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Posts Tagged ‘Marshall Plan’

Marshall Plan

Posted by M. C. on April 5, 2025

“Europe’s rebound owed more to trade than charity; our largesse just padded foreign budgets while ours rotted.”
Libertarian Party of Pennsylvania

On this day, April 3, 1948, President Harry Truman greenlit the Marshall Plan, sending $13 billion to rebuild post-WWII Europe. Touted as a communist stopper, it kicked off a habit of endless foreign aid—trillions since, with billions still flowing yearly. Europe’s rebound owed more to trade than charity; our largesse just padded foreign budgets while ours rotted.

This set a precedent for global handouts we can’t afford. The Libertarian Party of Pennsylvania says stop. Our money belongs here—fixing roads, not foreign capitals. Charity’s noble; forced subsidies aren’t.

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The US Has a Long History of Weaponizing Aid to Other Countries

Posted by M. C. on May 27, 2020

In the 1960s, humanitarian aid to Laos took the form of food deliveries. But those food deliveries hid the delivery of weapons.

https://truthout.org/articles/the-us-has-a-long-history-of-weaponizing-aid-to-other-countries/

By  ,
Truthout

The spread of the coronavirus will not save Iran from sanctions, the U.S. cried. “Our policy of maximum pressure on the regime continues,” U.S. Special Representative for Iranian Affairs Brian Hook said, as the State Department added more sanctions on Iran, one of the countries worst hit by the pandemic.

Iran had pleaded for an easing of sanctions, since U.S. sanctions are “severely hampering” Iran’s fight against the coronavirus. Intensifying the sanctions rather than easing them to allow Iran to fight the virus is a form of “medical terrorism,” according to Iran’s foreign minister Javad Zarif. Medical terrorism that locks a country under pandemic out from humanitarian aid is one way of using humanitarian aid as a weapon of war or regime change.

Like Iran, Venezuela is on its back, struggling through the COVID-19 pandemic with the grip of U.S. sanctions on its throat. As it gasps for breath, the U.S. will only release Venezuela’s throat if the democratically elected president, Nicolás Maduro, surrenders to regime change demands and abandons his office, completing a decades-long attempt at a coup that dates all the way back to Hugo Chávez in 2002. The U.S. is taking advantage of mass Venezuelan deaths during a pandemic to force Maduro and the party of Chávez out of office. Though disguised as a compromise transition, it is neither a compromise nor a transition, as Maduro would be forced from office and not allowed to run again. Meanwhile, the lives of Venezuelans held hostage, while the pretender, Juan Guaidó, would be allowed to compete in the next election. Humanitarian aid as blackmail to carry out a coup is another way of using humanitarian aid as a weapon.

Both of these strategies were overt actions in which human lives were leveraged and humanitarian aid was withheld to accomplish foreign policy goals. But there is a covert U.S. strategy in which humanitarian aid is weaponized not by withholding it, but by providing it. In this act of betrayal of trust, humanitarian aid is sent into a suffering country as a Trojan Horse carrying weapons or other acts of war in its belly. This strategy makes an early appearance in the post-World War II Marshall Plan.

The Marshall Plan

The Marshall Plan was sold to the public as a humanitarian plan to rebuild Europe after World War II to insulate it against communism. But, while aid money was flowing into Europe, some of it was being diverted for covert purposes. CIA expert John Prados reveals in his book Safe for Democracy that the CIA used that humanitarian aid vehicle as a way of hiding the source of money being smuggled into Europe for propaganda and political actions.

According to Joel Whitney, in his book, Finks: How the CIA Tricked the World’s Best Writers, those propaganda actions included using “confidential funds” from the Marshall Plan to finance magazines, like Der Monat, which were injected into nearly every foreign nation to advance the U.S.’s clandestine Cold War cultural and foreign policy propaganda war.

From 1951 to the closing of the Marshall Plan in 1952, under the direction of Frank Wisner, the head of CIA covert operations, Marshall Plan funds were diverted for covert programs. Prados says that several organizations have been used, or set up, by the CIA to funnel funds and that the CIA’s role is often concealed by funneling money through legitimate foundations.

But the covert U.S. strategy extends beyond money; humanitarian aid was used to camouflage the delivery of weapons.

