9.4 Two Super Powers Emerge

The North Atlantic Treaty Organization (NATO), formed in April 1949, joined the United States and Canada with ten Western European countries. Its key promise was collective defense: an attack on one member would be treated as an attack on all. West Germany joined in 1955 after rearming. American troops and nuclear weapons stayed in Europe for the rest of the Cold War.

The economic side of the Western bloc was planned even before the war ended. At the Bretton Woods conference (1944), the Allies created the International Monetary Fund (IMF), to stabilize currencies and lend to countries in trouble, and the World Bank, to finance reconstruction and development. Currencies were pegged to the U.S. dollar, which was tied to gold. The General Agreement on Tariffs and Trade (GATT, 1947) set up rounds of negotiations that lowered tariffs; in 1995 it was replaced by the World Trade Organization (WTO). Together these made the dollar the center of a growing, open world economy.

The Soviet Union created the Council for Mutual Economic Assistance (COMECON) in 1949 to coordinate the economies of its satellite states, countries that were formally independent but controlled by Moscow. In 1955, in response to West Germany joining NATO, it created the Warsaw Pact, a military alliance that also justified keeping Soviet troops in eastern Europe.

Communist states promised security and equality. They provided guaranteed jobs, free education and health care, cheap housing and transport, and child care that let women work outside the home. In return they demanded obedience. Economies were centrally planned, with heavy industry favored over consumer goods, so shortages and long lines were common. COMECON also pushed members to specialize, for example making Hungary a major bus maker for the whole bloc, which tied their economies to one another and to the Soviet Union. Censorship, one-party rule and secret police, such as East Germany's Stasi, silenced critics, and travel to the West was tightly restricted, so most people could not emigrate. In June 1953 a workers' uprising in East Germany was crushed by Soviet tanks.

Stalin died in 1953. In 1956 his successor Nikita Khrushchev gave a “secret speech” to the Communist Party congress condemning Stalin's purges and personality cult. This de-Stalinization released many prisoners from the gulag, eased censorship somewhat (Aleksandr Solzhenitsyn's novel about a labor camp, One Day in the Life of Ivan Denisovich, was published in 1962) and raised hopes in eastern Europe that Moscow would allow more freedom. Khrushchev also promised Soviet citizens better living standards, but his farm and economic reforms fell short of their goals. In Poland, strikes in 1956 brought the reform communist Władysław Gomułka to power, and the Soviets accepted him because he kept Poland in the Warsaw Pact.

Both crises proved that Moscow would use force to keep its satellites communist and in the bloc. After 1968 Soviet leader Leonid Brezhnev declared what became known as the Brezhnev Doctrine: the Soviet Union had the right to intervene in any socialist country where socialism was threatened. They also showed the limits of Western power, since NATO would not risk nuclear war to help. Repression bought stability for two decades, but it destroyed much of communism's moral appeal, both in the East and among Western leftists. When Gorbachev abandoned the Brezhnev Doctrine in the late 1980s, the bloc collapsed quickly (9.7).