The Cold War 1945-1991
1. There were two sides to the Cold War; each represents an economic ideology.

Capitalism: All industry, business and agriculture should be owned by private people or firms. Competition between rival factories or shops or farms will cause prices to fall and make business more efficient.
 Any person should be free to start a business and employ people
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Any profit he or she makes is reward for hard work

Average standard of living is higher than under Communism
 Opportunity for all
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A free economy
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Choice of many parties for Government; chosen by the people; a democracy

Communism: Everything belongs to the state and should be run by the government on behalf of the people. A classless society achieved by overthrowing capitalism by revolution.

No private person should be allowed to profit from the work of other citizens
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All profits, instead of going into the pockets of one owner or even shareholders, goes to the state –everyone benefits

Lower average standard of living, but (in theory) everyone equal

Fairness and equality for all
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A controlled economy
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Only one party of Government –no need for any more
 The United States wanted to…

Create a new world order in which all nations had the right of selfdetermination
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Gain access to raw materials and markets for its industries
 Rebuild European governments to ensure stability and to create new markets for American goods

Reunite Germany, believing that Europe would be more secure if
Germany was productive
 The Soviets wanted to …

Encourage communism in other countries as part of the worldwide struggle between workers and the wealthy

Rebuild its war-ravaged economy using Eastern Europe’s industrial equipment and raw materials

Control Eastern Europe to balance U.S. influence in Western Europe

Keep Germany divided and weak so that it would never again threaten the
Soviet Union
2. Background:

At the Potsdam Conference in 1945, Truman and the West had the bomb and were anxious to restrict Russia. Truman had been horrified at the pre-war Allied policy of appeasement.


The alliance of Britain and the U.S with the Soviet Union was pragmatic; need to defeat Germany. Neither Churchill nor FDR trusted Stalin; neither told Stalin about the atomic bomb.

The Truman Doctrine in March 1947 promised that the U.S. “would support free peoples who are resisting subjugation by armed minorities or by outside pressures.” The doctrine was triggered by the British’s inability to hold the line in
Greece; it was followed by aid to Greece and Turkey, and included money to secure upcoming elections in Italy and the advance of Communist trade unions in
France. This signaled the end of “isolationist” policies and George Washington’s
Farewell Address that had warned of “entangling alliances.”

The Marshall Plan reflected the strength of the U.S. economy and offered huge sums to enable war shattered economies of Europe to rebuild and, by generating prosperity, to reject the appeal of Communism. Czechoslovakia showed interest in receiving Marshall Aid but was blocked by Russia. The U.S. sent 17 million dollars and much aid came in the form of goods made by American firms. The
Soviet system was as much dependent upon creating a self-contained economic bloc as it was in maintaining a repressive political system.

The U.S., Britain, China, and Russia met I 1944 to discuss plans for a new organization to replace the League of Nations. The U.N. was formed at the San
Francisco Conference in April of 1945. It was composed of a Security Council with 11 members with veto power and permanent seats for the five major powers
–U.S., France, Great Britain, China, and the USSR. The
Secretariat, headed by the Secretary-General was to handle day-to-day affairs. The General Assembly was made up of delegates from each member nation; the USSR was to get three votes per Yalta. Finally, there was to be an International Court of Justice to deal with legal disputes between members.

There were to be free election in Poland the following year but a communist government was formed with no elections. Countries that bordered the USSR were pressured to establish communist governments. Churchill responded with his
“iron curtain” speech in March 1946, declaring the USSR’s intentions were to control Eastern Europe and expand power throughout the world.

West Berlin, as an outpost of Western democracy and economic success deep within the Communist zone, was both a nest of spies for both sides and a constant challenge to the Soviets. The Berlin Blockade was an attempt to starve the city into submission and the Allied airlift signaled the West’s determination to use all resources to defend Berlin. Thereafter, it was accepted by both sides that Berlin would act as the trigger for general war. Any Russian invasion would be followed by conflict with the considerable Allied forces camped permanently on the plain of West Germany. Both sides finding Europe too dangerous a site for confrontation looked elsewhere to compete.

Twelve nations (10 European nations, Canada, and the U.S.) formed NATO in
1949 in an attempt to provide collective security and resist Warsaw Pact nations expansion.

In the United States, the second
“Red Scare”
launched by Senator Joseph
McCarthy, dominated U.S. politics for several years (1948-53) and helped pressure Truman into the Korean War, a costly and ultimately stalemated conflict.

Given the sudden fall of China and the development of the Soviet bomb, the level of panic is perhaps understandable.

In 1847, the government began loyalty checks of government workers because of the fear of communist infiltration. The House Un-American Activities Committee held numerous public hearings and ruined reputations of blacklisted individuals, including many from TV, radio and the movies.
 Causes of McCarthyism: o Soviets successfully establish Communist regimes in Eastern Europe after WW II o Soviets develop the atomic bomb more quickly than expected o Korean War ends in a stalemate o Republicans gain politically by accusing Truman and Democrats of being soft on communism

Effects of McCarthyism: o Millions of Americans are forced to take loyalty oaths and undergo loyalty investigations o Activism by labor unions goes into decline o Many people are afraid to speak out on public issues. o Ant-communism continues to drive U.SD. foreign policy

Alger Hiss, former State Department diplomat was accused of disloyalty by
Whittaker Chambers, a confessed Soviet spy. Hiss sued Chambers for libel, but was convicted of perjury in 1950. Richard Nixon made his anti-communist reputation on this case. In 1950, McCarthy contended that the State Department was riddled with communists. His lack of proof was his eventual undoing as he was reprimanded by the Senate.
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The McCarran Internal Security Act was passed in 1950 which required communist and “communist-front” organizations to register with the Justice
Department. Membership lists and financial statements were required. The president was given broad powers to detain potential enemies; Truman vetoed the bill as “a long step toward totalitarianism” but it was passed over his veto.

During this period, Ethel and Julius Rosenberg were arrested, tied and executed in
1951 for providing atomic secrets to the Soviet Union.

Truman restricted his anti-Soviet policy to one of “ containment
” resisting the advance of Communism into South Korea and other vulnerable countries. When
General Douglas MacArthur attempted to roll-back Communism by invading
North Korea with an eye on China, Truman fired him. The beginning of the
Korean War also highlighted the failings of the United Nations.

Up until 1950, Russia and the United States had respectively blocked each other’s initiatives by using their veto powers in the Security Council. Because the
Russian delegates were boycotting the UN in 1950, Truman was able to condemn the Communist invasion of South Korea and to set up a counter-attack under the banner of the UN. In contrast to the pre-War League of Nations, at least this

ensured that the UN would, in the future, be able to deploy force in international disputes.