Recovery Strategies in the Soviet Union and Eastern Europe

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  • 0:02 The Marshall Plan
  • 2:19 Soviet Recovery Strategies
  • 7:59 D?tente & Perestroika
  • 9:20 Lesson Summary
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Lesson Transcript
Instructor: Nate Sullivan

Nate Sullivan holds a M.A. in History and a M.Ed. He is an adjunct history professor, middle school history teacher, and freelance writer.

In this lesson, we will learn about the Soviet Union's strategy for recovery following World War II. We will learn what efforts the Soviet Union took to restore its economic footing, and we will see how the Soviet strategy differed from that of the Western democracies.

The Marshall Plan

Let's begin this lesson by quickly reviewing the American recovery program for post-World War II Europe. This will provide us with a context in which we can understand Soviet recovery strategies.

So, as we all know, World War II devastated Europe. Eastern European states, France, Germany, and Russia were particularly hard hit. Millions of people had been killed or wounded, while many major cities lay in ruins. Agricultural production had declined, resulting in near famine for millions of Europeans. Industrial and transportation infrastructures had been disrupted, leading to countless problems. How would Europe rebound from such tremendous destruction?

The United States, whose involvement in the war actually stimulated economic growth, stepped in to assist war-torn Europe. This recovery strategy was called the Marshall Plan. The Marshall Plan provided economic aid to 16 European countries struggling to rebound from the destruction of World War II. It was implemented between 1948-1951. The Marshall Plan was officially called the European Recovery Program, or ERP. The program has come to be called the Marshall Plan because U.S. Secretary of State George C. Marshall was instrumental in developing it.

In all, over $13 billion dollars in assistance was given away under the Marshall Plan. Assistance took the form of food shipments, fuel, machinery, and other staples. While the Marshall Plan was certainly generous, we should also understand that to a large extent, the plan was motivated by a desire to thwart the spread of communism in Eastern Europe.

See, the Western democracies believed that the devastation following World War II was fertile soil for Soviet expansion. The United States, therefore, felt obliged to assist in the economic restructuring of Europe in order to ward off communist expansion and ensure the foundation of democratic-capitalist states.

Soviet Recovery Strategies

When the Marshall Plan was first rolled out, the United States invited the Soviet Union to participate. The Soviets, however, refused, recognizing that participation in the plan would undermine their interests in Eastern Europe; not to mention, it might make them look weak and helpless. See, the Soviets saw the Marshall Plan as little more than a front for American expansionism in Europe. They felt threatened by it. The fact that some Eastern European states expressed interest in the Marshall Plan further demonstrated to the Soviets that they had to come up with their own strategies for recovery, independent of the United States.

The war devastated the Soviet Union. Nearly one quarter of its capital resources had been destroyed. So how did the Soviet economy (and the economies of its satellite states) recover from the devastation of World War II? One word in particular comes to mind: 'plunder'! Yes, this was one of the Soviets' primary recovery strategies.

At the risk of being over-simplistic, the Soviet Union benefited enormously from the resources it systematically plundered during and after the war. Industrial complexes, agricultural resources, gold, and other valuables were perceived by the Soviets as legitimate 'victor's spoils.' Art, too, was a commonly looted item. The recent movie Monuments Men briefly depicts Soviet efforts to loot European art. But more than that, the Soviets were after raw materials and industrial resources.

The Red Army was notorious for dismantling entire industrial complexes and sending them back to the Soviet Union where they were rebuilt and put into operation. The industrial centers of Germany located in the Ruhr and Rhineland areas were of particular benefit, as was the Ukraine, with its rich industrial and agricultural resources. The Soviets even plundered from their supposed allies in Eastern Europe, like Poland. The resources stripped from Germany and Eastern Europe greatly aided the Soviet Union's economic recovery.

The important thing to remember about the Soviet Union's recovery strategies is that they involved a planned economy. A planned economy is exactly what it sounds like: an economic system that is planned out by the state or other central authority. A planned economy is the opposite of a market, or capitalist economy, in which wages and values are determined according to market value. Laws of supply and demand cause a market economy to fluctuate, while regulation and central planning typically fix values in a planned economy.

In the Soviet Union, Five Year Plans were developed by committees to plan national economic growth. The first Five Year Plan began in 1928. The fourth and fifth Five Year Plans, between 1945-1955, emphasized growth in heavy industry, agricultural production, and military spending. This often proceeded at the expense of basic standards of living. These plans sucked money from the ordinary citizen in order to fund government priorities. For example, by 1950 the Ukraine's industrial output exceeded pre-war levels, although many Ukrainians lived in near-poverty.

In response to the Marshall Plan, the Soviets formed the Council for Mutual Economic Assistance, or Comecon, in 1949. This organization was developed to foster economic cooperation among the Eastern Bloc states. For states like Bulgaria, Czechoslovakia, Hungary, Poland, Romania, and others, Comecon offered an alternative to the American Marshall Plan.

Comecon was concerned primarily with trade and credit between member states. Of course, the program was ultimately about control. It was a way of keeping the Eastern Bloc states tied to the Soviet Union. In time, non-Eastern Bloc states, like Cuba and Vietnam, also became members of Comecon.

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