Between 1945 and 1965, economic recovery had brought renewed growth to Europe. Nevertheless, the political divisions between Western and Eastern Europe remained; so did disparities in prosperity.
Between 1964 and 1982, Significant change in the Soviet Union seemed highly unlikely. The man in charge, Leonid Brezhnev (1906-1982), lived by the slogan “No experimentation.” Brezhnev had entered the ranks of the Party leadership under Stalin and, after the overthrow of Khrushchev in 1964, had become head of both the Communist Party and the state. He was optimistic, yet reluctant to reform. Overall, the Brezhnev years were relatively calm, although the Brezhnev Doctrine – the right of the Soviet Union to intervene if socialism was threatened in another socialist state – became an article of faith and led to the use of Soviet troops in Czechoslovakia in 1968.
THE BREZHNEV YEARS Brezhnev benefited from the more relaxed atmosphere associated with detente (day-TAHNT) (see “The Cold War: The Move to Detente” later in this chapter). The Soviets had reached a rough parity with the United States in nuclear arms and enjoyed a sense of external security that seemed to allow for a relaxation of authoritarian rule. The regime permitted more access to Western styles of music, dress, and art, although dissenters were still punished. Physicist Andrei Sakharov (ahn-DRAY SAH-kuh-rawf) (1921-1989), for example, who had played an important role in the development of the Soviet hydrogen bomb, was placed under house arrest for his defense of human rights.
In his economic policies, Brezhnev continued to emphasize heavy industry. Overall industrial growth declined, although the Soviet production of iron, steel, coal, and cement surpassed that of the United States. Two problems bedeviled the Soviet economy. The government’s insistence on vigorous central planning led to a huge, complex bureaucracy that discouraged efficiency and reduced productivity. Moreover, the Soviet system, based on guaranteed employment and a lack of incentives, bred apathy, complacency, absenteeism, and drunkenness. Agricultural problems added to Soviet economic woes. Bad harvests in the mid-1970s, caused by a series of droughts, heavy rains, and early frosts, forced the Soviet government to buy grain from the West, particularly the United States. To their chagrin, the Soviets were increasingly dependent on capitalist countries.
By the 1970s, the Soviet Union had developed a ruling system that depended on patronage as a major avenue of advancement. Those who aspired to rise in the Communist Party and the state bureaucracy needed the support of successful Party leaders. At the same time, Party and state leaders – as well as leaders of the army and the secret police (KGB) – received awards and material privileges. Brezhnev was unwilling to tamper with the Party leadership and state bureaucracy despite the inefficiency and corruption that the system encouraged.
By 1980, the Soviet Union was ailing. A declining economy, a rise in infant mortality rates, a dramatic surge in alcoholism, and a deterioration in working conditions all gave impetus to a decline in morale and a growing perception that the system was foundering. Within the Party, a small group of reformers emerged who understood the real condition of the Soviet Union. One member of this group was Yuri Andropov (YOOR-ee ahn-DRAHP-awf) (1914-1985), head of the KGB and successor to Brezhnev after the latter’s death in November 1982. But Andropov was in poor health when he came to power, and he was unable to make any substantive changes. His most significant move may have been his support for a young reformer, Mikhail Gorbachev (meek-HAYL GOR-buh-chawf) (b. 1931), who was climbing the rungs of the Party ladder. When Party leaders chose Gorbachev as Party secretary in March 1985, a new era began (see Chapter 30).
As we saw in Chapter 28, the attempt of the Poles and Hungarians to gain their freedom from Soviet domination had been repressed in 1956. This year of discontent had consequences, however. Soviet leaders now recognized that Moscow could maintain control over its satellites in Eastern Europe only by granting them leeway to adopt domestic policies appropriate to local conditions. As a result, Eastern European Communist leaders now adopted reform programs to make socialism more acceptable to their subject populations.
In Poland, continued worker unrest led to the rise of the independent labor movement called Solidarity. Led by Lech Walesa (LEK vah-WENT-sah) (b. 1943), Solidarity represented 10 million of Poland’s 35 million people. With the support of the workers, many intellectuals, and the Catholic Church, Solidarity was able to win a series of concessions. The Polish government seemed powerless to stop the flow of concessions until December 1981 , when it arrested Walesa and other Solidarity leaders, outlawed the union, and imposed military rule.
The government of János Kadar in Hungary enacted the most far-reaching reforms in Eastern Europe. In the early 1960s, Kadar legalized small private enterprises, such as retail stores, restaurants, and artisan shops. His economic reforms were termed “Communism with a capitalist facelift.” Under his leadership, Hungary moved slowly away from its strict adherence to Soviet dominance and even established fairly friendly relations with the West.
