tv Benn Steil The Marshall Plan CSPAN March 24, 2018 8:01pm-9:01pm EDT
so i can tell you whether or not democracy is dying. i can't tell you that the risk that is might be but thankfully, we repaid agency and especially collective agency. we still retain freedom that people in -- russia and turkey will have to let's do it and feel optimistic. >> that's a perfect way to end. it really is. thank you. thank you all. [applause] thanks panelists. thank you. booktv is on twitter eafn facebook wean and we want to hear from you are. tweet us twitter.com/booktv or o
post a comment on our facebook page. facebook.com/booktv. good afternoon everyone. my name is liz a member of the event staff and i would like to welcome you all this it lovely day to politics and prose. today we're here to listen to vince for a new bock the marshal plan dawn of the cold war a couple of quick notes now would be a great time to silence your cell phones. c-span booktv is recording today a and you don't want to be that person whose phone is ringing in the middle of the roading when we get to question and answer portion if you would please step up to mic we have over here on your right, just to make sure we can all hear your question and
your question gets recorded that would be mice and keep a question so we can keep the conversation going. normally if you're a regular we know we ask is you to fold chairs afterren efnght so leave them where e they are. book will be available after signing at the register ask for one and ben will be signing up here so now for the fun stuff. combining economic and a political history. so gives us a detailed account of the marshal plan from conception to aftermath and focuses on year 1947 to 1949 when the chill that would become cold or war set into u.s. soviet relations. drawing on new material from american russian, german and other europe archives and traces dawn desperate efforts to frustrate the u.s. by the prod to divide germany and called it a fresh perpghtive on marshal plan and washington post said at his best when describing agencies and policies that
oversaw and executed marshal plan he writes el gengtly explaining complicated mechanisms ewe used to fuel and fellow director economics at counsel on foreign relations. please help me welcome him to politics and pros. [applause] thank you very much liz this is a great washington politician thanks to all to you for coming out on windy weekend afternoon when i decided -- i wanted to write my own book on the plan of course had been done a few times before but thing that intrigued me most was endless desire with to repeat and past five years alone we've had calls for marshal plans in u ukraine and greece and southern europe and north africa and gaza most recently in syria but old o
original one never been replicated or even badly imitated i think that speaks to the unique historical circumstances in place when the plan was launched. in 1947, the united states dominated the globe economically and militarily like never before or never since. it could have used that dominance. we with accounted for over half of world manufacturing output. we were with the soul possessor of atomic weapons an could haves used that dominance in order to pursue policy and america first. but we didn't do that. instead, we chose after considerable debate sometimes costic debate to spend enormous sums on foreign aid in europe, and to build new multilateral institutions to promote international corporation. now remarkably, with all of the
major institutions that we currently associate with the post war or liberal order were created just a few short years after the second world war. the united nations, the imf, world bank, nato and predecessor organization to european union and world trade organization were all created between 1945 and 1949. and importantly for my story two of these institutions, the european union and nato were direct products of the marshal plan. now, that might sound surprising. but this grand project of integrating western europe economically and politically ultimately militarily was actually the most critical component of the new american strategy at the time in 1947 quote unquote containing the soviet union which came from famous american dplo malt george canon. now to understand why that was we have to go back a few years
further. to the warriors -- during the second world war, of course, the united states and the soviet unions were allies. in the battle against nazi germany. but as soviet dictator riley observed at the allied war leaders conference in 1943, quote unquote the best friendships are those founded on misunderstandings, and no doubt misunderstandings between stalin and fdr were profound and contradicted enormously to their friendship over those years, fdr -- believed or needed desperately to believe that the soviets after the war would effectively contain thelses and stalin for his part believe that side americans would go home as they had after world war i. and this -- misunderstanding began collapsing almost immediately
after the fighting stopped. over the course of 1946, stalin began trying to expand his borders southward. he pressed new territorial claims in turkey and iran. he refused to -- withdraw soviet troops stationed in iran under treaty and only backed down after president truman sent a large military latila to the region. but watershed moment, however, came in february of 1947 the british empire was rapidly collapsing because britain was going bankrupt. and the british ambassador it in washington came to the state department and announced that they were withdrawing all of their troops from greece. thousands of troops from greece where they were protecting the government against communist rebels.
