Western Prosperity and Eastern Communism

Western Prosperity and Eastern Communism

Introduction

• The post-World War II era saw the ideological conflict between democracy and communism intensify, leading to the Cold War between the United States and the Soviet Union.

• This conflict manifested in differing economic systems in Western and Eastern Europe, reflecting contrasting views on the relationship between the individual and the state.

Economic Growth and the Welfare State in Western Europe

• Governments in Western Europe increased their involvement in economic management after World War II, continuing practices from World War I, the Great Depression, and World War II.

• Post-war growth was used to enhance social welfare benefits for citizens, marking a new dynamic where the state took responsibility for basic individual needs.

• Economic challenges later in the 20th century led to criticism and limitations of the welfare state.

Marshall Plan

• Proposed in 1947 to aid Europe in rebuilding infrastructure and industry after World War II.

• The U.S. Secretary of State, George C. Marshall, believed economic stability would prevent the spread of communism.

• Offered 13 billion for economic recovery programs.

• The Soviet Union and its Eastern European satellites declined to participate.

Western Europe Recovers

• Marshall Plan funds stimulated rapid economic recovery and growth.

• Funds were used to purchase new equipment and raw materials.

• By 1950, European industrial output was 30 percent higher than pre-World War II levels, with steel output up by 70 percent.

• Economic growth continued through the 1960s, supported by economic cooperation in the Common Market.

• West Germany's post-war economic recovery was termed an "economic miracle."

• By 1955, West Germany's gross national product (GNP) exceeded pre-war levels, with low unemployment and wages doubling between 1950 and 1965.

• Italy experienced similar economic recovery, particularly in producing automobiles, appliances, and office machinery.

The Rise of Consumerism

• As Europe's economy strengthened, consumerism became more important both economically and culturally.

• Increased purchasing power became a key indicator of upward mobility.

• The middle class expanded, creating a larger market for consumer goods.

• Increased wages allowed working-class families to acquire middle-class items like televisions and home appliances.

• Installment buying facilitated the purchase of expensive goods.

• Automobile ownership significantly increased, growing from 5 million to 45 million between 1948 and 1960.

Expansion of Social Welfare Programs

• European economic growth enabled governments to provide welfare benefits.

• Changing economic conditions led to political debates about social welfare in the late 20th century.

Creation of the Welfare State

• Britain's Labour Party government initiated a welfare state, offering benefits like subsidized healthcare, unemployment insurance, and old-age pensions in 1946.

• Conservative governments also expanded the welfare system in the 1950s and early 1960s, including affordable housing programs.

• The British system became a model for other European states.

• Benefits for children and increased educational opportunities were introduced.

• These programs required high taxes and government expenditures, increasing from about 17 percent of gross national product in 1967 to nearly 50 percent by the 1980s.

• Most people accepted high taxes due to the benefits provided.

• The welfare state increased government involvement in people’s lives and promoted better living conditions.

Challenges to the Welfare State

• Economic growth ended with recessions in 1973-1974 and 1979-1983.

• Reduced demand for European goods led to job losses.

• Governments faced difficult decisions regarding high spending on social welfare programs.

• In 1982, West Germany's coalition government split over reducing such spending.

• Margaret Thatcher, as British Prime Minister in 1979, cut taxes and limited social welfare programs to curb inflation.

• These cuts were seen as harmful in industrial areas with rising unemployment.

• Thatcher privatized industries, yielding mixed results.

The Soviet Bloc

• Western European economies maintained free-market capitalism aspects, whereas the Soviet bloc had centrally planned economies with significant Soviet control.

• Albania and Yugoslavia were the only Eastern European countries with communist governments somewhat independent of the Soviet Union.

• Soviet control varied from being repressive to allowing limited economic and social reforms.

Centrally Planned Economies

• Soviet bloc countries had planned economies managed by a central committee in Moscow.

• Joseph Stalin’s five-year plans focused on heavy industry at the expense of consumer goods and living conditions.

• Prices were kept low, but shortages and poor quality of goods were common.

Planned Economies in the Stalinist Era

• Communist leaders in Soviet bloc countries followed Stalin’s model with similar five-year plans.

• The Council of Mutual Economic Assistance (COMECON) was established to ensure the Soviet Union benefited from the economies of the Soviet Bloc.

• The Soviets confiscated factories, railroad stock, and livestock from Eastern European countries.

• Countries were directed to focus on specific industries.

• Trade terms favored the Soviets over the satellite nations.

Social Welfare Programs

• The state provided extensive social welfare programs, such as affordable housing and healthcare, but the quality and quantity were insufficient.

• Affordable housing consisted of poorly constructed and crowded apartment buildings.

