Michel Pablo

Disunited Europe

The Balance Sheet of the Marshall Plan

(March 1952)

From Fourth International, Vol. 13 No. 2, March–April 1952, pp. 37–41.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

A few months from June 1952, the time for the realization of a balanced European economy, predicted by the specialists who conceived the Marshall Plan in 1947, the objective appears still far off and as then Europe is threatened again with a grave crisis.

“Where are we?” Such was the recent query of M. Van Zeeland, Belgian Minister of Foreign Affairs. “I admit I am disturbed. Great clouds are appearing on the European horizon.” (Le Monde, March 3)

In reality the clouds never disappeared from the European skies since the end of the war and the storm warnings have sounded more than once since then.

M. Van Zeeland is not wrong however. As in 1947 when it was an emergency necessity to save the tottering structure of European capitalism, so today the conjuncture of the armaments economy and accelerated preparations for war are threatening Europe with a crisis as serious as the one which existed four years ago.

Normally the Marshall Plan should come to an end next June.

“It is ironical,” the London Economist remarks (Jan. 5), “that after four years of cooperation, Europe will find itself in what can appear to be the same situation as in 1947.”

Even before this date, the implementing organization of the Marshall Plan, the Economic Cooperation Administration (EGA), has had to change its name to the Mutual Security Administration (MSA). And despite the fact that this new organism has still not eliminated the Organization for European Economic Cooperation (OEEC), the initial function of the Marshall Plan has already been qualitatively changed.

“The conception of economic cooperation,” the Economist of Jan. 5 admits, “in which the emphasis has been on Europe, is being transformed into the wider concept of mutual security, with the emphasis on the North Atlantic Community.”

If these fine distinctions have any meaning whatever they mean that the military and political character of assistance has taken priority over what could have been considered above all as an economic objective at the beginning of the Marshall Plan.

Aims of the Marshall Plan

Let us briefly recall the aims which this plan was given at the time based on the report of the Sixteen (drawn up following the conferente held in August 1947 by sixteen European nations): increase of production and of productivity especially in the sphere of agriculture, coal, electric power and steel; financial stability, development of economic cooperation of the countries of Western Europe, tending toward the creation of a single European market; reduction of the European deficit in dollars through the development of an export program with the United States and Canada.

According to the report of the Sixteen, if these aims were to be realized the following conditions also had to be fulfilled: lowering of prices in the United States, curtailment of European imports from the United States, compensated by imports coming from Eastern Europe and Asia, increased exports to the United States and to the American continent in general.

It is apparent on the face of it how the evolution of the “cold war” since then has destroyed most of these conditions just as we foresaw at the time that they would, and consequently has compromised the success of the plan. (See The Marshall Plan by M. Pablo, Fourth International, March–April and May 1948).

“Europe is still starved for dollars,” the Economist (Jan. 5) bitterly, notes. “The overseas payment accounts of most of the countries are again markedly in the red; the countries are still trying in vain to fight inflation while the necessity of developing productivity is just as great as it was four years ago.”

Naturally the approximately $12 billion expended since then by the USA for the Marshall Plan (as against $22 billion provided for in the report of the Sixteen and against $15 billion announced at the beginning of the Marshall Plan) has permitted the attainment of at least some of the initial objectives: European production and productivity have more or less progressed as originally envisaged and their level at the end of 1951 was with some exceptions close to that fixed at the time.

Agricultural production except for livestock, has attained and slightly surpassed its objectives, as well as the production of electric energy and of steel. On the contrary coal production remains below expectations, and this is especially due to the falling off of English production in particular.

Total industrial production of Western Europe was 13% higher in 1949 than in 1948, 25% higher in 1950, 35% in 1951.

Productivity also has made notable progress during these four years and several European industries, thanks to the Marshall Plan, have been able to re-equip, to expand and to modernize their equipment.

