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    American Visions and British Interests: Hogan's Marshall PlanThe Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947-1952by Michael J. HoganReview by: Charles S. MaierReviews in American History, Vol. 18, No. 1 (Mar., 1990), pp. 102-111Published by: The Johns Hopkins University PressStable URL: http://www.jstor.org/stable/2702734 .Accessed: 26/02/2012 14:40

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    AMERICAN VISIONS AND BRITISH INTERESTS:HOGAN'S MARSHALL PLAN

    Charles S. Maier

    Michael J. Hogan. TheMarshallPlan:America,Britain,andtheReconstructionfWesternEurope,1947-1952. New York:CambridgeUniversity Press, 1987. xiv+ 482 pp. Notes, bibliography, and index. $34.50 (cloth); $15.95 (paper).The historiography of the MarshallPlan, along with the historiography of theCold War in which it used to be embedded, has progressed during the lastfew years to a new level of sophistication. Michael Hogan's dense and im-portant work (along with other recent studies, preeminently Alan Milward'sTheReconstructionf WesternEurope1945-51, 1984) sets the history of the Eur-opean Recovery Programin a new interpretive framework. It leaves behindthe preoccupation with the Soviet-American antagonism; if it seems helpfulto resort to concepts such as postrevisionist, the book might best be describedas transrevisionist. It has crossed to new concerns.The MarshallPlan, formally titled the European Recovery Program(ERP),emerges in Hogan less as a chapter of American foreign policy than as anemanation of a domestic vision of political economy. This vision takes on in-stitutional form within a set of policy dialogues-between the executive andthe Congress, the European Cooperation Agency and the U.S. Treasury, and,just as critically, between Washington and London. Within this frameworkHogan's Marshall Plan emerges as a historic compromise between a vigorousAmerican corporatism and a waning British imperialism. It represents theUnited States alternative for postwar international economic stabilization.Hogan has taken us a long way from just a story of foreign aid. And whilehe evidently admires the Recovery Program, his approach also leaves behindthe warm glow with which so many narratives and personal testimonies havesuffused the initiative. The Marshall Plan, afterall, has attained virtualpolicycanonization. Its example still summons American leaders (rightly so, I willconfess to believing) to aspire to-if not to fund-generous, internationallycoordinated, and far-sighted assistance programs. Secretaryof State GeorgeMarshall still enjoys the nearest attributionto immaculate conception of anymodern American statesman. He remains our Cincinnatus of the Cold War,

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    MAIER / American Visions and British Interests 103a Washington who never had the disadvantage of a presidential term. Indeedthe United States was fortunate to have him. The issue for the historian, how-ever, is not whether the Marshall Plan was far-sighted policy, but how itsoperation can be rescued from celebratorymyth. Even wise policies deservehard analysis, and Hogan provides a close examination. He happily does notlabor for the umpteenth time the pseudo-dramatic narrative of how Marshallcame to present his HarvardCommencement address and Bevin and Bidaultresponded. He remains interested throughout in substantive issues, not inthe anecdotal atmospherics that too often afflict histories of the contemporaryera.Hogan also shifts the emphasis from issues prompted by the revisionistcritique of the late 1960s. The Marshall Plan in the revisionist perspective wasdesigned to make Western Europe a safe arena for international capitalism.The crudest accounts, which claimed that the United States required the aidprogram to avoid recession at home, did not really convince. But the argu-ment that the ERPwas the key component of a global strategy of capitaliststabilization had a more forceful logic:' it was, afterall, just a less euphemisticversion of what many American policy makers often claimed. In retrospectthis issue seems awkwardly framed. The question was not whether Wash-ington aspired to buttress an international capitalism, but on what politicaland economic terms it sought this aim and how it squared with others. Ho-gan's agenda in fact involves unraveling the tangle among American objec-tives: the ideological and practicalconnection among democracy, welfare cap-italism, the representation of interests, and economic growth.In any case revisionism has not remained a dominant mode; or perhaps weare all revisionists now. Certainly the historiography of the Marshall Planhaschanged again. The research now being published pursues different issues:no longer how the Recovery Program might have answered the supposedneeds of American capitalism, but how did it fit in with the long-term de-velopment of American foreign policy, indeed public policy overall? Whatdid the Recovery Programactually accomplish economically? How much ofan impact did it exert on the European societies? Europeans as well as Amer-icans have been contributing to this new scholarly examination, some byfocusing on the Recovery Program itself, others by examining related eco-nomic and social issues.2 Tocitejust the countries where this reviewer followsresearch, noteworthy French studies of postwar recovery and economic pol-icy have recently appeared;3a spirited current controversy in West Germanyhas debated the importance of the Plan to postwar recovery;4 Italian-basedscholars have made acute contributions.5There are related investigations oflabor and political party responses to the plan.6 Other theses have appearedor are underway for the Netherlands and the Scandinavian countries. To-

