The Morgenthau Plan and the Marshall Plan

November 11, 2012 12:57 PM

Perhaps the most fruitful way to look at the debate between Morgenthau and Marshall that was carried on--largely below the surface, largely without explicit confrontation--at the end of WWII is that it was an attempt to figure out how to resolve call it two historical problems: the problem of European military culture, and the problem of modern industrial war. Economist Brad DeLong explains.
posted by shivohum (22 comments total)

Mod note: Fixed link, carry on.
posted by restless_nomad (staff) at 1:07 PM on November 11, 2012

DeLong is incoherent and wrong.

Today Washington at least is strongly opposed to austerity, to guarding against moral hazard as job #1, to deflation, and to worrying too much about confidence in the currency. When Undersecretary of the Treasury Lael Brainard speaks, she calls for pro-growth policies and symmetric adjustment in Europe. When Tim Geithner speaks, he tells the Europeans to be more aggressive in leveraging up their recovery and rebuilding funds and spending them than he dared to do himself in 2009 and 2010.

Bullshit. Washington is all for backdoor German bank bailouts in Greece, and austerity. And they're all for austerity at home, with this "Grand Bargain", aka the Cat Food Compromise. All those spending cuts and tax increases, and the potential privatization of social security IS austerity.
posted by wuwei at 1:55 PM on November 11, 2012 [2 favorites]

Bullshit. Washington is all for backdoor German bank bailouts in Greece, and austerity.

Yeah, reading through earlier articles on his blog suggests this guy has some serious ideological axes he's trying to grind anyway. And his historical case for "unique" Western military brutality is seriously questionable. I mean, China alone has had a long history of truly apocalyptically bloody wars (civil and foreign), and the Middle East has been a gigantic laboratory for experiments in mass killing, land expropriation, genocide, and institutionalized torture since the time of the Assyrians onwards.

So yeah, seems to me like ignorance holding forth on multiple fronts. I know exactly nothing about his central argument concerning Marshall and Morgenthau, but I'm not inclined to trust it, given the nonsense its embedded in.
posted by AdamCSnider at 2:04 PM on November 11, 2012 [2 favorites]

Yep. The Manchu conquest of China featured routine massacres of entire cities. That's how it was done.
posted by wuwei at 2:08 PM on November 11, 2012

What I think is more interesting to consider about this piece is that there was a time when the US had that kind of power over Europe (or at least Western Europe) and how far we are from that time.

Otherwise, the little bit at the end about current economic policy has very little to do with the meat of the piece. What's the point?
posted by ssg at 2:11 PM on November 11, 2012

"Why a Catholic general would allow his troops to massacre a city dedicated to the Virgin Mary has always left me extremely puzzled."

The sack of Magdeburg is really not that mysterious in the context of the age.
posted by Blasdelb at 2:12 PM on November 11, 2012

wuwei, I think you're confusing the domestic meaning of Washington ("the Beltway", lobbyists, all that) with the international meaning of Washington, which is what he's using here. The US is concerned that the Euro not go under, so they backed the ECB bailout, and they are concerned that the EU generally does not go into recession shortly as some have worried it inevitably will. This is a consistent position. The fact that there is a tiny political minority in the US seeking to privatize Social Security (heck, even Paul Ryan has backpedaled on that, as if it were realistic) has no bearing on what Washington (international sense) is telling its partners in official and even unofficial channels.

ignorance holding forth on multiple fronts

Uh ... you do know about this, right?
posted by dhartung at 2:26 PM on November 11, 2012

What a rubbish Posting by DeLong. Just stringing some historical Bits together is neither an Argument nor a good Comment.

As a historically minded German and keen Observer of the current EU-Struggle if find his "Thoughts" rather asthmatic.
posted by homodigitalis at 2:39 PM on November 11, 2012

Uh ... you do know about this, right?

And does that have any bearing on the a) political analysis of "Washington's" present policy stances and b) geopolitical/military history which I was criticizing? Or are we going for the argument from authority here, where being (for all I know) a quite good economist means his word is law in any other area of human knowledge he feels keen to opine on?
posted by AdamCSnider at 2:49 PM on November 11, 2012

Isn't the real point of the article:

Austerity = WWI/Versailles
Keynesian Stimulus = Marshall Plan

The rest is (occasionally poorly thought out) noise.
posted by JPD at 2:53 PM on November 11, 2012 [1 favorite]

I actually liked this quite a lot. My only knowledge of the Morgenthau Plan is from a brief reference in Louis Halle, The Cold War as History.

