Assess the extent to which the US policy of rebuilding the economies of Japan and Western Europe was motivated primarily by ideology.

On one hand, post-war policies aimed to prevent the spread of communism by restricting the economic hardship that had caused its rise in Russia and China. They could, on the other hand, be described as providing markets, pursuing dollar diplomacy, or establishing strategic control.

In the four years following 1948, the European Recovery Program resulted in a $13m dollar US investment into the Western European economies. It was stated that the aim was directed against hunger and poverty in the aftermath of the war, not against any country and doctrine. However, as a result of the Truman Doctrine’s political aims and the USSR’s rejection of it, it came to be seen as ideologically motivated. It demonstrated the USA’s huge economic strength, which is based on capitalism and enterprise, and it appeared to link economic hardship with support for communist doctrines.

The policy was a change from simply giving aid - the US had already contributed $9 million to investments in infrastructure. This was an indication that a motive was to establish a regenerated Western Europe, which would be open to US trade and investment. The USSR saw that its economic aims were linked to growing US influence and economic policy, US power, and the spread of a capitalist ideology.

On the other hand, despite the influx of US money, the economies of Western Europe were in need, and there was a huge task of rebuilding. The British government, as a major recipient, saw the plan as one of generosity. It may have been motivated by fears that if decisive action were not taken, the economies of Western Europe would take 20 years to recover. This would have serious financial consequences for the US, whereas the Marshall Aid program, by promoting a more rapid and self-generated recovery, would benefit the US economically and reduce defense commitments as Western Europe became more capable of funding its own defense capabilities.

The more complex motives for US economic policy may have been distorted by the political and ideological elements of the US as a leader and defender of the Free World. A key element was that the aid would allow Europeans to rebuild and cooperate in integrating Western Germany into an economic and political framework that would keep the peace and prevent the US from being drawn into a third Germany-based European conflict. Thus, there is a possible discussion about the motivations and the relative importance as ideology as a justification for high levels of overseas spending.

Japan

The immediate problems of occupation in Japan were far worse than the problems the US encountered in Germany’s shattered cities, and the responsibility of direct rule for providing necessities was significant. Japan was regarded as a vital component of strategic defense, and the US was slower to recognize a distinct communist threat in Asia than in Europe, and the CCP’s victory, followed by the invasion of South Korea, increased the need to ensure that Japan remained stable.

The first phase of economic rebuilding was ideologically based in the sense that the US wanted to change the cult of militarism and emperor worship and lead Japan towards constitutional democracy along the lines of its model Asian state, the Philippines. To break the power of the Japanese elites, economic aid was allied to land reforms to deal with immediate problems and a dismantling of larger industrial concerns.

After 1947, economic policy shifted to the ‘reverse course’ as the threat from the CCP became more evident, and there was greater concern for infrastructure recovery and larger industrial concerns as Japan became a supply base for the war in Korea. Thus, policy was driven by a different sort of ideology concern, but also by the need to maintain the strategic defense ring in the Pacific.