Marshall Plan’s Spirit Can Succeed in Today’s World

It is timely to recall the elegant words of Gen. George C. Marshall, speaking on this day 40 years ago at Harvard University: “It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health in the world, without which there can be no political stability and no assured peace.”

Marshall, then secretary of state, was addressing a world that had problems far different from what we have today. Two years after the end of World War II, Europe was prostrate. The Soviet Union was occupying all of Eastern Europe and appeared to be settling in for the very long term. European governments were unstable at best, and democracy was at riskin dozens of countries. But these countries had physical infrastructures, albeit severely damaged, that could be rebuilt. They had educated, skilled work forces. What they lacked was capital. In sharp contrast to Europe, the United States had survived the war with no damage to its economic infrastructure. In fact, its economy had emerged from depression to become the only strong generator of capital in the world. The dollar was king.

Marshall’s plan worked. Capital went from the United States to Europe, materially accelerating the restoration of economies there. Democracy was strengthened in many countries where it had been seriously threatened. The seeds of European recovery and the Common Market were sown. And George Marshall, the wartime American army chief of staff, celebrated as one of the most successful generals of all time, became a world-class statesman.

The spirit of the Marshall Plan was indeed noble. Yet it was also a good example of enlightened self-interest, as American exports to and investments in European markets grew.

Today we are faced with a very different set of world problems. But the spirit of George Marshall speaks to us with renewed relevance.

We have economic imbalances in the form of large budgetary deficits, slow growth in the largest economies of the Western world, foreign-exchange volatility, monumental debts owed by developing countries, and the fear of world recession. Recently the International Monetary Fund revised downward its growth forecasts for most economies in the area of world trade. Trade disputes are multiplying faster than new trade-expanding agreements can be negotiated. When the United States and Japan, which together represent 30% of the world’s gross national product, both have growth forecasts hovering at 3% and under, the world has a big problem.

How, then, can the spirit of the Marshall Plan be applied to today’s problems?

The underlying principle of the plan was simple. It made economic considerations equal to, if not more important than, military might in defining true national security. It is that simple principle from which we have strayed. Too often we think of national security in terms of throw-weights, tanks and missiles when we should be thinking of it equally in terms of economic strength, not only domestically but also throughout the world. A more economically stable world might allow materially lower defense budgets.

We have a happy coincidence in timing. Within a few days of this 40th anniversary of the Marshall Plan, the economic summit begins in Venice. The portents for world economy demand bold actions to address trade, debt, economic growth rates and foreign-exchange stability--just for starters. Wouldn’t the world be better off with an adoption of Marshall’s principles, and an announcement of a new initiative that parallels his famous plan?

While the United States must remain the free world’s principal guarantor of security in the military part of the equation, other countries should add more to the economic part of the same equation. Japan, in particular, should become a leader in introducing significant economic initiatives.

Japan’s emergence as the world’s second economic power is a historic achievement. But, as many Japanese political leaders recognize, this achievement means that responsibilities follow--and not always popular responsibilities. Japan must show a capacity for making the tough decisions that befits its global economic power. There is much recent evidence that the Japanese government is doing just that.

As the two economic superpowers, the United States and Japan bear the responsibility of developing bold new initiatives to deal with these mounting and interrelated world economic challenges. The details will be difficult to develop and implement, and the initiatives must be acceptable to the Western European countries. But the job must be done.

Our task today is the same one that Gen. Marshall confronted: to ensure that there is a larger economic pie to divide peacefully, rather than a smaller pie that must be fought over. The task is, if anything, even more urgent than it was 40 years ago.