and this really set off alarm bells in washington because they believed that if the united states didn't fill the gap being createssed by britain's imperial implosion that the soviets would. but this time, however, stalin had already begun shifting his focus away from the mediterranean and towards central europe. germany in particular -- and in march of 1947, secretary of state george marshall second from left fly to moscow for six weeks of negotiations with a soviet counterpart foreign minister -- third from the left. he was -- george marshall allied, of course, with the british and french foreign ministers earnest seven on the far left. george dough from france on the far right. but, of course, those two countries had their own national interest to protect with regard
to germany. so these six weeks of negotiations were all focused on the future of germany. , of course, at the end of world war ii, germany was divided into four zones of occupation in the west there was an american, british, and french zone in the east, of course, the soviet zone, and berlin itself which was an outpost in eastern europe was also divided into -- four sectors along the same lines. so the purpose of these moscow deliberations was to find some way to achieve a peace treaty with germany reunify country and end the occupation. there was one narrow issue that divided the united states in the soviet union deeply and that was the issue of soviet leader
joseph demanding $10 billion in recreations from western germany over o 100 billion dollars today's money. the united states, however, spending enormous sums to keep e western germany alive it was descending into disorder and chaos so the united states said that this is not possible because we would effectively be financing those reparations because western germany is not close to self-anding but done that after world war i and weren't going to repeat that era. but there was -- a much deeper fundamental conflict between the united states and the soviet union when it came to germany and that soviet union could count and a united germany being ally of the other. that was simple too threatening to both parties. fundamental national interest.
so mid-april after meeting with stalin that goes nowhere george marshall flies home an make a very famous radio address and announces that patient is sinking while doctors deliberate and we would not wait with any longer. that is the cooperative arrangement that we had made with the soviet union at the ulta and pop stem in 1945 we're at an end. the soviet we argued had undermined them. they had committed to unifying germany, economically, but they were not doing anything of the sort. they were effectively taking over east german companieses and ripping up factories to take back to the soviet union. the marshal said corporation was aten end. now while marshall was in moscow, president trying truman
was delivering a truman speech and two things were of highlighting about that -- speech he pledges to countries facing quote unquote aggressive movement that seek to improve them toaltarian regime and he emphasizes and this is important that it is economic and financial aid that is quote unquote essential to economic stablization and orderly political processes. so now he's beginning to foreshadow it what would become the marshal plan and this new emphasis on economic and financial smans. now, the idea behind this was that we needed someway to counter the soviet countermilitary force dominance in europe. at the end of world war ii there were over 3 million american troops in europe and president truman was termed to carry out fdr's pledge to withdraw these troops within two years.