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    104 REVIEWS IN AMERICAN HISTORY / MARCH 1990gether they have woven the Recovery Programinto a dense fabricof nationalhistories. Moreover, the same examination is now being extended to the mil-itary assistance programs that followed on the ERP and also played an im-portant institutional role.Why this intensive reexaminationnow? Ingood partthe recent accessibilityof archives has stimulated research. The massive documentation of the Amer-ican foreign assistance agencies (the European Cooperation Administrationforthe MarshallPlan, the successor Mutual SecurityAdministration, ForeignEconomic Agency, and even Agency for InternationalDevelopment) was juststarting to open up over a decade ago when Hogan was pursuing the files.Holdings have continued to be made available forresearchersat the Suitland,Marylanddepository of the National Archives. The researchercan follow thedevelopment of foreign-aid policy at the highest levels of the ECAas well asthe impact on each country in many parallel files, whether those retained bythe Washington Headquarters, those accumulated by the Paris Office of theSpecial Representative, or those in the respective country missions. As justpart of his massive research effort, Hogan based much of his work on theoriginallyreleased ECA documents (then filed as RecordGroup 286, but sincereorganized as Record Group 469), which allowed him to cover the key doc-uments concerning policy formation. Thousands of cubic feet have beenopened since, much of it very detailed, and especially valuable on the recip-ient nations. These files can be complemented by the Post or Embassy re-cords, State Department's decimal files, and the Treasury holdings that Ho-gan has also exploited. Hogan's work was obviously shaped by the vastBritish documentation at the British Public Record Office. Continental ar-chives have also made progress in accessioning the records of the 1950s. Scho-lars now can draw on smaller holdings at the French Ministries of ForeignAffairs and Finance, the overlapping West German agencies, whose recordsareretained in Bonn and Koblenz, and records in other national archives. Forany single historian the prospect is endless. In fact, the effort has becomecollective. The European University Institute along with scholars elsewherehave been systematically sending out their graduate students to sift the dis-persed records. The Marshall Plan is now the stuff of which serious historycan be written.Hogan has written very serious history. He has fully documented the ori-gins of the Marshall Plan and the years in which Washington sought to useits foreign assistance to shape the European economic and political order. Hehas a keen sense of how European issues hang together-the stakes of Ger-man reconstruction, the French role on the continent, the importance of Bel-gian financial conservatism, and the British effort to maintain freedom of ac-tion. Farmore than a study of just the Marshall Plan, the book provides a

