tv Benn Steil The Marshall Plan CSPAN April 6, 2018 3:42am-4:43am EDT
there. >> sunday night at 80 stern on c-span. >> at a bookstore event, author ben steele talked about his book the marshall plan about the u.s. plan to rebuild western europe's economy after world war ii. from politics and prose in washington d.c., this is one hour. >> an afternoon everyone. my name is liz. i'm a member of the event staff and i would like to welcome you all to politics and prose. today we are here to listen to ben regarding the marshall plan said this would be a
great time to silence yourself from her book tv is recording and you don't want to be the person whose phone is ringing in the middle of the recording. when we get the question-and-answer portion, if you would please step up to the microphone to make sure we can all hear your question and your question gets recorded. that would be really nice. also, please make sure it's actually a question so we can keep the conversation going. normally if you are a regular we ask you to fold up chairs after an event. we do have two more events today so please leave them where they are. books will be available after the signing of the register, just go ask for one and then he will be signing up. now for the fun stuff. combining economic and political history. they give us a detailed account of the marshall plan from inception to its afterlife. he focuses on the year 1947 to 1949 when a chill that would become the cold war set in to the u.s. soviet.
he traces the desperate efforts to frustrate the u.s. by dividing germany. they called it a fresh perspective on the marshall plan and the washington plan described the agencies and policies that oversaw and executed the marshall plan. he wrote elegantly on economics, explaining complicated mechanisms that were used to fuel the western european recovery. is a senior fellow and director of international economics at the council on foreign relations. please help me welcome him to politics and prose. >> thank you very much. it is great to be back at politics and prose, this is such a wonderful washington institution. thank you for coming out on a windy weekend afternoon. when i decided that i wanted to write my own book on the
marshall plan, it had been done a few times before but the thing that intrigued me most about it was the endless desire to repeated and the patpast five years we have had calls for marshall plans in ukraine and greece in southern europe and north africa and gaza and most recently in syria, but the old original one has never been replicated or even badly imitated and i think that speaks to the unique historical circumstance in place when the plan was launched. in 1947, the united states dominated the globe economically and militarily like never before and never sends. it could've used that dominance. we accounted for over half of world manufacturing output. we were the sole possessor of atomic weapons. we could've used that dominance in order to pursue a form policy of america first. but, we didn't do that.
instead, we chose, after considerable debate, sometimes caustic debate to spend enormous sums on foreign aid in europe and to build new multilateral institutions to mount international cooperation. remarkably, all of the major institutions that we currently associate with the postwar liberal order were created just a few short years after the second world war. the united nations, the imf, the world bank, nato and the successor of the european union and trade organization were all created between 1945 and 1949. importantly, for my story, to these institutions were direct products of the marshall plan. that might sound surprising, but this grand project of integrating western europe economically, politically and
ultimately militarily was actually the most critical component of the new american strategy at the time in 1947, containing the soviet union which came from famous american diplomat. to understand why that was, we have to go back a few years further to the war years. during the second world war, the united states and the soviet union were allies in the battle against nazi germany. , but as soviet dictator joseph stalin rightly observed at the conference in 1943, the best friendships are those founded on misunderstandings. no doubt, misunderstandings between stalin and fdr were profound and contributed immensely to their friendship over the years.
fdr believed or needed desperately to believe that the soviets would effectively contain themselves and stalin, for his part believed that they would go home after world war i. the misunderstanding began collapsing almost immediately after it stopped. over the course of 1946, stalin began trying to expand his borders southward. he pressed new territorial claims in turkey and iran, he refused to withdraw soviet troops that have been stationed in iran during the war under treaty, and he only backed down after president sherman sends a large military to the region. the watershed moment came in february 1947. the british empire was rapidly collapsing because britain was
going bankrupt. the british ambassador in washington came to the state department and announced they were withdrawing all of their troops from greece where they were protecting the government against communist rebels. this really set off alarm bells in washington because they believed if the united states didn't fill the gap being created by britain's imperial implosion that the soviets would. by this time, stalin had already begun shifting his focus away from the mediterranean and toward central europe. in march of 1947, secretary of state george marshall, second from left flies to moscow for six weeks of negotiation with soviet counterpart.