THE PRAGUE SPRING Czechoslovakia did not share in the thaw of the mid-1950s and remained under the rule of Antonin Novotny (AHN-toh-nyeen noh-VAHT-nee) (1904-1975), who had been placed in power by Stalin himself. By the late 1960s, however, Novotny had alienated many members of his own party and was particularly resented by Czechoslovakia’s writers, such as the playwright Václav Havel (VAHT-slahf HAH-vul) (1936-2011). A writers’ rebellion late in 1967, in fact, led to Novotny’s resignation. In January 1968, Alexander Dubček (DOOB-chek) (1921-1992) was elected first secretary of the Communist Parry and soon introduced a number of reforms, including freedom of speech and the press, freedom to travel abroad, and a relaxation of secret police activities. Dubček hoped to create “communism with a human face.” A period of euphoria erupted that came to be known as the “Prague Spring” (see the box on p. 909).
It proved short-lived. The euphoria had led many to call for more far-reaching reforms, including neutrality and withdrawal from the Soviet bloc. To forestall the spreading of this “spring” fever, the Red Army invaded Czechoslovakia in August 1968 and crushed the reform movement. Gustáv Husak (goo-STAHV HOO-sahk) (1913-1991), a committed nonreformist, replaced Dubček, abolished his reforms, and reestablished the old order.
Elsewhere in Eastern Europe, Stalinist policies continued to hold sway. In the early 1950s, the ruling Communist government in East Germany, led by Walter Ulbricht, had consolidated its position and become a faithful Soviet satellite. Industry was nationalized and agriculture collectivized. After Soviet tanks crushed a workers’ revolt in 1953, a steady flight of East Germans to West Germany ensued, primarily through the divided city of Berlin. This exodus of mostly skilled laborers created economic problems and led the East German government in 1961 to build the infamous Berlin Wall separating West from East Berlin, as well as equally fearsome barriers along the entire border with West Germany.
After building the wall, East Germany succeeded in developing the strongest economy among the Soviet Union’s Eastern European satellites. In 1971, Ulbricht was succeeded by Erich Honecker (AY-rikh HOH-nek-uh) (1912-1992), a party hard-liner who made use of the Stasi (SHTAH-see), the secret police, to rule with an iron fist for the next eighteen years. By 1989, there was one Stasi officer for every 165 people in East Germany. Prosperity (by 1980, East Germany had the tenth-largest economy in the world) and repression were the two mainstays of East Germany’s stability.
Repression was also an important part of Romania’s postwar history. By 1948, with Soviet assistance, the Communist People’s Democratic Front had assumed complete power in Romania. In 1965, leadership of the Communist government passed into the hands of Nicolae Ceaușescu (nee-koh-LY chow-SHES-koo) (1918-1989), who with his wife, Elena, established a rigid and dictatorial regime. Ceaușescu ruled Romania with an iron grip, using a secret police force – the Securitate – as his personal weapon against dissent.
After two decades of incredible economic growth, Europe experienced severe economic recessions in 1973-1974 and 19791983. Both inflation and unemployment rose dramatically. A substantial increase in the price of oil in 1973 was a major cause for the first downturn. But other factors were present as well. A worldwide recession had led to a decline in demand for European goods, and in Europe itself, the reconstruction of many European cities after their devastation in World War II had largely been completed. The economies of the Western European states recovered in the course of the 1980s, although problems remained.
WEST GERMANY After the Adenauer era, West German voters moved politically from the center-right politics of the Christian Democrats to center-left politics, and in 1969, the Social Democrats became the leading party. By forming a ruling coalition with the small Free Democratic Party (FPD), the Social Democrats remained in power until 1982. The first Social Democratic chancellor was Willy Brandt (VIL-ee BRAHNT) (1913-1992). Brandt was especially successful with his “opening toward the east”-known as Ostpolitik (OHST-paw-li-teek) – for which he received the Nobel Peace Prize in 1972. On March 19, 1971 , Brandt met with Walter Ulbricht, the leader of East Germany, and worked out the details of a treaty that was Signed in 1972. This agreement did not establish full diplomatic relations with East Germany but did call for “good neighborly” relations. As a result, it led to greater cultural, personal, and economic contacts between West and East Germany. Despite this success, the discovery of an East German spy among Brandt’s advisers caused his resignation in 1974.
His successor, Helmut Schmidt (HEL-moot SHMIT) (b. 1918), was more of a technocrat than a reform-minded socialist and concentrated primarily on the economic problems largely brought about by high oil prices between 1973 and 1975. Schmidt was successful in eliminating a deficit of 10 billion marks in three years. In 1982, when the coalition of Schmidt’s Social Democrats with the Free Democrats fell apart over the reduction of social welfare expenditures, the Free Democrats joined with the Christian Democratic Union of Helmut Kohl (HEL-moot KOHL) (b. 1930) to form a new government.
