Economic Ideas and Government Policy: Contributions to Contemporary Economic History

By Alec Cairncross | Go to book overview

4

POSTWAR PLANNING IN EUROPE, 1945-7*

Two years elapsed between the end of the war in Europe and General Marshall’s speech in Harvard heralding the Marshall Plan. What happened in those two years? What problems did European reconstruction raise? How were those problems seen and by what strategies was it proposed to overcome them?

These are not questions that can be answered briefly. Moreover the answers to them did not remain the same from year to year. There was no single set of problems unaffected by events; some problems disappeared as recovery proceeded while others, often unforeseen, took their place. As the problems changed so, too, did the ideas in vogue. The strategies proposed in 1945 had lost favour by 1947 when a new set of remedies had to be put together to meet a new situation. After two years of rapid recovery in nearly all European countries (Germany excepted) the economic situation was judged, paradoxically, more alarming than it had appeared in 1945. There is thus yet another question to be answered: why this alarm in the midst of growing prosperity?

I shall say little about the course of events or about the domestic problems they raised and try to concentrate on ideas and strategies.

Events

In spite of the enormous amount of damage, destruction and dislocation caused by the war, industrial production in Western Europe, if one leaves out Germany, had recovered to the pre-war level by 1947. But if one looks more closely, this was true only of the United Kingdom, Scandinavia, Belgium and one or two of the less industrialized countries, not yet of France or Italy, still less of Germany.

Nearly everywhere, Europe in the spring of 1947 was in a state of boom,

* From Danmarks genopbygring og Marshallplanen (Proceedings of a conference in Copenhagen, June 1987) Økonomi og Politik, Algade 48 Dk 5500 Middlefart, Denmark, pp. 213-23.

-53-

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