June 1, 1987

Thank you very much, and welcome to the White House. I'd like to thank you for being here. It's a pleasant coincidence that George C. Marshall Month, which we will proclaim today, coincides with the upcoming economic summit. I'm certain that General Marshall would approve of my taking advantage of this opportunity to speak with you also about some of our expectations, our goals, for that important gathering.

First and foremost, today we gather to honor George C. Marshall, a gallant soldier, a visionary statesman, and an American who set a standard of honor and accomplishment for all who have followed. George Marshall is the only professional soldier ever to win the Nobel Prize for Peace. It was a fitting tribute. Even in time of war, Marshall was a champion of peace. During his tenure as Chief of Staff of the United States Army, a war -- the greatest conflagration in human history -- was won, and that victory was not a triumph of conquerors in a struggle for power and domination, but a desperate fight of free peoples for the preservation of the humane values and democratic institutions they held dear.

What made the Second World War different from all those that had preceded it was that Western civilization, by its outcome, was left in the hands of leaders like George Marshall, individuals dedicated to ideals which were not forgotten after the enemy was vanquished. It's difficult in this time of plenty to imagine the destitution, devastation, and hopelessness that pervaded Europe after the close of the Second World War. The conflict had taken the lives of millions of Europeans, many of them the young leaders who are the greatest asset of any society. Resources used to fuel the war machines were gone. Great destruction had been brought upon the face of Europe. Germany lay in almost total ruin. Throughout the rest of the continent, cities and factories were in disrepair; the whole economic infrastructure had been devastated. The monumental job of rebuilding seemed overwhelming.

It was at this time of despair when, under the leadership of wise and decent individuals like George C. Marshall, by then Secretary of State, our country stepped forward with a program Winston Churchill referred to as the ``most unsordid act in history.'' Forty years ago June 5th, Secretary of State George Marshall gave the commencement address at Harvard University. In it he laid out a proposal for the reconstruction of Europe, the foundation for what has been the most remarkable period of peace and prosperity in the history of that continent.

In today's money, the Marshall plan was a commitment of extraordinary proportions, about $60 billion. And with that, industry, large and small, was provided capital; harbors, canals, roads, electric systems were rebuilt; and the production lines began to roll as Europe went back to work. The Marshall plan was an investment America made in its friends and in the future. If it had simply been a gift of resources, it would likely have been a colossal failure. The success of this greatest of undertakings, the rebuilding of a battle-scarred continent, can be traced to goals that are easily distinguished from the mere transfer of money.

First, it was designed to generate hope where there was none. George Marshall, as a soldier, well understood the role of motivation. ``It is the spirit which we bring to the fight that decides the issue,'' he once wrote. ``It is morale that wins the victory.'' George Marshall's speech was viewed by many Europeans as a lifeline thrown to them at a time when they were foundering. It gave them reason to work, to build, to invest. And in short order, purpose replaced aimlessness; enterprise replaced inertia.

The second and most important goal of the Marshall plan was to provide incentives for Europeans to find common ground, to bring down the political barriers which stifle economic activity and growth. Our leadership helped officials overcome local interest groups and work with other governments to beat back the pressures for protectionism and isolation; to free the flow of commerce, materials, and resources across international frontiers; to integrate transport and power systems; and to develop economic and political ties that would serve as an engine for progress.

The Marshall plan led to the creation of institutions that today are pillars of the free world's economy -- the European Economic Community, the General Agreement on Tariffs and Trade, the OECD -- and created the environment where the World Bank and the IMF could function. The Marshall plan was an act of generosity, but it was not a giveaway program. Instead, it was the beginning of a process of cooperation and enterprise that has carried the peoples of the Western democracies to new heights. But there was one most important achievement, too much overlooked. A reading of history reveals that in past wars, the peace settlement laid the foundation for the next war. Hatreds and enmity remained. And today we have known 40 or more years of peace, and one-time enemies are the closest of friends and allies as a result of the Marshall plan.

With us today is an individual who, at President Truman's direction, took a central role in polling the leadership, gathering the ideas, and putting together a comprehensive overview of foreign policy strategy. This effort was the genesis of the Marshall plan. His dedication, creativity, and resourcefulness were of great service to his President and his country at that pivotal moment. And Clark Clifford, we are proud to have you with us today.

Now, in a few days, I will leave for the economic summit in Venice. It will be the 13th time the 7 major industrial democracies have so met, and the 7th time I've been privileged to represent the United States. While our country is still looked to for leadership, the free world is now undeniably a partnership among democracies, to a large degree because of initiatives we set in motion four decades ago. Today free world efforts -- economic, political, and security -- depend on genuine cooperation. Self-determination, as we've recognized since the time of Woodrow Wilson, is consistent with the interaction of free peoples. We sought it, and, brother, we've got it.

The Governments of Western Europe, North America, and Japan face the future together, and meetings like the economic summit build unity and sense of purpose. And that unity is increasingly important. The velocity of economic change reshaping our world is making greater demands on our governments, individually and collectively. This change flows naturally from the open economic system we've established in the West. Our peoples and countries are now operating in a global market. Instantaneous communications, multinational corporations, the flow of international investment, widespread computer technology, and the integration of financial markets are facts of life.

