Competition and Coexistence, 1950-1962

Page 34 and 35 (Mahalia Ashraf)

Korean War Military Spending

  • It set in motion a prolonged period of economic prosperity in the West that lasted until the early 1970s'.
  • Massive military spending generated a higher level of aggregate demand and transformed the US economy.
  • There is debate over whether military spending was necessary:
    • Spending was necessary, because it was one of the only forms of government involvement in the economy that politicians could agree on.
    • Others believe military spending came at the expense of domestic reforms.
  • Military spending revitalized Western alliance:
    • Following the end of the Marshall Plan, US aid to Western Europe continued through Mutual Security Administration which provided around $25 billion over a four year period (1951-1955).
    • Korean War had a strong impact on the West German economy which had not revived through the Marshall Plan.
  • Economic Integration stimulated Western Europe economy.
    • European Coal and Steel Community were formed in 1951; France, West Germany, Italy, Belgium, Netherlands, and Luxembourg surrendered national control over production to a multinational authority.
    • Treaty of Rome in 1957 joined the same six countries in a European Economic Community. The EEC eliminated trade barriers among its members and led to a massive increase in US investment in Western Europe
  • Korean War also boosted economic growth and political stability in Japan.
    • US known as “divine aid” in Japan.
    • US military expenditure pulled Japan out of the economic stagnation resulting from the US-imposed austerity programs.

Page 36 and 37 (Leah Myers)

  • A massive infusion of US public funds stimulated the struggling Japanese economy.
  • The government worked closely with business and banking groups to modernize and expand Japanese industry.
  • Korean war also changed the political relationship between Japan and the United States.
  • September 1951, a peace treaty, largely drafted by the U.S, formally ended hostilities and restored Japanese sovereignty over the home islands.
  • Japan remained formally demilitarized.
  • Japanese self-defense force grew and added air and naval arms
  • United states in 1951 signed a mutual security treaty with the Philippines and entered into a loose alliance with Australia and New Zealand which also symbolized US displacement of British influence in the Pacific.
  • US provided South Korea and Taiwan with massive economic assistance.
  • The United States also supported land reform in both countries.
  • Economic reform and US stimulated rapid economic growth in Taiwan.
  • The Korean war also changed the political relationship between the United States and South Korea and Taiwan,
  • In 1955, the United States signed a security treaty with Taiwan.
  • US also forged a close security relationship with South Korea.
  • Countries of Eastern Europe were also a security problem for the USSR.
  • "New Course" followed Stalin's death; the soviets ended the most repressive features of Stalinism in Eastern europe and backed reformist leaders.
  • East Germany was transformed from an aid donor to the soviet economy to an aid recipient.
  • At the Twentieth Congress of the communist party in February 1956, Krushchev denounced Stalin and Stalinism.
  • Krushchev also acknowledged that Socialism could come about.
  • Krushchev's remarks provoked increased popular discontent in the region.
  • Summer of 1956: Liberalization efforts in Poland threatened to move out of control when the army opened fire on striking workers.
  • With backing from the Chinese, the Polish communists brought back Wladyslaw Gomulka, nationalist communist.
  • Soviets decided to allow Poland to pursue its own path to Socialism.
  • Poland abandoned collectivization of agriculture, improved relations with the Catholic church, raised wages, and regained control of its armed forces.

Page 39 (Nathan Shanor)

- Following two years of disputes within the Hungarian Communist Party, Hungary brought back former party leader Imre Nagy, a nationalist Communist.
- Nagy couldn’t control events, so he announced that Hungary was leaving the Warsaw Pact, proclaimed Hungarian neutrality, and appealed to the UN for support.
- Soviets made a deal with János Kádár in which he would keep Hungary in the Warsaw Pact in return for the Soviets allowing Hungary a large degree of latitude in its internal affairs—once Nagy was removed.
- November 4, Soviet and other Warsaw Pact troops re-entered Budapest and crushed the Hungarian revolution.
……Devastating to communist parties in the West; widespread resignations and disillusionment.
……Undercut Khrushchev’s efforts at liberalization by showing USSR did not include self-determination in Eastern Europe.
……Soviet intervention showed the hollowness of the “liberation” rhetoric of the Eisenhower administration.
- In an effort to buy loyalty, the USSR reversed the flow of resources and subsidized Eastern European development through increasingly favorable trade agreements.
……Revived national Communism in Eastern Europe.
……Reduced the amount of aid to PRC.
- USSR backs the PRC in September 1954 in the hopes of repairing relations that had been strained during the Korean War.

