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The Aftermath of WWII

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  • 0:03 Aftermath of WWII
  • 0:40 Cold War
  • 2:14 European Reconstruction
  • 4:55 Lesson Summary
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Lesson Transcript
Instructor: Christopher Sailus

Chris has an M.A. in history and taught university and high school history.

In this lesson, we explore the economic and political realities which emerged in Europe immediately after the end of World War II and the steps countries took to confront them.

Aftermath of WWII

Have you ever had your house burn down? It can be a terrible ordeal - not only is there the possibility of injury, but even after that is settled, you really feel like you have to start life all over again. In Europe in World War II (WWII), much of the continent literally and figuratively burned. Entire cities were destroyed, economies collapsed, and the geopolitical reality of the continent was irrevocably changed. In this lesson, we will explore these months and years immediately surrounding one of the largest wars ever in Western society, and the politics and circumstances that confronted post-war Europe.

Cold War

When WWII ended, the United States, the United Kingdom, and the Soviet Union had already decided what post-war Europe would look like. At various conferences, the most important of which were at Yalta and Potsdam, the three powers split Germany and its capital, Berlin, in two, with the Eastern portion controlled by the Soviet Union and the Western portion controlled jointly by the United States, the United Kingdom, and France.

Additionally, the Soviet Union was given 'influence' over the governments of several Eastern European states, where they promptly set up loyal, communist puppet regimes. These client states, though technically independent, were effectively part of the Soviet Union, sharing its communist economy and single-party political structure.

The United States and the West feared the creation of this Eastern Bloc, as Western journalists and government officials termed it, and the further spread of communism and/or totalitarian states in the rest of the world. U.S. foreign policy became one of containment - essentially, stopping the spread of communism wherever it could. This was in direct opposition to the Soviet Union's policy of fostering the spread of communism, especially in its Asian neighbors.

For example, Soviet agents had spent significant time with Mao Zedong's fledgling Communist Party in China in the 1930s and 1940s, where communism eventually prevailed and created the People's Republic of China in 1949. U.S. containment policy led to various wars against communist rebellions in the ensuing decades, most notably in Korea and Vietnam.

European Reconstruction

While the United States worried about the spread of communism in Asia and elsewhere, war-ravaged Europe needed desperately to rebuild. Six long years of war and the Holocaust wreaked devastation across the continent, leveling entire cities and tearing families apart. Additionally, these same countries had spent vast sums of capital fighting the war, and their gold reserves were depleted.

Most countries had also taken out large loans, mainly from the United States, in order to help pay for the war effort, leaving most of these countries in massive financial debt. In order to pay off these debts, many countries resorted to simply printing more money, which caused inflation to skyrocket. In a short period of time, many European currencies, like the French franc, became virtually worthless.

The U.S. government decided that the European economic tailspin required outside aid to be stopped. This aid came from the United States in the form of the Marshall Plan. Named after its creator, Secretary of State George Marshall, the Marshall Plan created a framework to reinvigorate the European and world economy through giving monetary aid to the war-ravaged countries of WWII. The offer was extended to all countries debilitated by the war, though the Soviet Union and those Eastern Bloc countries under Soviet control eschewed any foreign aid.

According to the plan, the United States and several other countries less economically depleted by the war combined to give gold and currency (in most cases U.S. dollars) to European countries so they could pay for basic government services and service their debt. This aid was given without any repayment requirements. The aid had immediate impact on war-ravaged Europe and Japan, and within only a few short years, most countries' economies were producing goods near or even exceeding pre-war production levels.

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