Hi, welcome back. In this segment we're going to focus on how two Europes get created in the late 1940s. And the key event in this period is the famous Marshall Plan, kind of his great response to those failures I talked about in the last presentation. Of course, it's called the Marshall Plan. That was a deliberate decision because Marshall was a lot more popular than President Truman and so the hope was calling it the Marshall Plan will raise the odds of getting it through Congress. But it wasn't just about George Marshall. This was really a team effort, and it's worth kind of noting some of the members of the American team, very different kinds of people. This man on the left, Dean Acheson. The number two man in the State Department at the beginning of �47, left government, but played a key role. He was a figure who had ideas about how to manage this politically, stressing the anti-communist message to Congress cause he knew that would be popular, sensitive to economics in rebuilding a world of more liberal free trade. A key role played by this man, George Kennan, developing an idea of the need to contain Soviet Communism, but not to counterattack it. If you can just contain it, it will expire of its own contradictions. But to contain it, he didn't want a military confrontation. He thought you needed an economic revival in Western Europe, and one with a relatively light hand from the United States. Or this man, who often isn't given enough attention. This man is Will Clayton. He was the person running economic policy at the State Department, a key figure in the Marshall Plan story. His background is interesting. He comes from Texas. He was involved with a firm called Anderson Clayton that was a huge broker of cotton sales. That's right, cotton. And like many Southerners involved in the cotton trade, a big advocate of free trade. And he was trying to figure out how to revive the world trading system. And of course one reason the Europeans couldn't buy things in world trade, especially from America, is they didn't have hard currency. They didn't have enough dollars. So how do you solve that problem? We have this image now of the Marshall Plan as, well, that's just this big foreign aid effort. We were very generous, and we gave the Europeans tons of money and got them on their feet. And that's a kind of good cartoon story for the Marshall Plan. But you can't learn anything from it. Because the notion of creating another such foreign aid program to solve our problems misses what really made the Marshall Plan work. More devilish details. I'll just call out two particular details that are really interesting about the way the Marshall Plan was designed. First off, this was not just giving the Europeans a bunch of money and then getting them to put it to work in rebuilding their countries. This is really telling the Europeans: The Europeans write a shopping list. You know how to write a shopping list. Here's the stuff we wish we could buy if we had a lot of dollars. And then the American government is their purchasing agent, in effect. We'll go buy it. And, of course, who are we going to buy if from? We'll buy it from Americans. So think about that. The Europeans form the shopping list. We'll spend our money buying stuff from Americans. Well, that has some political arguments going for it. But the Europeans like that, because you're giving them the money, the funds that they can use in making massive purchases from the United States that, otherwise, they couldn't afford to make. That then helped them build up their economies, get their trade restarted again. Here's another key ingredient. For the Europeans to participate, they have to kind of get together and not only cooperate on the shopping list, but they had to agree as a condition that they would organize and cooperate with each other and knock down the trade barriers inside Europe. We weren't going to deal with eight European countries each with its own trade walls. We believed knock down your trading barriers inside Europe, so that you have good economic space between you and can work together, then you can participate in putting together your shopping list for us. So European cooperation and European initiative are key elements of this design. A design that was based on the premise that if they had dollars, that's kind of the ignition fuel they need to get their economies going again. That meant that the Europeans were going to have to work together; they were going to have to be interdependent. But interdependence also had political implications. It meant that the kind of political rivalries before the war were going to have to be downplayed, have to be muted, for this plan to work. So it's enormously important political agenda for the European participants, not just economics. Now, of course, at the point you're organizing this, the people who want to take part are going to be people getting involved in a really close relationship with each other and with the United States. And the attitudes toward that vary depending on who you ask. Of course, from the communist point of view, everything about this is wrong. The Americans are the hub, not the Soviets. That's bad, both politically and economically. The cooperative elements imply free trade and a capitalist economic system -- incompatible with communism. And since the Soviet government is looking forward to the communization of all these countries, they, in effect, prevent all the countries where they have influence from participating in the Marshall Plan. So if you're an American editorial writer, here's the way you see the Soviet role. The Marshall Plan's trying to score for a European recovery, but there's Stalin trying to block the goal. Or, from a European perspective, this is the kind of propaganda for the Marshall Plan but -- Whatever the weather we must move together. [LAUGH] Can you imagine this kind of image even being put on a wall in the 1930s? Or, if you adopted the Soviet point of view, here's their caricature: that's the Statue of Liberty. That face, that's the face of George Marshall; he's holding up the big money bag, dollars. Marshall Plan is written on this document, and what�s happening is he expects everyone to just kind of kowtow and bow down before the power of the almighty dollar. That's the Soviet image of the Marshall Plan. So what are the effects, then, of the Marshall Plan's adoption and implementation in �47, �48, and