Pages 40-41 (Alex Terry)

United States

  • U.S. Atomic Monopoly ends in 1949 when U.S.S.R. tests successful atomic bomb.
  • U.S. seeks to keep superiority by attempting to develop the hydrogen bomb.
  • Start of Korean War leads to massive increase in military spending in U.S.
  • Eisenhower Administration relies heavily on CIA for intel and for taking care of smaller incidents
  • New approach for containment is presented: decreasing conventional forces and increasing nuclear threats to enemies
  • From 1953 to 1960, the number of nuclear warheads in the U.S. jumps from 1,000 to 18,000.
  • U.S. develops long range weapons, including Inter-Continental Ballistic Missles (ICBMs) Mid-Range Ballistic Missles (MRBMs) and B-52 Bombers.
  • Before these inventions, U.S. had been forced to rely on military bases in foreign territory in order to have weapons within striking range of the U.S.S.R. and other distant enemies.
  • By mid-1960's 375 military bases had been established in foreign nations.

Soviet Union

  • In the Soviet Union, the Korean War led to a swell in troops: 2.8 to 5.8 million from 1950 to 1955.
  • After Stalin's death in March 1953, new leader emerges: Krushchev.
  • Krushchev stresses defensive tactics towards the West, reconciliation with Yugoslavia, and a more active policy with the Third World.
  • Under new leadership, the number of Soviet troops is reduced back to 3.6 million by 1960.
  • Soviet becomes the first nation to successfully develop a hydrogen bomb in 1955.
  • Soviets also develop long range weapons and bombers, but they only have 1/22 of what the U.S. has produced.
  • In August 1957 Soviets test their first ICBM successfully
  • This feat was far overshadowed by the launching of the first satellite, Sputnik, in October 1957

Pages 42-44
Diem-Anh Vo

  • Soviet ICBMs transformed strategic environment - now possible for Soviet Union to threaten US directly
  • in wake of Sputnik, many people in US feared Soviet Union was leading arms race
    • Eisenhower knew otherwise - beginning in 1956, U-2 spy planes mapped and photographed Soviet Union
    • first US ICBM went on alert in October 1959
    • Eisenhower saw no need for massive increases in military spending - he also feared the influence of the military-industrial complex ("conjunction of an immense military establishment and a large arms industry")
  • late 1957: CIA claimed that Soviets had ability to build and deploy 500 ICBMs by 1962
  • top-level commission issued a report that warned that US strategic forces were vulnerable to a surprise attack
    • called for 50% increase in US military spending, including $20 billion for fallout shelters
  • "missile gap" became an issue in 1960 presidential campaign - Democrats charged that Eisenhower had allowed Soviets to gain lead in arms race
  • President Kennedy (1961-63) convinced Congress to fund massive increase in military spending
    • space program grew from $400 million to $5 billion in 1965
    • increases in US conventional forces (for flexibility to different levels of threat), including deployment in Europe of several thousand tactical nuclear weapons
  • Feb. 1961: US Sec. of Defense McNamara declared that there was no missile gap
  • Soviet Union saw US build-up as US plan to fight a war rather than avoid one
  • Khrushchev wanted to cut back military spending in favor of focusing on economic problems
    • tried to bridge missile gap with policy of bluff
    • rather than deter the West, Khrushchev's claims stimulated Western build-up of forces to meet increased threat
  • Oct. 1961: Soviet Union detonated 50-megaton hydrogen bomb.

The Third World (Rebecca Purser)
Developments in the 3rd world = source of tensions in Cold War
• Most issues came from colonialism
• 3rd World nations sought to extend external support, while superpowers needed allies
Indonesia, India, and Egypt all wanted to define a political space between the two blocks that would act as a neutral space in the war.
• This began with the Bandung Conference of African and Asian states (1955)
3rd world independence movements strove to:
• Nationalize foreign-owned properties
• Overthrow repressive power structures
• Challenge the West’s cultural hegemony through regeneration of customs and cultures
Decolonization could possibly bring power to movements that would attack Western capitalism and rapidly develop underdeveloped economies.
• This would totally throw off the world’s power balance
• This could remove areas containing raw materials, markets, and labor forces that belonged to the West.
The 3rd world’s goals aligned with the USSR and opposed the USA. However, Stalin had very limited support for movements that were out of Soviet control. Kruschev, on the other hand, jumped at these opportunities to organize a “revolt against the West”.
• Kruschev supported with economic and military assistance
• Kruschev announced his support of national liberation (1961)
• Soviets gained very little lasting advantage from efforts. Instead, it increased US involvement in the 3rd world.
US’ 3rd World Political ties:
1. Latin America
2. Philippines
3. South Korea
US had mainly economic interests in the 3rd World.
 They wanted to maintain integration of 3rd World in Western- dominated economy. This ensured alignment with West in the Cold War.
The following led to a more active role of the US in the 3rd World:
1. Increased reliance on imported oil
2. Strategic minerals
3. Decline of European colonialism
The US preferred to work with democratic forces in the 3rd World, but it actually tended to side with monarchs, anti-democratic, and anti-communist nations.

pg 47-Allison Bailey
I. The British, France, and Israelis develop plans to recapture the Suez Canal.

