was dominated by a patchwork of currencies
France had the Frank Germany had the deutschmark Italy had
the lira in Zambia still had the kwacha well the
countries of the eurozone didn't exactly have smooth courtship In
fact they marked the first couple of decades of the
twentieth century with the biggest wars in history up to
that point and then ended the century there with a
common currency So how did they do this Well quick
timeline From nineteen fourteen to nineteen eighteen most of the
countries of Europe fought against each other in World War
I In the nineteen twenties Germany suffered through a massive
inflation and a painful political dislocation brought on by their
defeat in the war Other countries faced their own traumas
Fascism rampant in Italy paranoia and political division in France
By the nineteen thirties that continent suffered through the ravages
of the Great Depression and the rise of the Nazis
From nineteen thirty nine to nineteen forty five another war
Well this one was worse than the previous one That
conflict WW two left Everyone in Europe bombed out and
broke the center of the world economy then shifted to
the United States Meanwhile Europe split into spheres of influence
US dominated area in the West and the communist U
S S R dominated the area in the east So
for half a century or so an unending stream of
wars economic dislocation rivalry and while political confrontation marked relations
on the continent hardly a place ripe for currency unification
So what happened Well here's the short answer Eastern Europe
started instituting more socialist economic policies right after World War
Two Meanwhile the Western countries especially France the UK and
what was then known as West Germany started opening up
trade in a new series of treaties from the nineteen
fifties In the nineteen nineties the nations of Europe stopped
being openly compay edited Justus They were adding expensive social
programs Meanwhile the larger economies experienced an influx of these
huge migration policy issues The migrants came from other European
countries and largely from former colonies in Asia and Africa
will eventually none of the major European countries could really
afford to operate individually and by the late nineteen eighties
the governments of the communist countries in Eastern Europe started
to collapse The new regimes in these former Iron Curtain
nations looked to join the growing European wide market East
and West Germany reunited The former communist countries entered the
trade treaties The European Union became one of the world's
key economic organizations Pressure for a single currency began to
grow well in nineteen ninety to the members of the
European Community signed a treaty that pave the way for
a single currency A series of treaties followed until the
euro was introduced on January first nineteen ninety nine and
by two thousand two the first countries had completed a
changeover from their previous currencies Lesson here Don't LOSE HOPE
ONE DAYS Great war can become tomorrow's free trade Unified
currency zone Well a single Middle East currencies that ever
coming India Pakistan Trade Zone A gift card that works
at both Yankee Stadium and Fenway Park Yeah you never
know In a few decades maybe