The Marshall Plan That Failed

“We used to win,” Donald Trump said through his campaign and into his presidency. “We don’t win anymore.”

For all the outrage the line would regularly elicit, it in fact reflects one of the few points that Trump and his critics in the foreign-policy establishment agree on. Both look back with nostalgia to a lost golden age, when America did great things at home and on the world stage. Trump’s story of decline is just a cruder version of a more widely accepted narrative; it was able to take hold because he delivered it to a nation already in thrall to its own myths.

More than any other period in American history, the years just after World War II are taken to represent that foreign-policy golden age. They mark the start of the American era, a period of bold leadership that gave us the doctrines and accomplishments we invoke today. The Marshall Plan, which saved Europe from poverty and despair; the construction of America’s global alliances; the democratic renovation of Germany and Japan; the “containment” strategy that defeated the Soviet threat; the valor of the “Greatest Generation” and the vision of the “Wise Men”—all fit tidily into a narrative of power and purpose reshaping the world and ultimately leading to America’s victory in the Cold War.

More than any other figure in that narrative, George C. Marshall embodies the conception of American power at its best. As an Army general, he led the U.S. to victory in World War II; as the secretary of state and then defense, he forged a model of global leadership that fused strength and ambition with generosity and wisdom. The Greatest Generation looked to his greatness. The Wise Men sought out his wisdom. Persuasively or not, officers and policy makers in every generation since have claimed to be carrying on his legacy. Challenges from the Middle East to Middle America are still met with calls for another Marshall Plan.

But there is a problem with this triumphal narrative: It leaves out one of the central events of both Marshall’s career and American foreign policy during that golden age.

In between Marshall’s heroic service in World War II and his visionary statesmanship at the dawn of the Cold War, he took on the most difficult mission of his life. For 13 months, from the end of 1945 until early 1947, he was the special envoy to China, laboring to broker peace in the civil war between Mao Zedong’s Communists and Chiang Kai-shek’s Nationalists and to lay the groundwork for a U.S.-allied Chinese democracy. When he failed, both the fallout and the lessons shaped the rest of his acclaimed career and decades of U.S. foreign policy.

“Who lost China?” Americans would ask for years afterward. Some argued that Marshall deserved a sizable share of the blame.

Because Marshall’s China mission cuts against the usual depiction of the man and the time, it has tended to be left out of the story altogether. The full story should be not just about success and power’s possibilities, but also about struggle and power’s limits. Marshall’s achievements have done plenty to inspire Americans over the years. His failures, however, may have even more to tell them about his legacy—and about where their country is today.

Marshall didn’t want to go to China. After a grueling six-year tenure as Army chief of staff, which began the day Hitler invaded Poland, in 1939, he wanted to retire. But a civil war in China, and the risk of a Communist victory, threatened to demolish America’s vision for postwar world order. So President Harry Truman asked Marshall—whom he called “the greatest military man this country ever produced, or any other country for that matter”—to take on what was meant to be a final mission. Marshall’s sense of duty would not allow him to say no.

In a matter of weeks, Marshall achieved what even cynics were calling a miracle. “It looks as if the Chinese program is working out exactly as planned,” Truman wrote him. “Thanks to you.” Under Marshall’s guiding hand, the Nationalists and the Communists agreed to a cease-fire in a civil war that had raged on and off for two decades. They settled on the principles of a democratic government, listening as Marshall explained the Bill of Rights and read aloud from Benjamin Franklin’s speeches. They signed off on a plan to merge their troops into one army.

When Marshall visited the Communists’ remote revolutionary headquarters, Mao declared, “The entire people of our country should feel grateful and loudly shout, ‘long live cooperation between China and the United States.’” He had already instructed followers that they were entering “a new stage of peace and democracy,” and talked about how much he could learn from a visit to America. Other Communist leaders such as Zhou Enlai were speculating about what jobs they would get in a new government led by Chiang Kai-shek.

But as we know now, the groundwork Marshall laid for a peaceful, democratic, American-allied China would not survive. Discussions moved from the high-level accord to the details of implementation, and apparent agreement gave way to irreconcilable differences about China’s future. As tensions between Washington and Moscow grew, Joseph Stalin went from supporting Marshall’s efforts to encouraging Mao to accelerate his guerilla war.

Marshall struggled for another 10 months to avert a breakdown—and the consequent risk of Communist victory and renewed world war. Officials in Washington would compare him to Sisyphus, trying again and again to restore progress. Only at the end of 1946 did he finally give up. “It is now going to be necessary for the Chinese, themselves, to do the things I endeavored to lead them into,” he concluded.

But in the next phase of his career—watching him at work in China, Truman decided to make him secretary of state—Marshall would struggle with a wrenching choice: what to do as war spread and as Mao’s victory came to appear more and more likely. Yet his China mission had left him with little hope that American help could make a decisive difference there, and convinced him that a major military effort to stop Mao would bring enormous risks, while using American resources that were desperately needed elsewhere.

