The Growth of American Power Through Cold and Hot Wars 299Cold War! The Political Rivalry Emerges
The Bretton Woods system anticipated what would come after the war ended
and was the foundation of American plans for economic power. The establish-
ment of the United Nations [U.N.], an institution comprised of the nations of
the world, like Wilson’s idea of a League of Nations at Versailles, was intend-
ed to bring political stability by resolving disputes without war, but that, too,
would be dominated by the Americans. But at that time, in 1944-45, the U.S.
and Soviet Union were still allies in the fight against Hitler and the Nazis and
so there was still uncertainty over what the world would look like after the
war ended. Within a few years, the Cold War would be a fact of interna-
tional life, a sometimes frightening rivalry between the Americans and
Russians complete with war scares, incredible increases in weapons produc-
tion, and an all-out attack on “communism” abroad and at home.
Perhaps the most crucial reality of the war was that the U.S. came out of the
conflict with great advantages in economic, military, and political power over its
rivals, especially the Soviet Union, which had suffered immense losses during
the war. The Gross Domestic Product of the U.S. was $120 billion in 1945,
which was about four times greater than that of the Soviet Union. By 1950,
American GDP had soared to $293 billion. Personal consumption stood at $71
billion in 1940 and $192 billion in 1950, and coal production, a key indicator
of industrial power, stood at 560 million tons in 1950. For the Russians, the
story was quite the opposite. Because of the German invasion and devastation
caused, the Soviet GDP in 1942 fell by two-thirds of what it had been just two
years earlier, while Russian consumption fell to about half of its prewar level.
Coal production stood at 261 million tons, less than half of the U.S. It was a
time of “extraordinary deprivation,” as one economist who has studied wartime
Russia put it. Militarily, the U.S. had a huge advantage in power as well. While
the Soviet Union suffered over 20-25 million dead and had over one million
farms and factories destroyed, the U.S. lost about 300,000 men and the war was
not fought on American soil so there was no destruction. And the gap grew
greater over the next decade, so that by the mid-1950s, the US was spending
more on “defense” than the net profit of all U.S. corporations combined. Add
in that the U.S. had a nuclear monopoly, and one can see that the “rivalry” was
as one-sided as the New York Yankees playing a minor league team.