so the request that the military was wrestling with with was how do we do this and provide security. make sure that our violent interest had protecting western europe are met without having to rely on the military. so the idea was well, we would leverage our economic dominance, dominance to counter the soviet are conventional force, interestingly muff, the ideaings initial ideas behind the marshal plan did not come from economists. but, in fact, from military men. people like secretary of war henry simpson army secretary kenneth roil and navy secretary eventually defense secretary james forestall was a hawks hawk. but he observed in giving testimony before congress in favor of marshal aid quote unquote this aid is far less expensive than standing isolated and alone in an unfriendly world. >> the underlying philosophy was
that merck own economic and security security depended on having strong independent allies. that is not colonies. not tributaries. not transactional counterparts. but allies who would stick with us through thick and thin. we were, obviously, going to go through -- periods of disagreement with western yiewrnls on economic and political affairs. but we wanted to create allies in europe and eventually in asia pacific as well. with with which we would have that -- sort of spiritual bond so this was really revolutionary -- vision. main architects of the marshal plan well certainly george kanen third from left which really the father of the geostrategic framework behind the marshal plan. will clayton on the right under
secretary of state for economic affairs. and many ways deserves to be considered one of the founding fathers of the european union. he was the one who said it was absolutely essential that we integrate western europe. make sure it uses its resources and most efficient manner possible. and that we teach them how to clap about rate so that they can collectively resist soviet subversion or local communist parties that would be coming particularly powerful in italy and france, of course, supported by the soviet union. one person who was very important to this story who was never formally part of the marshal plan is not in the state department on the right -- a general lucious clay, american military governor in germany. clay deserves enormous credit
for helping to reverse american policy in germany. under fdr our policy have been the so-called morgan foul plan to deindustrialize germany essentially to turn it into a -- this was leading to complete chaos and disorder in germany mass starvation in parts of the country. it was clay who really convinced washington that this was a disastrous policy. and help make a revival of western germany. the most critical component in west european economic and political integration. republican senator arthur vandenberg the one time isolationist had a senate foreign relations committee. marshall always said that he believed that vandenberg was so important to passage of the marshal aid legislation that he should have had his own name
attached it. general marshall, in fact, never used the term -- marshall plan. without arthur vangdenburg almost impossible to imagine this having become legislation, and he sacrificed his own presidential ambitions to convince -- very, very skeptical republican congress to go along with -- this legislation. marshall himself, of course, not in architect of the details of the marshall plan. but without question a great in the greatest possible salesman for the marshall plan. early on in process of taking it -- the plan from planning stage to actual policy stage, truman's main political advisor clark clifford said you know this is going to be a big visionary thing. we should call it the truman plan. and truman laughed and said
don't even think of it he said anything going up to congress bear in my name will twitch a few times go belly up and die. even the worst republican could not vote against the plan named after general marshall. so -- truman was a wise man. and in many ways. so marshall makes his iconic harbored speech, and june of 1947, it's quite short, it's deliberately very vague and there are two, two primarily reasons for this. one is that he wanted for europe to take ownership of the plan. it was critical that this not be seen as something that was being imposed on the europeans. the europeans had to buy in themselves and come to the united states with a firm proposal. no doubt we gave them plenty of what we called friendly aid in the drafting of their plan. but they ultimately had to it say, yes we are committed to
this. and we were part of developing it. but he also wanted and this was a key component of the geostrategy of the marshal plan to convince stalin to reject it. he did it not want himself to be the one ruling out soviet participation because he then said, well world opinion will come down against us and say what we are ones who split europe. it must be stalin who seen as splitting europe. now, stalin really wrestled for quite a few weeks with the question of how to deal with the marshall plan. he had wonderful spy network in washington and london so he was fully informed of what the united states wases up to. but he also needed dollars, desperately, and when it came to nicks at least he was very a markist ideowith log and believed inedible crisis of
