DMPQ- How important was the Marshall Plan in bringing about the recovery of Western Europe between 1947 and 1951?

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Between 1948 and 1951, the United States undertook what many consider to be one of its more successful foreign policy initiatives and most effective foreign aid programs. The Marshall Plan (the Plan) and the European Recovery Program (ERP) that it generated involved an ambitious effort to stimulate economic growth in a despondent and nearly bankrupt post-World War II Europe, to prevent the spread of communism beyond the “iron curtain,” and to encourage development of a healthy and stable world economy.

The overall production objective of the European Recovery Program was an increase in aggregate production above prewar (1938) levels of 30% in industry and 15% in agriculture. By the end of 1951, industrial production for all countries was 35% above the 1938 level, exceeding the goal of the program. However, aggregate agriculture production for human consumption was only 11% above prewar levels and, given a 25 million rise in population during these years, Europe was not able to feed itself by 1951.Viewed in terms of the increase from 1947, the achievement is more impressive. Industrial production by the end of 1951 was 55% higher than only four years earlier. Participating countries increased aggregate agricultural production by nearly 37% in the three crop-years after 1947-1948. Total average GNP rose by roughly 33% during the four years of the Marshall Plan.

Even though trade rose substantially, especially among participants, the volume of imports from the rest of the world rose substantially as well, and prices for these imports rose faster than did prices of exports. As a result, Europe continued to be strained. One obstacle to expansion of exports was breaking into the U.S. and South American markets, where U.S. producers were entrenched. OEEC exports to North America rose from 14% of imports in 1947 to nearly 50% in 1952.

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