A Marshall Plan for the 21st Century?

Today, America is the world’s unchallenged superpower. But how it chooses to take on the responsibilities of such a role makes a huge difference to world politics and the global economy.

April 12, 2002

Today, America is the world's unchallenged superpower. But how it chooses to take on the responsibilities of such a role makes a huge difference to world politics and the global economy.

As the cycle of violence continues in the Middle East — and Afghanistan reconstructs its economy after decades of civil war and conflict — a call for leadership has emerged. The United States must share its wealth — and play a more active role in financing development around the world.

At times, such appeals have the ring of a new Marshall Plan — the development initiative undertaken by the United States to reconstruct post-World War II Europe. The plan was signed into law by President Harry Truman on April 3, 1948, some 54 years ago this month.

A new Marshall Plan would help not only the world’s poor, but also address the despair and lack of opportunities facing people in the developing world today. Such conditions are widely seen as the breeding ground for the acts of terror that have now shaken the world.

But today’s calls for a Marshall Plan for central Asia or the Middle East tend to be rejected by U.S. policy makers and public opinion — mainly on the grounds that it would be too expensive. The Bush Administration, the Congress or U.S. voters would never endorse a similar plan today, it is said.

It is true that the Marshall Plan was expensive. In total, it cost the United States about $12 billion over four years. That works out to $96 billion in today’s dollars. But if the ensuing result would be stability, prosperity and peace — as it was in western Europe — wouldn’t that be worth such an amount?

Just consider that this $96 billion is only a little larger than the increase in the defense budget that the Bush Administration has called for since taking office in January 2001. If anything, the people of Afghanistan — and the developing world at large — are certainly as needy as the people of Europe were 50 years ago.

Back then, the goal of funding projects such as the Marshall Plan reached beyond development aid to encompass national security as well. Helping those left destitute after World War II would also stop the spread of communism — via the creation of free market economies.

Moreover, the United States is wealthier today than it was back when President Truman signed the Marshall Plan. Take the stock market, for example.

Even after the dot.com bubble burst last year — the market created amazing wealth over the past decade alone. Between 1991 and year-end 2001, the value of America’s stock markets increased by $10.3 trillion — over 200%.

And even though the stock market has slowed down now, U.S. wealth creation has not. Over the past three years, U.S. home values have increased by 5% annually — adding another $2 trillion to the country’s wealth.

The United States has a long and proud history of extending a helping hand to the world’s downtrodden. It welcomed refugees as immigrants and rebuilt nations after wars.

As Americans start to look beyond their borders and engage the world, they should focus not just on winning wars, but on building peace. In the end, it’s not about the money — but about understanding the need for wealth-sharing in an increasingly tempestuous world.