capitalism had arrived and that the united states in its own o interest would have to give billions of dollars to europe in order to bail out its own collapsing industries. so he wanted to be able to take advantage of that. but he had three fundamental reasons to resist the marshal plan. first, it indicated that the u.s. was not going home. it was going to maintain a powerful, political, and ultimately he believed rightly military presence in europe. second, he was extremely concerned to learn that western germany would be the marshal plan, the new industrial engine for integrated western europe and finally, factory that tipped the balance was that, his own satellite countrieses in eastern europe wanted desperately to participate in the march tcial plan. the checks and in particular a refused to take no it shall as an witness shex czechoslovakia
had a newly elected government in 1936 two-thirds democrats one-third communist and the democrats even moving into autumn continued to speak out in favor of -- of czech participation, and this is why i subtitle my book -- dawn of the cold war. because the cold war really starts at the -- after marshall makes his speech. that's when stalin begins cracking down across central and eastern europe undermining coalition government and coalition of sorts, obviously, they were not free and. but not just there but in poland and hungary. roe mania. bulgaria and in february of 1948, excuse me in february of 1948 he actually precipitates a
cue and stalls a unify communist government. and here you see the political map of europe changing dramatically. if you look at the political map of europe in 1943, it's sort of a geografng jumble of alliances. but now after the marshal plan, it's for those of us old enough to remember the cold war this is the map where or familiar with with the stark geographic split between the western part under american leadership and -- eastern part under soviet leadership. here you see a picture of the communist leadership and czechoslovakia after the cue in february 1948, this turned out to be in a sense a god sending or for the marshal legislation. as i said republicans with were very resistant to idea of a
massive foreign aid plan but after the cue new czechoslovakia many republican ares switched to the other side and said this is the only way we can stop communism from spreading into western europe. they were critical elections coming up in italy in april of 1948, and it was considered imperative that we pass this legislation before those elections to convince italians that what we were with offering as an at ltive to communism was real. as we go into the spring of 1948, stalin refocuses on germany and he tries to come up with new ways to stop the united states from creating a west german state. so? june of '48 he institutes the famous blockade of berlin. which was ultimately overcome as
we know by a heroic airlift. operated by western allies in particular the united states which continued not only through the winter with of '48 and '49 but it wasn't wrapped up entirely until september of 49 a remarkable success. but it wasn't just the airlift the united states and its allies instituted counterblockades which had devastating efnghts on the economy and eastern germany and the soviet union which was one of the markets that convinced stalin finally to -- lift the blockade so in may of 1949 west germany, a new state is created. in september of 1949, conrad is elected chancellor of the new federal republic of germany in october stalin creates his own new east german state and now
the borders, the geographic borders of the cold war conflict in europe are effectively frozen for 40 years. let me talk briefly about the marshal planet itself. what did it actually achieve in western europe? and how did it do that? >> well what was it in terms of everybody likes to focus on the money -- it was 13.2 billion spread over four years. to put that in contemporary context if we were to do a marshal plan of equivalent size in terms of percentage of our annual output that would be 800 billion. so this was a significant amount of money. what did it do? well the -- participants of 16 marshal recipient countries did recover very dramatically over o the years from 1947 to
1952 output increased by over 60% and early account of the marshal plan tengded just to scribe that to marshall plan to leave at that. eventually fellow economists starting talking over the debate much more skeptical and starting running statistical assimilations and that -- led them to be rather baffled because the things that they were looking for didn't seem to be there. for example, was it that the marshal plan allowed these countries to import much more than they would have otherwise because he had no dollars in gold anymore and they found that effect was positive but -- way too small to explain it. was it that government spending went up and that these countries couldn't have afforded without marshal aid. well actually government spending as percentage output over marshall years:ed in europe and that wasn't the explanation. and understand last week, you had a wonderful speaker here
jerry mueller good friend of mine written a fabulous book called tyranny and metrics and one thing that jerry argues is that often the things that are most important are impossible to quantify and when we keact quantity if i them we ignore them. now george kanen who was not an economist always argued and i think he's fund mentally right here, that the most important element of the marshal plan was a psychological element convincing europeans that unlike after world war i we were not going home. this was why the marshal plan for example was a four-year plan. we didn't just give the europeans money wish them well and -- retreat into isolationism. again -- i think canyon was very right but he was wrong about one thing -- many in the state department were wrong about this. that we could achieve this without a military component. the french and the british in particular were adamant that they could not follow this state department vision.
