Post-war American technological transfers to Britain and Italy

In this blog post William Ciptonugroho of the University of Cambridge introduces his recent research on the Marshall Plan, which was financially supported by a grant awarded by the Economic History Society through its Research Fund for Graduate Students.

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The Marshall Plan was one of the largest aid transfers in history, and it represented an American effort to halt the spread of communism across Europe by rescuing the economies of its Western European allies from the devastation of the Second World War.

Of the seventeen European nations that were involved in the Marshall Plan, Britain and Italy were the first and third largest beneficiaries of American aid, respectively. Yet, despite being the biggest recipient of American aid, Marshall aid arguably played a relatively minor role in shaping Britain’s post-war economic trajectory. This starkly contrasts that of Britain’s Continental European neighbors like Italy, where Marshall aid is noted to have played an instrumental role in catalyzing the post-war European economic miracle.

A part of the reason why Continental European economies like Italy were able to grow so rapidly after the Second World War was because there was ample scope for such economies to engage in catch-up growth, adapting technologies that they borrowed from countries at the scientific and technological frontier (namely the United States). In this regard, the Marshall Plan played an instrumental role, stimulating the diffusion of American technologies across Europe through the so-called “Technical Assistance and Productivity Program” (or simply, TAP Program).

As described by Boel (2003), the TAP Program was an effort by the United States to evangelise their European counterparts in the gospel of American-style productivity, and this was done out of fear that low European productivity levels would hamper the overall success of the Marshall Plan by ensuring Europe’s perpetual dependency on American aid. Continuing until 1958, six years longer than the Marshall Plan itself, the TAP Program sought to raise European productivity through three main channels: firstly, it organised “study tours” for European industrialists to visit American factories and plants; secondly, it disseminated materials on American managerial and technical know-how; lastly, it offered heavily-discounted loans to European firms to purchase American machinery.

Writing in 1996, James M. Silberman — who masterminded the TAP Program while serving as the Bureau of Labour Statistics’ Chief of Productivity and Technology Development — argues that the TAP Program was one of the Marshall Plan’s most successful initiatives. This was because, notwithstanding the relatively low cost of the program ($300 million over the program’s 10-year existence), the TAP Program led to “almost immediate productivity gains” during a time when most European countries had not yet started to liberalise their economies.

Despite the apparent success of the TAP Program, however, its rollout was not without controversy. For instance, the TAP Program received criticism from some American industrialists that it was diminishing the competitive advantage of American firms in Europe. As such, I am interested to see whether said criticism led the White House to place restrictions on the outflows of American machinery that occurred under the TAP Program, especially when it came to more advanced machine tools. If America did indeed place restrictions on technology outflows, then it is far more likely that Britain would have been impacted as opposed to Continental European economies like Italy. This was because, in the immediate post-war period, the Communist threat that existed in countries like Italy was far greater than that of Britain; therefore, there arguably exists a greater geopolitical incentive for Washington to revive Italy’s post-war economy (such as by supplying the Italians with more advanced American machinery). Hence, if Britain is found to have received less high-tech machinery than did its Continental European neighbours, it may help explain why the British economy experienced a “relative decline” in the post-war period as there was less scope for the British economy to engage in catch-up growth through the diffusion of more advanced American technologies.

Fortunately, primary source material related to the machine transfers that occurred under the TAP Program can be found at the American National Archives in College Park, Maryland — and thanks to the generous support of the Economic History Society, Cambridge’s St John’s College, and Dr Cristiano Ristuccia — I endeavour to spend the coming months researching such sources to uncover new insights into the TAP Program’s rollout in Britain and Italy. I particularly hope that my research will make an important contribution to the literature on Britain’s experience with the Marshall Plan (because, to the best of my knowledge, very little has been written about the type of machinery Britain received under the TAP Program).

References:

Bianchi, Nicola, and Michela Giorcelli. “Reconstruction Aid, Public Infrastructure, and Economic Development: The Case of the Marshall Plan in Italy.” The Journal of Economic History 83, no. 2 (May 2, 2023): 501–37. https://doi.org/10.1017/s0022050723000128. 

Boel, Bent. The European Productivity Agency and Transatlantic Relations, 1953-1961. Copenhagen: Museum Tusculanum Press, 2003. 

Comin, Diego A., and Bart Hobijn. “Technology Diffusion and Postwar Growth.” SSRN Electronic Journal, 2010. https://doi.org/10.2139/ssrn.1676306. 

Crafts, Nicholas, and Gianni Toniolo. Economic growth in Europe since 1945. Cambridge: Cambridge University Press, 2002. 

McGlade, Jacqueline. “A Single Path for European Recovery? American Business Debates and Conflicts over the Marshall Plan.” Essay. In Marshall Plan: Fifty Years After, edited by Martin Schain, 185–204. Palgrave Macmillan, 2014. 

Silberman, James M., Charles Weiss, and Mark Dutz. “Marshall Plan Productivity Assistance: A Unique Program of Mass Technology Transfer and a Precedent for the Former Soviet Union.” Technology in Society 18, no. 4 (1996): 443–60. https://doi.org/10.1016/s0160-791x(96)00023-1. 

Wasser, Solidelle F, and Michael L Dolfman. “BLS and the Marshall Plan: The Forgotten Story.” Monthly Labor Review, June 2005, 44–52. 

To contact the author:

William Ciptonugroho

University of Cambridge

wc366@cam.ac.uk