So far as stabilization and financial stability in the struggle against inflation are concerned, all the very moderate progress realized in this sphere, particularly between 1949 and the first half of 1950, was completely destroyed with the outbreak of the Korean conflict and the new conjuncture of armaments economy and accelerated preparation for war.

“The age of inflation,” in which the capitalist world has lived since the last war especially, is far from being closed.

On the contrary, the inflationary pressure is stronger than ever, cracking the fragile edifice of European economy on all sides.

“Plans” and Trade

So far as inter-European economic collaboration and the creation of a single market is concerned, “progress” has never gone beyond the stage of “plans” such as the “Schuman Plan” and such daring recommendations like those contained in the “Liberation Code” published by the OEEC in 1951.

The practical application of these plans is quite another matter.

The “Schuman Plan,” by proposing to create a single “European market” for coal and steel, corresponded to a need of agreement between the magnates of the Lorraine metal industry and the magnates of the Ruhr coal industry in order better to cope with the threat of a crisis and also to better exploit the perspectives opened by the armaments economy. With the aid of the Americans this will inevitably result in the transformation of the Lorraine-Ruhr combine into the war arsenal of Western Europe.

There are, however, still very important problems to be solved relating to organization and to the concrete administration of the plan before it can become a reality.

The antagonistic relationships between the various European powers and between each of them and the USA are reflected as in everything else also within the “Schuman Plan” complicating and delaying its implementation.

Here is the situation regarding a broader financial and commercial “European market” guaranteeing free circulation of commodities:

In 1951, following the “Liberation Code” of the OEEC, 75% of the private commerce of several countries was theoretically no longer subject to export and import restrictions, and a common list of commodities which could thus freely circulate from country to country was adopted. But as long as the governments retained control over the most important and most interesting imports for inter-European trade and maintained tariff barriers, the quantitative liberation of private inter-European commerce is a wretched consolation.

Moreover, even this limited and timid liberation of trade did not stand up for more than a few months. In effect, the new financial crisis which engulfed first England and then France since the end of 1951 has obliged both these countries to adopt draconic measures regarding their imports and has simultaneously seriously again paralyzed all inter-European commerce which was already so limited.

The condition of the European Payments Union (EPU) is another example of the disjointedness of capitalist Europe and of its organic inability – because of the nature of its social system and the concrete conditions under which this system must now function – to unite, to create a united economic structure. From its origin this organism has evolved in the direction of permanent imbalance which is constantly being aggravated: most of the countries, first and foremost England and France, have become “exaggeratedly debtor,” only Belgium, on the other hand, remaining “exaggeratedly creditor.” (Van Zeeland’s declaration in Le Monde, March 12, 1952).

This situation now threatens to lead to a paralysis of the European Payments Union which “will mean a relapse into bilateralism, that is, to a 40% retreat in the economic activity of Europe,” according to the same statement by Van Zeeland.

There remains for examination the evolution of the dollar deficit of total trade of Western Europe during this period.

Despite the substantial increase in exports to the USA and Canada which went from $1.3 billion in 1948 to $2.4 billion in 1951, the $5.3 billion deficit in 1948 was reduced to $3.8 billion in 1951 (that is, $1 billion higher than the provisions in the report of the Sixteen for 1951).

The importance of this deficit, still enormous, can be still better grasped if one takes into consideration the fact that European exports to the North American continent in 1950 and 1951 have benefited from an exceptional conjuncture caused by the mass stockpiling in the USA of a series of raw materials and products necessary for the colossal armaments program undertaken by that country.

Can one say as much for European imports coming from the USA?

Under present conditions, they remain those that are strictly necessary for the very minimum of normal activity of the European market, and it is rather their limited character, in the absence of the means of payments, which prevents their increase and in certain sectors these imports are already threatened with paralysis.

Here we touch the very essence of the problem: whence the failure of a balanced restoration of European economy despite the $12 billion expended by the Marshall Plan? What are the conditions which would be required for a healthy evolution of this economy?

