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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Zhdanov was apparently sort of the Soviet Kennan.
Must have been tough selling what was basically a recovery sabotage plan and revolutionary loyalty test as a meaningful response to the Marshall Plan. Communism was already a bankrupt idea by 1947.
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Funny how the Soviets analyzed and critiques the US actions pretty much correctly, yet were unable to do anything with their narrative.
Moral: It’s not sufficient to hate-read between the lines of your opponents’ story correctly. You also have to tell a better story yourself.
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The 22-23 September meeting was meant to launch Cominform, Moscow’s anti-Marshall-plan organization. I had no idea they did this thing.
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The Soviets read the US so clearly partly because of spies, but also because they’d tried the same thing earlier with something called Comintern which led to Moscow being accused of interfering in other countries. Imperialist recognize imperialism
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Stalin gives up on non-revolutionary methods and instructs communist parties in the West to destabilize the plan by any means, returning to ore-war revolutionary models. Tries to bring all in line. In the East, no more tolerance for non-communist coalition partners. Purity time.
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Yugoslavia under Tito resists Stalin but he doesn’t invade because Soviets aren’t strong enough to directly provoke the US.
Kinda interesting that the ideologically pure, global superpower that became familiar later did not take shape till 1949, 30y after 1919.
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Italy and France erupt into communist-backed unrest against Marshall Plan.
Damn I had no idea the Soviets instigated such direct resistance to the plan. I was under the impression it was an uncontested, peaceful aid drop.
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The tactics set back recovery in both countries and turn sentiments against communists. Both countries swing right electorally in response.
...and this is why I’m a huge skeptic of the Bernie crowd. Strong rhymes here.
Communists and socialists have learned nothing in 70 years.
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1950 vs 2020
- No Soviets but Putin trying same Stalinist tricks for same reasons
- China belt-road-initiative looks more Marshall Plan than anything the US is doing
- The US is larping 1830s Jacksonian version of itself
- As usual under inequality stress West swings fascist
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Plot shifts to DC. Truman now has to use Red Scare and threat of all Europe going communist if US aid doesn’t materialize before winter privations to persuade Congress.
Both parties are reluctant. Republicans more so. Narrative trotted out of Europeans just not working hard.
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To recap: Truman doctrine and early aid to UK was explicitly anti-communist. Marshall Plan pulled punches and pretended to be about humanitarian aid. Stalin called bullshitbon that. Now it’s back to explicit anti-communism optics. This is how we get to NATO I guess.
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1946 US loan to the UK appears to have been a big deal in this story. It forced £ convertibility to $ for UK war loans from colonies incl. India. Destroyed empire and led Marshall Plan to be more generous grants rather than loans. Finally paid off in 2006!
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“Truman’s challenge was to convince many more Republicans [besides Vanderburg] that the Marshall Plan was the answer to communism, rather than being communism itself”
The plan smelled of FDR’s WPA to many Congress. Truman had to red-scarify it to sell it.
Birth of McCarthyism?
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