Rebuilding the World: Origins of the Cold War

World War II changed how humans made, traded, and consumed goods. It left countries in Europe and East Asia devastated. These countries needed to be rebuilt after the war. But, there were disagreements on how to do so. The biggest disagreements were between the United States and the Soviet Union.

These tensions sparked the Cold War. It was called a “cold” war because the countries did not engage in direct combat. They just wanted to spread their economic models across the world.

The Soviets were communist. They believed in economies controlled by the state. The Americans were capitalists who believed in free markets. They each tried to convince the
rest of the world to follow their economic models. They sent military and financial aid to their allies.

After the war, the Soviets took control of Eastern Europe. The U.S. feared that they could expand into Western Europe. The U.S. sent billions of dollars of aid to Western Europe. They did this under the Marshall Plan. It helped rebuild countries that were left in ruin after the war, such as Germany. Several American allies underwent economic “miracles” with help from the Marshall Plan. The U.S. hoped their successes would cause other countries to embrace capitalism.

Historian David Landes and Sociologist Immanuel Wallerstein wrote about the recoveries of Germany and Japan. They disagreed on the reason behind the U.S.’s efforts to rebuild. Landes insisted that the recoveries were built on “work, education, determination”, and American financial assistance. Wallerstein claimed that the U.S. decided to help because they hoped that the economic success of their allies (like Germany) would convince more countries to join their side, rather than the Soviets’.

Decolonization and economic dependency

After the war, European countries did not have the money to keep their empires. European empires in Africa and Asia collapsed. In 1945, over a third of the world’s people lived in a colonized nation. Most colonized countries became independent between 1945 and 1970.

Europe lost power in international politics. Newly independent nations of Africa and Asia spoke out against inequality. Some refused to follow either the U.S. or Soviet Union.

Western Europe and Japan were rebuilt with American money. They were also rebuilt with raw materials from the former colonies. They profited from the work of people in Asia, Africa, and Latin America. Farmers in these countries grew cash crops. Cash crops are crops that are sold for money rather than eaten by the people who grew them. These farmers became dependent on selling all their crops. They were unable to grow food for themselves, which forced them to rely on aid from richer countries. This created a system of dependency. Kwame Nkrumah was Ghana’s first president. He called this new system neo-colonialism. The inequalities that existed under empires were still present even after their collapse.

Some countries fought against this system of neocolonial dependency. They nationalized industries. This meant that the government took control. For example, Iran’s government took control of the country’s oil industry. It was previously controlled by a British oil company.

The U.S. feared that these countries might support the Soviet Union. It believed these actions could cause communism to spread. The U.S. military worked against leaders who nationalized industries. The CIA helped organize coups that removed these leaders from power. The new leaders would return industries to private ownership.

Consumption and inequality

There was an increased demand for consumer goods in the U.S., Japan, and Western Europe. Americans moved to large homes in the suburbs. They bought new cars and washing machines.

This also created inequality within wealthy nations. Black Americans were often unable to buy a new house or car. Racist Jim Crow and redlining1 laws denied them equal opportunities.

There was also a setback for women’s rights after the war. Many women had filled the jobs of men during the war. After the war, they went back to working in the household. New tax laws favored households that were dominated by men. This made women more dependent on men.

The period from 1945 to 1970 saw the rebuilding of some of the world’s largest economies. One-third of the human population was freed from living under empires. However, this period also started the Cold War and the system of dependency. Both led to decades of conflict. They also created inequalities between rich and poor nations. Many of these inequalities continue today.

1 Redlining is a financial and loan practice of excluding people from certain neighborhoods and denying public services to certain neighborhoods, often with racist motivations.