The progress of mankind, however, remains dependent on political as well as economic and technological momentum. Today we face challenges comparable to those that confronted struggling democracies four decades ago. We sought to achieve prosperity; now we seek to preserve it and ensure that our standard of living continues to improve. Nothing can be taken for granted. We must be active and vigorous to be successful. And we must work together. And that is what freedom is all about, and that's why we call the portion of the planet on which we live the free world. People here are not told what we must do. We talk things over and decide what to do for ourselves. There's a story about an American and a Russian. As is often the case, the American was bragging about how in the United States everyone was free to speak. Well, the Russian replied, ``In Russia we're just as free to speak. The difference is in your country you're free after you speak.'' [Laughter]

The greatest challenge for those of us who live in freedom is to recognize the ties of common interest that bind us, to prove wrong those cynics who would suggest that free enterprise and democracy lead to shortsighted policies and undisciplined self-interest. Today -- and we can't say this too often -- it is in the common interest of all of us, in every free land, to work against parochialism and protectionism, to keep markets open and commerce flowing. By definition, protecting domestic producers from competition erodes national competitiveness, slows down economic activity, and raises prices. It also threatens the stability of the entire free world trading system.

Some countries, which have taken full advantage of America's past openness, must realize that times have changed. Today any country selling heavily in the United States whose markets are not substantially open to American goods risks a backlash from the American people. No country that closes its own markets or unfairly subsidizes its exports can expect the markets of its trading partners to remain open. This point will be driven home in Venice. It was the central theme of our agreement at last year's Tokyo summit to launch the Uruguay trade round.

While the vibrancy of the U.S. economy has contributed enormously to the world expansion, preserving a growing world economy is the business of every member of the world trading community. It is the special responsibility of the larger economic powers. It will be made clear, especially to our friends in Japan and the Federal Republic of Germany, that growth-oriented domestic policies are needed to bolster the world trading system upon which they depend. We and our allies must always fulfill our agreements concerning exchange rate stability. Economic policy decisions made last year in Tokyo and at this year's meeting of Group of Seven finance ministers in Paris and in Washington cannot be ignored or forgotten. The commitments made at these meetings need to be translated into action. Talks continue to flow about the necessity of a coordinated attack on market-distorting agricultural policies, policies which are found in almost every Western country. The time to act is fast approaching.

One concern shared by the industrialized powers is what to do about the Third World countries which are not developing, not progressing, countries that, if something doesn't happen, will be left behind. Japan has made admirable strides in this direction by offering to share some of its wealth, some of its trade surplus, with lesser developed nations. I hope that during the course of this summit Japan will clarify what form this aid will take. I also hope that other countries will consider following Japan's good example.

However, as I noted about the European example of four decades ago, the transfer of cash alone is not the solution. If tax rates are too high, if markets are not free, if government is big, corrupt, or abusive, a country cannot expect to attract the expertise and private investment needed to advance, nor will its own people have the incentives needed to push their economy forward. After the war, German industry was little more than a shell. If Ludwig Erhard and Konrad Adenauer, courageous democratic postwar leaders of that country, had not dramatically, in one fell swoop, eliminated most of the intrusive controls on the West German economy in 1948, Marshall plan aid might not have had the miraculous impact that it did.

If we're serious about changing the plight of less fortunate nations, we must, at the very least, be candid with them about these economic realities, open their eyes to the secret of Germany's restoration and the secret of the amazing growth taking place on the Pacific rim. That secret is a Marshall plan of ideas. It is simply that freedom of enterprise, competition, and the profit motive work. They work so well that the United States now must maneuver with economically powerful competitors, friendly competitors.

And, yes, let us admit the recognizable friction among the great democracies about trade and economic policy. Our heated debates and maneuverings and the fact they're front-page news are a healthy sign. First, during economic movement, close friends disagree, but no one should lose sight of the impressive strides taking place. Second, the attention paid to complex economic issues, which decades ago were subject matter only for specialists, suggests the wide degree of consensus our nations have reached on the vital issues of war and peace, human rights, and democracy.

Today, the unity of the West on security issues is something which George Marshall and his contemporaries would look on with a deep and abiding pride. Marshall led America through war and out of isolationism. Like protectionism, isolationism is a tempting illusion. Four decades of European peace and the greatest economic expansion in history stand as evidence that isolationism and protectionism are not the way. We must work with like-minded friends to direct the course of history, or history will be determined by others who do not share our values, and we will not escape the consequences of the decisions they make.

Nowhere is this burden heavier than in the Middle East, a region that has been plagued with turmoil and death. If we retreat from the challenge, if we sail to a distance and wait passively on the sidelines, forces hostile to the free world will eventually have their way. Two weeks ago, we lost 37 of our sons in the Persian Gulf. They were the pride and joy of their families, fine young men who volunteered to wear the uniform and serve their country. We have none better than these. They died while guarding a chokepoint of freedom, deterring aggression, and reaffirming America's willingness to protect its vital interests.

