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From Labor Action, Vol. 13 No. 8, 21 February 1949, p. 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
One year will shortly have elapsed since the beginning of the European Recovery Program (ERP), the economic aid aspect of the much broader Marshall Plan. The initial $5 billion fund has now been exhausted or committed and it has therefore become necessary to ask Congress for an additional appropriation of $5½ billions to carry the ERP through June of 1950. This is the formal explanation behind Secretary of State Acheson’s recent statement on the ERP as well as Economic Cooperation Administrator Hoffman’s general report on the first year of the program. Of course, the additional billions will be approved by Congress (after a minimum of complaining and criticism). To begin with, much progress has been made from the American standpoint despite possible complaints and, more importantly, it would be out of the question to withdraw from or hedge on such deep commitments.
What kind of progress can be cited? Naturally, ERP tries to take full credit for the undoubted and substantial recovery which Western Europe has undergone in the past year. It would appear that this has all been due to the glorious and philanthropic gifts flowing out of America’s abundant production! The natural economic forces in Europe, with the rich resources in material and manpower that Europe still possesses, are hardly taken into account. Yet the fact remains that western Europe has achieved a definite and tangible recovery, that it is again a going capitalist economic region, that its productivity is surpassing the bare minimum necessary for life itself and that its economic specific weight in relation to America and eastern Europe has advanced.
In this respect, it has again become possible for the political and ruling groups of eastern Europe to reassert themselves in world affairs and to maintain a certain independence they have not known in many years. It would be absurd to deny this since this factor will greatly influence relations between western Europe and America in the future. It will not be strictly a one-sided affair, thanks to the counterforces and trends which economic advancement has created. And this is something to be thankful for!
The recovery referred to can be measured in more specific terms: 1948 factory and mine productivity was about 15 per cent over 1947 and equal to pre-war productivity; steel output equalled that of 1937 and gained 25 per cent over 1947, if we excluded western Germany from the totals; railroad and freight traffic was largely back to normal; crops for the year were 25 per cent above the extremely bad year of 1947 and – with the exception of western Germany which is about to be subjected to an ersatz milk and meat diet experiment, and still strictly rationed England – the general food situation is far superior to previous years. Perhaps the most favorable sign of all was the 20 per cent increase in overall exports for the Marshall Plan countries, with the general prospect that increased export and tourist trade for 1949 will again be much higher. In general, the picture when viewed objectively would indicate that the recovery potentiality of western Europe, once it was stimulated by the American flow of goods, proved considerably higher than originally expected.
The considerable flow of foods, fertilizer and feed from America in 1948, together with good weather, were responsible for the crop recovery. The quantity of raw materials, semi-finished products, machinery, fuel, etc. – accounting for about 60 per cent of the billions spent – provided the necessary stimulus to set western Europe’s productive plant into operation once more. These factors, together with the skill and capacity of the workers, are behind the marked recovery.
Of course, there are many factors on the other side that must be considered. We have written here of recovery measured in purely capitalist terms, and not in terms of real needs and distribution. For example, it is already clear that by the time ERP runs out in 1952 few, if any, of the nations involved will have achieved a trade balance and overcome their current dollar shortages and deficits. Very little progress has actually been made toward the abolition of trade barriers and customs boundaries, and East-West European commerce is virtually extinct. Whatever efforts were made at some kind of “economic union” of the participating nations fell flat before the mutual rivalry of the countries involved. Large-scale unemployment persists in Greece and Italy.
From the standpoint of the European people and workers involved, most detrimental is the continuation of inflationary regimes with swollen military budgets that unbalance the entire economy. Thus, in the field of distribution of the gains we have cited, we have the typical disproportions characteristic of capitalist economics. The improved standards of the masses are at a far lower level than that of the rich, the industrialists and the business men.
From a political point of view, the U.S. has won a considerable victory in its struggle with Russian expansionism. The recovery achieved has halted both Russian imperialism and the national Stalinist movements which resorted to open sabotage in the struggle against the Marshall Plan. In this respect, the leadership of the countries of western Europe is more dependent upon continued U.S. aid than before; but as we have indicated above this is not unilateral relationship as, for example, is the case when Russian imperialism seizes hold of a foreign country. In this sense, both the temporary halting of Stalinism and the economic recovery are objective results that are highly favorable to the real socialists of western Europe, provided they make use of them.
Acheson, who will manage fhe new phase of the ERP program, will continue the economic aid in substantially the same way as hitherto. However, his political approach will be more and more a pushing of the Marshall nations towards some form of unity, according to his conception of the term. That is, a partial economic unity to further strengthen the economic recovery achieved, and above all a military unify based upon his proposed North Atlantic pact and other measures. The administration’s ideal is a semi-unified western Europe, productive and strong, with a coordinated military machine supplied by American arms. This is the essence of the new phase of the Marshall Plan.
Many controversies will develop during this new phase. The pressure of Congressmen for immediate and tangible repayments (in the form of strategic metals and raw materials; privileged trade agreements; forcing unwelcome tax provisions upon the benefiting nations, etc.) will grow. We submit, however, that these are secondary and subordinate factors in the real picture. At this stage of the game, U.S. imperialism does not proceed in that way. The conception of those who conceived of the ERP program as resulting in the outright and clear “enslavement” of western Europe, its governments and peoples by the U.S. has proved to be more than naive. The shrewder and more far-sighted exponents of the “American Century” have other ways of proceeding, and they have not failed as yet.
This is precisely why the revolutionary socialists of Europe must match them in keenness of analysis and program by building their own political approach on the basis of objective facts and not presuppositions. Their struggle must be, in economic terms, for a progressive sharing of the fruits of economic recovery and, in political terms, for the shaping of the coming unification of western Europe in a democratic form rather than the militaristic form which America would like to see.
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