Charles W. King

The success of The Marshall Plan rebuilding Europe after World War Two and correcting the mistakes of the Treaty of Versailles is one of the most well known facts about World War Two amongst the American. Named for George C. Marshall, the US Army Chief of Staff during the war and Secretary of State and Defense after the war, the Marshall Plan provided more than $13 billion (in 1940s dollars) to Western Europe to help rebuilding. This largess is contrasted with the punitive measures imposed on Germany after World War One.

The Treaty of Versailles required not only German admission of guilt for World War One but the acceptance of responsibility for not only their own war debt, but millions in reparations to the victorious Entente powers. The predominant historical narrative is that the burdens of the Treaty of Versailles led to the collapse of the Weimar Republic’s economy, the rise of Adolph Hitler, and World War Two, and that the Marshall Plan averted a repeat of this cycle. Contemporary historians and economists are skeptical of whether the Treaty of Versailles actually contributed to the hyperinflation that plagued Germany in the interwar period. This raises the question; if the Treaty of Versailles is not responsible for World War Two, then what was the purpose of the Marshall Plan?

First and foremost the Marshall Plan, along with the Cooperative for American Remittances to Europe (CARE), saved countless lives in Western Europe in the years after World War Two. Additionally, like many of the other post-war efforts by the United States and its Allies, the Marshall Plan was designed to create a post-war order that was good for the United States. As it transitioned from a war-time economy to a consumer one the United States would need markets for its goods. A struggling Europe or a Europe that had turned to communism would not be able or willing to purchase American consumer goods. Like many of the American aid programs that would follow in the twentieth century the Marshall Plan had requirements. States receiving aid had to lower interstate barriers to trade and other regulations. The Marshall Plan also facilitated economic growth through labor union participation, increased productivity, modern American business practices and above all capitalism.

Recognizing the purpose economic and political objectives of the Marshall Plan illuminates the fact that while bold and on a scale not seen before, it was not unprecedented. Economic growth through productivity and access to markets goes back to colonial resistance to British mercantilism and monopolies. Westward expansion and the acquisition of overseas territory at the end of the nineteenth century represent the second phase of this effort. The Marshall Plan was the third. It ushered in decades of active American foreign policy where aid was a political tool used to gain market access for the United States and to prevent foreign states from falling to communism by allowing them to participate in the economic growth experienced by the US and its trading partners. The Marshall Plan for all of its expense and obvious moral character was essential to preventing the collapse of the American economy and a return to the Great Depression after World War Two. George Marshall and President Truman recognized that for the United States to continue to prosper it needed to invest in the wider world.

Charles W. King

If the failures of nation building projects in Vietnam, Iraq, and Afghanistan must serve as a warning to policy-makers what should they look to for an example of success? The Balkan nations that NATO intervened in the 1990s are a possibility; they are in the process of accession to the European Union and negotiating their own regional free trade agreement as the EU focuses on Brexit and refugee policy. But these nations are not yet finished building the institutions that will carry them forward, as demonstrated by the ongoing corruption probes in a number of Balkan states. The Republic of Korea and the Republic of Taiwan provide better examples of successful nation building projects. When they were founded in the late 1940’s they did not have the institutional foundations that facilitated the reconstruction of West Germany and Japan. Decades later South Korea and Taiwan have joined Germany and Japan on the world stage as major allies of the United States, and significant players in the global economy. They have transitioned from ‘developmental autocracy’, to borrow a phrase from Gregg Brazinsky of George Washington University, to democratic governments.

Two of the key factors in these successes were the development of state institutions and export economies. At their founding neither South Korea nor Taiwan possessed an industrial economy or plentiful natural resources that could fill national coffers and provide an easy road to prosperity. Forced to develop economies from scratch they elected to develop for export rather than to protect against foreign imports. Successful industrial export economies require an educated workforce for the research and development, and the high quality manufacturing that sustains them. It also requires independent courts and rule of law to limit corruption and provide stability and predictability to foreign investors and partners. This strong economic development at a precursor to democratization is a common historical development, not unique to South Korea and Taiwan.

South Korea and Taiwan have also each faced a single existential threat since their founding; North Korea and the People’s Republic of China respectively. This has substantially distorted the shape of their national institutions. Where the leaders of other ‘developmental autocracies’ have used Western liberalism as a post-colonial boogeyman, and made internal dissent the primary focus of their security forces, South Korea and Taiwan could afford to do neither. Confronted with these existential threats, their militaries developed as important and respected institutions of the state rather than as oppressors of the people.