he was allied with the british and french foreign minister's. of course, those two countries had their own national interest to protect with regard to germany. these six weeks of negotiations were all focused on the future of germany. of course, at the end of world war ii, germany was divided into four zones of occupation. in the west there was an american, british, french zone, in the east the soviets own, and berlin itself which was an outpost in eastern europe was also divided into four sectors along the same lines. the purpose of these moscow
deliberations was to find some way to achieve a peace treaty with germany and reunify the country and the occupation. there was one narrow issue that divided the united states and the soviet union equally and that was the issue of reparations. joseph stalin was demanding $10 billion in western germany. the united states, however, was spending enormous sums to keep western germany alive. it was descending into disorder and chaos. united states said this is impossible because we would effectively be financing those restorations because western germany is nowhere close to self-sustaining. we had done that after world war i and we were not going to repeat that error. there is a much deeper, more fundamental conflict tween
united states and the soviet union when it came to germany, and that is that neither the united states nor the soviet union could count on the united germany being allied together. that was simply too threatening to both parties fundamental national interest. in mid april, after meeting with stalin that goes nowhere, george marshall flies home and makes a very famous radio address in which he announces that the patient is thinking while the doctors deliberate. we would not wait any longer. that is the cooperative arrangement so we help you with soviet union and they were at an end and the soviets had undermined them, they had committed to unifying germany
economically, but they were not doing anything of the sort. they were effectively taking over east german companies and ripping up the factories to take back to the soviet union. he said cooperation was at an end. while marshall was in moscow, president truman was delivering his famous truman doctrine speech. two things worth highlighting about that speech, of course he had famously pledged to a country aggressive movements that seek to impose upon them totalitarian regimes, but he emphasizes, and this is quite important, that it is economic and financial aid that is essential to economic stabilization and orderly political processes. now he is beginning to foreshadow what would become the marshall plan and this new emphasis on economic and
financial assistance. the idea behind this was that we needed some way to counter the soviet conventional military force dominance in europe. at the end of world war ii there were over 3 million american troops in europe and president truman was determined to carry out fdr's pledge to withdraw these troops within two years. the question that the military was wrestling with is how do we do this. how can we provide security, make sure that our vital interests in protecting western europe are met without having to rely on the military so the idea was, we would leverage our economic dominance to counter the soviet conventional forces. interestingly enough, the eight initial ideas behind the marshall plan did not come from us but in fact from military men, people like secretary of war henry stinson, army secretary kenneth royal and navy secretary eventually defense secretary james forestall.
he observed in giving testimony before congress in favor of marshall aid, this aid is far less expensive than sending isolated and alone in an unfriendly world. the underlying philosophy was that america's own economic and physical security depended on having strong independent allies. that is not colonies, not tributaries, not transactional , counterpart's, but allies who would stick with us through thick and thin. we were obviously going to go through periods of disagreement with the western europeans over economic and political affairs, but we wanted to create allies in europe and eventually in the asia-pacific as well with which we would have that sort of spiritual bounding. this was a really revolutionary vision.
for the main architects of the marshall plan, certainly george cannon, third from left was really the father of the geo strategic framework behind these marshall plans. will clayton on the right, under secretary of state for economic affairs in many ways deserves to be considered one of the founding fathers of the european union. he was the one who said it was absolutely essential that we integrate western europe, make sure it uses its resources in the most efficient manner possible and that we teach them how to collaborate so they can collectively resist soviet subversion or the local communist parties that were becoming very powerful, in particular in italy and france which were supported by the soviet union.
one person who is very important to the story who was never formally part of the marshall plan, he's not in the state department, on the right, a general lucius clay, the american military governor in germany, he deserves an enormous credit for helping to reverse american policy in germany. under fdr, our policy to d industrialized germany, essentially to turn it into, this was leading to complete chaos and disorder in germany, mass starvation imparts of the country, it was clay who really convinced washington that this was a disastrous policy and helped make a revival of western germany the most critical component in west european economic and political integration.
