Chapter Content
Alright, so let's talk about the Cold War. You know, that weird time after World War II where things were... tense. I mean, the war was over, right? Supposedly, everyone was on the same team after taking down like, the ultimate bad guys. But, uh, it didn't really work out that way.
See, all those pre-war issues, like, you know, militarism, imperialism, racial stuff, cultural rivalries, they didn't just disappear. They were still lurking around, ready to cause trouble. And, boy, did they ever. They morphed into this massive, nightmarish thing – the Cold War between the US and the Soviet Union.
But here’s the crazy part, and it's a big BUT. Despite all the tension, the near-misses, the massive arms race, the Cold War didn't exactly stop progress. It might have even, get this, sped it up!
I know, it sounds counterintuitive. Like, how can a conflict that almost ended the world actually be… beneficial? Well, that’s not obvious. The Cold War was constantly dancing on the edge. It invested a ton in weapons that could wipe us all out. Things could have easily gone south, like, really, really south.
But you know what? It also kind of kept other conflicts in check. So even though it was a source of tension, it paradoxically stopped other things from getting too out of hand.
And speaking of paradoxes, check this out. Nikita Khrushchev, this guy who was basically Stalin's right-hand man, a pretty brutal guy, actually ended up being, like, a winner in a weird way. He was all about peaceful coexistence and competition. He said, and I quote, "Let us try out in practice whose system is better, let us compete without war. This is much better than competing in who will produce more arms." He wanted competition to improve people's lives. He thought whatever system improved people's lives the most would win.
And get this, this is the guy who also famously said the USSR would "bury" capitalism! But by 1990, even the guys in the Kremlin knew that socialism, the way they were doing it, wasn’t working. The capitalists didn't bury them. They just didn't. But the Cold War ended with one system, yeah, you guessed it, offering a better life.
It's kind of amazing when you think about it.
You know, after World War II, the Allies formed the United Nations. It was supposed to be a way to, you know, cooperate and build a better world.
But according to Marxist-Leninist theory, a true peace wasn't really supposed to happen. Lenin believed capitalism needed imperialism, and imperialism led to militarization. All that meant weapons and colonies, and that meant jobs. That also meant war, which the capitalists needed to delay revolution. So, it was revolution because of the economy or revolution because of political fighting. According to Lenin, neither could be avoided.
Then you had Stalin and his crew, and they had a five-point plan. Point one: beef up the military to protect socialist countries. A lot of Americans wanted to start World War III right after World War II, so this was reasonable. Point two: spread socialism. Point three: improve the Soviet economy. Point four: help socialist movements in other countries. And point five: lay low.
Their plan was basically defend, rebuild, and wait. Waging a cold war wasn't a part of the plan!
Now, over in the West, people weren’t exactly jumping to get involved in another conflict. Western Europe was exhausted. And while General Patton was all about taking his tanks to Moscow, most people thought that was a little crazy. After years of war, nobody wanted to send more people to die.
Stalin was a brutal dude, and he really liked to grab land on the cheap. But even he was a little cautious. He kept his ambitions in check for the most part. Marx said capitalism would collapse on its own. No need to rush things.
The Great Depression was very recent, so people really believed central planning would work out in the end. One economist, Paul Sweezy, said that the socialist countries would improve and the capitalist countries would struggle. A British historian named A. J. P. Taylor thought nobody in Europe really believed in private enterprise.
But of course, Stalin couldn't resist taking Czechoslovakia in 1948. And Mao decided to ignore Stalin and chase Chiang Kai-shek out of China. People were concerned, and socialism was starting to look kind of bad. The more outsiders looked, the worse it seemed.
It was turning into the newest version of Russian imperialism. So expansion began, and the US felt they had to do something about it.
The Truman administration thought that the US leaving the world stage after World War I had helped cause World War II. They wanted to make different mistakes. They saw Western Europe heading towards socialism. They'd lost faith in the market because of the Great Depression. And remember, the Soviet Union was reporting high growth rates. Lots of people thought central planning would rebuild Europe faster than markets could.
