Introduction: Lost Theoretical Insights from US Secretary of State George Marshall

Seventy-five years ago, on 5 June 1947, US secretary of state George Marshall gave a speech at Harvard University announcing what was to be called the Marshall Plan. The Marshall Plan was probably the most successful development plan in human history, re-industrializing and industrializing countries from Norway and Sweden in the North to Greece and Turkey in the South-East. At about the same time, a similar process based on the same principles re-industrialized and industrialized East Asia, spreading from Japan in the North-East towards the South-West. In this way a cordon sanitaire of wealthy countries was created around the communist world, stemming the communist tide that was rising at the time of Marshall's speech. One country to benefit from the Marshall-type ideology was South Korea, a country that in 1950 was poorer (GDP per capita estimated at $ 770) than Somalia (GDP per capita estimated at $ 1057; Maddison 2003), which today is an example of a failed state (see Figure 20.1 below).

Although sometimes it is misunderstood as a scheme for giving away huge sums of money rather than a re-industrialization scheme, the Marshall Plan is well known. What is less known is that the relatively short speech contained three key theoretical insights with strong relevance in today's situation.

The first insight is the link between a certain type of productive structure and what George Marshall calls ‘modern civilization’, what in a more politically correct and neutral language today could be called ‘development and democracy’ (italics added):

There is a phase of this matter which is both interesting and serious. The farmer has always produced the foodstuffs to exchange with the city dweller for the other necessities of life. This division of labor is the basis of modern civilization. At the present time it is threatened with breakdown. The town and city industries are not producing adequate goods to exchange with the food-producing farmer. During the formation of the European nation-states, it was common knowledge that democracies and ‘civilization’ were both products of certain economic structures associated with ‘city activities’ (chapter 13).