republican senator arthur vandeberg on the right, a one-time isolationist, head of the senate foreign relations committee, marshall always said that he believed that vandeberg was so important passage of the marshall aid legislation that he should have had his own name attached to it. the general never use the term marshall plan. without arthur vandenberg, it's almost impossible to imagine this having become legislation. he sacrificed his own presidential ambitions to convince a very skeptical republican congress to go along with this legislation. marshall himself of course, not an architect of the details of the marshall plan, but without question a great synthesizer and the greatest possible salesman for the marshall plan. early on in the process of
taking the plan from planning stage to actual policy stage, truman's main political advisor clark clifford said this is going to be a big visionary thing, we could call it the truman plan. he laughed and said don't even think of it. he said anything going up to congress bearing my name will twitch a few times, belly up and die. even the worst republican could not vote against a bill named after general marshall. he was a wise man in many ways. marshall makes his iconic harvard speech in june of 1947. it's quite short, it is deliberately very vague and there are two primary reasons for this. one is that he wanted for europe to take ownership of
the plan. it was critical that this not be seen as something that was being imposed on the europeans. the europeans had to buy in themselves and come to the united states with a firm proposal. no doubt, we gave them print engine plenty of what we call friendly aid in the drafting of their plan, but they ultimately had to say yes, we are committed to this and we were part of developing it. he also wanted, and this was a key component of the geo strategy of the marshall plan to convince stalin to reject it. he did not want himself to be the one ruling out soviet participation because he then said world opinion won't come down against us and say we are the ones who split europe, it must be stalin who seeme seen as splitting europe. stalin really wrestled for quite a few weeks with the question of how to deal with the marshall plan.
he had a wonderful spy network in washington and london so he was fully informed of what the united states was up too. he also needed dollars, desperately, and when it came to economics, he was very much an ideologue and believed the inevitable crisis of capitalism had arrived and the united states in its own interest would have to give billions of dollars to europe in order to bail out its own collapsing industry. he wanted to be able to take advantage of that. but, he had three fundamental reasons to resist the marshall plan. first, it indicated that the u.s. was not going home, it was going to maintain a powerful political and ultimately, he believed, military presence in europe, second, he was extremely concerned to learn that western germany would be the fulcrum of the marshall plan, the new industrial engine for an integrated western europe,
and finally, the factor that tipped the balance was that his own satellite countries in eastern europe wanted desperately to participate in the marshall plan. the checks in particular refused to take no as an answer from stalin. checklist of arc you is the one country in eastern europe which had a legitimately elected coalition in 1946. about two thirds democrat, one third communist. the democrats even, moving into the autumn, continue to speak out in favor of czech participation. this is why i subtitled my book don of the cold war because the cold war really starts after marshall makes his speech. that's one stalin begins cracking down across central and eastern europe, undermining all these coalition governments, the coalitions of sorts, obviously they were not free and
sovereign. not just in czechoslovakia but poland and hungary, romania, bulgaria and in february of 1948 he actually said precipitates a cool in prague and stalls at a unified communist government. here you see the political map of europe changing dramatically. if you look at the political map of europe in 1943, it's sort of a geographic jumble of alliances, but now after the marshall plan, for those of us old enough to remember the cold war, this is the map we are familiar with, that this stark geographic split between the western part under american leadership and the eastern part under soviet leadership. here you see a picture of the
communist leadership in czechoslovakia after the two and february 1948, this turned out to be in a sense, a godsend for the marshall legislation. as i had said the republicans were very to the idea of a massive foreign aid plan, but after the two in czechoslovakia, many republicans switch to the other side's and said this is the only way we can stop communism from spreading in western europe. they were critical elections coming up in italy in april of 1948 and it was considered imperative that we pass this legislation before those elections to convince the italians that what we were offering as an alternative to communism was real. as we go into the spring of 1948, stalin refocuses on
germany and he tries to come up with new ways to stop the united states from creating a west german state so in june of 48 he institutes the famous blockade of berlin, he was ultimately overcome, as we know, by a heroic airlift operated by the western allies, and particularly the united states which actually continued not only through the winter of 48 and 49, but it wasn't wrapped up entirely until september of 1949. it was a remarkable success, but it wasn't just the airlift, the united states and its allies and in those instituted counter blockade which had devastating effects on the economy and eastern germany and the soviet union which was one of the factors that convince stalin finally to lift the blockade. in may of 1949, west germany