You can imagine Western Europe maintaining all the controls they used during the war to avoid shifting money around. They might have restricted the market and rationed things. It would have led to economic stagnation. From the perspective of the time, this was a real danger.
In fact, State Department officials worried that Europe might be dying. There was a risk of the economy just collapsing. War had already shown Europe the value of rationing, and the working classes were pushing for communism to get into a permanent ruling coalition. European politics had divided everyone along class lines for a couple of generations.
After World War I, Europe had grown poorly. If the same thing happened again, Western Europe might have voted to join Stalin.
But Europe pulled through. And by 1951, they were doing even better than they had before the war. The Western European economies had grown faster than they had after World War I.
They established social programs, but the market remained as well. There was actually a bit of resistance. But markets eventually worked, and the continent recovered. There was significant government ownership and redistribution, but the market was still the center of it all.
So, how did Western Europe do so well after the war?
Well, first you had the American administrations of Franklin D. Roosevelt and Harry S Truman. They had more power abroad than at home. They ran Japan and West Germany. They gave Western Europe direct relief, military support, loans, and access to US markets. This shaped their policies in ways that the US liked.
The US decided to build up Western Europe politically, economically, and militarily. The Truman Doctrine called for the "containment" of the Soviet Union. As one columnist put it, "One way of combating Communism is to give western Europe a full dinner pail."
Truman used Secretary of State George C. Marshall's reputation to get the Truman Doctrine, the Marshall Plan, and NATO through Congress. To do so, he made a deal with influential Republican senator Arthur Vandenberg. The plan was named after Marshall and not Truman because Truman knew it wouldn't pass if it had his name on it.
The Marshall Plan was a multiyear project. From 1948 to 1951, the US gave $13.2 billion to European recovery. About 1% of US national income went to it over the years the program ran. In Western Europe, that was about 3% of their national income.
The money did increase investment. Roughly 35 cents of every dollar went to investment. An extra dollar of investment raised national product by 50 cents the following year. The money relaxed foreign exchange constraints and made things like coal, cotton, and petroleum more available.
But the Marshall Plan's effects were small potatoes. It probably only increased investment by 1% of GDP. Yet Europe grew way more than expected.
The political-economic effects were what really made a difference. The US enthusiastically embraced its role as the world's hegemon. The fact that there was a hegemon made some things possible, and it made everything easier because everyone knew how to coordinate.
Marshall Plan aid was given on the condition of successful financial stabilization. Countries had to agree to balance their budgets, restore financial stability, and stabilize exchange rates. To balance their budgets, they needed to resolve political conflict. The Marshall Plan provided the resources for this resolution.
The resources didn't obviate sacrifice, but they increased the size of the pie.
And institutions like the European Coal and Steel Community and the World Bank were founded at this time. Harry Dexter White and John Maynard Keynes designed a system to globalize the world for good. The World Bank would finance parts of the world ruined by war, and the IMF would manage currency values. The Cold War gave life to these institutions.
There was supposed to be an International Trade Organization (ITO), but the Truman administration decided it was too much to push through Congress. Openhanded cooperation was out, and assistance in the long twilight struggle between the free world and global communism was in. Instead, there was the General Agreement on Tariffs and Trade (GATT), which negotiated gradual reductions in tariffs.
Much of the credit for Europe's successful reconstruction belongs to these acts of cooperative international statesmanship. The Marshall Plan era saw the creation of the social democratic "mixed economy," which had price freedom, market forces, public ownership, and public demand management.
But one of the most important factors was the very real totalitarian threat from the Soviet Union. People were more willing to work with each other when faced with the danger. They came to fear the Soviet Union and wanted a US presence in Europe to deter aggression.
It was like the Soviet forces in Germany concentrated everyone's mind on making NATO and the European Union a success.
By 1948, the US government had plans to wage a real cold war. But those plans remained fantasies until the Korean War.
In 1950, Kim Il-Sung wanted to take over South Korea and asked Stalin for help. Korea was divided at the 38th parallel, with the Soviet Union overseeing the north and the US overseeing the south.