... by the last year of the War in Europe intractable circumstances were dictating the decisions of the leadership in American and Britain. In both countries, that leadership was worn out. Roosevelt had been President since 1933, living in a constant state of crisis for almost twelve years without respite, confronted very day by fearful dilemmas, by decisions almost beyond mortal capacity to make. He was like a soldier who has been in battle continuously for months without relief. At last he had reached the point where he simply trusted to a sort of native virtuosity to get him through from day to day, from hour to hour.

Those who saw President Roosevelt in the last year knew that he was near death. He could no longer comprehend the vast scene of action over which he presided. He could no longer read the papers that were put before him. The last time he addressed Congress he was no longer able to stand his feet for the occasion but addressed it sitting down. All the flesh had gone out of his face, and he looked so ghastly that the press-photographers had to be kept at a distance. Then a blood-vessel burst in his brain, and he was dead.

... [Churchill], too, was reduced to the point where he put his name to documents that he had read without understanding, and that he did not believe in. [6]

[6] For example, both Roosevelt and Churchill, at the Quebec Conference of September 1944, approved the so-called "Morgenthau Plan" for the postwar dismemberment of Germany and its conversion "into a country primarily agricultural and pastoral in its character." When Roosevelt returned to Washington, Secretary of War Stimson read out loud to him some of the sentences in the document that he and the Prime Minister had initialed. The President, Stimson later wrote in his diary, "was frankly staggered by this and said he had no idea how he could have initialed this...." (Stimson and Bundy, p. 581.)

posted by russilwvong at 3:13 PM on November 11, 2012

Also worth noting that DeLong is an economic historian, not just an economist.

Wikipedia: Morgenthau Plan, Marshall Plan.

Albrecht Ritschl on the Marshall Plan.
posted by russilwvong at 3:19 PM on November 11, 2012

For example, both Roosevelt and Churchill, at the Quebec Conference of September 1944, approved the so-called "Morgenthau Plan" for the postwar dismemberment of Germany and its conversion "into a country primarily agricultural and pastoral in its character." When Roosevelt returned to Washington, Secretary of War Stimson read out loud to him some of the sentences in the document that he and the Prime Minister had initialed. The President, Stimson later wrote in his diary, "was frankly staggered by this and said he had no idea how he could have initialed this...."

the point of the Delong essay is to inject a little political history into the economic history outlined by Ritschl:

At the end of World War II, Germany nominally owed almost 40% of its 1938 GDP in short-term clearing debt to Europe. Not entirely unlike the ECB's Target-2 clearing mechanism, this system had been set up at Germany's central bank, the Reichsbank, as a mere clearing device. But during World War II, almost all of Germany's trade deficits with Europe were financed through this system, just as most of Southern Europe's payments deficits towards Germany since 2008 have been financed through Target-2. Incidentally, the amount now is the same, fast approaching 40% of German GDP. Just the signs are reversed. Bad karma, that, isn't it....

What happened to this debt after World War II? Here is where the Marshall Plan comes in. Recipients of Marshall Aid were (politely) asked to sign a waiver that made U.S. Marshall Aid a first charge on Germany. No claims against Germany could be brought unless the Germans had fully repaid Marshall Aid. This meant that by 1947, all foreign claims on Germany were blocked, including the 90% of 1938 GDP in wartime clearing debt.

Currency reform in 1948—the U.S. Army put an occupation currency into circulation, and gave it the neutral name of Deutsche Mark, as no emitting authority existed yet—wiped out domestic public debt, the largest part of the 300% of 1938 GDP mentioned above.

But given that Germany's debt was blocked, the countries of Europe would not trade with post-war Germany except on a barter basis. Also to mitigate this, Europe was temporarily taken out of the Bretton Woods currency system and put together in a multilateral trade and clearing agreement dubbed the European Payments Union. Trade credit within this clearing system was underwritten by, again, the Marshall Plan.