Yet the American people are aware that it is not our interests alone that are being protected. The dependence of our allies on the flow of oil from that area is no secret. During the upcoming summit in Venice, we'll be discussing the common security interests shared by the Western democracies in the Persian Gulf. The future belongs to the brave. Free men should not cower before such challenges, and they should not expect to stand alone. And we're working together in a number of critical areas. Our friends and allies have been cooperating ever more closely to combat the scourge of terrorism. Democracies are peculiarly vulnerable to this form of international criminality, and at the upcoming Venice summit, we will give renewed impetus to the momentum which has developed in the past year.

The Western alliance, with courage and unity of purpose, has time and again thwarted threats to our prosperity and security. During the last decade, as American military spending declined, the Soviets raced ahead to gain a strategic advantage, deploying a new generation of intermediate-range missiles aimed at our European allies. This hostile maneuver, part of a long-term strategy to separate Europe from the United States, was countered by a united alliance. Pershing and cruise missiles were deployed in Western Europe, even amidst the noise and clamor of sometimes violent opposition and an intensely hostile Soviet propaganda campaign. Let no one forget, 6 years ago we offered to refrain from deploying our intermediate-range missiles if the Soviets would agree to dismantle their own. It was called the zero option. The other side refused. At that time, a vocal minority in Western countries, including the United States, suggested if we moved forward with deployment of our Pershing and cruise missiles all hope of arms control agreements would be lost.

The pessimists, however, have been proven wrong, and Western resolve is paying off. In recent months, we've witnessed considerable progress in our talks with the Soviet Government. The Kremlin now in principle accepts the zero option formula in Europe, and our negotiators are busy seeing if the details can be worked out. In short, we may be on the edge of an historic reduction of the number of nuclear weapons threatening mankind. If this great first step is taken, if nuclear arms reduction is achieved, it'll be due to the strength and determination of allied leaders across Western Europe who refused to accept the Soviet nuclear domination of Europe. European leaders, and indeed most Europeans, have come to understand that peace comes only through strength. Strength and realism are the watchwords for real progress in dealing with our Soviet adversaries.

As we view changes which seem to be happening in the Soviet Union with cautious optimism, let it be remembered that, four decades ago, the Kremlin rejected Soviet participation in the Marshall plan. If the current Soviet leadership seeks another path, if they reject the closed, isolated, and belligerent policies they inherited, if they wish their country to be a part of the free world economy, we welcome the change. Let there be no mistake: The Soviet Government is subject to the same rules as any other. Any government which is part of our deals with the West's major economic institutions must do so with good faith, open books, and the open government on which both depend. Economic transactions are not maneuvers for political gain or international leverage; such destructive tactics are not tolerated. Countries which are part of the system are expected to do their best to strengthen the process and institutions or be condemned to economic isolation.

The Soviet Union must also understand that the price of entry into the community of prosperous and productive nations is not just an economic price. There is a political price of even greater significance: respect for and support for the values of freedom that are, in the end, the true engines of material prosperity. Time will tell if the signs emanating from the Soviet Union reflect real change or illusion. The decisions made by the Soviet leaders themselves will determine if relations will bloom or wither. Any agreement to reduce nuclear weapons, for example, must be followed by reductions in conventional forces. We are looking closely for signs that tangible changes have been made in that country's respect for human rights, and that does not mean just letting out a few of the better known dissidents. We're waiting for signs of an end to their aggression in Afghanistan.

This year is also the 40th anniversary of the Truman doctrine, which fully recognized the need for economic assistance, but underscored the necessity of providing those under attack the weapons needed to defend themselves. On March 12, 1947, President Truman addressed a joint session of Congress and spelled out America's commitment. ``It must be the policy of the United States to support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures. I believe that we must assist free peoples to work out their own destinies in their own way.'' So said Harry Truman.

Nineteen forty-seven was a volatile political year for our country. I was a Democrat back then. President Truman was under attack from both sides of his own party, and the opposition controlled both Houses of Congress -- and believe me, I know how frustrating that can be. Even amidst the deep political divisions so evident in 1947, the Marshall plan and Truman doctrine were approved by Congress. In the end, it was our ability to overcome our own domestic political discord and forge a bipartisan approach that made the difference. Greece and Turkey were saved; Western Europe was put on the path to recovery; human freedom was given a chance. Democracy has its weaknesses, but its strengths will prevail.

I leave for Europe with confidence. This generation of free men and women, too, will work together and succeed. We will pass on to our children a world as filled with hope and opportunity as the one we were handed. We owe this to those who went before us, to George C. Marshall and others who shaped the world we live in. With this said, I will sign the order proclaiming George C. Marshall Month. Thank you, and God bless you.

Note: The President spoke at 3:07 p.m. in the East Room at the White House. In his remarks, he referred to the Group of Seven, the countries that participated in the annual economic summit meetings.