of integrating their economies without american security guarantees because they would not be self-sufficient anymore. the french in particular said what happens after germany revives they cut off our ow coal supply or the soviets take over germany and cut off our coal supplies. we will not get any recovery. businesses will not invest and unless they know that the communists are not coming back into government in our country. and that the soviets and germans will not be a future security threat to us. so a year and a day after passage of the marshal aid legislation said this system april 4th, 1949, we signed the founding agreement to create nato. which was called in the state department interestingly enough, a military erp. european recovery plan a formal name of the marshal plan and i
would argue without that security component, the marshal plan would never have succeeded. to put that in contemporary context if you look at iraq and afghanistan, we've spent over 200 billion dollars on reconstruction aid alone. this is over 50% more than the totality of marshall aid in current dollars. we have almost nothing to show for it economically or politically. and the most fundamental thing that was missing in both cases was internal and external security. both were battling groups like the taliban and isis. they were -- alternative benefactors like iran with whom we were -- toc ling. so the security component was missing. the second factor that was absolutely critical to the
rejeeve nation of western europe was the reversal policy in germany. we remember truly dictators in germany. we made germany economic policy and we did an astangedding job many interest of too many i won't talk about all of the details of what we did. but broadly speaking, the ambition of the marshal plan was to recreate germany again as the main capital good supplier to europe. after war we were the main capital good supplier. and although many were visionist historians take soviet line that this was just a boom or for american industry it was the opposite that goal of the marshal plan was to reduce the american trade surplus with europe and restore germany to its traditional position. so europe could come back into balance and this was remarkably successful. to close, let's take things forward to more contemporary context and think a bit about
u.s. russia relations today and what we can possibly learn from the marshall plan. now, historically, political upheaval in germany has haddive reverberation throughout europe in 199 was no different and, of course, when the berlin wall fell. and after the security buffer collapsed entirely closer to moscow than it had ever been since the 18th century. whereas the alliances that we in the united states created in world war ii and nato more popular than ever to newly liberated central were clambering to get in. but it wasn't just nato the european union as well became as popular as it had ever been. i think that's the greatest possible testimony to what we
created after world war ii. remember also that natos article five mutual security guarantees were only invoke once in alliance history after september 11th, 2001 when we were attacked with our own allies when invoked in our defense. now soviet leader was extremely concerned about nato expanding to russia's borders. he pressed president -- bush not to do this. he -- he saw the political risk within russia of this perhaps undermining the new democratic forces that he had unleashed. now president bill clinton had two logical directions in which he could have gone. one was the direction advocated by george kanen who was now well into his 90s and still commenting.
canon said don't even think of expanding nato this is what we fought the cold war or for to get to this point. let us see if we can support the democratic forces and russia and reach an koodges accommodation unctioning what it means in central and eastern europe and it was the republican position. you might call the gingrich position outlining contract of america with basically said kanen speaking nonsense russia will always be russia. and we need to protect our new democratic all l lies and central and eastern europe. bill clinton being bill clinton chose a third option. which was to expand nato without paying for it so this is essentially where we are today george in 1997 condemns this, he says it will be the most fateful era of american policy in the entire post cold war era. it will inflame nationalistic
national and militarist tendencies in russian opinion, have an adverse effect on the development of russian democracy. restore the a atmosphere of cold war to east relation and directions decidedly not to our liking. top state department diplomat richard says this was nonsense. he said and i quote him the united states could have its cake and eat it too. we could offer protection to the central and eastern europe and europes enhe said i quote again years from now people will look back at the debate and wonder what all of the fuss was about and notice that nothing has changed in russia's relationship with west. and it is difficult i would argue to be more wrong richard was. now let's fast forward to where russia was led my putin. putinen primarily foreign policy ambition since becoming
president has been to restore the soviet political and economic space. to understand russian thinking about this, with this is a very interesting map 237. it's a map of what i will call the russian view of the world. north is at the -- at the bottom. not at the top. so you're looking at europe as a russian, russian might see it in moscow. and what's very noticeable you look at the russia's western border it's thousands of miles of plains unprotected by bodies of water or amount of water so you know -- sure russia may be paranoid at time but -- paranoid a time but pair noidz have enemies. that pole i can invaded from the west. hitler invaded from the west both of them went to moscow. so this is the russian mindset when it comes to nato. i think that comments that putin made were reare counted by former israeli leader perez in 2016 right before he died.