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    MAIER / American Visions and British Interests 105cross-section of postwar liberal politics. This review can only touch on someof the importantquestions that Hogan has tackled and the stakes of the schol-arly debates. He follows the Plan from its American origins in the early chap-ters, then examines how it was advanced in negotiations with the Europeans.The first two chapters tackle the question of what the Marshall Plan repre-sented in the tradition of American policy making. Hogan traces the Euro-pean Recovery Program to a long-term strategy of stabilization throughgrowth, based on corporatist or neocapitalist interest-group collaboration athome and on the effort to secure Anglo-American cooperation abroad.Thomas McCormickhas elevated the "corporatist"paradigm for Americanforeign policy into a general model of United States foreign relations. To mymind, the paradigm can only cover a restricted twentieth-century approachand should not be overgeneralized.7 Nonetheless, insofar as a corporatist ap-proach to policy making did prevail in the United States, it did so during theSecond World War and the postwar era, when under Democratic Party ad-ministrations the episode of labor-management collaboration for the sake ofhigh wartime output might appear the basis for organizing a long-term in-ternational political economy. For Hogan-whose earlier work concerned theforging of Anglo-American cooperation in the 1920S8-the parallel betweenthe two postwar periods is unmistakable. The effort at domestic and Euro-pean stabilization carried out under the aegis of Hoover's "associationalism"but shattered by the world economic crisis was resumed in the second post-war era. The second version, however, was constructed on the broader po-litical base of "the New Deal synthesis" (pp. 22, 427). Itembraced the spokes-men for organized labor and incorporated the techniques of Keynesiandemand management. It was more viable.Three major theses thus structurethis complex narrative:first the domesticneocapitalist origins of the Recovery Program;second, the joint Anglo-Amer-ican basis of the stabilization effort; third, the consistency of the Americanplanners' pursuit of West European integration. "Both recovery periods ...witnessed the formation of an Anglo-American partnership that subordi-nated French hopes for economic and political predominance to the reinte-gration of Germany"(p. 20). In substantive terms integration meant the con-struction of supranational institutions, such as the OEEC,the effort to unifythe European economies, to overcome the old Franco-German antagonismand thus mobilize German economic strength, and finally to persuade theBritish to link their economy with that of continental Europe. British reluc-tance to commit the fortunes of the United Kingdom to this agenda meantthat within the overarching partnership there was a serious divergence.Most of Hogan's highly detailed narrative is devoted precisely to U.S. ef-forts to press the Europeans toward integration. Along with Milward's more

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    106 REVIEWS IN AMERICAN HISTORY I MARCH 1990thematically organized coverage, his book provides the best available treat-ment of the European-American interaction-at least the nonmilitary as-pects-during the late 1940s and early 1950s. ForHogan, integration involvedovercoming two major obstacles: Britain'sreluctance to give up the protectedposition of the sterling area and merge its economy more fully with the Con-tinent;and French reluctance to accept the Germanrecovery thatWashingtonbelieved would provide the economic motor for European growth. By re-maining aloof fromthe continent, the Britishalso made the French even moreaverse to accepting West German revival. Ultimately, Hogan proposes, theAmerican model of domestic neocapitalism (the heir of technocorporatist col-laboration), could depoliticize the continental quarrels enough to facilitateFranco-Germancollaboration, even if Britainremained partially odd man out.And compromise with the U.K. over the payments' issues allowed substantialrealization of Wasington's goals: "Europe made the American way"-but si-multaneously "America made the European way" (pp. 427, 445).More than any other issue, the long negotiations to reestablish a multilat-eral system of payments brought out the divergences that lay between Wash-ington and London. London, with a precarious reserve position, wished toshield sterlingso it could remain an internationalcurrency.Thismeant settinglimits on continental creditors who might present their pounds for dollars orgold, and preventing the Indians and Egyptians from cashing in the creditbalances they had accumulated during the war. Washington pressed to re-move such restrictions, which they felt artificiallymaintained old imperialprivileges, would limit the demand for American goods, and prevent inte-gration of the West European economies. Hogan devotes major sections ofhis narrative to the compromises on these issues so arduously worked outduring the payments agreements of 1948-49 and the European Payments Un-ion of 1950. In fact Washington spokesmen, as Hogan recognizes, never ad-vanced a single policy. By and large, ECA officials spoke for activist and"Keynesian" approaches to national investment even when these undercutorthodox deflationary efforts at the currency stabilization that U.S. Treasuryofficials urged. Although they chafed at Britishresistance, they were willingto protect the continental countries from the rigors of multilateralism byAmerican side payments. ECAcompromises meant that Washington had tosettle for less of the American design than it originally wanted. On the otherhand, such compromises remained the prerequisite for the progress that wasachieved.

