How Successful was the Marshall Plan?
The Marshall Plan was the response of the United States to the European financial crisis of 1947. As Scott Newton explains here, this crisis threatened to destabilise the continent and, so the Americans feared, hand it to the Russians by destroying post-war European recovery.
The origins of the crisis lay in the breakdown of the world economic system as a result of the Second World War. This system had been predominant during the nineteenth century and had remained shakily in operation between the wars. It had been a multilateral trading system: the Western Hemisphere (America) generally ran a trade surplus with Britain and continental Europe, but incurred deficits with the tropical areas of the Far East (which had provided raw materials for the expanding economy of the United States). Continental Europe incurred deficits with the United States and with many nations in the British Commonwealth and Empire, but maintained surpluses with the United Kingdom. Intra-European trade was balanced by the exchange of furnished goods for food and raw materials from Eastern Europe. The United Kingdom financed its deficits with Continental Europe and the United States through a trade surplus with Far Eastern countries (particularly India) and by virtue of banking and shipping services and overseas investment.
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