Ultimately, Marshall warned, the United States would “have to be prepared to take over the Chinese Government, practically, and administer its economic, military, and government affairs.” That would “involve [the U.S.] Government in a continuing commitment from which it would be practically impossible to withdraw,” as well as a “dissipation of resources” that would “inevitably play into the hands of the Russians.” Yet to Marshall, the challenge was not just about resources. A full-scale military commitment would involve “obligations and responsibilities … which, I am convinced, the American people would never knowingly accept. We cannot escape the fact that the deliberate entry of this country into the armed effort in China involved possible consequences in which the financial costs, though tremendous, would be insignificant when compared to the other liabilities involved.”

Just a few years after Marshall and Mao toasted a future of peace and friendship, the Communists conquered all of China, and Chiang fled to Taiwan. At the height of his mission, Marshall had been hailed by figures across the American political spectrum for having “saved” China. Now he was savaged for having “lost” it.

The implication—that American policy makers had, out of some combination of timorous passivity and treasonous perfidy, lost China to Communism—set off one of the darkest-ever turns in American civic life. In a three-hour tirade against Marshall and “the criminal folly of the disastrous Marshall Mission,” Senator Joseph McCarthy spoke of “a conspiracy so immense and an infamy so black as to dwarf any previous venture in the history of man.” (McCarthy had this speech published as a book, America’s Retreat from Victory: The Story of George Catlett Marshall.) In the McCarthyist fervor that followed, even Marshall’s protégé, Dwight Eisenhower, would fail to defend him when campaigning for president at McCarthy’s side.

For generations of Cold War policy makers and strategists, the lesson was clear: They could not leave themselves vulnerable to charges of having “lost” a country to Communism. “God almighty,” Lyndon B. Johnson said as he agonized over an intervention in Vietnam that he doubted would succeed, “what they said about us leaving China would just be warming up compared to what they’d say now.” Some of his contemporaries went a step further, calling Vietnam an opportunity to pursue the course that should have been pursued in China a decade and a half before. Even into the 1980s, the analogy would maintain its grip, with the “loss” of China invoked as an argument for intervention elsewhere.

But Marshall himself drew different lessons from failure, especially when it came to the global Cold War struggle against Soviet-backed Communism that was just beginning as he took over as secretary of state. “The benighted people, the little people of the earth, have begun to realize how tragic their situation is, how unfair,” he observed. “The Communists seize this growing revolt as a spring-board for their own purposes. They use it. We have largely ignored it through the years, with all our kindly and generous feelings toward our fellow men. Much of our present troubles spring from this source.” Yet while he recognized a need for American leadership in addressing this challenge, he also recognized the limits of what American power could achieve on its own. As he stressed, “The main part of the solution of China’s problems is largely one for the Chinese themselves.”

When facing the prospect of collapse in Europe as the Cold War began, it was these lessons that Marshall applied. He saw the need to address “hunger, poverty, desperation, and chaos” as a precondition to averting the spread of Communism, as well as the need for America’s partners to take certain steps before American help could be effective. He stressed these basic principles to a new State Department unit, the Policy Planning Staff, charging it with finding a way to prevent devastation in Western Europe from opening the way to Soviet domination. The result was the Marshall Plan—the biggest foreign-assistance effort in American history, and arguably the greatest accomplishment in the history of American foreign policy.

When I joined the Policy Planning Staff more than six decades later, at the beginning of Barack Obama’s presidency, both senior government officials and prominent outside commentators continued to invoke Marshall’s example and call for a version for our own time—a Marshall Plan for Southeast Asia, a Marshall Plan for Central America, a Marshall Plan for Tunisia or Egypt or the entire Muslim world, even a Marshall Plan for the decaying American interior. Never mind that these calls were coming amid an acute financial crisis and budget shortfalls, while the actual Marshall Plan’s contribution was, as a percentage of GDP, equivalent to around 1 trillion dollars today.

Marshall’s China mission, meanwhile, remained largely unknown, even though it might have been a more valuable object of study. In it, you see the cycle of great expectations and bitter disappointment that continues to characterize America’s relationship with China. You see the hard questions of when and whether to intervene and how to aid partners who may not govern or fight the way we think they should. You see the reality of a foreign policy that must reckon with wicked problems and manage the consequences of failure.

But the echoes go beyond specific foreign-policy concerns. As Americans agonize and argue over fears of national decline, the story of Marshall’s China mission is, in one sense, sobering. Even at the height of the U.S.’s power, when the country had just led the Allies to victory in World War II and accounted for nearly half the global economy, it could not solve every problem. But the story should also be reassuring. In America’s moment of greatest leadership, it did not have to solve every problem to show it was strong.

This article has been adapted from Daniel Kurtz-Phelan’s new book, The China Mission: George Marshall's Unfinished War, 1945-1947.