There is no doubt that without the conjuncture of the armaments economy opened by the Korean conflict, European economy would still have been able to evolve for a certain time in a more normal fashion and it would still not be so quickly threatened again with dislocation.

The exceptional rise in the prices of raw materials and of products which it imports from overseas, caused by stockpiling in the USA, as well as the burden which the armaments economy has placed on each country, are incontestably the two factors which have acted in contrary direction to the initial impulse given by the Marshall Plan, and have in large part wiped out the progress of restoration and cure of the European economy. But even without this unfavorable conjuncture, under the new postwar conditions, it would not have been possible to have recovered an equilibrium, stable even in the slightest manner, for example, in comparison with that which existed before the war of 1939–1944.

Distortion of European Economy

The European capitalist economy is organically unbalanced, and this is at the bottom of the frequent crises which it has experienced at every important change of the international conjuncture.

Leaving aside the historic conditions under which European capitalism developed during the 19th century and up to the war of 1914–1918 – conditions which were in large part destroyed following this war – it is sufficient for us to recall the elements of relative equilibrium in the European economy on which it still rested in the period between the two wars, 1914–1918 and 1939–1944.

The group of large industrial countries which now form the nucleus of Western Europe – England, Germany, France, Italy – was engaged in economic relations with quite a different milieu than that of today, namely Eastern Europe, the African and Asian colonies, and the semi-colonial countries of Latin America.

On the other hand, the relationship of economic forces with the USA, while having changed in its favor – in comparison with the situation before the war of 1914–1918 – did not alter the industrial supremacy of the European group in the world: US production in 1937 was 76% of European production at the time (excluding the USSR) as against 151% in 1947. After the last war industrial Europe lost the largest part of its traditional outlets and its sources of revenues which would have balanced its accounts: Eastern Europe to the benefit of the USSR, China and partly India, Indonesia, Indo-China, Burma, Malaya, South Africa, Australia, Canada, the semi-colonial countries of Latin America. In one way or another all these countries changed their old semi-colonial or colonial relations as regards the metropolitan industrial countries of Europe, making their situation untenable on a capitalist basis in the long-run.

The removal of the traditional zones of European capitalism threatens it with pure and simple suffocation. The changes caused in this sphere by the last war have upset the structure of European capitalism.

Hence flows its irremediable decadence and its increased parasitic dependence upon American imperialism. But if this dependence keeps the crisis of capitalist Europe from assuming absolutely catastrophic form, on the other side it works in a way to accentuate its disequilibrium.

Exchange between the USA and Europe is not that of industrial countries and colonial or semi-colonial countries but exchange between countries which are equally industrial and even today almost equal in economic and productive potential.

On the other hand, the USA which deals separately with each of the countries of the European groups has a

crushing superiority over each of them which still further imbalances exchange, already unbalanced in principle by the equally highly industrial nature and often non-complimentary nature of the two parties.

Thus the exchanges of Europe with the USA will never be able to replace the lost colonial and semi-colonial zone for the former, or to balance the currents in both senses, or to restore the former situation of European capitalism. International economy has changed in its structure, and the first victim of these changes is European capitalism.

Peculiarity of US Imperialism

However, the increased dependence of Europe on the USA bears with it another no less grave aspect. American imperialism is already profoundly involved in an armaments economy and in a policy of war preparation. This evolution is determined by the special conditions under which American imperialism develops.

The principal field of its economic activity still remains the domestic market while its productive capacity has doubled since 1937. On the other hand, it also has found itself, after the conclusion of war, in a world less favorable for imperialist expansion than that which formerly favored the rise of European imperialism.

It has had to confront the threat of over-production and of crisis through the means of artificial markets of which state expenditures have become the principal instrument since the New Deal.

In fact it is the state, more and more interlaced with several groups of big monopolists, which is trying to keep economic development in balance and to prevent the depression.

