Seventy-five years ago, on June 5, 1947, Secretary of State George C. Marshall, who had been a five-star general in World War II, gave a commencement speech at Harvard University.
Rather than stirring, the speech was bland. Its long sentences were hard to follow. It was vague. And yet, in just under eleven minutes on a sunny afternoon, Marshall laid out a plan that would shape the modern world.
“The truth of the matter is that Europe's requirements for the next three or four years of foreign food and other essential products—principally from America—are so much greater than her present ability to pay that she must have substantial additional help or face economic, social, and political deterioration of a very grave character,” he said. “It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health in the world, without which there can be no political stability and no assured peace. Our policy is directed not against any country or doctrine but against hunger, poverty, desperation and chaos. Its purpose should be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist.”
In his short speech, Marshall outlined the principles of what came to be known as the Marshall Plan to rebuild Europe in the wake of the devastation of World War II. The speech challenged European governments to work together to make a plan for recovery and suggested that the U.S. would provide the money. European countries did so, forming the Organization for European Economic Co-operation (OEEC) in 1948. From 1948 to 1952, the U.S. would donate about $17 billion to European countries to rebuild, promote economic cooperation, and modernize economies. By the end of the four-year program, economic output in each of the countries participating in the Marshall Plan had increased by at least 35%.
This investment helped to avoid another depression like the one that had hit the world in the 1930s, enabling Europe to afford goods from the U.S. and keeping low the tariff walls that had helped to choke trade in the crisis years of the 1930s. Marshall later recalled that his primary motivation was economic recovery, that he had been shocked by the devastation he saw in Europe and felt that “[i]f Europe was to be salvaged, economic aid was essential.”
But there was more to the Marshall Plan than money."