Ideas

As Nixon and Khrushchev agreed in the Moscow model kitchen, the Cold War invoked a competition over models of economic organization. The Soviets stressed the virtues of public ownership and central planning; Americans, the capacity ofthe market, private ownership, and entrepreneurial control. Still, the Communists’ economic program varied greatly over time. Ideology remained important, but its interpretation was malleable. Over the longer term, Communists professed belief that after successive crises of capitalism their vanguard party would seize authoritative power, allegedly on behalf of the industrial working class, and transfer economic assets from private to public control. Social democratic reformist or "revisionist" versions of Marxism in the Soviet Union and Western Europe might advocate incremental economic change, but earned only contempt from Lenin after 1914 and then from Stalin as he consolidated power in the late 1920s. By the end of that decade Stalin and his allies unleashed a campaign against peasant smallholding agriculture, embarked on collectivization, and introduced the first of many Five-Year Plans. The rise of Fascism and the threat of Nazi expansion led Stalin to shift course anew in the mid-i93os and seek broad alliances with the social democrats and even non-Marxian liberal democrats. From the Kremlin decisions of i935 to encourage popular fronts until the formation of the Cominform in 1947, the Soviets soft-pedaled their earlier aspirations for single-party dictatorship and collectivization wherever it might be opportune. Instead, the Comintern, itself dissolved in 1943, called merely for "progressive” coalitions that would defeat Fascism and institute "people’s democracies” in the countries liberated fTom the Germans. The ultimate form of the economy

Was adjourned as an issue for the future. Western socialists and British Labour Party leaders remained more insistent on old ideas of nationalization. They believed, along with a now-rather-forlorn New Deal Left marginalized during the war, that political power would be based on control of economic institutions. The Soviets understood that economic structures would depend, conversely, on political control. Hence they wished to maintain a substantial share of power in the West, and increasingly total domination in Eastern Europe.

Non-Communist political leaders possessed no unified anti-Bolshevik economic ideology between the wars. Catholics clung to a vision of diffused property. Fascists wanted a vigorous program that combined state-led modernization, rearmament, and coordination of interest-group bargaining. They were defeated, but economic mobilization during the Depression and then World War II brought far more state intervention even to liberal economies. Given the sacrifices demanded from civilian populations, expanding welfare-state policies and sometimes nationalization of basic industries seemed a foreordained imperative for postwar social policy in many European societies. The balance of political forces changed - the Labour Party unexpectedly won the 1945 election in Britain. Coalitions based on resistance forces defeated Fascists and collaborationists on the continent and were prepared to enact the enshrined goals of their socialist participants. Labor union and anti-Fascist political party leaders worked together on "charters" of the resistance or national solidarity pacts that provided for initial wage restraint but more social security, greater protection against unemployment, and further nationalizations of infrastructure. In Britain and the United States, "Keynesian" deficits were accepted as possible fiscal weapons to prevent a return to prewar unemployment. In occupied West Germany, both the Social Democrats and the labor-oriented wing of the Christian Democrats spoke out against any reinstitution of a powerful capitalist industry.43

Call all these latter concepts the ideas of 1945. They enjoyed significant but limited success until the end of the 1970s. The upshot was a social compromise in the West and in Japan. Welfare states were largely instituted, but they coexisted with a return of private enterprise and ownership. The American occupying authorities in Germany helped postpone irrevocable decisions for nationalization until left-wing energies dissipated after 1948-49. Nonetheless, trade unions and the Social Democratic Party sought and achieved a fundamental voice in corporate governance by winning the right of co-determination - that is, parity representation on boards of directors. In

Japan, following extensive debate, American occupation authorities supervised a "reverse course" that helped conservatives to rein in union activism and patiently reconstruct corporate control. Whereas German unions managed to institute co-determination, the Japanese unions worked to forge a system of lifetime job security for their workers. Fascism ended as a political discipline but left its habits and networks: entrepreneurs and political leaders wanted to recover a framework of social discipline and political conservatism. Whether in Italy, Germany, or Japan, labor and management fought to a draw, as American policies both restrained workers’ new strength and assured their new voice. In other countries, conservatives returned to the governing coalitions after 1948 and through the 1950s, which became in general a decade conducive to economic growth under capitalist auspices.

Indeed, as Cold War confrontation congealed at the end of the 1940s, the economic "ideology" that came to play the greatest role in the nonCommunist world was the idea of sustained economic growth - both as high theory and in the applied form that I have earlier termed the "politics of productivity."44 Ideas of progress and enrichment had marked earlier economic analysis fTom the eighteenth century. But the new formalized notions of sustained economic growth as measured by increasing national income could be traced to young Anglo-American economists on the eve of World War II, who assimilated John Maynard Keynes’s 1936 General Theory of Employment, Interest, and Money. But they went beyond Keynes’s concern with using government spending to recover high employment and defined economic goals in terms of achieving a continuous expansion of output. Early growth literature stressed how difficult it was to achieve the delicate equilibrium between consumption and saving so as not to veer off into inflation or recession.45 By the late 1940s, however, New Deal economists and the Truman administration promised that technological innovation would assure continuing expansion year after year. Such steady enrichment would allow simultaneous gains for capital and labor. They were not locked into a class war - a message that American labor delegates as well as entrepreneurs and government officials delivered throughout the late 1940s and 1950s.

Applied to the less-developed countries - then called more frankly "backward" or "undeveloped" - the idea of sustained quantitative growth was reshaped as a template for qualitative and structural change, that is, for economic development, which would be enshrined as an official program in Point IV of Truman’s January 1949 inaugural address. The promise of the vast dam or steel complex attracted intellectuals and policymakers in Asia and Africa, who asked, however, whether their societies might industrialize without replicating the class divisions of the West. Each camp dangled development projects before the nonindustrialized world in an effort to marginalize the influence of the other. The Point IV aid requested, however, remained about i percent of Marshall Plan funding and tended to be extended as an adjunct of trade negotiations on behalf of American firms. Even had sums been larger, development would have remained elusive as even well-funded European areas such as the south of Italy persistently demonstrated.

Specific ideologies aside, the Cold War exerted a profound behavioral impact on economic habits in general. In effect, the protracted confrontation replaced the role of ascetic Protestantism to which Max Weber had ascribed so important a function in Western economic development. Envisaged as a long and enduring commitment, the unremitting vigilance that Cold War leaders invoked naturally reinforced the tradeoff between present and future that is always at the heart of economic progress. As George Kennan signaled in his famous long telegram and anonymous article (signed by "X"), Cold War victory, like economic reconstruction, would take a long time and demand continuing discipline. So, of course, did economic progress. Until the mid-1960s, socialism and capitalism both prioritized the future. Reconstruction required dreams deferred. Remarkably enough, each side did impose that discipline on itself - and this after the most costly war in history had already demanded so much sacrifice. Still, the overarching adversarial contest evoked a capacity for deferred gratification that economic aspirations alone might not motivate. The confrontation between "East" and "West" and the need to rebuild industries and urban centers led to a decade of extraordinary public cohesion. So, too, did the diffuse commitment to reconstituting traditional family and gender roles and the unavowed determination to repress the memory of wartime violence and occupation, complicity, and even betrayal. This extraordinary psychosocial discipline lasted until the mid-i960s. Then the claims of the present, of consumption and of social welfare, of youth culture and expressivity - of detente - reclaimed the present against the future; and the great societal self-discipline - freely chosen or imposed - began to weaken and fray. Music and missiles, rockets and rock and roll began to pull in separate directions.