was created. in september of 1949, conrad is elected chancellor of the new federal republic of germany. in october stalin creates his own new east german state and now the geographic borders of the cold war conflict are effectively frozen for 40 years. let me talk briefly about the marshall plan itself. what did it actually achieve in western europe, and how did it do that? what was it, everyone likes to focus on the money. it was 13-point to billion dollars spread over four years. to put that in a contemporary context, if we were to do a marshall plan of equivalent
size in terms of percentage of our annual output, that would be $800 billion. this was a significant amount of money. what did it do? the participants of the 16 marshall recipient countries did recover very dramatically over the years from 1947 to 1952, output increased by over 60% in the early accounts of the marshall plan tend to just describe that all to the marshall plan and leave it at that. eventually, my fellow economist started taking over the debate, they were much more skeptical and started running simulations and that led them to be rather baffled because the things they were looking for didn't seem to be there. for example, was it that the marshall plan allowed these countries to import much more than they would have otherwise because they had no dollars in gold anymore and they found that the effect was positive, but way too small to explain
it. was it that government spending went up and that these countries couldn't have afforded the government spending without the marshall aid? actually, government spending of a percentage of output over the marshall years declined. that wasn't the explanation. understand last week you had a wonderful speaker here, jerry, a good friend of mine his written a fabulous book called the tyranny of metrics. one of the things jerry argues is that often, the things that are most important are impossible to quantify and we can't quantify them, we ignore them. george cannon who is not an economist always argued, and i think he was fundamentally right that the most important elements of the marshall plan was a psychological element convincing the europeans that unlike after world war i, we were not going home. this is why the marshall plan, for example was a four-year
plan. we didn't just give the europeans money and wish them well and retreat into isolationism again. i think he was very right but he was wrong about one thing, many in the state department were wrong about this, that we could achieve this without a military component. the french and the british in particular were adamant that they could not follow the state department vision of integrating their economies without american security guarantees because they would not be self-sufficient anymore. the french in particular said what happens if germany revives, they cut off our coal supply or the soviets take over over germany and take off our coal supply. we will not get any recovery. businesses will not invest unless they know the communists are not coming back into government in our country and that the soviets and the germans will not be a future security threat to us.
a year end a day after passage of the marshall aid legislation, this is april 4, 1949, we signed the founding agreement to create nato which was called, interestingly enough, a military erp. a military repor recovery plan. this is the formal name of the marshall plan. without that i would argue the marshall plan would have never succeeded. to put that into context, if you look at iraq and afghanistan, we have spent over $200 billion on reconstruction aid alone. this is over 50% more than the totality of marshall aid. we have almost nothing to show for economically or politically. the most fundamental thing that was missing in both cases was internal and next terminal security. they were battling groups like the television and isis, they
were alternative benefactors like iran with whom we were tussling so the security component was missing. the second factor that was absolutely critical to the rejuvenat rejuvenation of western europe was the reversal policy in germany. we were truly dictators in germany, we made german economic policy and we did an astounding job. in the interest of time i won't talk about all the details of what we did but broadly speaking, the ambition of the marshall plan was to re-create germany again as the main capital good supplier. after the war, we were the main capital good supplier. although many historians take the soviet line that this was just a boondoggle for american industry, it was the
opposite. the goal was to reduce the american trade surplus with europe and restore germany to its traditional position so europe could come back into balance. this was remarkably successful. to close, let's take things forward to more contemporary context and think a bit about u.s. russia relations today and what we can possibly learn from the marshall plan. now, historically, political upheaval in germany has had massive reverberations. 1989 was no different. it was when the berlin wall fell. after the berlin wall fell, the soviet security buffer collapsed entirely, closer to moscow than it had ever been since the 18th century whereas the alliances that we in the united states created after world war ii, i'm
thinking in particular of nato, they were more popular than ever with the newly liberated central and european countries clamoring to get in. it wasn't just nato. the european union came as popular as it had ever been. i think that's the greatest possible testimony to what we created after world war ii. remember the article five security guarantees were only invoked once in the alliance history. that was after we were attacked with our own allies. now, soviet leader gorbachev was extremely concerned about nato expanding to russia's borders, he pressed president bush not to do this, he saw the political risk within russia of this perhaps undermining the new democratic
