The Rise of the American System - Liberal Leviathan: The Origins, Crisis, and Transformation of the American World Order - page 136

nomic growth and stability. U.S. officials also worried that economic misery in Europe would
feed political instability and create opportunities for communist political inroads.
The objective of the aid program, as Secretary Marshall indicated in his famous address,
was “the revival of a working economy in the world so as to permit the emergence of
political and social conditions in which free institutions can exist.” Without American-assis-
ted European recovery, Marshall contended, “there can be no political stability and no as-
sured peace.” 72 It was this emerging Cold War rationale that helped build the domestic sup-
port for such costly undertakings. The United States would take responsibility for the revival
of Europe, doing so in a way that allowed Europe to reintegrate and participate in a wider
open liberal order.
In this evolving strategic setting, two convictions about Europe emerged among Truman
administration officials that would persist through the postwar era. One was that European-
wide economic recovery could only occur if Germany was also revived. As George Kennan
argued, “[t]o talk about the recovery of Europe and to oppose the recovery of Germany is
nonsense.” 73 The other was that the administration of Marshall Plan aid had to be a collect-
ive European undertaking. The United States would give aid not to individual country but to
Europe as a whole. This way of running the program would encourage European cooperation
and integration—undercutting tendencies toward bilateralism, autarky, and political conflict.
A united Europe would provide the necessary foundation for economic and political recon-
struction. 74
Through the Bretton Woods agreements, Europeans succeeded in shifting America's post-
war focus on free trade to support for a more general framework of rules and institutions
that reconciled openness with government commitments to full employment and social pro-
tections. But along the way, the economic weakness of Europe and rising tensions with the
Soviet Union brought the United States into a direct role in rebuilding Europe and opening
and managing the world economy. The European states, experiencing a “dollar shortage,”
were unable to take on responsibilities as envisaged under the Bretton Woods agreements. In
these circumstances, as Robert Gilpin notes, “the United States assumed primary responsib-
ility for the management of the world monetary system beginning with the Marshall Plan and
partially under the guise of the IMF. The Federal Reserve became the world's banker, and the
dollar became the basis of the international monetary system.” 75 In the years that followed,
the dollar became the principal reserve currency, and international liquidity was provided
through the outflow of dollars. America's support for an open world economy would entail
organizing and running it.