  • French resent Nassar's support for Algerian rebels, Israelis are threatened by Nassar's support for guerrilla attacks on their territory
  • Hope to minimize the US response by attacking on the eve of US presidential elections in Oct
  • US opposes the action and forces them to withdraw their forces
  • Soviets play almost no role-issue threats to court Middle Eastern Approval

II. US pledge to protect Middle East from USSR, intervene in Lebanon in 1958

  • crisis had little to do with USSR, stemmed from internal instability and regional rivalries
  • US leaders feared Nassar, anti-western
  • Lebanon-Kamil Sham'un was a pro-western president who tried to rewrite the consitution to stay in power, threatened stability and increased opposition to his rule
  • Coup by the army in Iraq of July 1958-overthrew western monarchy, US fears revolt in Beirut and sends 14000 troops and brokers a settlement, maintains pro-Western alignment
  • British undertake simultaneous operation to bolster King Hussein in Jordan

III. Iraqi coup results in withdrawel of Iraq from Baghdad Pact

  • Baghdad pact= culmination of several schemes to bolster the western position in the Middle East, furter injected Cold War into regional rivalry between India and Pakistan
  • 1954- US begins supplying Pakistan with military assistance=effort to recreate Old Indian Army
  • Same year, Pakistan joins SEATO to gain leverage with India

Page 49- Alexander Hoare

Viet Minh wanted to consolidate control of the north.
The Viet Minh protested against Diem’s choice to not participate in elections
Diem reversed Viet Minh land reforms which revived the armed resistance against him.
1960 Viet Minh members in the south organized a national liberation front.
They wanted to overthrow Diem and reunify the nation
In Laos, royalist government took control in 1954
Formed a communist neutralist government in 1957
1958 rightist forces overthrow the leftist government in Laos
1960 August- neutralists and communists regained control
1960 December-Rightist forces overthrow the communists and neutralists again.

The Suez Crisis accelerated the end of European colonial dominance.
This showed the vulnerability of these European powers.
1956 Morocco and Tunisia gain independence
1957 Ghana gained independence
Algeria gained independence in 1962
By 1962 most of Africa had gained independence.
Decolonization of Africa was influenced by the international conflicts between the USSR and the USA
Congo independence in 1960
Soviets gave aid through the UN to the Congo but the USA refused due to suspicion of communist sympathies.
The USA gave covert anticommunist assistance until the Congo was secure against communist influences.

pg. 50-51
(Hannah Wichmann)
Latin America

  • key issue: what kinds of internal political, economic, and social arrangements and external ties would best ensure political stability and economic development?
    • inevitably involved the US
  • 1950s: US sought to increase its influence in Latin America
    • through strengthening ties with the region's powerful military establishments - through large-scale program of military assistance and training


  • reformist government came to power in 1944 revolution
  • managed to survive despite hostility of the US-owned United Fruit Company
  • 1950 - free elections brought Jacobo Arbenz to power (reform-minded military officer)
  • Arbenz government passed land-reform - expropriated lots of United Fruit Land
    • confirmed US suspicions that Guatemala was in danger of becoming Communist
    • reality: only a few Communists in the legislature, no Communists in military, Soviet Union not too interested in Guatemala
  • 1954: Soviets sent arms to Guatemala
    • gave the US the opportunity to condemn Guatemala before the Organization of American States
    • but US CIA had already organized, financed, and supported an attack on Guatemala by a small exile army - to intimidate Guatemalan Army and make them remove Arbenz
    • plan was successful
    • new government: reversed land-reform, 40 years of repressive rule by a succession of military or military-dominated governments that cost 100,000+ Guatemalan lives


  • began as a broadly-based indigenous struggle against a corrupt, repressive, US-supported military dictator
    • January 1959: new Cuban government took over
    • found themselves in conflict with US economic interests
  • charismatic Fidel Castro gained control of the army (unlike Guatemala)
    • USSR provided Cuban revolutionaries with enough economic and military assistance to ensure their survival (unlike Guatemala)
  • US was confident that it could control Cuban developments due to the dependence of the Cuban economy on the US and the presence of a large, pro-US, professional middle class
    • but Castro implemented reforms that struck at US economic interests and pro-US Cubans chose exile over resistance
  • US measures to control Cuba
    • economic sanctions: cutting off Cuban sugar exports to the US
    • Eisenhower organized an invasion force composed of Cuban exiles
  • Reasons for the Cuban ability to defeat the Bay of Pigs invasion (April 1961)
    • Castro responded to economic sanctions by making trade and economic assistance agreements with the Soviet Union
    • revolution reforms were popular
    • Cuban nationalism
    • Castro's control of the army
  • after the Bay of Pigs - Castro moved steadily toward Communism and a military alliance with the Soviet Union

