Benn Steil on the Importance of Allies

As a part of its Future of American Power series, GMF hosted a conversation with Dr. Benn Steil on his latest book, The Marshall Plan: Dawn of the Cold War (2018). Steil’s book provides a comprehensive examination of the Marshall Plan and an important contribution to Cold War literature. We spoke with him about the Marshall Plan’s lasting impact on Europe and the transatlantic partnership, and what historical lessons can be applied in today’s global context.

What lessons do you think policymakers in the United States and Europe should draw from the Marshall Plan?

Dr. Benn Steil: I think the most important lesson, certainly for the United States, is that allies matter. It is important to have allies – enduring friendly relationships that survive through the tensions that normally occur over years and decades. It is more important to have allies than to have vassals or tributaries or transactional counterparts.

Republican Senator Henry Cabot Lodge, in October of 1947, wrote to the Republican Chairman of the Senate Foreign Relations Committee Arthur Vandenberg in support of the Marshall Plan. What he said is very prescient. He wrote, “The recovery of Western Europe is a 25- to 50-year proposition, and the aid which we extend now and over the next three or four years will in the long future result in our having strong friends abroad.”

And how right he was: In 1989 when the Berlin wall fell, the communist alliances, such as they were, collapsed almost overnight, whereas the alliances that we created during the Marshall years, particularly NATO, were as attractive as ever. The Central and Eastern Europeans, of course, were clamoring to get in. And I would also mention the European Union, which was very much a creation of the State Department as part of the Marshall project. So this is what I would emphasize the most — the importance of having allies.

The Marshall Plan put over $13 billion dollars into foreign aid over four years. Do you think history has proven that this was a good economic investment for the United States?

Dr. Benn Steil: It was a significant economic investment as a percentage of our output. An equivalent Marshall Plan today would be about $800 billion dollars.

I believe it was money very well spent. We certainly met our objectives. Western Europe did not succumb to communism. It is easy to look back now and say, "Well, why would it have?" But in Italy and France, in particular, the local communist parties were extremely powerful, and we were very worried that they would wind up taking over the government there. Output recovered enormously over the years of the Marshall Plan, about 60 percent on average across the Marshall countries. So we did achieve our objectives.

 I would emphasize, however, that it was not merely the economic aid that did this. Had we not added a security component in 1949 – that is, the creation of NATO – our allies in Western Europe would not have had the confidence to adopt the State Department's vision of economic unification, because they felt that would undermine their self-sufficiency. They needed security guarantees from the United States to go forward.

To put that in a more contemporary context, think about Iraq and Afghanistan. We have spent already over $200 billion dollars on reconstruction aid there. That is over 50 percent more than the totality of Marshall aid in current dollars, yet we have almost nothing to show for it economically and politically. I think the most significant reason certainly is the lack of internal and external security in both cases. That is what's missing. You are not going to get economic revival without physical security.

In your research for this book, did you learn anything about the history of the Marshall Plan that you did not previously know or that you found interesting while you were researching?

Dr. Benn Steil: An advantage that I had over previous writers on the Marshall Plan was good access to the Russian archives. I did learn some surprising things from them.

We are used to thinking of the Cold War as an ideological battle, but really the early years of the Cold War were a geographic battle — who would control what parts of Europe. Prior to the launch of the Marshall Plan, Stalin was ruthlessly pragmatic. He did not particularly care what brand of socialism each government in Eastern and Central Europe produced as long as they maintained their loyalty to Moscow. But when Czechoslovakia and Poland started flirting with the possibility of taking Marshall Aid, he cracked down, because he saw it as a threat to his security buffer.

Likewise, if you look at the souring of relations between the United States and Russia today, I do not believe this is a battle of ideology between say liberalism and illiberalism. I do not think Vladimir Putin is in any sense an ideologue. This is fundamentally about geography: who controls what economic and physical space in Europe. I think when we decided to expand NATO in the 1990s we grossly underestimated how strongly the Russians felt about this, having been invaded from the West so many times in its history — Napoleon, Hitler, etc. — and therefore, we did not fund it properly.

Going forward we will either have to provide NATO with far greater financial resources to ensure that our Article 5 mutual security commitments are credible, or we will have to try to reach some new sort of understanding with the Russians about what national sovereignty actually means in the border countries to Russia. I think that will be very difficult, but we in the United States, just as a pure pragmatic matter, have to choose one direction or the other. This middle course that we have taken has been unsuccessful.

GMF’s Future of American Power series discusses new books focusing on U.S. power in the world. In line with its mission to strengthen transatlantic relations, these conversations specifically focus on the implications of U.S. foreign policy for its European partners, as well as other key regions for the transatlantic relationship.