There were no US garrisons in the south at the time. Dean Acheson even announced that the US defense perimeter in the Pacific was the Aleutians, Japan, and the Philippines. He implied that Korea wasn't worth defending. The United States was in favor of decolonization, which meant it would likely not guarantee to keep fighting.
Acheson's speech may have been what pushed Stalin to let Kim Il-Sung invade. And then the US surprised Kim, Stalin, Mao, and themselves by rallying the United Nations to send an army, largely made up of US troops, to defend South Korea.
Fighting raged across the Korean Peninsula. In three years, 1 to 2 million Korean civilians died, 5 to 10 percent of the population, and 400,000 South Koreans were abducted. In military dead and missing, there were 500,000 Chinese, 300,000 North Koreans, 150,000 South Koreans, 50,000 Americans, and 4,400 more. The US Air Force dropped half a million tons of bombs during the war, which was 40 pounds for every North Korean alive at the time.
The US didn't use nuclear weapons. General Douglas MacArthur asked for them when the Chinese army forced the UN army to retreat. The Pentagon and President Harry Truman refused.
Starting in March 1951, the battlefront stabilized near the 38th parallel. Truman began to seek a cease-fire and a return to the status quo ante.
On March 5, 1953, Joseph Stalin died of a stroke. His heirs decided that the Korean War was pointless and should end. The UN prisoner-of-war position was adopted, so POWs could choose not to return.
And so North Korea continued under the autocratic rule of the Kim dynasty, and South Korea remained an independent democracy.
The Korean War changed the world by turning the US toward much greater annual military expenditure and giving it a global reach. The US took up a new role.
Germany looked analogous to Korea. Stalin's successors were mostly unknown. By the mid-1950s, there was a full US army sitting in West Germany in case Stalin's successors tried to reunify Germany by force.
What had been national security fantasies became reality. US national security spending rose to 10 percent of national income. The weapons were largely unused, but their purchase supported demand and employment in the United States.
This spending allowed the US to project its Cold War military might. The US deployed troops and established military bases around the world. A lot of the US national product was "net military transactions," which meant expenditures abroad by the US military that didn't bring any money back. This offset the end of the Marshall Plan. NATO provided demand for European production during Europe's economic booms.
Which brings us to nuclear weaponry.
From 1956, the Soviet Union's policy was "peaceful coexistence." War between the superpowers was off the table. The US and the USSR would coexist, with the Soviets lying low and demonstrating socialism's advantages.
From 1954, the US policy became "massive retaliation." Secretary of State Allen Dulles made it clear that the US would respond "vigorously at places and with means of its own choosing." This meant that a nuclear response to a conventional attack was not off the table.
Each side viewed the other as an existential threat, which led to both sides becoming existential threats.
Nuclear forces that US planners regarded as inadequate to deter a Russian strike struck Russian planners as dangerously close to being able to devastate the Soviet Union.
But the key word in Dulles's speech was "contain." As diplomat George Kennan put it, the right strategy was "holding the line and hoping for the best." He said that Soviet pressure could be contained by the "adroit and vigilant application of counter-force."
Kennan also said that "The issue of Soviet-American relations is in essence a test of the overall worth of the United States as a nation among nations." He believed that America's security depended on its ability to pull itself together and accept the responsibilities of leadership. He truly believed in American Exceptionalism.
American leaders overwhelmingly agreed with him. Totalitarianism loomed large. Nazi Germany had been defeated, but Stalin's and Mao's systems of socialism were growing. The nations that comprised them were materially weak, but they were populous.
Most US leaders didn't panic. Deterrence would control the nuclear threat. They believed bureaucratic ossification was the destiny of socialism if it was contained and outwaited. And you know what? They were right.
Soviet leader Nikita Khrushchev also said, "Whether you like it or not, history is on our side. We will bury you." What he meant was "We will outlast you." He clarified later that he meant the working class would bury them. Russia had lost millions in World War II. Nobody in Russia wanted World War III.