forces that he had unleashed. president bill clinton had two logical directions in which he could have gone. one was the direction advocated by george cannon who is now well into his 90s, and still commenting. cannon said don't even think of expanding nato, this is what we bought the cold war for, to get to this point. let us see if we can support the democratic forces in russia and reach an accommodation, and understanding about what sovereignty and independence means in central and eastern europe. the other logical position was the republican position which you might call the dole gingrich position outlining the contract of america which basically said he's speaking nonsense in russia will always be russia and we need to protect our new democratic allies in central and eastern europe. bill clinton being bill clinton chose a third option which was to expand nato
without paying for it. this is where we essentially are today. george cannon, at age 931997 condemns this and said it will be the most fateful error in the post war era. it will inflame militaristic. [inaudible] will have an adverse effect on russian democracy and restore cold war to east-west relations. top state department diplomat richard holbrook said this was nonsense, he said the united states could have its cake and eat it too, we could offer protection to the central and eastern europeans without alienating russia and he said years from now people will look back at the debate and wonder what all the fuss was about. they will notice that nothing has changed in russia's
relationship with the west. it is difficult to be more wrong than richard was. let's fast-forward to our current era where russia is led by vladimir putin. his primary foreign policy and vision has been to restore the political and economic space and to understand russia thinking about this, this is a very interesting map. it's a map of what i would call the russian view of the world. north is at the bottom, not to talk. you're looking at europe as a russian might see it in moscow, and what's very noticeable, if you look at the western border, it's thousands of miles of planes and unprotected by any bodies of water or any mountains. sure, russia may be paranoid at times, but paranoids have
enemies. napoleon invaded from the west. hitler invaded from the west. both of them went to moscow so this is the russian mindset when it comes to nato. i think the comments that vladimir putin made were most recounted by the israeli leader in 2016 right before he died, he recounted what vladimir putin had told him about the conflicts with the united states. what did they need nato for the soviet union doesn't exist. the warsaw pact was dismantled. did they think i didn't know crimea was russian and that they gave it you ukraine as a gift. i didn't care until they needed ukraine in nato. they want to go to the european union i said great, go to europe but why did they need them in nato. these are not the words of an ideologue. these are the words of a
riskless pragmatist. not uniquely ruthless. gorbachev supported the annexation of crimea. so what did cannon have to say about this, very wise again in 1998 age 94, we have signed up to protect a whole series of countries even though we have neither the resources or intention to do so in any serious way. coming back to the marshall plan to wrap up, i believe the historical lesson is this. we remember the marshall plan today because it was visionary and it stirred people's imagination, but it was also hardheaded and it succeeded because it was hardheaded. if we had defined success to
include, for example, bringing czechoslovakian and poland and the marshall plan, we would have failed. why, because we would've had to go to war with the soviet union to do that. the american public would never have supported it and therefore, what we talked today about is the greatest success in american foreign policy and it probably would have been one of its greatest debacles. the great active statement ship like the marshall plan are grounded in realism and not just idealism. this is a lesson we need to relearn. thank you very much. [applause] very pleased to take your question. cspan is here so i know only very important to speak into the microphone. who would like to go first. >> i wanted to ask you about this issue of whether or not it was wise to incorporate the eastern central european countries into nato. the backlash to that really
didn't materialize until vladimir putin came to power. there wasn't a backlash to that in the former soviet union. obviously not in the countries that wanted to be admitted. i wanted to ask you about that a little bit. the other question is what about the agency of the independent countries themselves. they wanted to join nato and so what place was a for the united states to perhaps negotiate with russia over their heads. >> the first question, the first material conflict with
the russians over nato began in march of 1999. three days after the first wave of nato expansion, hungary, poland, czechoslovakia, we began to bomb serbia. may remember that, over kosovo. how did the russians see this? i'm not trying to convince you to sympathize with the russians, but you need to empathize with your adversary and understand how they see the world in order to see how things could deteriorate after that. nato, we had always and the size was a purely defensive alliance. cozumel had nothing to do with nato. serbia was a slavic orthodox state like russia. so ordinary russians felt a kinship with serbians.
