ABSTRACT
World War II came to an end in 1945 with disastrous economic and political consequences. Europe suffered in particular: agricultural and industrial production had significantly fallen below prewar levels, and so had exports; there were food shortages, deficient housing and scarcity of raw materials; existing capital equipment was either devastated, or obsolete and ill-adapted to peace production; people were hungry, poor, and demoralized; gold and dollar reserves had been depleted; and European economies lacked access to world markets. At the political level there was humiliation and shame in Germany on one side; aching nationalism and political divisiveness in the rest of Europe on the other. Political antagonism between west and east would cleave the world into two hostile blocs for more than a generation. Civil and political liberties and democratic institutions were fragile and under assault from misery, lack of opportunities, and widespread pessimism. At that time, a soldier – a former chief of staff of the United States Army who had become secretary of state – George Catlett Marshall, rose to address young students of Harvard University with a truly visionary message:
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. 1