Military expenditures combined with foreign aid, exceed by far the whole of American exports and revenue from investments abroad. [1] That is to say, the economic action of the state financed by its own budget is infinitely more important for the equilibrium of the American economy taken as a whole than the normal flow of its merchandise and capital abroad. This is a unique characteristic of American imperialism which is explained by the concrete actual conditions under which it has historically arrived at the summit of its power and is obliged to function.

Rigid and disturbing consequences flow from this state of affairs: the more and more important place which the state occupies in the function of the American economy, and the military form and foreign aid which this economic action of the state assumes, involves it in a war policy and one of increased interference in international affairs. In its turn this political behavior becomes the cause for new developments in the economic structure of society. Never has Lenin’s formula “politics is concentrated economics,” been more valid than for the case of American imperialism and its state.

This functioning of monopolistic economy of the United States, which threatens to stifle in its normal national boundaries, requires the diversion of an increased part of its strength in sectors (armaments economy, foreign aid) which in turn draw it into this sphere of aggressive international politics. This is the image of the apogee of the parasitic, decadent and destructive phase of imperialism. The effects on European capitalism were inevitable and will even be fatal for it.

We have seen that on the plane of commercial exchange the equally highly industrial structure of the USA as well as of Western Europe, and on the other hand the crushing preponderance of the USA in this sphere, result in European capitalism, divided, irrationally organized, being incapable under present conditions of balancing its exchanges.

On the other hand, all aid which the USA grants to foreign countries inevitably evolves with the whole of the policy of this state towards aid which has a political and military character.

This is the case of the Marshall Plan having been absorbed by the military aims of the Atlantic Pact. And it is also the Europe of the “European Army,” directed by the Pentagon.

Thus European capitalism because of the pull of exchange as well as because of the evolution of the character of the assistance which American capitalism grants to foreign countries, cannot disengage itself from its dependence on the USA and finds itself a cogwheel in the preparation of imperialism for war, the only possible policy for world imperialism in its phase of final decadence.

It is not a question of the monstrosity of the leaders of the nation, but the monstrosity of a social system no longer having any other resources to maintain itself than to prepare and to engage in the most absurd wars and the destruction of the wealth of humanity.

The characteristics of American imperialism are the characteristics of contemporary imperialism in its most powerful, most complete, most consistent expression.

Problem of European Unification

Nothing less than a revolution will suffice for Europe to liberate itself from this really suicidal enterprise.

In the present social state of affairs, with the divided and antagonistic national states reflecting the antagonisms between the particular economic structures of the European countries, whose development is unequal and uncomplementary, dependent on the USA and terrorized by the spectre of revolution, it is absolutely vain and Utopian to envisage the possibility of a united capitalist Europe.

Any abolition of economic and national frontiers or the creation of a united European market would signify a reclassification of industries and of agricultural enterprises according to the law of the strongest and most effective economically. It will result in a shake-up, antagonistic to the innumerable feudalisms organized within each present state and which subsist thanks only to its artificial protection and its complicity. The social reclassification of millions of men which would follow from this is not the least other aspect of this problem.

On the other hand, the struggle for the supremacy for this or that national economy over the whole of the European economy, would follow the same line of the strongest and naturally none of the weak are disposed to submit to it.

To organize a united European market from the point of departure of the present positions acquired by each industry and each national enterprise, which were created in the concrete historic development of European capitalism on an anarchistic, antagonistic, unequal, basis, would signify a revolutionary transformation which the European bourgeoisie has not the strength to undertake.

The market of the US has been built on a normal development of the country from the east to the west. The development of European capitalism has followed the line of distinct unequal and antagonistic structures. It is infinitely less probable that in a capitalist world like that of Western Europe dominated by internal inter-European and international antagonisms, the European bourgeoisie can realize its unification.

Failure of Capitalist Plans

Up to now its reactions have been clearly in another direction. On the economic plane even the experience in miniature of the united market of Benelux has not succeeded. The equilibrium between the two structures, Belgium and Holland, each plunged into an international involvement with the rest of the world market, is proving impossible.