Crises in Berlin and Cuba

Pages 51-55
Diem-Anh Vo


  • West German membership in NATO and creation of Warsaw Pact increased order and predictability by lessening uncertainty about future of Germany
  • lack of formal peace settlement with Germany was continuing problem - Soviets feared West was waiting for economic "miracle" to pull East Germany from socialist bloc
    • Soviets continued to have difficulty constructing viable state in East Germany
    • concerned about US plans to furnish West Germany with nuclear weapons
    • West ignored plan proposed by Polish foreign minister to create a nuclear-free zone in central Europe
  • Soviets wanted to force West to recognize division of Germany
    • Nov. 1958: Khrushchev proposed German peace treaty that would recognize existence of two Germanies; called for end of four-power control of Berlin and demilitarization and independence of Western sectors
    • ultimatum: Khrushchev would turn over control of access routes to Western sectors of Berlin to German Democratic Republic
    • Spring 1959: Eisenhower invited Khrushchev to US, Khrushchev withdrew ultimatum -progress towards repairing relations
  • Relations strained again - May 1, 1960: Soviets shoot down U-2 spy plane; Eisenhower took responsibility for flights but refused to discontinue them
    • June 1961: Khrushchev renewed ultimatum; Kennedy responded by calling for additional increases in military spending
    • Aug. 13: East Germans sealed off access routes between East and West Berlin
    • US tanks sent to Checkpoint Charlie, allied corridor between sectors - demonstration of US determination to maintain its access rights
    • Soviets responded by sending in tanks, tense confrontation
  • Berlin Wall was an ideological defeat for Soviet Union and world communism—symbol of failure of East Germany to win loyalty from inhabitants and Soviet-style socialism losing power
    • unexpected outcome: Wall created period of prolonged stability in Europe


  • US continued covert action
  • Castro successfully sought increased military assistance from Soviet Union
  • Khrushchev secretly deployed medium- and intermediate-range ballistic missiles in Cuba for reasons:
    • missiles in Cuba promised a quick fix to problem of Soviet strategic inferiority
    • allowed Khrushchev to continue plans to shift resources from military and heavy industry to agriculture and consumer sector
    • Soviet missiles in Cuba would be psychological counter to US missiles in Turkey
    • wanted to force US to respect Soviet Union and negotiate a relaxation of tensions
  • October 1962: US discovered deception
    • Kennedy publicly demanded that Soviets remove their missiles; ordered naval blockade as way of pressuring the Soviets to meet his demands
    • Kennedy and Khrushchev finally reached agreement that led to removal of missiles, Soviet combat troops, and Soviet-supplied tactical bombers in exchange for US pledge not to invade Cuba.
    • US also secretly agreed to remove nuclear-armed Jupiter missiles from Turkey

Iranian Crisis 1951-1953 (p. 46) Morgan Grain

  • Iran nationalized the British owned Anglo-Iranain Oil Company in the Spring of 1951.
  • Britain feared that if Iran succeeded in taking over the company, all of their oversea investments would be at risk.
  • U.S feared Iran's actions for the same reasons as British, however they also feared if Britain used force against Iran, Iranians would turn to Soviets for influence and aid. U.S urged Britain to pursue diplomatic negotiations, but Britain refused and organized an international boycott of Iranian oil.
  • 1953- Boycott sharply reduces Iran's export earnings and decimated gov't revenues.
  • Due to fear of Soviet influence, Britain and U.S covertly organized a coup that removed Musaddiq (nationalist prime minister of Iran) and installed a gov't willing to reach an oil settlement.
  • Resulted in Iran being set back in progress made to being a more representative gov't.

Suez Crisis of 1956 (p. 46) Morgan Grain

  • Grew out of Arab-Israeli dispute and Egyptian efforts to finance a massive development project centered on construction of a gigantic dam on the Nile R. at Aswan. After Egypt turned to the SovietBloc for arms in 1955, U.S and Britain decided to pull their funds from Aswan dam project. Egyptian nationalist leader Gamal Abdel Nasser responded by nationalizing the British and French owned Suez Canal Company.
  • Without consulting with the U.S, Britain and France developed a scheme to recapture control of the canal through military action, and attacked in late October. U.S was angered by this and opposed the action. By using their economic power, the U.S forced Britain and Franc to remove their forces. Soviet Union was occupied in Hungary, and practically played no role at all.
Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License