    Itis no deprecation of Hogan's achievement-his breadth and detail of cov-erage, his mastery of the complicated issues debated between Washingtonand its allies-to register some dissent and criticism. For a work on an eco-nomic assistance program, the economic side of the story remains underde-

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    MAIER / American Visions and British Interests 107veloped. Hogan is concerned to defend the significance of the Marshall Planagainst Alan Milward's recent and provocative reevaluations as well asagainst my 1981 observation that in quantitative terms alone, the RecoveryProgram contributed only a very small portion of European capital forma-tion.9 The latter dispute need not be labored; there is probably less disagree-ment than Hogan would suggest. My point was that the ERPworked pri-marily by alleviating strategic bottlenecks and foreign-exchange constraints,not by vast infusions of capital. Hogan disagrees with Milward's far morecomprehensive argument thatthe Marshall Planwas hardly necessary (whichis not to say Milward does not think it was a good thing). Milward has main-tained that the crisis of 1947 arose as a consequence of the rapid investmentthat Europeans had undertaken since the war. He has undertaken a series ofcounter-factual calculations to demonstrate that even without U.S. aid, theseprograms could have continued without real cuts in European consumptionstandards. France and the Netherlands alone might have required temporarycutbacks given their commitment to both eating well and investing.10In general Milward's large work contends that each successive postwarAmerican policy initiative fell short of announced goals and must be deemedunsuccessful. In his scenario, the Bretton Woods system of exchangeable cur-rencies never worked as Americans envisaged. Marshall aid was the priceWashington had to pay to help rescue multilateralism. In turn the ERPwasunable to advance Europe toward the American goals of integration. Instead,decisive progress awaited the Franco-GermanSchuman Plan that allegedlyran against U.S. aspirations for more inclusive linkages. Hogan argues, cor-rectly Ibelieve, that the results of American policies should be assessed morefavorably. Milward's concept of success seems too stringent to be useful. Af-ter all, each alleged postwar American "failure" brought Western Europecloser to the prosperous liberal democratic order we championed. The liberal-democratic and prosperous Europe that Americans sought to nurture didemerge "on our watch," as it were. Still, it is unfortunate that in a work ofsuch ambition, Hogan cannot provide more of a strictlyeconomic evaluation.He relies on assertion and secondary testimony in effect to assert the crucialeconomic importance of the Marshall Plan.A second difficulty arises from the very emphasis on British-American n-teractions that make this study so rewarding. By adopting an Anglo-Ameri-can perspective Hogan has vastly enriched the usual account of the Americandiplomatic historian. On the other hand, the ERP was also designed to stemcommunist appeals in Italy and Franceand to redress West German demor-alization. Marshall aid was construed as an economic instrument to restorethe possibilities forcentrist politics on the continent. Itsmost notable politicalsuccess perhaps was to strengthen beleaguered social democratic unions and

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    108 REVIEWS IN AMERICAN HISTORY / MARCH 1990parties, but this development receives much less emphasis than, say, the longnegotiations over convertibility.Third, one can quarrel with Hogan's heavy emphasis on the concept ofintegration. ECA program officers in Italy who were trying to get the gov-ernments in Rome to invest in the Mezzogiorno, or not to build, say, anotherpurely pork-barrelmodel dairy farm, the frustrated mission directorsin Ath-ens who faced dismaying clientelism, did not habitually think in terms ofEuropean integration. They worried about corruption, local factionalism, lackof technical know-how, and often grinding poverty. Integration was a termthat popped up in the ECA vocabulary after 1949 as Paul Hoffman and ECAofficials sought dramatic objectives for the second biennium of the four yearprogram. Its real purport puzzled the British and many Americans. It endedup by being defined largely in terms of currency convertibility, or else wasquickly exploited by spokesmen for German reconstruction to argue that re-building the Ruhr, say, would be to the benefit of other Europeans.This is not to deny that Washington policy makers had a persisting visionof a large interconnected European market, which they sometimes naivelycompared to the interregional flows in the United States. Indeed until theCold Warreally firmed up, Truman had entertained images of East-West ex-changes of agricultural and industrial goods. Hogan is certainly justified inpointing to the continuing invocation of the ideal; nonetheless, Iwould ques-tion the degree to which an explicit commitment to "integration"really ori-ented policy before 1949.Finally, I would ask whether Hogan's concept of American politics doesnot unduly overstress synthesis and undervalue the continuing strength ofsome fundamental divisions in American politics. Hogan summarizes:

    The Marshall Plan. . . was the brainchild of . . . the so-called New Deal coalition,which was strong enough to prevail against opponents on the Left and the Right. . . [including] at its core a bloc of capital-intensive firms and their allies amonglabor, farm, financial and professional groups. Its leadership combined the tech-nocorporative formulations of the 1920s with the ideological adaptations of the1930s in a policy synthesis that envisioned a neo-capitalist reorganization of theAmerican and world systems. It was this synthesis, what I have called the NewDeal synthesis, that inspired the Marshall Plan to remakeWestern Europe in theimage of "God's own country." (p. 427)I am on recordwith a similar analysis;" however, it is instructive to recall theconflictuality of American politics in the 1940s. Hogan himself repeatedlystresses the continuing tension in American policy between the New Dealplanning tradition-which found a last home in ECAwith its Keynesian ac-tivists-and the more orthodox preferences and Midwestern sobriety of

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    MAIER AmericanVisionsand British nterests 109Treasury Secretary John Snyder and many spokesmen for business and in-dustry (although not the effervescent Paul Hoffman). Treasury officials re-mained convinced that less supranational institutions or Keynesian interven-tion than the correct alignment of exchange rates (devaluation of the Britishpound) and thus market forces would prompt recovery.Indeed what seems to have happened by the end of the 1940s is that interms of rhetoricthe economic interventionists briefly gained the upper hand.But not in terms of actual policy results. Hoffmann and his adviser Bisselltalked about integration, urged a strong supranational OEEC, pressed theEuropeans to use the new armory of macroeconomic planning and nationalaccounts. (Tojudge by ECA'sprogrammatic efforts, from 1949one might referto a "second" Marshall Plan as one used to talk about a second New Deal,although the objectives moved toward planning, not away from it.) In termsof actual policy, however, the interventionists tended to lose ground. Germanrecovery in Europe would also strengthen forces hostile to Keynesianism. So,too, at home the progress toward a welfare state was arrested. To a degreethe advent of the Korean War and the urgency of the rearmament agenda (inthe works with plans for the hydrogen bomb and NSC 68 even before Korea),provided objectives that bridged the differences. As in 1940-41, the commit-ment to mobilization helped overcome deep conflicts between the New Dealand its opposition, but rifts as well between the planning and market-orientedtraditions inside the Democratic camp.As much as it represented a resolution of earlier divisions over politicaleconomy, the Marshall Plan, I believe, provided some of the same occasionforconflict that the Depression had earlier. Even a coherent American foreignpolicy allowed for a replay of domestic debates. The evidence for such divi-sions clearly emerges in Hogan's book, but he prefers to stress what unitesthe contenders even as he extensively documents their disputes. Iwould sug-gest that it is less "synthesis" that is operative than stalemate, or at best acompromise finally reached under the impact of national military mobiliza-tion in 1949-51. Much of the history of the FairDeal recapitulates the trans-formation of the New Deal as WorldWarIIapproached. Disputes that wereshelved in 1940were to be shelved again before Korea. The story of Americanpolitics in the twentieth century is less one of synthesis than of continuingstruggles, never decisively won by liberals, but never completely reversed bywould-be conservatives. Hogan's major work allows us to place postwar for-eign policy within this continuing rhythm of national contention. As Hoganso substantially demonstrates, the Marshall Plan broke down the barriersbe-tween domestic and foreign policy agendas. This episode of national activismlong merited the magisterial treatment it has finally received.

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    110 REVIEWS IN AMERICAN HISTORY / MARCH 1990CharlesS. Maier, Department f History, HarvardUniversity, s the authorof TheUnmasterable Task: History, Holocaust, and German National Identity(1988).

