There’s a sense of “it’s okay to lie and cheat in dealings with evil capitalists” to their whole posture.
We’re now at the breakdown point. Stalin has received spy intel that confirms US motives and he orders Molotov to back out of Marshall Plan talks.
Conversation
Molotov walks out of talks, accusing the U.K. and France of letting the US but it’s way into interfering in Europe, for its own economic self-interest. Not wrong but a half-truth that revealed the central failure of communist imagination to understand nonzero sum capitalist logic
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“Bevin did a superb job of getting Molotov out of Paris. He had the — by careful maneuvering... [He] had the courage to invite him and the bluntness to get rid of him.” — Truman commerce secretary W. A. Harriman on Ernest Bevin, British foreign minister
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Looks like Bevin’s tactics relied on Kennan’s insight into how to goad Stalin into causing the schism when they could have stayed and done more damage.
Acheson exits government to return to law practice. Robert Lovett takes over as driver of Marshall Plan
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Soviets try a last gambit on July 5, 6th, cabling satellites to attend plan launch but vote against it and walk out, to undermine launch. But then reverse course on July 7, not trusting the satellites, especially Czechoslovakia, to run the play. So July 7th is real Cold War start
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Marshall has already committed to the schism mentally on April 15, so Stalin took nearly 3 months to catch on. Crucial slip that led to Soviets being successfully cast as the cause of the schism and interested in chaos over reconstruction. Which was not wrong.
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It’s amazing to think that in 1947 Soviets genuinely believed Western capitalism would collapse under its internal contradictions and prepared Soviet Inion would step into vacuum via the communist parties they were sponsoring ideologically throughout the west.
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The McCarthy era paranoia makes more sense now even if no more justifiable. The Soviets really were a grim specter of an alternative history/future looming over the imagination of the West.
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“The idea of European integration as a Trojan horse for German hegemony would become a staple of communist diplomatic doctrine.”
“German rehabilitation wrongly given priority over assistance to its victims”
Again not wrong... it’s what did happen...but failure of imagination.
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Understood in the light of their best ideals rather than their worst hypocrisies, this was a contest of nonzerosum imagination+wealth motives vs zero-sum geopolitical justice motives.
Soviets lost because they backed the worse idea, not by being geopolitically outmaneuvered.
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Czechoslovakia makes a weak bid to join Marshall Plan, but is firmly reined in by Stalin.
“I went to Moscow as the foreign minister of an independent sovereign state. I returned as a lackey of the Soviet government” — Jan Masaryk.
Replying to
Soviet bloc out. 16 nations meet to hash out the coordinated aid request to the US. Now France is the main bottleneck, wanting to keep Germany weak. The West had the same suspicions of US intentions as the Soviets. They were just even more suspicious of Soviets.
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Bunch of committees to pull the proposal together in 6 weeks. This description reads like a major NSF or DARPA grant proposal coming together across a bunch of universities. The trick is to pitch what the US government wants you to pitch. Figure it out via backchannels.
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This bit is a headache-inducing account of the intricate maneuvering to get France face-saving concessions while protecting German recovery. Ruhr kinda internationalized to give France some control over European steel, in return for stopping obstruction elsewhere.
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The sausage making is ugly and I can’t keep all the names and positions straight. Basically some economic efficiency in recovery was sacrificed to assuage French demands. Some reasonable, others not. There are no saints here but degrees of original sin in rebirth of Europe.
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Interesting tricky problem was rationalizing trade payments. All the countries lacked gold and dollars. Wild inflation everywhere. Belgium had a big trade surplus due to being liberated first, and getting production back on, and wants to keep that. Others say screw you,
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Basically the precondition of American aid was continent-wide recovery coordination. Which required stable currencies and convertibility. Which required a completed recovery. Chicken-egg. Solved via payments union and trade quotas. Command economy it till you get to free market.
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European currencies remained inconvertible till 1958 🤯
So it took 13 years for WW2 destabilization effects to be surgically stabilized with a command economy before free-float trade was possible again.
How long for Covid destabilizations?
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Scheme required each country to fill out very detailed questionnaires on economic production. They mostly just made it up. The US thought they’d police each other’s accuracy. Instead they colluded in don’t-ask-don’t-tell mutual obfuscation. Including Americans running Germany.
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Weird how we think of Cold Watmr as capitalist west vs command economy East. But there was no real capitalism for much of the period. Soviets had 5-year plans, Western Europe had Marshall Plan. The US had military-industrial complex. Real capitalism was in eclipse 1929-1989.