two ordinary russians, not just extreme. they will become locked into american policies that are antithetical from our own interest. to advance it closer, i've often heard from people that the russians are being disingenuous, a course they know we are not going to invade. i do think they know that. in 2015, turkey shut down a russian fighter that from syria and the first thing they told the russians was turkish airspace is nato airspace,
meaning, you attacked us, you attacked the united states and the united states will come to our defense. russian prime minister condemns this, that turkey had invoked not itself as the actor but nato saying this was very dangerous. from the russian perspective, those who were part of nato get locked into policies that they consider fundamentally detrimental to their interest. i agree with you that the central and eastern european countries desperately wanted protection from russia, but there was, in my view, no cost to trying this approach, meaning, let us see if we can reach a mutual understanding with the russians about what sovereignty and independence would mean in central and eastern europe.
we didn't try that. >> i don't think we have any choice, if you look at the situation in the baltics, for example, i have yet to meet a single military expert, we've had many come to speak at my institution, the council on foreign relations who believe we can defend the baltics without using tactical nuclear weapons. personally i don't know how you feel but i find that terrifying because the american public is highly unlikely to support the united states using tactical weapons in order to defend countries they hardly know. they can point out where they are on the map and they didn't know we had any security commitment to them. personally i find that very dangerous. you come back to the marshall plan, we did make very controversial and hardheaded decisions about where to draw
the line in terms of what the american public would tolerate and what our military capacity would be in europe. i think we have to have that hardheaded vision to make sure policy in europe is effective. >> my question is, do you think part of the reason the marshall plan is so successful in western europe and why it hasn't been replicated when people call for marshall plan in syria or afghanistan.
were they involved in any way in shaping the marshall plan. subject to their exposure in a more boots on the ground manner, did the fact of their infiltration change how the marshall plan was implemented? >> very interesting question. my previous book, the battle was about the creation about the so-called brentwood system interestingly enough they were soviet agents.
the form policy that were allowed to the bureaucracy were under treasury. most of the consequential agents of influence came up through the u.s. treasury. one thing to note is that truman reestablishes the primacy of the state department. most of them were architects of the plan and were involved in such activity and as you know many of them have the reputation today of being the
earliest cold warriors. they were conscientious objectives during the fdr administration. you raise a wonderful point about mccarthyism who comes a few years later and i do argue in the book that the atmosphere created in washington from the fall of 47 to spring up 48 when the marshall legislation goes through did help stimulate anti-communism. marshall was very uncomfortable with himself, but vandeberg made clear to marshall that for going to push this through congress, the focus has to be not humanitarian but anti- communism and this did, to some extent contribute to the atmosphere of extreme paranoia
in washington. it did have some positive effects no doubt, the soviets were a threat, no doubt the french and italian communist parties were a threat to what we considered a fundamental interest, but then that eventually was spread much too wide and of course it infested our domestic politics. >> getting back to the economic argument that you were talking about in debunking, in your book you talk a little bit about the story of infrastructure and those who started on the path to re-create their infrastructure, did marshall money go to build that up or was it expected that those countries would devote much of their own resources.