In 1953, the London Agreement on German Debt perpetuated these arrangements, and thus waterproofed them for the days when Marshall Aid would be repaid and the European Payments Union would be dissolved. German pre-1933 debt was to be repaid at much reduced interest rates, while settlement of post-1933 debts was postponed to a reparations conference to be held after a future German unification. No such conference has been held after the reunification of 1990. The German position is that these debts have ceased to exist.

Delong is saying that all of this happened because the Department of War won the post-war/post-Roosevelt bureaucratic fight in D.C. The Keynesian stimulus of the Marshall plan was just the icing on top of a hard core of debt forgiveness and forced economic reintegration of West Germany into the industrial core of Europe. This re-integration despite the long half-life of Anglo-horror at a continental economy with a unified germany at it's core (unified as in the Franco-Prussian war not the end of communism.)

Also, Delong is a hack and a war-nerd, as evidenced by his glowing citation of Victor Davis fucking Hanson.
posted by ennui.bz at 3:45 PM on November 11, 2012 [1 favorite]

Usually the preferred Delong epithet for Hanson is wingnut, but sometimes simply idiot, or less simply a cyborg sent back from the future by Skynet to destroy us. I assume (not having read the cited book) he has some decently good reasons to call it excellent.
posted by louie at 3:55 PM on November 11, 2012

Usually the preferred Delong epithet for Hanson is wingnut, but sometimes simply idiot, or less simply a cyborg sent back from the future by Skynet to destroy us. I assume (not having read the cited book) he has some decently good reasons to call it excellent.

Yet, he can swallow Hanson's neoconservative history enthusiastically:

Europe tended to be somewhat different. War tended to be short-term bloodier for the elites--more decisive and more costly battles, as stressed by Victor Davis Hanson in his absolutely superb The Western Way of War. And decisive defeat tended to be much more likely to be catastrophic not just for military-political elites but for the agrarian and mercantile populations they ruled.

The problem with Hanson's "Western Way of War" isn't necessarily that it is factually absurd (though i'm sure it is...), but that it's typical of the intellectual hash that arises out of the twin poles of neoconservative thought:

1) paying lip service to conservative bugbears: i.e. not only is there a WESTERN way of way of war but that it derives from the grand source of WESTERN civilization, the ancient greeks.

2) under the cloud of pretend historiography which easily cows the casual observer, and even though they loath the French, the neoconservative has a sort of mad post-"structuralist" view of history/the world. He's not actually arguing that there is cultural continuity of WESTERN CULTURE going back to the ancient Greeks. But that the ancient greeks posses some sort of atom of culture, which can analyzed, retrieved and potentially revivified by the enterprising wingnut as a kernel of an agenda of radical change.

'Neoconservative' is a misnomer. They have nothing in common with those striving to guarantee the established order. They reject just about all the attributes of political conservatism as it is understood in Europe. One of them, Francis Fukuyama, who became famous from his book on The End of History, insists: "In no way do the neoconservatives want to defend the order of things such as they are, i.e. founded on hierarchy, tradition and a pessimistic view of human nature" (Wall Street Journal, December 24, 2002).

Delong may disagree Hanson on the facts of current policy. But he doesn't really understand why Hanson is always wrong. The point of "The Western Way of War" isn't just that Europe has a structurally different way of fighting (which is more or less absurd as pointed out above) but that part of what makes WESTERN CULTURE (i.e. democracy as typified by decisive elections/votes) derives structurally from this "Greek"/WESTERN idea of warfare.

It's a nutty hypothesis but there's a method to the madness which apparently goes above the naif Delong's head.
posted by ennui.bz at 4:47 PM on November 11, 2012

US intervention in Europe since WWII has been Structuralist. NATO in particular seems like a Structuralist solution to divide what Delong draws from other sources as "Iron and Rye". What would the US have done without Stalin is what I wonder.

WWII started with a whole bunch of civil wars first. Where Fascism took root, attempts at restructuring or ineffectual attempts at restructuring by a polity were replaced by less democratic but identical processes. During economic hardship re-structuring of economic resources does seem inevitable; how to do it without war remains a challenge.
posted by vicx at 10:42 PM on November 11, 2012 [1 favorite]

What would the US have done without Stalin is what I wonder.

This is an interesting thought exercise, but it's hard to do. If you eliminate Stalin, then you pretty much have to reinvent one in order to get to 1945 without the Germans eating knackwurst and borscht in Moscow. I.e., it's difficult to imagine a Soviet leadership that would manage to defeat the Wehrmacht and then not want their pound of flesh afterwards.