he -- recounted what putin told him about the conflict with the united states. he said and i quote what did the americans need nato for? the soviet union doesn't exist and war dismantled why do they need georgia and nato and romania do they think i didn't know that crimea is russian? and that he gave it to ukraine as a gift i didn't care until they needed yew yain i cans in nato what for? i didn't touch them they wanted to go to europe meaning european union, i said great. go to europe. but why did it they leave them in nato? these are not words of a ideal but a ruthless pragmatist not uniquely routeless interestingly he supported the crimea and occupation of -- georgia so wise again in 1998, and 94 we have signed up to
protect the series of countries even though we have neither resources nor the intention to do so in any serious way. so coming back to the marshal plan to wrap up, i believe this is historical lessons to this. we with remember the marshal plan because it was visionary. because it stirred people's imagination but it was also hard headed and it succeeded because it was hard headed. if we had defined success to include, for example, bringing czechoslovakia into the marshal plan we would have failed why? because we would have had to go to war with the soviet union to do that. american public would never have supported it and therefore what we talk today about -- about today is the greatest success in american foreign policy with probably have been one of its greatsest debacles. great acts of statesmanship like the marshal plan i would argue are grounded in realism and not just idealism. this is i believe, a lesson we
need to relearn. thank you very much. so very pleased to take your questions. krrk span is here so i know it's going to be very important to speak into the microphone. would like to go first? >> yes. i wanted to ask you about this -- issue of whether or not it was qiez to incorporate from eastern and central european countries into nato? the backlash to that really didn't materialize until in a significant way until putin came into power there wasn't as i know of a backlash to that in former soviet union, obviously, not in the countries that wanted
to be admitted. so i wanted to ask you about that a little bit, and then -- the other question is what about the agency of the countries the independent countries thelses? they wanted to join nato, and so -- what was it for the united states to perhaps negotiate with russia over their head? >> uh-huh. okay. first question -- the first material conflict tban in march 1999, three days after the first wave of nato expansion to the -- guard countries, hungary, poland czechoslovakia. we tban to bomb serbia now how
did russians see this not trying to convince you but you need to empathize with adversary understand how they see the world, and in order to see how things could deteriorate after that. nato we always emphasized was a u purely defensive alliance for our own members. had nothing to do with nato. serbia was a -- orthodox state like russia. so ordinary -- russians felt the kingship of serbian are so this -- to ordinary russians not just -- extreme nationalists like vladimir putin was an act of aggression and since it came only three days after the first wave of expansion to nato one thing i think it said to the russians is -- as countries who used to be about our allies forced allies,
of course, join nato, they will become locked into american policies that are to our own interest. u just to advance is closer today i heard russians are being disingenuous i know they're not going to invade but turkey shot dun a russian fighter jet that it was straight into turkish air space from syria and first thing turkish foreign ministry said quote unquote tushish air space is nato air space mean you attack us. you attack the united states and a the united states will come to our defense. and russian prime minister condemned this. that turkey had invoked not itself as the actor but nato saying this was very dangerous so from the russian perspective
countries part of nato get locked into policies that they consider fundamentally threatening to their own interests. i agree with you that the central and eastern european countries desperately wanted protection from russia. but there was in my view no cost to trying george canon's approach. meaning, let us see if we can reach a mutual understanding with the russians about what sovereignty and independence would mean and central and eastern europe without involving the american military. which, of course, they consider a fundamental threat to their security. and we didn't try that. now i have yet -- [inaudible conversations] i don't think we have any choice. if you look at the situation in the baltics, for example, i have yet to reach a single military
expert. we have had in come to speak at any institution for example the foreign relations believe we can defend baltics without using tactical nuclear weapons now personally i don't know how you felt but i found that terrifying because the american public is highly unlikely to support the united states using tactical nuclear weapons in order to defend countries they -- hardly know. they can't point out where they are on the map. they didn't even know we had any security commitment to them. personally i find that very dangerous. they come back to marshal plan. that we did make very controversial and hard had headd decisions about where to draw the line in terms of what the american public would tolerate and what a military capacity would be. in europe and i think we have to have that hard-headed vision again to make sure that security policy and europe is effective.