GREAT BRITAIN: THATCHER AND THATCHERISM Between 1964 and 1979, Britain’s Conservative and Labour Parties alternated in power. Neither party could end the fighting between Catholics and Protestants in Northern Ireland. Violence increased as the Irish Republican Army (IRA) staged a series of dramatic terrorist acts in response to the suspension of Northern Ireland’s parliament in 1972 and the establishment of direct rule by London. Nor was either party able to deal with Britain’s ailing economy. Failure to modernize had made British industry less and less competitive. Frequent labor strikes, many of them caused by conflicts between rival labor unions, also hampered the economy.
In 1979, after Britain’s economic problems had seemed to worsen during five years of Labour government, the Conservatives returned to power under Margaret Thatcher (1925-2013). She became the first woman to serve as prime minister in British history (see the box on p. 912). Thatcher pledged to lower taxes, reduce government bureaucracy, limit social welfare, restrict union power, and end inflation. The “Iron Lady,” as she was called (see the Film & History feature on p. 913 ), did break the power of the labor unions. Although she did not eliminate the basic components of the social welfare system, she instituted austerity measures to control inflation. “Thatcherism,” as her economic policy was termed, improved the British economic situation, but at a price. The south of England, for example, prospered, but the old industrial areas of the Midlands and north declined and were beset by high unemployment, poverty, and sporadic violence. Cutbacks in education seriously undermined the quality of British education, long regarded as among the world’s finest.
In the area of foreign policy, Thatcher, like Ronald Reagan in the United States, took a hard-line approach toward communism. She oversaw a large military buildup aimed at replacing older technology and reestablishing Britain as a world police officer. In 1982, when Argentina attempted to take control of the Falkland Islands (one of Britain’s few remaining colonial outposts; known to Argentines as the Malvinas) 300 miles off its coast, the British successfully rebuffed the Argentines, although at considerable economic cost and the loss of 255 lives. The truth, however, in a world dominated by two superpowers – the United States and the Soviet Union – Britain was no longer a world power.
UNCERTAINTIES IN FRANCE The worsening of France’s economic situation in the 1970s brought a shift to the left politically. By 1981 , the Socialists had become the dominant party in the National Assembly, and the Sodalist leader, François Mitterrand (frahnh-SWAH MEE-tayr-rahnh) (1916-1995), was elected president. His first priority was dealing with France’s economic difficulties. In 1982, Mitterrand froze prices and wages in the hope of reducing the huge budget deficit and high inflation. He also passed a number of liberal measures to aid workers: an increased minimum wage, expanded social benefits, a mandatory fifth week of paid vacation for salaried workers, a thirty-nine-hour workweek, and higher taxes on the rich. Mitterrand’s administrative reforms included both centralization (nationalization of banks and industry) and decentralization (granting local governments greater powers). The party’s victory had convinced the Sodalists that they could enact some of their more radical reforms. Consequently, the government nationalized the steel industry, major banks, the space and electronics industries, and important insurance firms.
The Socialist policies largely failed, however, and within three years, a decline in support for the Socialists caused the Mitterrand government to turn portions of the economy back over to private enterprise. Some economic improvement in the late 1980s enabled Mitterrand to win a second seven-year term in the 1988 presidential elections.
CONFUSION IN ITALY In the 1970s and 1980s, Italy continued to practice the politics of coalitions that had characterized much of its history. Italy witnessed the installation of its fiftieth postwar government in 1991, and its new prime minister, Giulio Andreotti (JOOL-yoh ahn-dray-AH-tee) (b. 1919), had already served six times in that office. Italian governments continued to consist of coalitions mostly led by the Christian Democrats.
In the 1980s, even the Communists had been included briefly in the government. The Italian Communists had become advocates of Eurocommunism, basically an attempt to broaden communism’s support by dropping its Marxist ideology. Although its popularity declined in the 1980s, the Communist Party still garnered 26 percent of the vote in 1987.
The Communists also won a number of local elections and took charge of municipal governments in several cities, including Rome and Naples, for a brief time.
In the 1970s, Italy suffered from a severe economic recession. The Italian economy, which depended on imported oil as its chief source of energy, was especially vulnerable to the steep increase in oil prices in 1973. The economic problems were accompanied by a host of political and social problems: student unrest, mass strikes, and terrorist attacks. In 1978, a former prime minister, Aldo Moro, was kidnapped and killed by the Red Brigades, a terrorist organization. Then, too, there was the all-pervasive and corrupting influence of the Mafia, which had always been an important factor in southern Italy but spread to northern Italy as w ell in the 1980s. Italy survived the crises of the 1970s and in the 1980s began to experience remarkable economic growth. But severe problems remained.