And so the world entered a stable equilibrium, although you had to squint to see it.
Khrushchev had reasons to be confident, not because of socialism, but because market economies can fail. Market economies can only work well if the market weights each individual's well-being appropriately. If my wealth is just my ability to work in someone else's field, and if the rains don't come, then the market will starve me to death.
Central planning could, theoretically, succeed. The Soviet economy had proven effective in building tanks. The centrally planned economy could also more easily divert resources from consumption to investment. The USSR's higher share of national income devoted to investment might outweigh the inefficiencies of central planning.
And there was never any good reason to believe that market economies were superior in technology. The launch of Sputnik, the first satellite, was a wake-up call.
The post-World War II world stood under the shadow of nuclear war. And there were other problems as well, forms of militarism and imperialism and rivalries.
For example, President Dwight Eisenhower boasted about how the CIA had entrenched Mohammed Reza Pahlavi as shah in Iran, keeping the Middle East from going communist.
Two decades later, watchers of peaceful coexistence would have followed the attempts of Chile's president, Salvador Allende, to build "socialism with a human face." But Cold Warriors sought the military coup by general-turned-dictator Augusto Pinochet, along with mass executions. On the other side of the Iron Curtain, watchers would have welcomed Czechoslovakia's Alexander Dubček's attempts to build "socialism with a human face," but Leonid Brezhnev sent in the tanks.
But for some colonized nations, the Cold War was a blessing. They could push for decolonization by saying that the Russians and the Chinese would take advantage of the situation. After independence, they could declare themselves "nonaligned," following the movement that started at the Bandung Conference. The more important the nonaligned state was, the more both sides would be willing to support a nonaligned government.
Of course, the hotter the Cold War became, the more likely that one of the superpowers would step in. Yugoslavia and Finland managed to do things their own way, but the Red Army stepped in to discipline East Germany in 1953, in Hungary in 1956, in Czechoslovakia in 1968, and in Afghanistan in 1978. The United States sponsored coups or sent troops to overthrow governments in Iran and Guatemala in 1954, Cuba in 1961, Chile in 1973, and more. And there were the cases where the Cold War turned hot: Korea (5 million dead), Vietnam (2.5 million dead), Ethiopia (1.5 million dead), and more.
Some governments attacked their own societies. Between 100,000 and 500,000 Indonesians were killed in 1965. The Khmer Rouge killed perhaps 2 million Cambodians for no reason whatsoever, and China and the US still backed them.
As bad as these butcheries were, there was always the potential for even more disastrous outcomes.
For example, humanity was on the edge of thermonuclear war during the Cuban missile crisis of October 1962. Nikita Khrushchev was surprised by John F. Kennedy's reaction to Russia's deployment of missiles in Cuba. In the end, the US promised not to overthrow Fidel Castro, and Russia withdrew its missiles from Cuba. More quietly, the US withdrew its missiles from Turkey.
It has gone down in American political historical lore that Russia blinked. But Russia was the reasonable one, willing to lose face. A lot of misleading histories were written over the next couple of decades based on that.
There were other teeters.
In 1960, the moonrise was mistaken by NATO radar for a nuclear attack. In 1967, NORAD thought a solar flare was Soviet radar jamming. In 1979, the loading of a training scenario onto an operational computer led NORAD to call the White House, claiming the USSR had launched 250 missiles. In 1983, Soviet Lieutenant Colonel Stanislav Petrov refused to classify a missile sighting as an attack, correctly saying it was an error.
That same year, the Soviet air force shot down an off-course Korean airliner. In 1988, the US Navy shot down an Iranian airliner.
Sometimes the Cold War went badly. And sometimes it threatened to go very, very badly.
The Cold War could have ended horribly, or with an Eastern Bloc victory. People made a difference. Those who kept the Cold War from getting hot and who helped make the social democratic Western alliance its best self.
There was a deadly serious underlying contest. Two systems were purporting to have their people's interests in mind. And in 1990, one of those two was better. But the "West" didn't so much prove its system to be the best as it proved its system not to be worse.