    1. Most cogently argued by Joyce and Gabriel Kolko, The Limitsof Power: The WorldandUnited StatesForeign Policy (1972).2. Cf. William Diebold, Jr. "The Marshall Plan in Retrospect: A Review of Recent Schol-arship," Journalof InternationalAffairs 41 (Summer 1988): 421-35.3. Annie Lacroix-Riz,Le choix de Marianne: les relations ranco-americaines 944-1948 (Paris:Messidor/Editions Sociales, 1985) has some interesting material but is unabashedly old-lineleftist in its criticism of U.S. policy. For recent research see Gerard Bossuat, "Le poids del'aide americaine sur la politique economique et financiere de la France en 1948," RelationsInternationales37 (Spring 1984): 17-36; Bossuat, "L'aide americaine a la France apres la sec-onde guerre mondiale," VingtiemeSiele (January-March 1986); also Bossuat's doctoral the-sis, "Lamodernisation de la France sous L'Influence: Premieres etapes de l'appel a l'tran-ger," 1988); and Michel Marguairaz's 1989 dissertation on French financial policy from 1930to 1950.4. This debate continues a parallel controversy over the importance of the German cur-rency reform. Werner Abelshauser has downplayed the significance of both the 1948 cur-rency conversion and the Marshall Plan for West German economic growth; Knut Borchardtand Christof Buchheim have insisted on the importance of both. See Abelshauser, Wirtschaftin Westdeutschland 945-1948 (Stuttgart: Deutsche Verlags-anstalt, 1975); Bucheim and Bor-chardt, "Die Wirkung der Marshallplan-Hilfe in der deutschen Wirtschaft," Vierteljahrsheftefur Zietgeschichte 5 (July 1987):317-47. A translation of this essay, a new (but still revisionist)evaluation by Abelshauser, will be included in Charles S. Maier, ed., assisted by GunterBischof, The Marshall Plan and Germany (Berg Press, 1990). See also Gerd Hardach, "TheMarshall Plan in Germany, 1948-1952," Journalof EuropeanEconomicHistory 16 (Winter 1987):433-85.5. Pier-Paolo D'Attorre, "ERP Aid and the Politics of Productivity in Italy during the1950s," European University Institute Working Papers No. 159, 1985; also D'Attorre "As-petti dell'attuazione del Piano Marshall in Italia," in Elena Aga-Rossi, ed., Il Piano Marshalle l'Europa Rome: Trecani, 1983), pp. 163-80.6. Anthony Carew, Labourunder the Marshall Plan: The Politicsof Productivityand the Mar-keting of ManagementScience(Manchester: Manchester University Press, 1987); also FedericoRomero, "United States Policy for Postwar European Reconstruction: The Role of AmericanTrade Unions," European University Institute Working Papers No. 311 (1987). For discus-sions of left-wing and labor politics that stress the ideological ramifications, see OthmarHaberl and Lutz Niethammer, eds., Die europdischenLinkeund derMarshall-Plan(Frankfurt:Main, 1986); Peter Weiler, British Labourand the Cold War 1988).7. Thomas J. McCormick, "Drift or Mastery? A Corporatist Synthesis for American Dip-lomatic History," Reviewsin AmericanHistory 10 (December 1982): 318-30. Fora more limitedapplication of the idea see McCormick's recent work, America'sHalf-Century:United StatesForeignPolicy in the Cold War(1989).8. Michael J.Hogan, InformalEntente:The Private Structureof Cooperationn Anglo-AmericanEconomicDiplomacy,1918-1928 (1977).9. Charles S. Maier, "The Two Postwar Eras and the Conditions for Stability in Twentieth-Century Western Europe," AmericanHistoricalReview 86 (April 1981), now in Maier, In Searchof Stability:Explorations n HistoricalPoliticalEconomy 1987), pp. 153-83, esp. p. 172. I wouldmodify the argument I then made in one respect: although the capital provided to mostECA recipients (Italy and Germany excepted in 1949) remained a small portion of their owninvestment effort, the total U.S. effort was a sizable transfer of about two percent of currentGNP in the late 1940s and early 1950s.10. Alan S. Milward, Reconstructionof WesternEurope, pp. 90-113; also Milward, "Was theMarshall Plan Necessary?" Diplomatic History (1989): 231-53. But as Milward admits, "the

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    MAIER / American Visions and British Interests 111debate about the economic effectiveness of Marshall Aid at the moment focuses on ques-tions which are too narrow and in certain respects sterile and unanswerable" (p. 92). Seealso the shrewd essay by Harold Van Buren Cleveland, "If there had been no MarshallPlan . . ." in Stanley Hoffmann and Charles Maier, eds., The Marshall Plan: A Retrospective(1984), pp. 59-64. Hogan lumps me with Milward for underestimating the economic effectof the Marshall Plan. Milward lumps me with Hogan for overstressing the themes of cor-poratist consensus. For an even sharper jab at Milward and Maier as revisionists, seeCharles P. Kindleberger, Marshall Plan Days (1987).11. Cf. Maier, "The Politics of Productivity," in In Searchof Stability, pp. 121-52.