Decades of economic and institution building under ‘developmental autocracy’ provided the foundations that South Korea and Taiwan needed to become prosperous democracies. They also represent two the longest and most expensive and expansive nation building commitments the United States engaged in during the Cold War. They are not the only ‘development autocracies’ the United States supported, but they are the most successful. Policy-makers should take a number of lessons from their examples; the nature of the economic development is important, and integrating the military and other state institutions as a part of the society is essential. Subsiding dictators in exchange for policy or resources will not lead to economic development or democratization but is sometimes necessary. By having a clear conception of their strategic objectives and an understanding of the differences between the successes in South Korea, Taiwan, West Germany, and Japan and failures in Vietnam, Iraq, and Afghanistan policy-makers can better determine what policies to implement and how much support they can commit to.

Further Reading

Gregg Brazinsky, Nation Building in South Korea: Koreans, Americans, and the Making of a Democracy, (Chapel Hill, NC: University of North Carolina Press, 2007).

Nancy Bernkopf Tucker, Strait Talk: United States-Taiwan Relations and the Crisis with China, (Cambridge, MA: Harvard University Press, 2009).

William Appleman Williams, The Tragedy of American Diplomacy, (New York, NY: W. W. Norton & Co., 2009).

James M. Carter, Inventing Vietnam: The United States and State Building, 1954-1968. (Cambridge UK: Cambridge University Press: 2008)

Mark Mazower, Dark Continent: Europe's Twentieth Century, (New York, NY: Vintage Books, 1998).

Charles W. King

The enormous cost and dubious return on funds provided for reconstruction efforts in Iraq and Afghanistan have prompted another round of resistance to further ‘Nation Building’ by the United States. Previous resistance to nation building peaked after the NATO peacekeeping missions in the Balkans in the 1990’s and after the Vietnam War in the 1970’s. Many Americans are not aware of the massive efforts made to support the Republic of Vietnamese. The United States spent $1.5 billion on state building projects between 1954 and 1960. American contractors built not only military bases in South Vietnam, but massive infrastructure projects including harbors, airports, and highway networks. After the war the US government was reluctant to engage not only in the manner of warfare experienced in Vietnam, but also investments of the scale it had made in the South Vietnamese state.

The failures in Vietnam, Iraq, and Afghanistan contrast starkly with the unbridled successes of American rebuilding efforts in Western Europe and Japan after World War Two. In both Europe and Asia the US was able to turn devastated countries into strong allies and vibrant markets in just a few years. The fact that reconstruction efforts in West Germany and Japan were during peace time rather than in the midst of a conflict is an important factor, but it is not the only factor. In Germany and Japan the US was rebuilding the infrastructure of existing states. In Vietnam, Iraq, and Afghanistan the US was building, not rebuilding, infrastructure for a new state. Germany and Japan already possessed strong state institutions. Where they had been turned towards war, now these institutions were being turned to collective defense and the free market. The existence of these institutions meant what  Germany and Japan needed was institutional reform and to rebuild their broken infrastructure. This taught American policy-makers in the decades since an incorrect lesson, that rebuilding broken roads and power grids was enough to create a strong state.

It is institutions not infrastructure that facilitated Germany and Japan’s transition from fascist aggressors to keystones of the post-war liberal order. The inability of infrastructure investment to create strong institutions in Vietnam, Iraq, and Afghanistan should not be a surprise to policy-makers. It is essential to recognize what construction projects in states without strong institutions can and cannot accomplish. The question for policy-makers in cases such as Iraq and Afghanistan, where the United States has a vested interest in establishing stable states, is how to create institutions that will endure and be effective.

Further Reading

Eric Hobsbawm, The Age of Extremes: A History of the World, 1914-1991, (New York, NY: Vintage, 1996).

Mark Mazower, Dark Continent: Europe's Twentieth Century, (New York, NY: Vintage Books, 1998).

James A. Baker III, and Lee H. Hamilton, The Iraq Study Group Report, (New York, NY: Vintage Books, 2006).

James M. Carter, Inventing Vietnam: The United States and State Building, 1954-1968. (Cambridge UK: Cambridge University Press: 2008).