Marshall Plan & K flight

Brad De Long delong at econ.Berkeley.EDU
Mon Oct 5 08:17:50 PDT 1998

>Have you checked the Bloomfield cite or the De Cecco one? Bloomfield
>is the one who used the "able and authoritative" phrase, by the way.

I have checked the Bloomfield cite. I haven't checked the de Cecco--but I have talked to Marcello de Cecco extensively about the Marshall Plan and its impact. The use made of de Cecco in the passage quoted from Helleiner is... interesting, and very much not what de Cecco says he thinks...

>What, again, is your evidence that the answer to (a) is "no"?

That European countries ran *enormous* balance of payments deficits--covered by Marshall Plan funding. If rich Europeans were taking the dollars given to them in Marshall Plan aid and using them to move their wealth from Europe to America, then western Europe's imports and exports should have been roughly balanced. Instead, imports exceeded exports by a substantial margin.

>I was under the impression that it was not necessarily only European
>fat cats who were benefitting, but US corporations who were selling
>goods and services to Europe (Chomsky says, "the generosity was
>overwhelmingly bestowed by American taxpayers upon the corporate

Aha! Two arguments--one that European fatcats used the bulk of Marshall Plan aid to facilitate their flight of capital, a second that the bulk of Marshall Plan aid chiefly benefitted U.S. plutocrats. Both can't be true, yet Chomsky tries to make both.

One reason that I am even more annoyed by Chomsky than by Alan Milward is because of phrases like "...bestowed by American taxpayers upon the corporate sector." Most Americans work for or sell products to "the corporate sector." Of every dollar in increased income from higher demand for American products as a result of the Marshall Plan, roughly 25 cents flowed to corporate profits and other surplus and roughly 75 cents flowed to American workers as higher wages and benefits--the benefits from a higher-pressure economy are distributed a little bit less unequally than the then-prevailing distribution of income (which was a lot more evenly distributed than income today), and significantly less unequally than the tax burden then (which was also a lot more evenly distributed than the tax burden now).

To try to draw a sharp distinction between "American taxpayers" who paid for and the "corporate sector" which benefited from the Marshall Plan is a deliberate attempt to create false consciousness. I think that the world is divided into two groups: the good guys, who try to raise the level of the debate about public policy and the road to utopia; and the bad guys, who are in the business not of education but of propaganda. I judge that Chomsky belongs to the second group.

>Also, Chomsky never claimed "dollar-for-dollar" parity. He claimed
>that the flows "approximately matched"...

They don't match dollar-for-dollar. They don't match approximately.

>So, 10.8 is "roughly balanced"? Is an increase of in BOP of 52% from
>1947 to 1948 "roughly balanced"?

I said that U.S. trade in the aftermath of World War II *wasn't* "roughly balanced." It isn't. Look back at what I wrote.

A more general point: in looking at Chomsky's argument--incoherent as it is, and false in its underlying facts as it is--I would like everyone to note that the rhetoric is profoundly anti-internationalist, and the argument is at its root at least pseudo-fascist in the strict sense of "fascism."

The underlying point, after all, is that America's "taxpayers" were and are being looted by their government to advance the interests of sinister foreigners and the shadowy masters of America's corporations. (If you throw in a reference to Goldman Sachs, it could have come straight out of the mouth of Pat Buchanan.) We've seen this rhetorical pattern--good, hard-working people who play by the rules and pay their taxes on the one hand; sinister shadowy figures who don't look like us, talk funny, and live by manipulating symbols in ways honest folk can't understand on the other--in the past. We are seeing it more and more on all sides of the political debate--right, center, and left--today.

I don't like it.

I don't like where it is taking us.

I do not like the political alliances that I see it engendering: I more than half-expect to see Noam Chomsky sharing a platform with Buchanan at some point in the next five years...

Brad DeLong

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