209-223 Height and End of the Cold War 1

209-223 Height and End of the Cold War 1 - Cold War II: The...

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Cold War II: The Marshall Plan and NSC-68 (cw2) 1. The Marshall Plan (1947) World War II seemed decisively to put an end to centuries of Western European predominance in the world. In material terms, thirty million people had died during the war; another thirty million migrated after 1945 as a result of changes in national boundaries. Aerial bombings had destroyed much of the heavy industry and railway lines on the continent. Twenty per cent of all housing had been damaged or destroyed in France and the Netherlands; thirty per cent in Great Britain; and forty per cent in Germany. For years these nations would be faced with the need to find adequate supplies of shelter, fuel and food. The Left (Socialists and Communists in France and Italy; Labour in Great Britain) was elected to office throughout Western Europe in the first postwar elections. The Left generally rejected the US analysis of the economic origins of the war: high tariffs had deepened the Depression that weakened the democracies and added fuel to Nazi expansionist desires. Many Europeans, especially those on the Left, believed that the unemployment had undermined democratic governments in the 1930s and led to the election of the Nazis in Germany and to weak-willed democracies in Great Britain, France and elsewhere. Which was the greater threat to democracy and peace: protectionism or unemployment? Governments in Great Britain and France feared that if they established free trade with the United States, powerful American industries built up over the war would overwhelm their European counterparts. Workers, the base of support for the Left, would lose their jobs. These governments proposed instead to establish their own privileged trading zones with current and former colonies. While foregoing free trade theoretically makes the cost of goods higher for consumers and therefore depressed the overall standard of living, postwar governments felt that the social costs of high unemployment were much greater. After the war, the United States exerted severe economic pressure on Great Britain and France and was successful in getting them to abandon these policies of using protected trading blocs. In 1947, the General Agreement on Trade and Tariffs (GATT) formalized this development. As GATT works on the principal that bilateral agreements among members must be extended to all member nations, it works to break up protected trading zones and to decrease tariffs. In 1947, not long after enunciating the Truman Doctrine, the U.S. took a much more energetic step to remedy the postwar economic malaise in Europe; Truman called the Marshall Plan "the other half of the
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same walnut." The U.S. launched the Marshall Plan to counter both the threat that Communists might attract enough votes to dominate governments in Western Europe and to prevent European nations from developing forms of "national capitalism": the use of tariffs to develop national industries which would promote high employment if at perhaps a lower overall standard of living. It was feared that such a system would cut out
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209-223 Height and End of the Cold War 1 - Cold War II: The...

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