5.2.2 Communism, Capitalism, and the Cold War

5.2.2 Communism, Capitalism, and the Cold War

Why has globalization expanded so rapidly in recent times?

Capitalism versus communism: The competition between capitalism and communism divided the world into three factions. On one hand were capitalist democracies including the United States, Canada, most of western Europe, and other nations. On the other were the Soviet Union and its allies or countries within its sphere of influence. The third group included the unaligned nations that were called the Third World —€“ mostly the poorer nations of Africa, South and Central America, and Asia.

• The capitalist countries valued private ownership of land and personal wealth. Communist countries were more concerned with the general well-being of the whole country and the general standard of living of all people.
  
  
• These two factions were in competition and rarely traded with each other.
  
  
• Competition prevented the world from becoming more connected during what is called the
  Cold War (1947-1991)

  a lengthy conflict between the United States and the Soviet Union and their allies that included
  
  

  • an arms race involving nuclear and conventional weapons and networks of military alliances
    
  • economic warfare and trade embargoes
    
  • propaganda and espionage
    
  • space race
    
  • proxy wars such as the Vietnam War (wars in which two nations do not fight directly, but they support military action in a third country)
  Cold War. The conflict was cold because very little actual fighting occurred, yet it was still a war because competition and the build-up of arms was intense.
  
  
• The Cold War lasted from 1947 until the collapse of the Soviet Union in 1991.
  

Watch

To learn more about the Russian Revolution, view Reds ( IMDB profile) or Dr. Zhivago ( IMDB profile).

The cartoon Anastasia ( IMDB profile) shows a less-than-accurate portrayal of the events of this time.

From Lenin to Stalin: After the Russian Revolution, real power in the Soviet government was held by soviets (councils) of workers, peasants, and soldiers. They elected Lenin as their leader. During this time, the land of the wealthy landowners was redistributed. After submitting a portion of their produce to the government, landowners were allowed to sell their goods on the open market. The government took over, or nationalized, heavy industry and banking and began the process of modernization. Although turmoil occurred, conditions improved for average Russians.

In 1924, Lenin died and Josef Stalin became leader of Russia. Stalin was a much less democratic leader. He consolidated his power base, forged ahead with industrial growth, and ended the farmers' right to sell their surplus products on the open market by taking away their private land and forcing them all to work collectively. Although the nationalization of industry was very successful in increasing production, collectivization in agriculture was not as successful. Landowners were forced to leave the country, and some killed their livestock and burned their crops rather than give to the government. At first, agricultural production declined and many Russians starved.

World War II and beyond: Although the United States and the Soviet Union were allies during World War II, the United States and other capitalist democracies saw the Soviet Union as a potential enemy. The Soviet Union was communist and its leaders believed that capitalism would be overthrown eventually because it was unjust. The United States feared that the Soviets would export communism to other nations of the world. That would end private ownership of property and the ability of individuals to become wealthy -€“ fundamental rights of individuals under capitalism.

World politics after World War II: The conflict between the United States and the Soviet Union, the world's two superpowers, dominated world politics from the end of World War II until the downfall of the Soviet Union in 1991.

• Spheres of influence: Both the US and the Soviet Union used their influence to encourage nations to follow their system.
  
  
• Economic systems: Capitalist countries allowed individuals to choose their own way to make money, but in communist countries, the government planned what would be manufactured and sold.
  
  
• The build-up of nuclear warheads by the two countries resulted in MAD, or mutually-assured destruction. In other words, although each country had enough weapons to destroy the world several times over, the fear of the other country launching a counter-attack prevented the use of these weapons.
  
  
• Proxy wars occurred in which both the Soviets and the Americans supported troops doing battle in other countries in the hope that their
  ideology

  The study of the origin and nature of people; doctrine, philosophy, body of beliefs, or principles of an individual or group.
  
  In Canada, capitalism is the dominant economic ideology and democracy is the dominant political ideology. Communism is a political and economic ideology practiced in the former Soviet Union and currently practiscd in China, North Korea, Cuba, Vietnam, and Laos.
  
  Ideologies can also be gender based (for example, a patriarchal system is dominated by men) or racially oriented (apartheid is a system of racial segregation.)
  ideology would win.
  
  
• Domino effect: Each side feared that its economic system would be taken over by the other side, and one nation after another would fall like a row of dominoes. For example, the United States, fearing that much of Asia would fall to communism, fought against communist North Vietnam. Americans feared that, if Vietnam were to become communist, Cambodia, Thailand, Laos, and Burma nearby would also become communist. In fact, after the United States pulled out of the area, Vietnam, Cambodia, Laos, and Burma became communist.
  

Why did communism fail?

• The communist system of production could not compete with capitalism.
  
  
• Adam Smith's invisible hand was able to bring producers and consumers together far more efficiently than could the centralized government of the Soviet Union.
  
  
• Communism did not succeed in providing the people with the kind of consumer products citizens wanted.
  
  
• Successful centralized planning for such a huge nation was almost impossible.
  For example, people need shoes. How many should be made to supply the needs of the population? What kinds of shoes are required to meet their needs? What about winter boots or work boots? Beyond the kind of shoes people need, what kind of shoes do they want? If they do not get what they want, they will look to the black market where they might be able to purchase goods illegally. The black market is another form of capitalism.
  

Reflect

Did communism, based on government control and planning rather than individual rights and freedoms, lead to greater prosperity?

As you have learned, capitalism is a driving force behind modern globalization. Capitalist nations are interconnected through trade. During the Cold War, communist and capitalist nations were not connected. After the downfall of the Soviet Union, most countries became capitalist and the former Soviet countries were able to trade with other nations of the world.