ABSTRACT
Immediately after the war, the overriding need was for economicrecovery. In 1947 US Under-Secretary of State for Economic Affairs, William Clayton, could report that ‘Millions of people in the cities are slowly starving’, since farmers had insufficient incentive to supply food ‘in normal quantities’. The present position ‘represents an absolute minimum standard of living. If it should be lowered, there will be revolution’.1
In fact the problem was more one of bottlenecks and transport difficulties; and though agriculture was generally down on pre-war levels, industrial production was up.2 But further revival would have run into balance of payments crises had it not been for Marshall Aid, since (in the absence of German industrial and of East European agricultural products) Western Europe had a collective deficit of $7.4 billion, mostly with the USA. Marshall Aid (and then offshore military procurement) bridged the gap until exports could be expanded. Growth could thus continue, with the result that by 1951 per capita incomes were above pre-war levels in most countries (though not West Germany).3 Marshall Aid had thus excluded the risk of ‘economic, social and political deterioration of a very grave