Laos: Hard Rice

Originally approved by Eisenhower in the 1960s, as well as attacking North Vietnam, the CIA’s clandestine guerilla forces in Laos targeted the Laotian Pathet Lao, whom the State Department considered communists. The U.S. believed Laos was part of the key to stopping the domino spread of communism throughout Southeast Asia. The covert force would play a major role in keeping Laos from falling to the communists. As the wars in Vietnam and Laos merged into one, the CIA force would also act to disrupt the Ho Chi Minh Trail, the supply route to Vietnam.

But the Pathet Lao were not so simply defeated, and as the ground war began to fail, the U.S. took to the air, and the secret American bombing campaign — which would make Laos one of the most bombed countries in history — began.

In the 1960s, humanitarian aid to Laos took the form of food deliveries. But those food deliveries hid the delivery of weapons. In The Ghosts of Langley, John Prados describes the way weapons were flown into the country on humanitarian aid planes flown by Air America. Air America pilots developed a cynical code word to distinguish legal food cargo from illegal weapons cargo: “soft rice” meant food and “hard rice” meant arms. The humanitarian delivery of food was cynically used as a Trojan Horse for getting weapons into Laos.

Two decades later, in 1986, an operation that looked a lot like the “hard rice” operation in Laos was unfolding in the skies over Nicaragua.

Nicaragua: Mixed Cargoes

Like Pegasus, the Trojan Horse had developed wings. The Reagan administration used planes full of humanitarian aid to hide the weapons that were mixed in in the belly of the plane. The current U.S. special envoy for Venezuela, Elliott Abrams, was part of a special group managed by then-White House aide Oliver North that delivered the decisions on the Trojan Horse weapons operation. At the time, Abrams was assistant secretary of state. On one known occasion, the special program’s decision was to fly humanitarian aid into Honduras. From Honduras, the plane would then fly to El Salvador, where it picked up seven tons of weapons that were airdropped into Nicaragua. At least twice, the U.S. flew such “mixed cargoes” on planes that were carrying weapons mixed in with the cargo of humanitarian aid. Read the rest of this entry »

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Foreign Aid Can’t Fix Bad Economics | The Libertarian Institute

Posted by M. C. on May 7, 2020

All things considered, foreign aid is a feel-good policy that strokes the egos of DC do-gooders but has suboptimal results in the real world—the one place politicians seem to be perpetually detached from.

https://libertarianinstitute.org/articles/foreign-aid-cant-fix-bad-economics/

by

Some myths in politics die hard.

We are constantly reminded by the managerial classes that foreign aid is crucial to lifting the developing world out of poverty. With the magic wand of public spending, money is sent to the developing world in hopes of pushing these countries out of their economic stupor. We’ve seen this story play out domestically when politicians call for wealth transfer programs with the purported intent of “investing” in economically beleaguered sections of America. With the universalist ethos of American politics, inevitably the domestic redistributionist logic is taken to the international level.

The mythos of foreign aid lives on in politicians’ constant appeals to the Marshall Plan as a source of inspiration for pushing new foreign aid ventures. The Marshall Plan refers to the economic recovery package sent to western European countries after World War II. Per conventional wisdom, Europe’s ability to bounce back from the devastation wrought by World War II is largely attributable to the Marshall Plan’s disbursements of aid, which totaled more than $100 billion in 2018 dollars.

Using the western European foreign aid program as a template, policymakers regularly search for the next region to experiment on. During a news conference at the 2017 G-20 summit, French president Emmanuel Macron was asked about the viability of a Marshall Plan for Africa. In a surprisingly brusque manner, Macron threw cold water on the idea. The French leader averred, “The Marshall plan was a reconstruction plan, a material plan in a region that already had its equilibriums, its borders, and its stability. The problems Africa faces are completely different, it is much deeper. It is ‘civilizational.’” Macron’s blunt commentary disappointed the journalist class, who were hoping to get a politically acceptable response.

Political commentators did not have to wait long. When former United States Secretary of Housing and Urban Development Julian Castro Julian Castro ran for the 2020 presidential candidacy, one of his selling points was a Marshall Plan for Central America—a region notorious for its socioeconomic and political strife. In the former 2020 Democratic Party candidate’s view, a Marshall Plan is the missing ingredient in getting Central America over the hump.

