Rebuilding the World: Origins of the Cold War

World War II changed how humans made, traded, and consumed goods. The war left the economies of Europe and East Asia devastated. As many as 80 million people died in the war. After the war, nations had to rebuild and rethink the global system, but there were disagreements on how to do so. The biggest disagreements were between the United States and the Soviet Union.

The United States and the Soviet Union fought for influence over the rest of the world, which sparked the Cold War. It was called a “cold” war because the two superpowers rarely fought directly against one another. Instead, they engaged in an arms race. They each wanted to spread their economic models to other parts of the world. The Soviets were communist, which meant that they believed in state-planned economies. The Americans were capitalist, which meant that they favored free markets. Both superpowers sent large amounts of financial and military aid to their allies.

After the war, the Soviets took control of Eastern Europe. The United States feared Soviet expansion into Western Europe. It implemented a plan to rebuild Western European economies that were left in ruins by the war. The Marshall Plan, named after Secretary of State George Marshall, sent billions of dollars in economic aid to seventeen countries in Europe. The plan was a massive success, as there were economic “miracles” in countries like Germany, the United Kingdom, France, and Greece. The U.S. also aided Japan after the war.

Historian David Landes wrote about the Japanese and German recoveries. He insisted they were built on “work, education, determination,” and American financial assistance. He said the U.S. helped these countries to block the Russian threat. The sociologist Immanuel Wallerstein, however, disagreed. Instead, he claimed that the Americans helped because the “world-economy needed the re-entry of these countries both as major producers and as major customers for US production.” The Americans embraced the idea of a “free world” in opposition to the communist world of the Soviet Union. They hoped that the success of their allies would convince more countries to embrace capitalism. By the 1950s, the American government saw all foreign policy in the context of the global Cold War.

Decolonization and economic dependency

One of the most important changes after World War II was the collapse of European empires in Africa and Asia. In 1945, over a third of the world’s people lived in a colonized nation. Between 1945 and 1970, nearly every colonial nation gained its independence.

European nations lost power in global politics. Leaders of the newly independent nations of Africa and Asia spoke out about international inequalities. They spoke against economic exploitation and racial inequality around the world. In the 1960s, Indian Prime Minister Jawaharlal Nehru led the Non-Aligned Movement. It was a collection of countries that refused to side with either the United States or the Soviet Union. Instead, they decided to invest in their own countries.

The economic revivals in Western Europe and Japan were aided by American money. However, they were primarily built on the exploitation of former colonial nations in Africa, Asia, and Latin America. Farmers there were forced to produce cash crops. These were exported to richer nations rather than consumed locally. Poorer nations, therefore, relied on food imports or aid from wealthy countries. This created a system of dependency.

Wealthy countries became richer by turning resources from poor countries into consumer goods. Poor countries became dependent on foreign trade and foreign aid to feed their people. Kwame Nkrumah, Ghana’s first president, created the term “neo-colonialism” to describe this system.

Leaders in Africa, Asia, and Latin America fought against this system of neocolonial dependency. Many built up their country’s industry or nationalized industry. Nationalizing industry means taking private industries and placing them under the public ownership of the government. For example, the leader of Iran nationalized the oil industry, which had been controlled by a British oil company.

The American government saw all foreign policy as part of the Cold War. It was suspicious of countries that nationalized industry, believing them to be associated with communism and the Soviet Union. The U.S. military and intelligence agencies worked against these countries in order to stop the spread of communism. The CIA helped organize coups that removed leaders in Iran, Ghana, Chile, and other countries. They replaced them with leaders who gave the industries back to private ownership.

Consumption and inequality

The revival of Western Europe and Japan and new American wealth created greater demand for consumer goods. Americans moved to larger homes in the suburbs. They bought new cars, washing machines, and household products. This created a greater demand for raw materials such as oil, coffee, and rubber from poorer countries.

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.