Marshall Plan

The Marshall Plan, known officially following its enactment as the European Recovery Program (ERP), was the main plan of the United States for the reconstruction of Europe following World War II. The initiative was named for United States Secretary of State George Marshall and was largely the creation of State Department officials including William L. Clayton and George F. Kennan.

Areas without the Marshall Plan

Large parts of the world devastated by the Second World War did not benefit from the Marshall Plan. The only major Western European nation excluded was Francisco Franco's Spain. After the war it pursued a policy of self-sufficiency, currency controls, and quotas with little success. With the escalation of the Cold War the United States reconsidered its position, and in 1951 embraced Spain as an ally. Over the next decade a considerable amount of American aid would go to Spain, but less than its neighbors had received under the Marshall Plan.{{ref|Spain}}

Related Topics:
Francisco Franco - Spain

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While the western portion of the Soviet Union had been as badly affected as any part of the world by the war, the eastern portion of the empire was largely untouched and had seen a rapid industrialization during the war. The Soviets also imposed large reparations payments on the Axis allies that were in its sphere of influence. Finland, Hungary, Romania, and especially East Germany were forced to pay vast sums and ship large amounts of supplies to the USSR. These reparation payments meant that the Soviet Union received almost as much as any of the countries receiving Marshall Plan aid.

Related Topics:
Reparation - Finland - Hungary - Romania - East Germany

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Eastern Europe saw no Marshall Plan money, and little help from the Soviets. The Soviets did establish COMECON as a rebuttal to the Marshall Plan, but it was far less generous, with many economist arguing it was mostly a one way transfer of resources - from Soviet satellites to the Soviet Union. Economic recovery in the east was much slower than in the west, and some feel the economies never fully recovered in the communist period, resulting in the formation of the shortage economies and a gap in wealth between East and West. The police states that emerged in much of Eastern Europe could enforce rationing and austerity measures that would have been impossible in the west, allowing some resources to be moved towards reconstruction. One Eastern European state, Yugoslavia, did receive some aid from the United States during this period, but this is generally not considered Marshall Plan aid.

Related Topics:
COMECON - Shortage economies - Police state - Yugoslavia

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Japan was also badly damaged by the war. The American people and Congress were far less sympathetic towards the Japanese than they were to the Europeans. Japan was also not considered to have as great a strategic or economic importance to the United States. Thus no grand reconstruction plan was ever created, and the Japanese economic recovery before 1950 was slow. However, in 1950 the Korean War broke out and Japan became the main staging ground for the United Nations war effort, and a crucial supplier of materiel. One well known example is that of the Toyota company. In June 1950 the company produced only some 300 trucks, and was on the verge of going out of business. The first months of the war saw the military order over 5000 vehicles, and the company was revived.{{ref|Toyota}} During the four years of the Korean War the Japanese economy saw a substantially larger infusion of cash than any of the Marshall Plan nations had.

Related Topics:
Japan - Korean War - Toyota

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Canada, like the United States, was little damaged by the war and in 1945 was one of the world's largest economies. However, the Canadian economy had long been more dependent than the American one on trade with Europe, and after the war there were signs that the Canadian economy was struggling. In April 1948, the US Congress passed the provision in the plan that allowed the aid to be used in purchasing goods from Canada. The new provision ensured the health of that nation's economy as Canada made over a billion dollars in the first two years of operation. {{ref|Canada}}

Related Topics:
Canada - 1945 - 1948

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