Allow me to express some skepticism. I previously noted that foreign aid is no silver bullet for the developing world. As a matter of fact, foreign transfers can foster bad behavior and prop up regimes with long-standing records of corruption. Macron was correct in his assessment of the Marshall Plan and why replicating it in Africa will not yield similar results. Europe was already prosperous and institutionally stable before most of the continent was ravaged during World War II. It was only a matter of rebuilding infrastructure and letting private actors return to the private sector to resuscitate many of the factors of production that had been destroyed during the war. Strictly speaking, the Marshall Plan wasn’t working with a blank slate, and functioned as a reconstruction plan that nominally sought to restore the pre–World War II equilibrium in the region. Europe already had enough know-how and capital accumulated in previous decades that it could work around the tragic circumstances of World War II and get back on its feet in no time.

Like most historical narratives of twentieth-century events, several key points tend to be omitted about the Marshall Plan. Contrary to what many court historians would have us believe, the Marshall Plan may have not been the sole cause of Europe’s success in the postwar period. Historian Tom Woods has argued convincingly that the economic liberalization in countries such as West Germany facilitated robust economic growth more than the aid from the Marshall Plan.

West German minister of economic affairs Ludwig Erhard’s economic reforms, such as lifting price controls and ending rationing, contributed to Germany’s incredible comeback after World War II. Other countries such as Austria and Greece, which received considerable aid on a per capita basis, witnessed more sluggish growth and didn’t really take off until aid was phased out. Despite what college textbooks say, the lifting of wartime economic controls was the decisive factor behind many European countries’ growth following World War II, not the Marshall Plan.

All things considered, foreign aid is a feel-good policy that strokes the egos of DC do-gooders but has suboptimal results in the real world—the one place politicians seem to be perpetually detached from. Due to institutional shortcomings inherent to the region and the flawed nature of foreign aid, a Marshall Plan for Central America would not pan out the way that many of its boosters such as Julian Castro would have us believe. Just look at the region’s corruption levels.

According to Transparency International’s 2019 Corruption Perception Index, El Salvador, Guatemala, Honduras, and Nicaragua are ranked 113th, 146th, 146th, and 161st, respectively, for overall levels of corruption. On the Heritage Foundation’s 2020 Index of Economic Freedom, El Salvador, Guatemala, and Honduras are middle-of-the-road countries at best, ranked 90th, 73rd, and 93rd. Nicaragua found itself in shoddy 113th place. Sending the modern-day equivalent of a Marshall Plan to the aforementioned countries is asking for corruption to proliferate and the compounding of previous problems.

Central America does find itself in a bind, but it can look at other developing countries for inspiration. For example, Panama has steadily become one of the more unheralded economic success stories in the last three decades due to its efforts to open up its economy to trade and foreign investment. Now Panama is being dubbed the Dubai of Central America. Chile is another successful model for Central America to look at. The Southern Cone country escaped the clutches of Marxism and became Latin America’s greatest economic miracle of the last century by adopting deregulatory measures, privatizing previously state-owned enterprises, and opening up trade. Even Botswana, which is situated in a part of the world not known for its stability, freed itself from the typical stagnation that marks the developing world. By embracing the rule of law, defending property rights, and opening up its economy, it has separated itself from its Sub-Saharan rivals, such as South Africa and Zimbabwe, both of which have witnessed their share of economic trials and tribulations, the latter being a poster child for hyperinflationary collapse.

When most developing countries have been buying into Keynesian or Marxist development ideas hook, line, and sinker, we should not be surprised when they continue languishing. Intricate policy papers calling for tweaks in foreign aid won’t cut it. The idea of the developing world breaking out of its self-imposed shackles is not so far-fetched thanks to a select few countries that have broken from the interventionist norm. The question is: Will their political elites ignore Western policy wonks’ half-baked advice and embrace markets instead?

The key to economic success is not a matter of technocratic rocket science. Comedian Jane Bussman has spent years abroad in Africa trying to figure out how to alleviate the region’s poverty. After witnessing the foreign aid racket firsthand, she came to the following conclusion:

If you want to help a country that’s troubled, buy their s&*t. Do a three-day stopover, even, and spend spend spend.

Economist Joseph Salerno simplified Bussman’s observation: “In other words, trade (and investment) and not aid” will break the poverty cycle. At this point, the developing world should take its chances by following the advice of comedians rather than that of haughty elites who do not understand the intricacies of wealth creation.

At least the comedians actually understand the concept of value creation. The same cannot be said about your typical IMF or USAID bureaucrat.

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