Related Items: The Marshall Plan

PEP Brings the Marshall Plan’s Proven Concepts
to Life in Russia in the 21st Century

General George Marshall, creator of Marshall Plan

U.S. Secretary of State George Marshall introduced the European Recovery Program (“The Marshall Plan”) at Harvard University on June 5, 1947. His plan was designed to rebuild Europe following the destruction of World War II.
History: After a bitter victory in 1919, the European Allies had forced an isolated Germany to pay billions of dollars in war reparations. This punishment threw Germany into deep economic depression, giving rise to broad support for the irrational economic and social solutions promised by Hitler’s National Socialist Party.

The Nazi Party took advantage of Germany’s low morale by rearming the country and pushing the world into the even more destructive World War II. General Marshall sought to ensure that the mistake would not be repeated after the war. He understood that peace cannot be taken for granted; it must be maintained. Marshall boldly embarked on an unheard of style of diplomacy: provide assistance to Western Europe and Asia (including former enemies) to boost individual economies and to strengthen peace and promote democracy.

Congress enacted the Marshall Plan as part of the Economic Cooperation Act of 1948. The plan’s technical assistance program invited 24,000 Western Europeans (and later, thousands of Japanese, Taiwanese, and Koreans) to the U.S. for business training. During their four- to six-week study tours, civic organizations and private business owners served as hosts and donated time to give seminars on U.S. production techniques. Upon their return to Europe, these managers wrote reports and gave lectures to their colleagues.
The program was hugely successful! Industries which had seemed hopelessly old fashioned and inefficient were able to restructure themselves quickly without forcing changes in national economic policies. Business sectors in the participating countries began to flourish. By 1960, the countries of Western Europe and Japan were revitalized with functioning democracies and self-sufficient free market economies.

Since the technical assistance program absorbed only 1.5 percent of the Marshall Plan’s budget, it was hailed as its most cost-effective component!

The program worked because of the broad involvement of the American public. It was not a monetary gift, but a “psychological gift,” enabling Europeans to take control of their own destinies.

The Marshall Plan provided much needed optimism and relief in a time of widespread social despair, while the technical assistance program facilitated the development of free markets and democracies. As a result, today, Germany and Japan are among America’s top foreign trading partners and strongest allies.