yeah so any question is do you think part of the reason why it was successful in yearn and haven't been replicated for a marshall plan in syria or afghanistan was preexisting political, and market economic institutions in western europe? >> have you read my book already? [laughter] yes countries from france for example had a long tradition of politically impartial civil service that implemented policy that was produced by democratically elected government. so that machinery, of course, had to be revived after the second world war. but the traditions were there. in many cases the public supported that. it didn't have that in iraq and afghanistan which is another thing that was missing from the e equation. thank you. [silence]
about the spy network in early 1950s my mother worked in the state department in cia liaison and i entry up hearing tales of how from time to time, people were out of the building in handcuffs and the context of the exposure of bow your heads and whitaker chambers. so -- i was interested first of all in tomorrows of people lis sit afnghts before exposure where they involved in think way in se the marshal plan. >> like bow your heads and chambers i'm not -- clear on exactly what they did lis and went to their exposure whether -- you know, apart from
mccarthyism. in a more boots on the ground manner did the fact of their infiltration change how the marshall plan was implemented? >> very interesting question. my previous which i commend to you all battle was about them the creation of the so-called brett and wood situation, to fix exchange rate system, et cetera. and many of the key -- actors in that drama interestingly enough were soviet agents. under fdr and state department was very marginalized and most important areas of -- foreign policy that were allowed to the bureaucracy under rei and
so most of the -- consequential spying activity in other words agents of influence within american goth came up within the u.s. treasury. so one thing to note about the marshal period is that truman reestablishes the state department. and none of the people to the best of my knowledge are are architects of the marshal plan in way involved in such afnght as you know many of them have the reputation today of being -- earliest cold war like george kanen and in effect conscientious objectors you raise a wonderful point, though, about mexico arkansas thyism which comes a few years later.
and i do argue in the book that atmosphere created from fall of spring '47 when marshall legislation goeses through, did help stimulate what you might call excessive -- anticommunism. marshall was very uncomfortable with himself. but vangdenburg made e clear to marshall that if we're going to push this -- congress the focus has to be not humanitarian. but anticommunism. i do think it contradicts in some cases atmosphere extreme paranoia washington so it did have some positive effects. no doubt, the soviets were a threat no doubt the -- french and italian communist parties were a threat to what we considered to be our fundamental interest. but the net eventually was
spread much too -- too wide and, of course, it infested our domestic politics. >> getting back to the economic arguments that you were talking about in debunking the kings spladges for the recovery. you -- in your book you talk a little bit about the story of infrastructure and those countries that already started on that path to recreatorcreater infrastructure did marshal plan money eventually go to help build that up ored those krpghts would devote most of their own resources to build -- rebuilding roads and the connecting points? >> in materials of germany which was the most critical, most of the industrial capacity was still there. remarkably despite all of the allied bombing during the war. once we did things like rebuild road networks for example germany industrial capacity were
very quickly so the primarily barrier was -- was really in terms of american policy. why are we going to -- allow this to it happen. now, if what the french at least in 1946 were just as ruthless as russians in terms of rip up german infrastructure and german factories dragging it back to france, but the united states insisted look, if we go down this route there's no way we will possibly enable us with revival of the european economy. the only way to do this is on the ground in germany. so it wasn't as if we suddenly started sympathizing with with the nazi. but we stopped that in germany fund mentally because we felt that the priority had to be rejuvenation of the european
economy as quickly as possible. in materials of the policies that the various countries followed they were twaibl very different. we did have -- conditionality medical record to steer it but french and italians in particular understood that americans really only had one nonnegotiable objective to keep the communist out of the coalition government. so -- the french, for example, purr seed plan for modernization that infuriated the state department to focus on face kl and monetary stablization several times we cult off marshal aid but every time we put it back because the french would come to us and say do you want the communist back? italian in the different direction like you need a modern industrial policy in italy and italians neil said we would do nothing of the sort and leave that to private enterprise.
