Western Civ, Basic Outlines of Cold War Era in Europe (up through the 1980s)
Soviet control over Eastern Europe hardened in the late 1940s and early 1950s. The USSR formed an economic bloc with the Communist regimes in
Eastern Europe (Comecon), and used its dominance to arrange unfair trade agreements that favored the USSR. Although the economies of Eastern
Europe produced goods of higher quality than those produced in the USSR, their economies and standards of living lagged far behind those in
Western Europe. Also, the Soviet Communist Party directly interfered and intervened in the activities of the ruling Communist parties in Eastern
Europe. In general, the USSR was “conservative” in its policies toward Eastern Europe, in that it sought to prevent change. This was in part a
reaction to Moscow’s inability to control the Communist Party in Yugoslavia, which broke with the USSR at the end of the 1940s. When Communist
reform movement emerged, the USSR sent in troops to overthrow them and replace them with “reliable” Communists (examples—Hungary in 1956;
Czechoslovakia in 1968). These actions reinforced Western beliefs that the
"Communist Bloc" had aggressive intentions.
In the USSR, the end of WWII had brought little comfort. Stalin
concentrated on rebuilding the infrastructure of this shattered country (in
particular, its cities), but at the same time increased the level of
authoritarian control over the population. Indeed, at the time of his
death in 1953, Stalin was planning a new wave of purges. After Stain's
death, however, the Communist Party leadership did implement some significant
changes--the most important being the end of terror campaigns. By the late
1950s the new leadership, under Khrushchev, had denounced Stalin's
"excesses." But despite Khrushchev's many reform programs, the
Soviet leadership refused to change the basic system of one party dictatorship
and a rigid "command" economy. While in the 1950s the Soviet
economy grew at a rate similar to that of the United States, by the early 1960s
Soviet economic growth was stalling. Khrushchev, in an effort to open up
more resources for the consumer economy by winning military "parity"
[rough equality] with the US at the cheapest possible price, stationed Soviet
missiles in Cuba--a gamble that led to a confrontation with the US. This
and other debacles led to Khrushchev's ouster in 1964. The new Soviet
leadership, guided by Leonid Brezhnev, concentrated on "stability of
cadres"--providing more and more benefits to the Soviet bureaucratic elite,
while ignoring the very real problems of the Soviet economy. Under
Brezhnev, the USSR put a huge share of its resources into the nuclear arms race,
so that by 1968 its military had reached parity with that of the USA. But
the Soviet economy fell further and further behind. The Arab Oil Embargo
of 1973 proved to work to the Soviet's great economic advantage, however; the
USSR was one of the world's leading oil producers, and the increase in world oil
prices allowed it to bring in large amounts of foreign currency. Oil money
kept the Soviet system going from the 1970s into the 1980s. But world oil
prices crashed at the same moment that a new Soviet leader, devoted to reform,
came to power in the mid-1980s (Gorbachev). So in the 1980s the huge
Soviet empire--one of the world's best educated countries--was teetering on the
edge of economic disaster.
At the same time that the Soviet Union was establishing its dominance over
Eastern Europe, the US’s Marshall Plan was helping Western Europe
rebuild. The damage caused by WWII took years to heal: there were
still "displaced persons" camps across Western Europe into the early
1950s (over 2 million "DPs"), and countries like England imposed
rationing on many goods until the late 1950s. But in the 1950s the
European economy was on the path to recovery. In 1949 the US created a European-American military alliance called NATO
(North Atlantic Treaty Organization), which protected Western Europe against the
supposed threat of a Soviet invasion. (The USSR responded to this by creating and Eastern European-Soviet military alliance—the Warsaw
Pact—in 1955. Also, France did not join NATO.) But the new military
alliance was not the only sign that Europe was moving towards new
"unified" institutions. Western European countries began working toward stronger
economic cooperation in the 1940s and 1950s: in 1948, they created the OECD (Organization for European Economic Cooperation), to reduce tariffs
and coordinate industrial policies. In 1957 several Western European countries formed the Common Market (the European Economic Community),
which further stimulated trade. At the same time, several Western European governments stimulated their economies by directly taking control over
some industries (“nationalization”—especially of coal, steel, railroad, automobile building, and health care).
Most of Western Europe had adopted some form of "mixed market" economy
by the 1960s, combining some state-owned industry with privately owned
(capitalist) business.
Although Europe lost most of its colonies in the 1960s, the European economies continued to thrive until the early 1970s, and the Common Market was producing as much as the US economy. This brought impressive improvements in standards of living; by most indices, the standard of living in Western Europe rivaled that of the USA (and in some countries was higher than in the USA). This had the effect of widening the gap between the lives of people in Western and Eastern Europe. Rising standards of living brought with them greater expectations, especially for even greater social and political democratization. In Western Europe, as in the USA, the 1960s and early 1970s were a time of great cultural and social upheaval--perhaps best captured in the mass student and labor unrest in Paris in 1968.
Europe's economic surge ended in 1973, however, with the Arab Oil Embargo and
the dramatic increase in world oil prices. Rates of economic growth slowed
across Western Europe after 1973. By the the late 1970s, reaction against
the slowing economy and against some of the social and cultural changes of the
1960s-70s had helped produce new conservative government majorities (e.g., Thatcher and the Tories in England)
that began reversing the trend of
nationalization, towards privatization of state industries. In the 1980s
in Western Europe, as in the USA, governments began dismantling post-war
economic programs and reducing social welfare benefits, while also doing all
they could to reduce the influence of labor movements. This turn toward
the right came at the same time as a new "heating up" of the Cold War
(following the 1979 Soviet invasion of Afghanastan).