Economics of the Cold War

The decade preceding World War II is most notably remembered for the Great Depression, a world wide economic period of decline on a scale never before seen. Obviously it affected every country differently and as a result the international political system was multi-polar and divided among two groups, the Axis and the Allies. The destruction of World War II left only two countries economically viable enough to be considered a world power, the United States and the Soviet Union. This unprecedented bi-polar international system would lead to a four decade long period of political unrest, which would come to be known as the Cold War. When most people hear Cold War, they think of the arms or space race, proxy wars, and powerful political rhetoric. The Cold War was much more than that, it was a war of economic ideologies, it was Capitalism versus Communism. As the end of World War II approached many Americans feared a return to the Great Depression once government military spending and production ceased, however, those fears were unwarranted (The Post War Economy). As a result of price controls and rationing established during the war, Americans had built up their saving due to the lack of consumer goods available for purchase. These excess savings led to an immediate increase in demand once the price controls were lifted. Add in the increase in demand from the increase in population from the baby boom and things were looking good for the U.S. Economy. Many industries boomed because of this, most notably the car, housing, and the newly created aviation and electronics industries (The Post War Economy). This booming economy led to a fundamental change in the landscape of America. As family size grew and cars became more popular, Americans left the cities and moved to the suburbs. Businesses and infrastructure quickly followed suit. For example, the number of shopping malls increased from eight at the end of World War II to 3,840 by 1960 (The Post War

Cited: The Cold War Economy, Explorations in Economic History Robert Higgs, July 1, 1994 The Costs of U.S The Post War Economy 1945-1960, Outline of the U.S. Economy by Conte and Carr, Adapted by Mike Moffatt Russian Military Budget, Globalsecurity.org, Septemeber 11, 2008 The Soviet Union After 1945: Economic Recovery and Political Repression by Mark Harrison, Past and Present (2011) Special Message to the Congress on Greece and Turkey: The Truman Doctrine, Provided courtesy of The American Presidency Project