we will focus on fiscal and monetary stablization. and again, the italians unked unked perfectly that nonnegotiate aid was keeping communist out of power. >> i wanted to follow-up on the question of the -- contrast between the marshal plan success and lack of success in the -- iraq and afghanistan. and it was wondering about the role of -- the millions of western yearn grants to the country and cultural and linguistic awareness that they brought to post yiewrm post war reconstruction in the derth of such people and linguistic in the other situation. on the whole it is difficult to say that that was helpful. and the reason i say that is that the --
so-called plan to deindustrialize germany had enormous popular support in the united states. in fact, before marshall went off to moscow in march of 1947, eleanor roosevelt henry are moore gab and other notables who have been a big supporters of this policy had -- a rally in new york to urge general marshall to maintain a quote unquote, hard piece with germany. and important most consequence with cial aspect of the marshal plan i woulding argue is the quick reviet revitalization was the most controversial in terms of american public opinion.
>> what was the effect of churchill speesm on all of these events? >> there was -- as you can imagine a split in views. truman came to a repent of having a accompanied churchill the speech was seen as being too aggressive and too militaristic. so that was at the time that he made it in 1946, considered overly, overly provocative. >> this may be outsided scope of your book. but could you draw any comparisons to what china is doing with the one road project and motivation dollars invested in possible outcome to the countries that are impacted? >> yeah, for external consumption, the chinese are clearly marketing their one belt
one road initiative as a -- as a chinese marshal plan as a forming of generosity. but i would note that there are, there are no notable similarities. for example, marshall aid was almost exclusively in the form of grants. one belt, one road. i wonts even call it aid it's investment. is in the form of loans. so what china is fund mentally looking to do is -- address the problem of its own massive industrial capacity. in other words, they've cool to the conclusion that they grossly over invested in china. they have as you know massive dollar reserves that he want to put to better use. so they figured okay, we can invest this money abroad and infrastructure that will be
useful for us to help our export industries and we can present it to the world as an act of generosity. but -- you know, i don't think it will have anywhere the transmissional effect that the marshall plan has. [inaudible conversations] you were talking about how we, in fact, wanted to focus on building up the economic -- economies of the marshal plan countries and not keeping an economic monopoly, so to speak. but what was the impact on the u.s. economy did a rising tide lift all boats or -- >> yes. and to paint fascinating that stayed in the united states in
1946, you know what jdp growth in the united states was? negative 11.6%. so we're talking massive reception their conditions. not surprisingly by the way, this all been predicted because government spending plummeted. after a the war -- and we had slightly negative growth again in is 1947 where marshall made his speech so in that context this was truly an extraordinary act of -- of statesmanship but we considered it to be fundamental it our own economic future. you know, stalin always insisted that we were doing this for ourself ourselves we were. but not in the way that he u saw it. one thing i talk about in the book truly remarkable is the mindset of the business community. the -- commercial lobbying firms in washington changed dramatically
over the second world war. they were traditionally mercantile and protectionists but therm brought around to the thinking that their own prosperity depended on rebalancing the global economy so that -- our allies could sell to us. that was the only way we were going to make a permanent revival of the global economy and, of course, the immediate decades after the second world war really were a golden period in terms of global chick revival. i think that owes much to the change in mindset in washington including the business community. >> thanks. >> can we get one more round of applause for -- [applause] thank you everyone so much for coming. please leave your chairs where they are. the signing line will be on this