The betrayals of Stalinism gave the United States the necessary breathing space to consolidate its hegemony and begin to stabilize a shattered world economic system. A period of more sustained economic growth after the war was made possible on the basis of (1) the immense destruction of the European and Asian economies in the war, and (2) the economic strength of American industry based on advances in the productive process. American capitalism sought to “reorganize the world” through a financial and currency regime (the Bretton Woods System), within which the American dollar would play the role of world reserve currency, with fixed international exchange rates and dollar-gold convertibility. With the support of the other capitalist powers, it created institutions such as the International Monetary Fund and the World Bank to regulate international economic affairs. With the Marshall Plan, begun in 1947, American capitalism sought to stimulate the economic recovery of Europe and Asia, which was the necessary foundation for the expansion of the US economy. On this basis of American hegemony over the capitalist system, world trade expanded rapidly following the war.
This international economic restabilization was the material foundation for national reformist policies in countries throughout the world. In the United States, the American bourgeoisie pursued a policy of Keynesian demand stimulation. It responded to the post-war strike wave by granting significant economic concessions to the industrial working class, continuing the reformist policies of the New Deal era that had been designed to avert social revolution. At the same time, with the support of the right-wing AFL and CIO trade union bureaucracies, it purged the trade unions and other American institutions of socialist-minded workers and members of the Communist Party. In Europe, a similar program of nationally-based social reform and labor-management collaboration was implemented with the active collaboration of the Social Democrats and trade unions. In the economically backward and former colonial countries, national bourgeois regimes were able to win a certain degree of independence, often by balancing between the Soviet Union and the United States. Through a policy that came to be known as import substitution industrialization, many former colonies were able to pursue a limited policy of domestic industrial development and agrarian reform. In the Soviet Union, the Stalinist bureaucracy oversaw a significant development of Soviet industry on the basis of national economic planning, albeit extremely distorted by the bureaucracy itself.
In international relations, the US sought to prevent any new eruption of direct conflict between the major capitalist powers, establishing institutions such as the United Nations to regulate international relations. The end of the war brought with it the beginning of the “Cold War” conflict between the United States and the Soviet Union. The immediate euphoria with which the American bourgeoisie greeted its nuclear monopoly was quickly shattered when the Soviet Union acquired the atomic bomb. A bitter struggle ensued within the political elite between those sections counseling the “containment” of the USSR and those advocating its military “rollback.” The logic of the latter position threatened to lead, as was well understood, to full-scale nuclear war. The conflict within the bourgeoisie came to a head in 1950, during the Korean War, when General Douglas MacArthur demanded that he be allowed to drop nuclear bombs on China to stop the advance of its troops into the Korean peninsula. Truman fired MacArthur. The “containment” faction had prevailed. For its part, the Stalinist bureaucracy set a strategic goal of accommodation with imperialism, expressed in the policy of “peaceful coexistence,” a logical continuation of the theory of “socialism in one country.” This uneasy truce, in which the two “superpowers” engaged in a nuclear arms race and competed for influence in the underdeveloped countries, frequently threatened to break out into full-scale conflict.