Climax of Capitalism, The by Kemp Tom

Author:Kemp, Tom [Tom Kemp]
Language: eng
Format: epub
ISBN: 9781317870739
Publisher: Taylor and Francis

The Cold War

While the United States government was thus advocating the opening up of the world market through lower tariffs and the breaking up of preferential trading systems, it found, to its chagrin, that a large part of the world was being closed to it, first by the extension of Soviet influence into Eastern Europe and, from 1949, in Asia by the success of the Chinese Revolution. The Iron Curtain was above all a barrier to trade and investment, while the Soviet system seemed poised to advance westward by military, as well as political and ideological, means. As the antithesis of free enterprise and market choice, it appeared to pose a threat to the fundamental bases of the American way of life. What is more, it appeared to have a fatal attraction for malevolent, or misguided, people in other countries and even in the United States itself. With the Soviet economy battered by the war and the enormous destruction and loss of life, it is doubtful whether the Red Army was in any position to move westward. Indeed, Stalin's policy, as expressed at the Yalta (February 1945) and Potsdam (July 1945) conferences, was a division of the world in which the Soviet sphere of interest would be recognized and guaranteed. The failure of the Americans and the British to reach agreement with Soviet representatives about the future shape of Europe, in an atmosphere of gathering mistrust during 1946-7, provoked partly by American possession of the atomic bomb, provided the breeding ground for the Cold War. A new era of international affairs had opened, with the division of the world into two antagonistic power blocs with incompatible social systems. It was now assumed, on the American side, that the Soviet Union was prepared to take by force what it had failed to secure by negotiation. Free market capitalism thus faced a challenge which would have to be met with military means. The United States now became committed to the possession of superior military force both in conventional weapons and in the new means of mass destruction of the nuclear age.

Resistance to the real or imagined expansionary goals of the Soviet Union could not be successful without the support of the other capitalist countries: former enemies as well as allies from the Second World War. Cold-War strategy required that American troops should be stationed on European territory and that the European countries should contribute their own contingents (formalized by 1949 in the North Atlantic Treaty Organization, NATO). In the period immediately after 1945, the West European countries, including the victors, were having an increasingly hard struggle to revive their economies. The defeated countries (including Japan) were grappling with enormous problems of reconstruction. The earlier American policy of reducing their industrial potential was abandoned under the pressure of the Cold War. The victor powers had to overcome the results of pre-war depression and war-time destruction and dislocation. They lacked the means to finance recovery and modernization principally because they could not afford to pay for necessary imports of raw materials and capital goods.

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