One fun scenario is to imagine some set of circumstances such that Georgy Zhukov would have ended up in Stalin's place, as a sort of Soviet analog to Eisenhower's presidency. (I'm still not sure though, even with someone as sane and decent at the Soviet helm as Zhukov reportedly was, that the outcome for Prussia would have been much different; the pressure to get rid of the junkers once and for all was too strong.) But you can imagine a very different history for other aspects of the latter half of the 20th century, if you want to, starting there.
posted by Kadin2048 at 12:04 AM on November 12, 2012 [2 favorites]

"This is an interesting thought exercise, but it's hard to do. If you eliminate Stalin, then you pretty much have to reinvent one in order to get to 1945 without the Germans eating knackwurst and borscht in Moscow. I.e., it's difficult to imagine a Soviet leadership that would manage to defeat the Wehrmacht and then not want their pound of flesh afterwards."

Strangely, Stalin, and the threat of Stalin, was a lot of what created Hitler, the Nazis, and the success of fascism in general. Internationally the capitalist classes thought they could use Hitler as a bulwark against communism and hoped they could control him and WWII happened when it turned out that they were wrong. Without Stalin siezing control from the Marxist/Leninists there may have been no Hitler - or at least a much weaker and very different one.
posted by Blasdelb at 3:38 AM on November 12, 2012 [2 favorites]

Interesting further post on the Morgenthau Plan at Crooked Timber.
posted by Chrysostom at 9:46 AM on November 12, 2012 [2 favorites]

ennui.bz: [N]ot only is there a WESTERN way of way of war but that it derives from the grand source of WESTERN civilization, the ancient greeks.

I haven't read Hanson's book. Is he saying that the soi-disant "western way of war" is total war as derived from the Greeks during the Peloponnesian War?
posted by ob1quixote at 2:40 PM on November 12, 2012

I haven't read the book either, but here is a transcript of a talk that Hanson gave, discussing some ideas in it.

I've read a few reviews and some of them said the book wasn't bad; the bulk of it is apparently a fairly uncontroversial history of hoplite warfare. (An uncharitable person might look at the two authors' names on the cover and wonder if Hanson supplied the politics while someone else supplied the scholarship.)

It's on my list of books to pick up and look over myself, next time I'm at the library.

If anyone here hasn't clicked Chrysostom's link to the discussion on Crooked Timber, it is really worth a read; Brad DeLong shows up in the comments section and there's a good dialogue. It turns to Harry Dexter White pretty quickly, but is interesting nonetheless. Hopefully it will continue.
posted by Kadin2048 at 11:00 PM on November 12, 2012 [1 favorite]

And does that have any bearing on the a) political analysis of "Washington's" present policy stances

Well, a) it says he knows macro, and b) he is a former Treasury official himself in the same area as which he actually cites public statements so I don't think your reading of his expertise is the same as mine. He's not speaking of what he thinks Washington wants, he's speaking of what Washington has actually said it wants.

b) geopolitical/military history which I was criticizing?

The commentary he was making was not really about geopolitical/military history except in regards to the Marshall plan, on which he has published at least one peer-reviewed article. The whole preamble is a tangential part of his argument which you're free to dismiss but boils down to "In 1945 Europe seemed to have barely survived two millennia of war including two destructive examples in the last two generations alone, so they decided to opt for something that would encourage less of that". I don't know that there really is a "western way of war", though the general concept of culturally-specific approaches seems to have some at least initial potential (I'd love to see some numbers to support the thesis), but even so, that isn't really what he's saying. Still, the reverse prospect of a half-century of essentially peaceful European conflict resolution does indeed give the whole enterprise some merit. As for being a "war nerd", apart from his publishing a series of "liveblogging WWII" news updates -- again a topic on which he has some academic expertise -- the history of his blog has been decidedly anti-war. I'm not sure why he felt the need to absorb Hanson's arguments or give his work a shout-out given that history, but his citation was certainly not an endorsement of Hanson's politicization of his own thesis as a basis for strategy (i.e. using our "way of war" to crush al Qaeda and other so-called enemies of Western Civ), which is what Gary Brecher was getting at; rather something of the opposite.
posted by dhartung at 2:37 AM on November 13, 2012