THE EUROPEAN COMMUNITY After 1970, Western European states continued to pursue the goal of integrating their economies. Beginning with six states in 1957, the European Economic Community expanded in 1973 when Great Britain, Ireland, and Denmark joined what its members now renamed the European Community (EC). Greece joined in 1981, followed by Spain and Portugal in 1986. The economic integration of the members of the EC led to cooperative efforts in international and political affairs as well. The foreign ministers of the twelve members consulted frequently and provided a common front in negotiations on important issues.
With the election of Richard Nixon (1913-1994) as president in 1968, American politics made a shift to the right. Nixon ended American involvement in Vietnam by 1973 by gradually withdrawing American troops. Politically, he pursued a “southern strategy,” carefully calculating that “law and order” issues and a slowdown in racial desegregation would appeal to southern whites. The South, which had once been a Democratic stronghold, began to form a new allegiance to the Republican Party. The Republican strategy also gained support among white Democrats in northern cities, where court-mandated busing to achieve racial integration had led to a backlash among whites.
As president, Nixon was paranoid about conspiracies and began to use illegal methods to gather intelligence on his political opponents. One of the president’s advisers explained that their intention was to “use the available federal machinery to screw our political enemies.” Nixon’s zeal led to the Watergate scandal-the attempted bugging of Democratic National Headquarters, located in the Watergate apartment and hotel complex in Washington, D.C. Although Nixon repeatedly lied to the American public about his involvement in the affair, secret tapes of his own conversations in the White House revealed the truth. On August 9, 1974, Nixon resigned the presidency rather than face possible impeachment and then trial by the U.S. Congress.
ECONOMIC PROBLEMS After Watergate, American domestic politics focused on economic issues. Vice President Gerald Ford (1913-2006) became president when Nixon resigned, only to lose in the 1976 election to the former governor of Georgia, Jimmy Carter (b. 1924). Both Ford and Carter faced severe economic problems. The period from 1973 to the mid-1980s was one of economic stagnation, which came to be known as stagflation-a combination of high inflation and high unemployment. In part, the economic downturn stemmed from a dramatic change in oil prices. Oil was considered a cheap and abundant source of energy in the 1950s, and Americans had grown dependent on imported oil from the Middle East. But an oil embargo and price increases by the Organization of Petroleum Exporting Countries (OPEC) as a result of the Arab-Israeli War in 1973 quadrupled oil prices. Additional price hikes increased oil prices twentyfold by the end of the 1970s, encouraging inflationary tendencies throughout the economy.
By 1980, the Carter administration faced two devastating problems. High inflation and a noticeable decline in average weekly earnings were causing a drop in American living standards. At the same time, a crisis abroad had erupted when fifty-three Americans were taken hostage by the Iranian government of Ayatollah Khomeini (ah-yah-TUL-uh khoh-MAYnee). Carter’s inability to gain the release of the hostages led to perceptions at home that he was a weak president. His overwhelming loss to Ronald Reagan (1911-2004) in the election of 1980 enabled the chief exponent of right-wing Republican policies to assume the presidency and initiate a new political order.
THE REAGAN REVOLUTION The Reagan Revolution, as it has been called, consisted of a number of new policies. Reversing decades of increased spending on social welfare, Reagan cut back on the welfare state by reducing spending on food stamps, school lunch programs, and job programs. At the same time, his administration fostered the largest peacetime military buildup in American history. Total federal spending rose from $631 billion in 1981 to more than $1 trillion by 1986. But instead of raising taxes to pay for the new expenditures, which far outweighed the budget cuts in social areas, Reagan convinced Congress to rely on “supply-side economics.” Massive tax cuts would supposedly stimulate rapid economic growth and produce new revenues. Much of the tax cut went to the wealthy. Reagan’s policies seemed to work in the short run as the United States experienced an economic upturn that lasted until the end of the 1980s. The spending policies of the Reagan administration, however, also produced record government deficits, which loomed as an obstacle to long-term growth. In 1980, the total government debt was around $930 billion. By 1988, the total debt had almost tripled, reaching $2.6 trillion.
In 1963, during a major economic recession, the Liberals had been returned to power in Canada. The most prominent Liberal government was that of Pierre Trudeau (PYAYR troo-DOH) (1919-2000), who came to power in 1968. Although French Canadian in background, Trudeau was dedicated to Canada’s federal union, and in 1968, his government passed the Official Languages Act that allowed both English and French to be used in the federal civil service. Although Trudeau’s government vigorously pushed an industrialization program, high inflation and Trudeau’s efforts to impose the will of the federal government on the powerful provincial governments alienated voters and weakened his government. Economic recession in the early 1980s brought Brian Mulroney (b. 1939), leader of the Progressive Conservative Party, to power in 1984.