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Still the plan was clearly to get off planning models. Will Clayton played Europe-whisperer nudging the discussions and proposal into the right shape via backchannel pressure and slight strong-arming of expressions of autonomy. Not Stalin-grade though.
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Clayton’s 3 requirements for a successful funding proposal:
1. Explain why finding to date hadn’t fueled recovery
2. A 3-4 year plan to fix this by production program
3. A blueprint for a European economic federation
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Plus yay/nay to features. Bilateral deals/tariffs under ITO logic bad. Customs union/free trade zones a la Benelux good.
This was an early version of the IMF/WB economic liberalization playbook of the 80s/90s clearly. Much less sophisticated and tied to Bretton-Woods spookiness.
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The Europeans resisted mightily. Wanted to retain bilateralism, tariffs and quotas over multilateralism, free trade.
In a way Trump’s Europe actions have been about trying to dismantle all this. His is the anti-Marshall non-plan.
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It’s clear that the preference is almost entirely due to the greater opportunities for corporatist grift and cronyism in a 1:1 opaque bilateral world as opposed to an n:n transparent multilateral world. The US wanted to legibilize Europe.
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Alright kids, bedtime. We’ll continue reading the story of Marshall Bunny... I mean Plan tomorrow night.
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So things are moving. Marshall has a team in Europe cajoling statist Europeans to think modern industrial, and a team in DC crafting a “shovel ready” plan.
Great phrase, I’m gonna steal it. My mansion plan is not yet shovel-ready. My telescope building plan otoh, is.
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Lol, the Europeans consider angling for the $$ without strings attached by hiring an American PR firm to make a style-over-substance pitch. State department scuttles that. Can’t bullshit the greatest bullshitter nation. The US means to exercise real control.
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This provokes a key question perhaps the book will answer: who was the principal, who was the agent in the end? Who suckered whom? Did the US but cheap control of Europe? Or did Europe get cheap US aid with cosmetic concessions?
I think the answer will be “yes”
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Extremely complicated tactical mid-game going on. Amounts to Uncle Sam yelling “get jobs!” at 16 kids while grudgingly allowing UBI. Kids trying to stay in their room demanding a higher allowance and avoiding getting a job. Sovereign laziness vs collective industriousness.
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This book is fundamentally changing my view of what the Marshall Plan was. It was a UBI experiment for unemployed countries that didn’t like sharing, and hated their rich uncle who’d just bailed them out militarily.
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Deal finally done, after eleventh hour accommodations of European constraints and lots of pretty words to create good optics for all. It was a face-saving packaging of a mess that was just good enough to get funding going.
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The US relaxes its demands recognizing that a war-exhausted Europe did not have the political capacity to act with the kind of decisive boldness needed. So plan gets pointed roughly right and unleashed. A punt basically.
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Elsewhere in parallel GATT happens. 23 nations. Unclear what the relationship to Marshall Plan was but same principals drove both. Clayton in particular.
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And of course GATT became WTO which Trump regime is now trying to destroy.
Liberal international order that began with Marshall Plan and GATT is now under wrecking ball attack by the country that built it.
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For context: Trump wants to rewind global trade to pre-WWI pre-industrial state. Not in a historic sense but by reaching for a vague aesthetic of bilateral kiss-ass global loyaltynomics. Others like Navarro are compiling his garish tastes into actual reactionary wrecking plan.
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Europe would not achieve the kind of free trade and economic integration envisioned by the plan till 1968.
But the Paris conference did expand minds to the possibility, and create a core group of political leaders interested in Europe as a whole and trust to pursue it.
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Chapter concludes with a view from the Soviet side: a hostile Kremlin analysis of the plan as American imperialism. Now it has to get through Congress.
The truth of the plan was somewhere between view from American and Soviet oiptics, plus strong Hanlon’s razor.
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Chapter 7.
“On Sept 17, 1947, Andrei Vyshinsky delivered an angry ninety-two minute indictment of the Marshall Plan before the United Nations General Assembly”
He was the “star prosecutor of the late 1930s Moscow show trials”
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‘But what truly bothered the State Department, James Reston observed, was not...Russian charges...but the feeling that the United States was intervening “just enough to be blamed for it and not enough to be effective at it.”’
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Stalin blindsided by unilateralism of Marshall plan. He expected to continue talks on Germany. Calls his own conference of communist parties under Zhdanov. Whips French and Italian communist parties into line but that costs them political cred at home
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