• Healthcare systems deteriorated over time due to a lack of improvements.

• Education was improved, emphasizing science and technology, with free public schools including Communist indoctrination.

Weaknesses of Planned Economies

• The Soviet economy achieved industrial growth at a great cost, including famines and restrictions on individual freedoms.

• The system was slow to adapt to technological changes and demand, leading to stagnation.

Suppression of Dissent

• Communists suppressed dissent and allowed only the Communist Party in Soviet bloc countries.

• Intellectual expression had to conform to state political goals.

• Private organizations feared to be used for political opposition were threatened.

• The recruitment of secret police reinforced suppression.

Limits on Travel

• Severe limits were placed on freedom of travel and emigration, exemplified by the Berlin Wall in 1961.

• The wall was built to prevent East Germans from fleeing to the West due to the planned economy's harsh realities.

• The Berlin Wall was a 15-foot high concrete barrier monitored by armed guards.

Changes under Khrushchev

• After Stalin's death in 1953, Nikita Khrushchev became the leader and initiated de-Stalinization policies.

De-Stalinization Policies

• Khrushchev denounced Stalin’s abusive practices in 1956.

• He eased political restrictions, allowing greater freedom of expression, and released some political prisoners.

• Economic policies were revised to be more flexible and rewarding.

• The work week was shortened to about 40 hours.

• More resources were allocated to consumer goods.

• Local decision-making about agriculture was allowed.

• However, economic policies failed to meet goals, and growth slowed between 1953 and 1964.

Revolts in Eastern Europe

• Khrushchev granted more autonomy to communist governments and eased travel restrictions.

• Slowing Soviet economy and restrictions led to revolts:

  • Poland (1956): Workers protested, and Wladyslaw Gomulka supported the Soviet Union.

  • Hungary (1956): Imre Nagy wanted a non-Communist, neutral country, leading to Soviet invasion, Nagy's execution, and Janos Kader's installment as leader.

  • Czechoslovakia (1967-1968): Alexander Dubcek eased censorship during the Prague Spring, leading to Soviet intervention.

The Collapse of Communism

• The Soviet Union remained a superpower through the 1970s and early 1980s under Leonid Brezhnev.

• Brezhnev favored the status quo and the use of military force to hold off threats to socialism, as seen in the 1968 intervention in Czechoslovakia.

• Tensions eased with the United States during détente in the 1970s; the Helsinki Accords were signed in 1975.

• More access to Western popular culture was allowed, but dissent was not tolerated.

• The rapid collapse of communism in the late 1980s was unexpected.

The End of Soviet Control

• Brezhnev emphasized heavy industries, but the overall economy slowed down.

• Inefficient use of resources, lack of productivity, and guaranteed jobs led to stagnation.

• Agricultural productivity declined, necessitating grain imports from the United States.

• Economic decline and health issues led to a sense of failure within the nation.

  Gorbachev’s Reforms

• In 1985, Mikhail Gorbachev became the leader and initiated reforms.

• His reforms included perestroika (economic restructuring) and glasnost (openness).

Perestroika

• Sought to introduce elements of a free-market economy.

Glasnost

• Encouraged open discussion of problems in the Soviet system.

• Led to media coverage of problems and protests.

• Political changes included the freeing of dissidents, competitive elections, and legalization of other political parties.

• The position of president of the Soviet Union was established and became more powerful.

The Soviet Union’s Collapse

• Gorbachev’s reforms had unexpected and destabilizing effects.

• Ethnic tensions and nationalism increased among the Soviet Union’s republics.

• Lithuania declared independence. Other republics began to push for independence.

• Conservative forces attempted a coup in August 1991, but it failed due to resistance led by Boris Yeltsin.

• in December, Ukraine, Russia, and Belarus declared that the Soviet Union no longer existed.

Satellites Break Free

• Gorbachev stated that the Soviet Union would no longer intervene militarily in Soviet bloc countries.

• The Soviet Union lost its ability to maintain control over satellite countries.

• In Poland, the Solidarity labor movement, led by Lech Walesa, gained support.

• Free elections were agreed upon, and Solidarity formed a new coalition government in 1990.

• The division between East and West Germany, symbolized by the Berlin Wall, ended.

• The border was opened in November 1989, and the Berlin Wall began to fall.

• Germany was reunified by October 1990.

New Nationalisms Rise in Central and Eastern Europe

• The revolutions of 1989 and the collapse of the Soviet Union led to new countries and governments but also ethnic tensions.

• The transition to free-market economies brought difficult changes.

Peaceful Revolutions

• Most revolutions in the Soviet satellites in 1989 were peaceful.

