Cold War Evolution and Interpretations - American financial hegemony




In addition to the ideological divide and issues of national expansion, U.S. economic hegemony fueled the Cold War. The Soviets—who had suffered far more devastation, both human and material, in World War II than the United States (or any other country)—sought loans, grants, and reparations to rebuild. Washington had contributed immeasurably to the Soviet war effort through lend-lease and other forms of aid. The United States also promised a postwar loan but delayed the matter and then linked economic assistance with political issues, notably the fates of postwar governments in East-Central Europe. No loan was ever made.

In striking contrast to the devastation of Russia's economy, World War II had been phenomenally good for American business. Government-fueled war production ended the Great Depression and brought full employment and rapid economic growth to the United States. Unscathed by war and prosperous at home, the United States emerged as the unquestioned economic powerhouse of the postwar world. The dollar dwarfed all other currencies and New York displaced London as the world's financial center. At the 1944 Bretton Woods (New Hampshire) Conference, the United States established the World Bank and the International Monetary Fund, agencies that would issue loans and assistance to anchor postwar economic recovery. Such assistance came with strings attached. In order to be eligible, countries would have to meet certain criteria compatible with free-market capitalism. After attending the conference, the Soviet Union never joined the Washington-based and U.S.-dominated international financial agencies.

If there was any hope of heading off the Cold War, it ended with the Marshall Plan. The European Recovery Program, launched by the U.S. Army general turned secretary of state George C. Marshall, laid the foundation for decades of American and western European economic and political integration. The program of loans, assistance, and psychological recovery from the destitution of war succeeded brilliantly in effecting the economic and political recovery of western Europe, especially in France and Italy, where communist parties backed by Moscow had been poised to bid for power. The Marshall Plan exemplified "empire by invitation," an interpretive framework that emphasized that American economic assistance and political influence were welcomed by the western European governments and the majority of public opinion. U.S. propaganda and covert operations, especially in Italy, played a significant role in the process, however. Nevertheless, there is little doubt that western Europeans welcomed American power and influence far more than Eastern Europeans welcomed Soviet power. This single reality carries a great deal of explanatory power as to both the origins and the eventual end of the Cold War.

By the late 1940s, the Marshall Plan had begun to achieve its aims of fostering western European economic recovery and political confidence building. It gave rise to a postwar order in which the United States emerged as the unquestioned world leader. It advanced an American campaign of global financial hegemony. As successful as the Marshall Plan was in advancing Western political and economic integration, the economic recovery program also cemented the division of Europe. Although the Soviets had attended the initial discussions in Paris, Stalin and his foreign minister, V. I. Molotov, understood all too clearly that they would be left, by design, on the outside looking in. With American economic clout dwarfing that of the devastated Soviet Union, Stalin and Molotov understood that the Marshall Plan posed a grave threat to the budding "people's democracies" of East-Central Europe. After Molotov strode out of the Paris discussions, Stalin ordered out the Czech delegation as well. Within months the Kremlin orchestrated a coup, brutally ousting Czech liberals in tactics that revived vivid memories of Hitler. "Moral Godfearing peoples," Truman declared, "must save the world from Atheism and totalitarianism."

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