Categories: Economy

We Should Indeed Have A Global Marshall Plan For Developing Countries

Fun to see something in The Guardian with which all of us will fully agree. It’s such a rarity that we should celebrate it in fact:

International support has been lacking precisely when it is most needed. The US has turned its back on the world. The UK, like Europe, appears preoccupied with its own medical and economic emergencies; the ability of Commonwealth countries to cope with the pandemic appears to have fallen off its domestic agenda. Defeating Covid-19 and preventing future outbreaks around the world can only happen through cooperation.

We need a global Marshall plan

Excellent.

So, what was the Marshall Plan first time around?

The Marshall Plan (officially the European Recovery Program, ERP) was an American initiative passed in 1948 for foreign aid to Western Europe. The United States transferred over $12 billion (equivalent to over $128 billion as of 2020)[1] in economic recovery programs to Western European economies after the end of World War II. Replacing an earlier proposal for a Morgenthau Plan, it operated for four years beginning on April 3, 1948.[2] The goals of the United States were to rebuild war-torn regions, remove trade barriers, modernize industry, improve European prosperity, and prevent the spread of Communism.[3] The Marshall Plan required a reduction of interstate barriers, a dropping of many regulations, and encouraged an increase in productivity, as well as the adoption of modern business procedures

That is, the Marshall Plan was vastly smaller than the current flow of aid from rich to poor countries. It was also highly conditional. You don’t get the loot unless you stop doing economically stupid things. Roughly – roughly you understand – you only got the cash if you followed the precepts of the Washington Consensus.

Well, yes, OK, that will work. So, let’s do it. Slash the amount of aid, make it highly conditional upon killing economic stupidity and then let’s watch those developing countries blossom as did Europe after 1948. Works for me.

Sadly, I don’t think it’s what Matey is suggesting.

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Tim Worstall

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  • Looking at the article, I'd say it makes an excellent case for the developing countries scrapping the lockdown.

  • But we are helping developing countries, we're throwing unlimited resources at developing vaccines and medicines for if the first doesn't work. Developing countries will get access to those, no doubt free of charge or at some nominal cost.

    I'm also fairly certain that as the problem recedes in the west a lot of know-how, staff and surplus equipment will be transferred to developing countries, again FoC.

  • Far from "removing trade barriers," our current round of loot to foreign countries for doing nothing, is contingent on them "lowering their deficits" by jacking up their tax rates, and preventing agricultural self-sufficiency by rejecting chemicals and machinery (if food aid doesn't put farms out of business first). Thanks for the lesson on how the Marshall Plan was to stand the recipients back on their feet rather than to make the givers feel good about ourselves.

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Tim Worstall

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