as it really gets going in the late 40s and even into the early 1950s? Perhaps the most important effect, overall, is psychological. It's not like all of a sudden, you start putting, you start announcing this in the middle of 1947 and economies are wonderful again. In a way, so much of the attitude here is: You've got a glass that's half full. The attitude is: Is this glass draining or filling? And what the Marshall Plan did is it made people have a sense that the glass was filling. It gave them confidence about the future. Political, economic confidence about the future. That was what was so important about it. There are arguments among the economists about whether it really had a big economic impact. Alan Milward, for example, says not so much, the European economies were beginning to recover anyway. I think there are some pretty good economic arguments on the other side, about the objective impact of the infusion of the American funds in this way, but the political impact of what this is doing, and the psychological impact, are irrefutable. What it also creates is a whole vision for Western Europe as a cooperative entity, combining its resources. That's very, very powerful. Let's look at the way this played out in European politics right after the war. You remember this kind of chart. This showed you the, kind of the basic families of political beliefs right after the war. Fascist diminished, National Conservatives, Liberals, Social Democrats, Democratic Socialists, Communists. So, here's a pie chart, showing you the results of the French legislative elections in November 1946. Right wing monarchist stuff, it's off the radar of French politics. There are some Gaullists who are beginning to organize on the right, disdainful of the party politics represented by the pre-war era, but in this new Fourth French Republic that replaced the Third Republic destroyed in the war, this is a very leftist orientation. You see the communists are at the very height of their power; they'll never get more votes than this in a French legislative election. The Democratic Socialists, pretty strong. And the Social Democrats, quite strong. The big three make up the dominant coalition in 1947, with the communist sharing power in the French government. But because of the break over the Marshall Plan, the big three break. The communists launch a general strike in 1947. They're pushed out of power. Instead, the Social Democrats form the hub of what will become a new coalition of ruling parties in France. Just a reminder of what we did in another slide, what do we mean by Social Democrats? What do they stand for? In Europe as well as in America, this was a lot of the basic menu. We went over this before. The only thing I would like to point out again, as you review this slide, is the implications for politics big and little. By big it means, big government, big companies, big unions, free market, but with a strong government role. But a lot of interdependence. A lot of institution building and cooperation. That has a small political effect in the way people have to work together, as well as the larger impact that we're seeing in the division of one Europe that's pointing towards the West and another that's oriented around the Soviet Union. The Social Democrats, sometimes called Christian Democrats in Western Europe, they become the key centrist force emerging in the late 1940s. They're well represented by these two men, both Frenchmen, key political allies. This man on the left, Jean Monnet, this man on the right, Schuman. Schuman is a really good representative of the new France: grew up in Alsace, actually was in the German army during World War I, then became part of the new France, devoted to the new France. He actually becomes France's foreign minister. He's cooperating a lot with this man, Monnet, a former champagne salesman, who becomes a key economic planner. Both these men, by heritage, by background, are committed to a world of international cooperation, of bridging the old pre-war differences, of getting Western Europeans to work together. Now, on the other hand, there's another vision for Eastern Europe. In Eastern Europe, the Soviet Union is increasingly tightening its grip. In 1947, �48, �49. That's tragic story for the fate of Eastern Europe. Recently the historian Anne Applebaum has written a detailed book chronicling just what happened in each of these countries as the Soviets subverted democratic forces and made sure that they and their allies seized power, by coercive means if necessary, throughout this zone, with the West essentially helpless to intervene, to do anything about it. That naturally created some flashpoints, in places where it wasn't clear whether it would go democratic or communist, like Czechoslovakia. The communist coup that overthrew the government of shared power and replaced it with a communist government in 1948, it shocked the West. Because remember, only ten years earlier, the whole cause of Czechoslovakia had been on the headlines all through the Western world, when the Germans were exerting their pressure on Czechoslovakia. So people were conditioned to care more about what happened when Czechoslovakia was taken over by the communists and its foreign minister, the famous statesman Masaryk, mysteriously committed suicide. But there are other flashpoints, above all, again, Germany. Divided Germany now becomes a polarized division with divided Berlin at the heart of it, in the middle of the Soviet zone of occupation. And in 1948, as the West begins converting its zones of occupation to a new capitalist system, the Soviets strike back. They cut Berlin off from ordinary road supplies, forcing Berlin to be kept afloat through an airlift of supplies. But that was a move that backfired. It created iconic images like this one. Study this photograph. Here are German children, standing on what looks like a hillside, that's actually a huge pile of rubble, from the destroyed wreckage of Berlin, and instead of American aircraft destroying Berlin, they're all standing there watching American transport aircraft coming in for a landing, bringing vitally needed supplies to the people of Berlin. Images like this had a galvanizing effect on Europe and kind of clarifying here are the two Europes that are coming into existence. Which side are we going to be on? Let's stop there and next time, let's see what's happening in Asia. [BLANK_AUDIO]
