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Is the Marshall Plan What Made the Rest of the World a Modern Consumer Society?

Are we a “modern consuming society”? According to Global Footprint Network’s  “How many Earths?” research, If we keep consuming at this pace, the US would need the equivalent of 4.6 planet Earths to provide the resources and absorb the waste of the consuming citizens; while Japan would need 2.4 Earths and Europe, 2.3. Those numbers indeed make sense as the population of the “consumerism locomotive” global middle class is expected to rise from 1.8 billion in 2009 to 3.2 billion by 2020 and 4.9 billion by 2030. Which means by 2030, a number of people almost corresponding to today’s whole world population will have resource-intensive lifestyles. So yes, we are a consumer society and the planet is actually on alert.

Except for when we find ourselves in the middle of nature, we are bombarded by offerings we would potentially buy throughout the day, in almost whatever we do. The message is clear: “Every product or service is worth to be consumed in one way, so why not just come and buy it?” But to be regarded as a “consumer”, a person actually needs to have three things: the product/service, need/want and the resource to buy that product/service.

Today, a typical middle-class member possesses all three. But who offered the modern middle class that money, those needs, and those products in the first place? If we said capitalism, we would take the easy way out. What specifically? The world was at war just 70 years ago. while capitalism was making the USA  a “modern consuming society” all over, Europe was in a post-war devastation. Berlin, Warsaw, Vienna, Dresden and major Asian cities were in ruins, and economic wounds were no better than the city ruins. Before the war, the UK was the largest creditor in the world, after the war, it became the largest debtor. Factories, workshops, fields, forests and vineyards in Europe were ripped into pieces. Leave consuming aside, an average European was able to have only 1000 calories a day.

Europe needed an economic reconstruction and the US couldn’t help but think this economic devastation could push Europe into the hands of “Communism”. After the UK cut the aid to Greece and Turkey, two countries geographically very close to Iron Curtain countries, it was time for US President Harry Truman to initiate the Truman Doctrine. In his own words, the aim of the Doctrine was “to support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures (Communism). I believe that our help should be primarily through economic and financial aid which is essential to economic stability and orderly political processes.” The US Secretary of State George Marshall, a World War 2 veteran, inspired the idea of Marshall Plan as a part of the Truman Doctrine. In his speech at Harvard University, he mentioned the reason as: “The modern system of the division of labor upon which the exchange of products is based is in danger of breaking down. It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health to the world …. Our policy is not directed against any country, but against hunger, poverty, desperation and chaos.” 

So does the aid influx begin in 1948 under the official name “European Recovery Program(ERP)”. Seventeen European Countries received a total of $13 billion, 20% as loans and 80% as supplies, food, machinery etc. between 1948-1952. Here is a tick to the checklist for a potential consumer: the resources. The US aid liquidated in European economies helped those countries balance their budgets and repay massive loans taken out during World War II.

The aid was allocated to very strategic aspects of the European Economy. Basically, the USA distributed the cards and each country drew its own card from the deck. Modern assembly lines sent to Italian Fiat factories revived the Italian economy via production and freedom of transportation. Greek villagers received dozens of Missouri Mules which were much stronger and durable than Greek mules leading to an agricultural-based economic upsurge in Greece. In 1949, American International Telephone and Telegraph Corporation (IT&T) reorganized the Greek telegraph and communication system, leading to the formation of modern Greek Telecommunications Authority.

Turkey was given the role of a “raw materials exporter” as 80% of the country’s population were farmers. So more than half of the aid allocated to Turkey was as modern machinery, fertilizers, and cheap loans to farmers. Even more strategically, Turkey had to fulfill a condition to receive loans for building a road infrastructure in the country: buying cars made in the US. Also, Minneapolis Malone tractors, which were given`away to Turkish farmers were being assembled under a US-Turkish partnership enterprise. So the US private sector was directly involved in Marshall Plan practices too.

George Marshall couldn’t think of an economically recovered Europe if Germany was left out, so a total of $5 billion was allocated to Germany between 1948 and 1952. The aid was allocated as 36% supplies, 52% industry raw materials and 12% freight payments. 40% alone was allocated to the coal industry. So the allocation was done in a way that would shape the principles of a modern production-based Western German economy with a free market. So here is the second tick at the consumer’s checklist: the markets that offer products/services created not only by strategically allocated loans but sometimes US private sector itself.

After World War II, while the Marshall Plan was shaping Europe against a Communist military and economic influence, it was also the key front in the cultural war for the US against Communism. Exhibitions for well-furnished modern homes containing household miracles like electric washing machines and vacuum cleaners were sponsored like many other consumer goods propaganda promoting an “American Way of Life”. Also, Coca-Cola and Hollywood movies were heavily promoted in Europe. As being divided into East and West, and by Communist and Capitalist status quo, Germany was the epicenter of exhibits and conferences promoting industrial productivity, tariff-free trade and mass consumption.

The Berlin Industrial Fair in 1950 was the most impressive of them. In a State Department memorandum, it stated: “It showed large machines being produced by the West at a time when Eastern factories were suffering from dismantling by the Soviets and when raw materials in the East were in extreme shortage ‘…’ The progress made in Western Europe in developing consumer goods was designed to raise the standard of living of the average family”. All of the 6000 products in the exhibition like kitchen gadgets, garden equipment and furniture were extremely modern in design and were manufactured solely in a Marshall Plan country (or the US itself).

Between 1948-1954, the ERP psychological propaganda campaign included pamphlets, posters, radio broadcasts, traveling puppet shows, and over 300 films, promoting the American way of life. Factory workers eating steak after work, an average American citizen owning a house and a car… “Reject Communism, American capitalism would give you a better life standard.” So the last tick for a potential consumer, wants or needs were created that way.

By the time the Marshall Plan ended in 1951, economic output in Western Europe had risen 35% above the pre-war levels. Even when the European population increased by a mind-blowing 25 million until 1952, national incomes per capita in ERP aided countries managed to increase 10 percent above pre-war levels. This was not just a rubber band effect as the trend of growth in ERP aided economies remained still until the 1973 Oil Crisis.

Booming production in Europe created a surplus of goods, decreasing overall prices. Surging wages and falling unemployment in proportion to skyrocketed production made these goods available to a large variety of socio-economic classes. Non-farming population in aided countries increased by 80.7% in total, forming the consuming middle class. This socio-economic outbreak blended with the propaganda of materialism created  “a modern consumer society” which would define itself only by what they possess.

The Marshall Plan transformed not only the economies but the foreign policies of Western European countries. Those countries were deliberately pressured by Washington to reduce tariffs, facilitate the integration of markets and to initiate liberalization programs. The USA was integrating the Western countries into a common structure bonded by a laissez-faire mindset. An idea of Franco-German-centered free-market Europe later shaped the foundation of European Coal and Steel Company (ECSC), subsequently evolving into European Union(EU).

Winston Churchill defined George Marshall’s initiative of reconstructing Europe as “the highest level of statesmanship”. Also on practice, looking at the outcome, US well reached its aim in drawing European countries to capitalism, reviving the European economy and creating new markets for its industries. As a result, George Marshall was awarded the Nobel Prize in 1953, after stimulating the creation of a massive consuming society and freezing up the World into the years of Cold War.


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