On June 5, 1947, Secretary of State George C. Marshall delivered a “routine commencement speech” at Harvard University. The only pomp and circumstance was for the graduates and the lone reporter in the crowd was there only because of a friend. It was, however, a speech that changed history as the retired General of the Army proposed a program for Europe based on building local economic strength, governance, and self-confidence.
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.
The Department of State called this the European Recovery Plan while the press labelled it the “Marshall Plan.” It was based on the recommendations of Marshall’s Director of the Policy Planning Staff, George Kennan.
A month later, Kennan wrote a memo — “Certain Aspects of the European Recovery Problem from the United States Standpoint” — that explained what success would look like. Marked Top Secret but since declassified, the memo stated that the basic operating principle of the program was intentionally withheld from public documents and pronouncements, and from the Congress. The program was designed with the explicit intent to maximize influence behavior. The goal was to not just build up Western Europe capacity but to deny ideological sanctuary, the true purpose of containment, by addressing the roots of instability that created opportunities for our adversary. As Kennan explained,
[A]ny set of events which would substantially restore to people in Western Europe a sense of political security, and of confidence in a future marked by close association with the Western Powers, would itself release extensive recuperative forces in Europe which are today inhibited or paralyzed by political uncertainty. In this sense, we must recognize that much of the value of a European recovery program will lie not so much in its direct economic effects, which are difficult to calculate with any degree of accuracy, as in its psychological political by-products.
To state this publicly, however, would be a self defeating act. For the Europeans themselves, the restoration of confidence must be an unconscious – not a conscious — process. They must come to believe seriously in the real value of such an economic program. Obviously, we cannot say to them that the value of such a program lies largely in their subjective attitude toward it. This would only confuse them and undermine in advance precisely the psychological reaction which we aim to produce.
Kennan continued to explain the importance that Americans feel a “a genuine effort has been made to achieve soundness of concept in the way United States funds are to be spent.” However, the needs in Europe outweighed easy political protection at home.
It is probably true that what Europe needs is simply further large scale aid from this country in the form of commodities or credits by grant and aid. The distinction between aid granted to specific programs designed to increase production (and hence to take the form of long-term loans) and aid granted for purely consumption purposes (and hence to constitute straight grants-in-aid) may well be vulnerable to attack on a theoretical economic basis. But it is one which, in the opinion of the Staff, is necessary for the psychological effect here and abroad, and that is why we have chosen to draw it.
Development and public diplomacy are historically and intimately linked. One requires the other. We need to remember that.