MISUNDERSTANDING THE MARSHALL PLAN
June 12, 1997
The 50th anniversary of the Marshall Plan was guaranteed to bring out of the woodwork
all the shallow and noisy people who think that government programs are the answer to
all problems. These people include one of the shallowest and noisiest of them all,
Julianne Malveaux of "U.S.A. Today" and assorted talk shows. According to Ms. Malveaux,
we should "try to transform nations the way we did with the Marshall Plan."
We can also
"replicate the Marshall Plan at home" in our inner cities. This mindset shows a complete
ignorance or disregard of history. A hundred years before the Marshall Plan, John Stuart
Mill pointed out that nations often have apparently miraculous recoveries from the
devastations of war because the physical destruction did not include destruction of the
skills, experience and aptitudes which built the physical things in the first place. In
short, what is crucial is the "human capital" needed to build or rebuild the physical
things. What the Marshall Plan did was to help feed and house people in Western Europe
until they could rebuild -- using the "human capital" that they already had and which
had built Western Europe into one of the leading industrial regions of the world in the
Where that "human capital" does not exist, you can pour untold billions
down a bottomless pit without making a dent in the problem. Nothing has been more common
in Third World countries than rusting machinery from the industrial world, whether left
over from the days of colonialism or built with foreign aid from the West. As John
Stuart Mill saw in the 19th century, it is not the physical capital but the human
capital that is crucial. The same thing was true even further back in history, when the
Romans pulled out of Britain in the 5th century, leaving intact a physical
infrastructure which they had built -- but which the British, at that juncture in
history, did not have the human capital to maintain.
Buildings and roads fell into
disrepair and, in some places, forests and wildness began to grow back into what had
been human settlements under the Romans. None of this is hard to understand from an
intellectual point of view. What is hard is to give up the emotionally satisfying vision
of moral melodrama that holds such fascination for sophomores of all ages, including Ms.
Malveaux. According to this moral melodrama, the poor are poor because of what the rich
have taken from them. Hence all the heady talk about "liberation" and various esoteric
theories of "exploitation." According to Malveaux, Africa's downfall "was European
colonialism." If this were to be taken as a serious statement to be tested against the
facts, it would immediately collapse like a house of cards.
So would most other
exploitation theories. If Europeans made Africa poor, then the departure of these
Europeans, as African nations emerged into independence in the 1960s, should have led to
rising standards of living. Tragically, in most of sub-Saharan Africa, standards of
living were lower 20 years after the imperialists were gone. In Central Asia likewise,
freedom from Russian domination after the break-up of the Soviet Union did not bring
rising standards of living but falling standards of living. Most of the scientific,
technological, and managerial skills in Central Asia did not belong to Central Asians
but primarily to Russians.
Similar results are seen, again and again, when various
minority groups who are supposed to be "exploiting" others are expelled from countries
around the world. In medieval Europe, Jews were expelled from a number of countries
where they were accused of exploiting the gentiles. But, after they left, prices and
interest rates tended to rise. Exploitation does take place and oppression still more
so. But they seldom explain either the wealth of the wealthy or the poverty of the poor.
Spain, for example, exploited the Western Hemisphere and its people mercilessly for
centuries. But after the gold and silver ran out and the Indians died off, Spain had
very little to show for it and has remained one of the poorer countries in Europe.
not only failed to develop its own human capital, it expelled minorities whose human
capital had contributed to the Spanish economy, including both the Jews and the Moors.
Although human capital fits the facts better than moral melodrama, it presents no
sweeping solutions for politicians to offer and no heady feeling of superiority for the
intelligentsia. So look for more calls for more Marshall Plans.
COPYRIGHT 1997 CREATORS SYNDICATE, INC.