>> in terms of germany which is the most critical, most of the industrial capacity was still there despite all the allied bombing during the war. once we did things like rebuild road networks, germany's industrial capacity revived very quickly. the primary barrier was in terms of american policy, where are we going to allow this to happen. what the french, at least in 1946 were just as ruthless in terms of ripping up german infrastructure, german factories and dragging it back to france, but the united states insisted, look, if we go down this route, there's no way we will possibly enable a swifter revival of the european economy. the only way to do this is on
the ground in germany. it wasn't as if we started sympathizing with the nazis. we started in germany because we felt the priority had to be a rejuvenation of the european economy as quickly as possible. in terms of the policies at the various countries followed, they were actually very different. we did have a condition in order to steer it but the french and the italians in particular understood that the americans really only had one negotiable objective and that was to keep the communist out of the coalition government. the french, for example pursue their plan for industrial modernization.
every time we put it back because the french would come to us and say do you want the communist back. the italians went entirely in the other direction. we told them you really need to have a modern industrial policy and an they said we will do nothing of the sort, we will leave it to private enterprise, we will focus on monetary stabilization. again, the italians understood perfectly well that the only nonnegotiable was keeping the communists out of power. >> i wanted to follow up on the question of the conquest between the marshall plan success and the lack of success in iraq and afghanistan. i was wondering about the role of the millions of western immigration immigrants in this country and the linguistic awareness they brought to
post- europe, postwar european construction and the girth of such people. >> on the whole it's difficult to say that was helpful and the reason i say that is the so-called plan to deal industrial eyes germany has enormous popular support in the united states. in fact, before marshall went off to moscow in march of 1947, eleanor roosevelt and other notables who have been a big supporters of this policy had a rally in new york to urge general marshall to maintain a hard piece with germany. in fact, the most important, most consequential aspect of
the marshall plan's success, which i would argue was a quick revitalization to the economy was the most controversial in terms of american public opinion. >> what was the effect of churchill's curtain speech on all of these events. >> there was, as you can imagin imagine, a split in views, truman came to repent of having a company churchill. the speech was seen as being too aggressive and too militaristic. at the time he made it, in 1946, it was considered overly provocative.
>> this may be outside the scope of your book, but could you draw any comparisons to what china is doing with the one road project and motivation dollars invested in possible outcome to the countries that are impacted. >> for external consumption, the chinese are clearly marketing their one belt one road initiative as a chinese marshall plan. it's a form of generosity. but i would note that there are no notable similarities. for example, marshall aid was almost exclusively in the form of grants. one belt, one road, i wouldn't even call it aid. it's investment. it's in the form of loans. so what china is fundamentally looking to do is address the problem of its own massive
industrial capacity. in other words, they've come to the conclusion they grossly over invested in china. they have, as you know, massive reserves they want to put to use. they figure we can invest this money in infrastructure which will be useful to us to help our export industries, and we can present it to the world as an act of generosity. i don't think it will have anywhere near the transformational effect that the marshall plan had. >> you were talking about how we wanted to focus on building up the economies of the marshall plan countries and
not keeping our economic monopolies, so to speak, but what was the impact on the u.s. economy, did the rising tide lifts votes or. >> yes, and to paint some really fascinating context about the domestic debate in the united states, in 1946, do you know what gdp growth in the united states was? negative of 11.6%. so we are talking massive recessionary conditions, not surprisingly by the way, this had all been predicted because government spending plummeted after the war. we had slightly negative growth again in 1947 when marshall made his speech so in that context, this was truly an extraordinary act of statesmanship, but we considered it to be fundamental to our own economic future. stalin always insisted we were
doing this for ourselves. we were, but not in the way that he saw it. one thing i talk about in the book that is truly remarkable is the mindset of the business community, the commercial lobbying firms in washington changed dramatically after the second world war. they were traditionally mercantilist and protectionist but they were brought around to the thinking that their own prosperity depended on rebalancing the global economy so that our allies could sell to us. that was the only way we were going to make a permanent revival of the global economy. of course the media decades after the second world war really were golden. in terms of global economic revival, and i think that owes much to the change in mindset