What Did the Marshall Plan Do?

The European Recovery Program, commonly called the Marshall Plan after General George Marshall, rendered aid to European countries that had been devastated by World War II. The program provided direct funding of industrial redevelopment and protected markets from international competition to foster development.

The Marshall Plan grew out of the United States' desire to prevent the renewed growth of extremist politics following the end of World War II. To that end, the Marshall Plan focused on promoting the rapid redevelopment of a stable European industrial base that could provide a high standard of living and make both fascism and communism less appealing to the devastated populations of France, Scandinavia and the Low Countries. Aid was also rendered to former Axis nations such as West Germany and Italy.

One part of the Marshall Plan consisted of the direct investment of $13 billion in aid between 1948 and 1951. Much of this aid acted as the seed capital that helped restart Western Europe's heavy-industrial base and put millions of workers back to work. Another key provision of the plan was local control of the aid. Rather than being imposed from outside, funds were distributed among 16 nations, with each state permitted to manage the money in accord with its own national interests.