Cold War

Cold war is a term that refers to the period of deep mutual hostility between the Soviet and Western blocs that possessed many of the earmarks of actual war except for combat. The commonly accepted time frame views the cold war as beginning in the immediate post–World War II years and ending in 1989 with the breeching of the Berlin Wall and the subsequent disbanding of the Soviet Union.

The primary arena of the conflict was the competition for superior military power measured in terms of men under arms and the development of advanced technology related to the number and lethality of atomic bombs and ICBMs (intercontinental ballistic missiles) to deliver them to their targets. But except for the marginal military conflicts in Korea (1951–1953) and Cuba (1961), when the two major belligerents narrowly escaped direct military confrontation, the cold war became a propaganda war between the proponents of the market economy (in which the demands of the citizen consumer determined the profile of production and expenditure of investment capital) and the socialist command economy (where decisions about what should be produced were made through centralized planning). At the grassroots level on both sides it was the standards of Western consumer culture that became the measure to judge the relative merits of the competing systems. It included everything from private ownership of cars and homes to the right to travel abroad.

In an arena framed by the relative merits of social versus private goods, the playing field on which the Soviet system was compelled to demonstrate its mettle was not an even one. The Soviet Union entered the cold war arena having suffered 27,000,000 casualties and a devastated industrial plant, whereas during World War II, the American industrial plant had achieved such high levels of productivity that it was able to supply Allied military needs, including those of the Soviet Union, while at the same time raising its domestic standard of living. The postwar decade in the United States witnessed an enormous leap in prosperity based on pent-up demand accumulated during the war years. The resultant prosperity reinforced the conviction of the superiority of the market economy, which was confidently touted by Western leaders as a force to liberate humankind.

While the Soviet leadership tried to rebuild their industrial base with the help of factories dismantled in East Germany as part of the reparations agreement signed at Yalta, a relatively unscathed United States offered to supply credit and risk capital to rebuild Europe's damaged economies. The strategy of the four-year plan proposed by Secretary of State George Marshall on June 5, 1947, and implemented a year later, was aimed at rolling back the dislocation and poverty left in the wake of the war that were viewed as the seedbeds for the spread of communism. The antidote was to rebuild the stricken European economies along free market lines. The investment of $13 billion succeeded beyond the imagination of the Organisation for European Economic Co-operation, the newly created agency responsible for the plan's implementation.

The Soviet Union was invited to join, but after some months of hesitation, Poland and Czechoslovakia were cautioned not to accept the offer. Instead, a campaign of threats and anticapitalist invective emanated from the Kremlin, which feared the rebuilding of German industrial power and the provisions of the program, which required dismantling of repressive state security apparatus and a full disclosure of economic status and activity.

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