• In Hungary, economic reforms had been gradually instituted, and a coalition government committed to democracy and a free-market economy was formed in 1990.

• Czechoslovakia peacefully resolved ethnic differences between Czechs and Slovaks, forming the Czech Republic and Slovakia in 1993.

War in the Balkans

• The death of Marshall Tito led to the collapse of Yugoslavia.

• Separatist groups wanted to establish independent republics.

• Serbian leader Slobodan Milosevic opposed them, leading to attacks on Croatia and Bosnia-Herzegovina, and ethnic cleansing against Bosnian Muslims.

• The war ended with a peace agreement in 1995 and new boundaries.

• Another war broke out in 1998 over Kosovo, leading to ethnic cleansing against ethnic Albanians.

• The United Nations made Kosovo a protectorate in 1999, and it declared independence in 2008.

Political Instability

• When the Soviet Union ceased to exist in 1991, 11 of the 15 republics formed the Commonwealth of Independent States (CIS).

• Ethnic issues and nationalist sentiments led to political instability.

• Ethnic tensions led to armed clashes within Georgia and between Georgia and Russia.

• Russia faced political instability and ethnic conflicts, transitioning to a free-market economy with severe inflation.

• Oligarchs gained control of businesses, and demonstrations and clashes were frequent.

• Yeltsin’s use of force against rebels in Chechnya contributed to political instability.

Reflections on the End of the Cold War

• Historians have different views on why the Cold War ended.

Pressure from Citizens

• Robert J. McMahon noted criticism of President Ronald Reagan's policies.

• David Cortright argued that various citizen groups successfully pressured Reagan to end nuclear proliferation.

• The Catholic bishops' statement that Reagan’s nuclear policy was immoral put pressure on the government.

Credit to Reagan

• John Lewis Gaddis gave Reagan credit for questioning the need for the Cold War.

• Reagan needed a Soviet leader willing to negotiate to abolish nuclear weapons.

Gorbachev Lost the Cold War

• Vladislav M. Zubok argued that Brezhnev failed to improve the lives of Soviets enough to make communism appealing.

• Gorbachev's openness weakened the Soviet system, and his agreement to reduce nuclear tension gave up leverage to unite the communist world.

AMSCO Questions answers

1. The Marshall Plan was designed to help European countries rebuild after World War II, believing that a stable economy would stop the spread of communism.

2. The Marshall Plan helped stimulate growth by providing $13 billion in support, which allowed Western European nations to buy new equipment and materials, leading to a significant increase in industrial production.

3. Western Europe recovered quickly due to the funds from the Marshall Plan, which led to industrial output being 30 percent higher than before the war by 1950, along with lower unemployment and better living standards.

4. The rise of consumerism in Western Europe happened because of strong economic growth that increased people's ability to buy things, allowing middle-class families to purchase goods like televisions and cars, which shifted culture toward consumer-focused lifestyles.

5. The welfare state was created by the Labour Party in Britain in 1946 to meet the needs of people after the war, aiming to provide benefits like healthcare and unemployment support to improve citizens’ lives.

6. The welfare state faced issues such as economic downturns and criticism for high spending, which made it hard for the government to manage resources effectively when money was tight.

7. Margaret Thatcher was important as the British Prime Minister because she cut taxes and reduced social welfare programs to deal with inflation, causing much debate about how these changes affected working-class communities.

8. The Soviet Bloc included Eastern European countries with economies controlled by the Soviet Union, which were inefficient and lacked a variety of consumer goods compared to Western countries.

9. People living under the Soviet Bloc dealt with many hardships, including limited personal freedoms, poor-quality goods, and strict government control that suppressed any opposing views.

10. Khrushchev made efforts to de-Stalinize by criticizing Stalin's harsh ways, implementing reforms to improve political and economic systems, promoting a more flexible government approach, reducing work hours, and allowing local decisions in farming.

11. Mikhail Gorbachev was important because he introduced reforms meant to modernize the Soviet economy and political system, which led to a weakening of communist control and ultimately the fall of the Soviet Union.

12. The purpose of perestroika was to change the Soviet economy by adding some free-market elements to increase efficiency and productivity after years of stagnation.

13. The purpose of glasnost was to promote openness in the government, encouraging discussions about issues in the Soviet system and allowing for greater freedom of expression.

14. The Soviet Union collapsed because of Gorbachev's reforms that sparked demands for independence among republics, failed attempted coups, and rising nationalist feelings that weakened Soviet power.

15. New nationalism affected Central and Eastern Europe by leading to the creation of independent nations after communism fell, while also causing ethnic tensions that made stability in these new countries difficult to achieve.