George C. Marshall Proposes the Marshall Plan | June 1947
Though far from the most engaging commencement address in Harvard University’s three-hundred-and-eighty-one-year history, Secretary of State George Marshall’s speech to the class of 1947 was without question the most significant. Using plain language and speaking in broad generalities, Marshall gave a brief, twelve-hundred-word address in which he proposed for the first time the European Recovery Program (ERP), popularly known as the Marshall Plan. He warned that “[t]he modern system of the division of labor upon which the exchange of products is based is in danger of breaking down” in Europe and called for the United States to “do whatever it is able to do to assist in the return of normal economic health,” with the stipulation that the recipient countries take the initiative in organizing the plan and that it be multilateral in nature. While Marshall avoided specifics, the weight of his proposal was nonetheless clear to the small number of people able to look beyond the speech’s uninspiring delivery: he was calling for nothing less than an unprecedented-and-sweeping aid program aimed at rebuilding Europe’s war-shattered economy.
(Courtesy of the George C. Marshall Foundation, Lexington, Virginia)
To officials in the Truman administration, the economic situation in Europe appeared increasingly dire in the late spring of 1947. Though the war had ended two years earlier, Europe’s economy remained deeply depressed. As Marshall noted in his address, the inability of European industry to supply consumer goods for exchange was causing farmers to revert to subsistence agriculture, leading, predictably, to serious food shortages. That spring, for example, London cut the ration in the British Zone of Germany to a meager 1,050 calories per day. Meanwhile, Europe’s industrial recovery remained caught in a paradoxical situation: the Continent required raw materials and capital equipment from the United States to rebuild its war-devastated industries, but it had nothing to exchange for those American goods until it had first rebuilt its economy. In the eyes of American policymakers, Europe’s grim economic situation and resulting disaffection had the potential to create serious problems for the United States. Should Europe’s agricultural and industrial sectors remain depressed, desperate Europeans might elect communists to power who would, in turn, reorient their states towards the Soviet Union. Moscow would then be able to join the skilled workforce and capital of Europe to the enormous natural resources of Asia—and thereby acquire the economic base needed to threaten the US—without firing a shot. To policymakers such as Marshall, therefore, the economic revitalization of Europe was not just a humanitarian concern, but also an issue of national security.
Though recognized as enormously important in retrospect, Marshall’s brief, awkwardly delivered address made little initial impression either on the fifteen-thousand people in attendance or on the national media. Harvard President James Conant later admitted that he did not appreciate the significance of the speech at the time. He was far from alone. Influenced by State Department press-relations officials who called Marshall’s remarks “a routine commencement speech,” the national media downplayed the address and missed the gravity of the secretary’s proposal. The bland headline to the New York Times’s anodyne story on the address, “Marshall Pleads for European Unity,” neatly captured the media’s subdued coverage.
While Marshall made scant impact on his audience, the reverse may not have been the case. In fact, the crowd’s response may well have shaped his strategy for winning approval of the program. During most of Marshall’s speech, particularly during his recitation of the miseries Europeans were then enduring, the audience remained impassive. However, the secretary’s thinly veiled warning against Soviet interference with the program, and his promise to Western European communist parties that any effort “to perpetuate human misery in order to profit therefrom politically or otherwise will encounter the opposition of the United States,” received a very different response. On both occasions, the crowd interrupted him with sustained and energetic applause. The enthusiastic response to the only bellicose notes in the address likely led Marshall to emphasize the threat posed by the USSR and to downplay Europe’s economic needs in his subsequent approach to building popular and congressional support for the ERP.
Marshall’s decision to propose the ERP in a quiet way at a low-profile event engendered significant debate in the State Department in the weeks leading up to the address. Expressing his belief that “commencement speeches were a ritual to be endured without hearing,” for example, Under Secretary of State Dean Acheson had pushed for a more visible venue for the proposal of such an important plan. The Secretary of State nonetheless stuck with his decision to make the announcement at Harvard. He agreed with Acheson that a commencement address would generate minimal initial publicity, but he also shrewdly grasped that a quiet rollout could pay political dividends. Aware that foreign aid was a perpetual tough sell, he believed that a bold and highly public declaration might generate opposition in Congress. A subdued announcement, in contrast, would afford time for legislators to become comfortable with the plan.
Marshall’s quiet rollout of the ERP ultimately proved successful. Aided by a communist coup in Czechoslovakia and by a subsequent war scare, the administration shepherded the plan through Congress in the spring of 1948. Marshall Plan assistance began flowing to Europe that summer. By the time the program concluded in 1952, it had disbursed $13.2 billion in aid, equivalent to $130 billion today and to a staggering $800 billion in terms of a comparable, 1.1% share of current Gross Domestic Product.
Historians continue to debate the impact of the program. Some point out that European economies were already recovering and question whether the aid program made a meaningful difference. However, others note that participating countries experienced an increase in industrial output of 60% between the plan’s announcement and its termination. They argue, moreover, that the benefits of the Marshall Plan were not strictly economic in nature. The ERP turned despair into confidence, permitted European countries to achieve economic recovery without having to impose politically unpalatable austerity measures, and discouraged those states from pursuing the protectionist, beggar-thy-neighbor policies that had proven so disastrous to international relations in the 1930s. The political and psychological consequences of the program that Marshall proposed in his commencement address were thus, ultimately, every bit as important as were its economic results.
The lasting significance of Marshall’s speech contrasted sharply with its brevity and wooden delivery. Given Marshall’s oratorical limitations, the address was surely not, as British Foreign Secretary Ernest Bevin later called it, “one of the greatest speeches in world history.” In light of the impact of the program that it birthed, however, Marshall’s commencement address surely stands as one of the most important public statements of American foreign policy in the twentieth century.
Bethell, John T. “The Ultimate Commencement Address.” Harvard Magazine. May-June 1997.
Judt, Tony. Postwar: A History of Europe Since 1945. New York, NY: Penguin Books, 2006.
Leffler, Melvyn P. For the Soul of Mankind: The United States, the Soviet Union, and the Cold War. New York: Hill and Wang, 2007.
Steil, Benn. The Marshall Plan: Dawn of the Cold War. New York, NY: Simon & Schuster, 2018.
Westad, Odd Arne. The Cold War: A World History. New York: Basic Books, 2017.
The George C. Marshall Foundation. “The Marshall Plan Speech.” Accessed July 2, 2018.