Monday, January 26, 2009

A new Marshall Plan is in order

While our nation debates the merits of a possible new, New Deal I find myself wondering why we don't instead consider the merits of a new Marshall Plan.

The Marshall Plan involved giving massive amounts of money and resources to people who in many cases had just tried to wipe out the entire free world. In hind-sight, it's easy to see that the Marshall Plan enabled the "economic miracle" that stabilized virtually all of Europe by providing almost universal prosperity to all western European nations. Funny thing, prosperous people tend to not engage in suicide missions bent on global destruction. All this is clear to us today, but it had to have seemed outrageous to most people at the time. I wonder how the American taxpayer felt knowing his taxes were going to help rebuild the nations that had just a few years before nearly conquered us. But would anybody regret it today? Would anybody say it would have been better to keep Europe in poverty, wounds and resentments festering, waiting for the next dictator to come along and promise redemption against those who had vanquished them to this miserable state? Without Europe and Japan as trading partners, the US almost certainly wouldn't be as prosperous today, to say nothing of how much more miserable those nations and the rest of the world would probably be.

So the question is why are we not considering a global Marshall Plan? The cost of our global War on Terror must certainly have run well into the trillions at this point. What if we considered investing directly in the economies of places like Iraq, Afghanistan, or Pakistan? Rather than spending trillions to run military operations in these places, why not spend trillions to raise the populations into a level of prosperity that would make it impossible for terrorist organizations to recruit. If this seems naive, why is it any more naive than thinking that Germany in the 1940's could turn from its long history of militaristic brutality into a peaceful and prosperous nation? Let's not whitewash history here, the history of Germany, like nearly every western nation, is one of regular violence and tensions, both within and without, culminating in decades of aspirations to world domination in the world wars. Why should we have thought that they could settle down once they achieved a little prosperity? Yet that's exactly what happened.

What if Pakistan and Afghanistan could share in the growth that China and India are experiencing? And what if that growth could be further accelerated to the levels of growth experienced in the decade or two after 1945 in western European nations? Our military might be unable to find bin Laden amidst all the warring tribes in Pakistan and Afghanistan. But if these countries were prospering, the military wouldn't need to find him...the real estate developers would kick him out of his cave to make way for a new time-share development in the mountains. The crazed young men out to conquer the world for Allah would be venting their testosterone during football matches after class just like young men do in any prosperous nation.

The crazy thing is this kind of investment probably wouldn't cost any more than we're already spending to try to keep order militarily in these places. And furthermore, the rapid spread of prosperity to every nation on earth as rapidly as we can spread it would also serve to raise living standards in America as well. It's no secret that one of the biggest threats to the American middle-class is the off-shoring of countless jobs to other countries where work can be done by far more desperate people in far more inhospitable conditions. How come nobody notices that we're so worried about jobs going to Mexico but there doesn't seem to be the same concern about jobs going to Canada? Of course this is because Canadians live as well as we do in the States, so there is no incentive for employers to seek lower labor costs there. The fundamental difference is prosperity.

A common justification for countless policies in favor of the wealthy of the last few decades has been the statement, a rising tide raises all ships. Don't the people using this statement realize the absurdity of this statement in that context? "The tide" must certainly be the mass of humanity, while the ships are the wealthy who sit atop them. To raise the standards for the wealthy and expect this to automatically raise the living standards for all is as backwards as thinking that by lifting boats out of the water that the water level will automatically rise to meet them. We have seen in the last few decades that this trickle-down approach does not work. The wealthy have seen their wealth grow at a tremendous rate, while the bottom half of society has barely seen their incomes or net worth rise at all. By contrast, the policies enacted after WWII, both in the US and abroad, were focused on allowing the masses to prosper and raising the living standard for as many people as possible. The result was an economic boom throughout the world. And the wealthy did not suffer, but benefited tremendously as a result. I'm sure an examination of wealth among the richest members of society during the decades after WWII would reveal that the growth of their wealth was scarcely any different than the last few decades.

It's time we take this to the next level. If we want to emerge from the current economic crisis stronger than we were going into it, then the only way to do that is by reimplementing the Marshall Plan. We must invest in every nation that will accept our money, including--especially--our enemies. The only condition on the money must be the adoption of basic labor and environmental standards to ensure that the investment raises living standards for the greatest number of people possible. Only by raising the tide can we keep all ships from running aground.



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