United States Foreign Aid Policy in the Beginning of the Cold War (1946-1950): Realistic or Idealistic?
After the Second World War the balance of power in the world was more than obvious; half of the Europe was under the influence of USSR, the other part stayed true to the United States. It was very likely, that USSR will try to spread its influence into the rest of the Europe and the world. In order to stop the spread of communism, the United States of America introduced a foreign policy to stop the spread of communism. The aim of that policy was to give a concrete material support to those countries, which already were the ally of the United States and those, which potentially could become their ally, because it was clear that communism was spreading into those countries, which had economical problems or were not the ally of the U.S.
Foreign economic aid policy (1946-1950)
National Security Council noted in April 14 1950 that “foreign economic policy is a major instrument in the conduct of United States foreign relations. It is an instrument
which can powerfully influence the world environment in ways favorable to the security and welfare of this country”; “…it is an instrument peculiarly appropriate to the cold war” (33).
The first apparent step to stop the spread of communism in the world was introducing, as Willard L. Thorp states, “European Recovery Program”(49), which was also known as Marshall Plan. Secretary of State George Marshall created the idea, that European countries would create the plan of how to rebuild their devastated cities and shocked economies. He gave this idea in his speech at Harvard University on June 5, 1947, which developed into the Economic Cooperation Act, which was accredited by the Congress in 1948 and signed by President Harry Truman in April 3 1948. “Over the next four years, Congress appropriated $13.3 billion for European recovery. This aid provided much needed capital and materials that enabled Europeans to rebuild the continent’s economy”(http://www.usnews.com/usnews/documents/docpages/document_page82.htm). The aid not only helped to rebuilt the economies of the Western Europe, but also to tighten economical relations between those countries and USA, because partnership between Western European and United States companies appeared and Western Europe became the great market for the United States goods as well as the market of the United States became a great market for the Western Europe countries goods.
Second, the United States created Point IV program, which was also known as “bold new program”, which was introduced by President Truman in 1949 and which appended to the import requirements for Europe declared in Marshall Plan and which introduced, as Thorp mentions, “technical assistance to the less-developed countries”
(50). This program helped to undeveloped areas, according to Thorp, “to develop their resources and improve their working and living conditions by encouraging the exchange of technical knowledge and skills and the flow of investment capital” (50). In other words, Point IV program in long term aspects helped to strengthen the economies of the free less developed countries and tighten the relations with the U.S.
Third, the United States gave funding aid to the Philippines, Japan and South Korea, loans and credits by the Export-Import Bank, the International Monetary Fund, and the International Bank to Indonesia, Iran.
To conclude, U.S. foreign economic policy was more realistic than idealistic. According to Marshall Plan all European countries were able to get money, even those, which were under the influence of the USSR. And even though neither country from Eastern Europe used the aid (apparently because of the USSR authority in their countries), the very idea to help even the countries, which belonged to the USSR, showed that the United Stated foreign policy was not only to stop the spread of communism, but to fight it. If Eastern Europe countries had gotten economical aid from the U.S., it was very likely that they would have started to get rid of USSR influence and to face the way of living of U.S. So it can be concluded that Marshall Plan at that point was a little bit idealistic, because despite the fact that a lot of countries from Eastern Europe wanted to get the aid (especially Czech, which had a lot of demonstrations against USSR policy not to allow countries to get the aid from the United States, which were crucially suppressed), it was impossible to help them; any relations with the United States the USSR saw as the great threat to its cause. To sum up, the U.S. foreign policy was