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American leaders

Now American leaders developed a full picture of what they wanted to accomplish in Europe. By the end of 1948, they had taken great strides in the direction of a European neo-capitalism. They had tried to strengthen the CEEC, which would later become the OEEC (Organization for European Economic Cooperation), to launch a new payments plan, and forge transnational networks of corporative collaboration and power sharing, all of which would supposedly help to integrate economies and set the stage for a new era of social peace and material abundance on the continent.

They had also encouraged a political unification of Western Europe and had opened negotiations for a North Atlantic military alliance that would eventually lead to the integration of a European defense system. 10 This alliance would be called NATO (North Atlantic Treaty Organization). American goals remained the same, then, but the first half of 1949 did witness a shift in strategy. Marshall Planners had always assumed that monetary and trade reforms should go hand in hand with programs to restore production and curb inflation.

The recovery of prewar production levels and the growing signs of financial stability therefore led inevitably to less emphasis on these initial priorities and greater pressure

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for the devaluation of currencies, the liberalization of trade, and the formation of a European payments union. 11 This change of course seemed particularly desirable because the recovery of production had done little to correct Western Europe’s trade and payments deficit with the dollar area, which actually grew worse in the first half of the New Year.

This deterioration raised the dreadful prospect that Western Europe would not be self-supporting at the end of the Marshall Plan. Under these circumstances, the devaluation of currencies and the elimination of bilateral payments barriers became the keys not simplify into an integrated European economy but also into a multilateral pattern of international trade. 12 There were two of the three conditions attached to the British proposal, the third being an American decision to waive Article 9 of the Anglo-American loan agreement.

Article 9 permitted the British to discriminate against American imports only in cases where discrimination benefited ‘war-shattered’ economies. If left standing, it would force the British to exclude the sterling Dominions from the advantages of the trade-liberalization proposal. The British would have to discriminate in favor of the OEEC countries against the Dominion (as well as against the United States), and this action would disrupt the sterling bloc. Once again, Britain’s interests in Europe had to be reconciled with it is commitments to the sterling area.

The Marshall Plan was a success if judged simply as a program to control inflation, revive trade, and restore production. However, there is little doubt that the Marshall Plan helped to modernize budgetary systems in Western Europe or that it encouraged the spread of indicative economic planning, the rationalization of production, the development of corporative patterns of public-private power sharing, and the conviction that economic growth was the way to improve social divisions. These had been American goals from the start.

They were parts of the New Deal synthesis and were pursued with particular vigor through the technical-assistance program, the productivity teams, and the national production centers that Marshall Aid helped to establish. 14 List of

Works Cited

Arkes, Hadley. Bureaucracy, the Marshall Plan, and the National Interest. Princeton: Princeton U. P. , 1972. Gimbel, John. The Origins of the Marshall Plan. Stanford: Stanford U. P. , 1976. Hogan, Michael J. The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947-1952.

New York: Cambridge U. P. , 1987. Lutz, Frederick A. The Marshall Plan and European Economic Policy. Princeton: Princeton U. P. , 1972. Pelling, Henry. Britain and the Marshall Plan. New York: St. Martin’s Press, 1988. 1 The Marshall Plan, 1987, pg. 26-31 2 Britain and the Marshall Plan, 1988, pg. 102-103 3 The Origins of the Marshall Plan, 1976, pg. 55-57 4 The Marshall Plan and European Economic Policy, 1972, pg. 29-33 5 Bureaucracy, the Marshall Plan, and the National Interest, 1972, pg. 70-73 6 The Marshall Plan, 1987, pg. 44-46

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