Rebuilding Europe: Western Europe, America, and Postwar Reconstruction

By David W. Ellwood | Go to book overview

CHAPTER NINE
Filling the Dollar Gap: the
Evolution of the Marshall Plan

AMERICAN PRESSURE STEPS UP

The challenge to rebuild European security on the basis of the ERP was 'one of the most difficult ever to be faced by the western world', according to a leading Washington economist, Harlan Cleveland. Cleveland, an archetypal New Deal technocrat who had moved up from the Economic Section of the Allied Commission in Italy via UNRRA to the highest levels of the European Cooperation Administration, was the man who first identified 'the revolution of rising expectations' under way in the world. The vision he expressed in an August, 1949 policy document sums up very effectively the state of thinking on Europe's future in the upper echelons of the Marshall Plan by this time. Cleveland complained of: 'the stifling effect on the process of economic growth, on competition and on the spirit of enterprise of the restrictive policies and practices of the participating countries, particularly economic nationalism.' To combat these practices a vast new sweep of integration was essential. Under the control of a European equivalent of the American Interstate Commerce Commission, all trade and payments barriers would be eliminated. Then a single currency and a harmonised banking system would organise the grand unified market. 1

In this way new 'free trade areas' could be created, said Cleveland's colleagues in the ECA, areas in which 'mass production for mass consumption and intensive internal competition can restore the dynamic of enterprise and economic growth'. In one vast market 'increased possibilities of specialisation' would boost competition and lower costs. The results, in the space of ten to twenty-five years, would

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