One has the occasion to appreciate the spirit of collaboration which animates each “European” partner each time the crisis strikes at their door.

The measures of self-protection, taken without regard to their “European” consequences, in several hours destroys the work of several months; if not of years, which was undertaken in a different sense. Recent examples of restrictive measures and of the controls imposed by England and France and the projects of unilateral devaluation to which France in particular will very probably be driven sow disaster and panic in all the “European communities.”

On the political plane, the phrasemongering of the Strasbourg assembly concluded by exasperating so ponderous a man and such a “great European” as Spaak, leading to his resounding resignation last December.

On the same plane, the debates which took place in the French assembly in February 1952 on the European Army as well as the vehement controversy between Bonn and Paris on the question of the Saar have sufficiently demonstrated, how inauspicious is the climate for “unitarian” enterprises and how much the past still weighs on the very slight “European” conscience of broad stratas of the bourgeoisie.

However, it is on the military plane that substantial progress has nevertheless been realized and of all the “European” plans, it is still the Pleven Plan which has more chances of success in one or another form. As a united “European” army, or as a federated “European” army, the military forces of the Western bourgeoisie will be obliged in any case to coalesce, to accept the super command of the Pentagon, and to carry on their counterrevolutionary war together.

“The unification of Europe” moves forward as an enterprise of the coalition of military forces of the bourgeoisie, subject to the American general staff.

If it is necessary on the other hand to exclude any genuine economic unification of Europe, on the contrary the coordination of its resources and the “planning” for war will prove to be a more and more urgent necessity.

American “aid” is already fully working in this direction.

Thus the only “united” Europe which moribund capitalism is capable of creating is that of the European, Military Union directed by the Pentagon, the new Holy Alliance of the Atlantic Pact.

However, Europe, even amputated from the countries which now form part of the Soviet zone of influence (and whose production represents 6% of world production) is in reality under certain conditions capable of still playing a first-line role in the evolution of the international situation and of the immediate destinies of humanity. Taken together, the countries of Western Europe already possess a production superior in several spheres to that of the USSR and of the satellite countries. (In 1951 Western Europe produced 460 million tons of coal, 55.5 million tons of steel, 246 billion kilowatt hours of electric energy). And its production is potentially equal to that of the USA. A genuine unification of these countries, with the abolition of economic and national frontiers, followed by rational planning of their economies, will raise this potential to a still higher degree.

Socialist Future of Europe

But this problem at the present stage of the history of the world is indissolubly connected to the social transformation of Europe, to its socialist future. If important forces of the European socialist workers movement could become conscious of its enormous possibilities and find the strength to smash the obstacles, routine, the cowardice toward American imperialism and their own bourgeoisie, and to rise to the stature of history and its demands, this united socialist Europe would have a chance of coming into being and of acting before the storm of the Third World War breaks over its ruins.

We are thinking especially of the leftwing of the Labor Party and that of the German Social-Democratic Party.

It is in England that the progressive forces of the socialist movement are now the most powerful and. the best placed to seriously envisage the possibility of a genuinely socialist power in that country, then taking the initiative for a united socialist Europe. Such an initiative would call forth first of all in Germany no less important forces. Such developments in England and Germany would exercise a decisive influence on the Communist and Socialist movement in France and in Italy.

Therein is a grandiose perspective with ensuing immense possibilities, especially for the leftwing leaders of the Labor Party.

Will they grasp this opportunity in time?

March 15, 1952


1. American exports do not exceed 10% of the total production of the country. (In reality they were 4.9% in 1946 and 6.6% in 1947.) On the other hand, the average of private capital exported between 1946 and 1949 was hardly $600 million, or 1/5 of the annual average of Marshall aid and 1/25 of the military budget up to 1949 ($16 billion).

Pablo icon
Michel Pablo
Marx icon
Marxist Writers’

Updated on: 10 April 2015