(originally published by H-German on 30 November 1995)
Four years ago Charles Maier and Günter Bischof brought out an edited volume on The Marshall Plan and Germany (New York: Berg, 1991) in which the chapters were arranged in three parts: The first part was devoted to the perspectives of those American policy-makers who designed the European Recovery Program, the second to those "institutional responses" in Europe that shaped a critical "new political matrix" of Franco-German cooperation, and the final section to an assessment of the ERP's economic achievement. In his introduction to Part III, Maier commented on a debate, not fully joined in the editor's view, between two positions staked out by German historians. On one side stood Knut Borchardt and Christoph Buchheim's positive evaluation of the Marshall Plan as something that contributed to unblocking very specific sectoral bottlenecks in the Western zones. On the other side there was Werner Abelhauser's more skeptical estimation of the ERP's impact on the West German economy as a whole.
Juxtaposing these two viewpoints, Maier observed, provided little "closure" on the controversy about the Marshall Plan because of the way their respective counterfactual premises "measure success differently" (Maier, p. 363). The world without Marshall according to Abelhauser was a macroeconomic universe in which foreign aid could do little more than help a resource-rich economy help itself. Because the German economy was already moving along an endogenous recovery path, outside assistance could not have contributed much. By contrast, the pre-Marshall cosmos as glimpsed through the counterfactual lenses of Borchardt and Buchheim was too disaggregated a constellation to have a trajectory of recovery. Since this disaggregated Germany was light years away from any kind of world to which the tools of macroeconomic analysis might be meaningfully applied, what one has to measure is the leverage exerted by foreign aid on key economic sectors.
Now two other economic historians, Helge Berger and Albrecht Ritschl, have come along with an approach to the Marshall Plan controversy less polarizing than the choice between Abelhauser's macroeconomic skepticism and Borchardt-Buchheim's microeconomic appreciation. Not all of the evidence and insights in this article are new. But the Berger-Ritschl approach to the subject is helpful, in large part because of the interesting way the authors refuse to separate the question of the Marshall Plan's measurable economic impact from the two other areas -- national politics and the institutionalization of trade -- compartmentalized in Maier's earlier survey.
One way to pinpoint just what is new about this article is to contrast it with Alan Milward's The Reconstruction of Western Europe, 1945-1951 (London, 1984). Milward had already made the point that the only really indispensable contribution of the Marshall Plan to European recovery was to facilitate trade and foreign exchange settlements in jeopardy from a balance-of- payments crisis in 1950-1951. The implication of Milward's interpretation was to 1) emphasize the narrowness of this time frame for effective ERP aid and 2) demythologize and break down our received picture of a coherent "Bretton Woods system" designed in the late forties and lasting through the seventies. Using similar evidence, Berger and Ritschl essentially reverse the thrust of Milward's argument. The narrow time frame of 1950-1951 becomes a tiny but important window of opportunity. Or, to switch metaphors, balance-of-payments crisis management in those few years becomes the small fulcrum on which an American lever re- launches the much bigger project of intra-European trade. That project, in turn, has more coherence and staying power than is revealed by Milward's iconoclastic attention to the perpetual cycle of the "Bretton Woods system's" mini-breakdowns and piecework reinventions (the revaluations of the pound and mark, the suspension of full convertibility until the late fifties, and the many discrepancies between the grand designs envisioned at Bretton Woods or the OEEC and the makeshift institutional arrangements for trade and payments devised under pressure in Paris, Washington, and Basel).
The reason Berger and Ritschl can claim that so little ERP aid accomplished so much has to do with the way they address Maier's question of how to "measure success." Their criterion for success is neither Abelhauser's macroeconomic impact nor Borchardt- Buchheim's sectoral unblocking. Nor, for that matter, is success defined as something that was good for American exports -- the counter-argument Marshall Plan skeptics often invoke against claims of American generosity toward Europe. Instead of focusing on how much Europe (or the US economy) needed American government aid, Berger and Ritschl deem the Marshall Plan successful when it weans Europe from American aid. The ERP is successful to the degree that it helps Germany to trade with Western Europe and lessens the reliance of all Europe's capitalist countries (victorious and vanquished alike) on American supplies of products and purchasing power. At the risk of taking the "bootstrap" philosophy of American aid at face value, Berger and Ritschl subject the Marshall Plan to a test of how well it lives up to its designers' stated aim of promoting an integrated European recovery. In so doing, they make the (non-)debate in which the macroeconomic skeptics and sectoral boosters talk past each other seem like a debate about something other than what the Marshall Plan was intended to do. (More on this point below.) As evidence that the ERP basically did what it was supposed to do, Berger and Ritschl carefully examine data on German trade before, during, and after the crisis of 1950-1951. They also highlight those features of the Marshall Plan's design (like the counterpart funds) that bolster its bootstrap image.
It is also interesting to contrast Berger-Ritschl's view of the new European division of labor with Milward's. A memorable thesis from the latter's book (a wide-ranging treatment not only of the Marshall Plan, but of European integration and the changing face of European capitalism) is that the Schuman Plan was an extension of the Monnet Plan. Milward was referring, of course, not to the Monnet of Eurovisionary fame, but to the Fourth Republic's first planning commissioner. He was implying that European integration grew out of French planning exigencies. Berger and Ritschl, however, place the fulfillment of Germany's position in the new postwar division of labor at the center of their discussion. They also emphasize the frustration of French ambitions, especially at the London Conference of 1948. According to Berger and Ritschl, the Nazi economy was far less oriented (no pun intended) toward Eastern Europe than conventional wisdom about Mitteleuropa suggests. This aspect of their argument is something of a double- edged sword for their overall thesis about reconstructing a West European division of labor. On the one hand, it shows that Germany was already poised to be the keystone of an integrated West European economy. On the other hand, it puts a greater burden of proof on demonstrating either that 1) new institutional arrangements were needed (logically) to make the division of labor work or 2) if indeed needed (perhaps in order to ensure that some kind of multilateralism replace outright German hegemony), institutions stronger than the ERP were actually present (empirically) to make the neue Arbeitsteilung function properly.
Finally, Berger and Ritschl also touch on the domestic political debate about German recovery in the early fifties. Here, as in their discussion of the Marshall Plan's "impact," they help to shift the focus away from the interpretive questions economists ask today (Could a Keynesian stimulus package ever do Germany any good? Has Germany lived up to its neoliberal creed, or has that ideology merely concealed a mercantilist, corporatist reality?) toward the aims and possibilities of the times. Erhard's successful bid for a delay in meeting European Payments Union obligations, they argue, was not a gamble with the Economic Minister's diplomatic capital or betrayal of his free trade principles; in light of Germany's need for imports and the unavailability of other fiscal or monetary policy instruments to cope with its balance-of-payments crisis, Erhard's policy was a pragmatic stopgap measure on a path toward eventual liberalization of trade.
In controversies on such topics of economic history as the Marshall Plan or Brüning's fiscal policy, German historians often seem to be using their positions on the issues in a Stellungskrieg about political and economic debates of the seventies and eighties. A virtue of Berger and Ritschl's approach is that it does not ask whether Keynesian or neoliberal economics works best for Germany, whether Europe needed Erhard to save the market from creeping collectivism, or whether the U.S. was trying to foist American products and "amerikanische Verhältnisse" on a more socially embedded version of the fatherland. Instead, in a conceptually sophisticated way that does owe something to recent advances in European historiography, they take seriously what politicians, economists and diplomats thought they could do fifty years ago.