Why did Western European economies grow faster than Eastern European economies after World War II?

1 Answer
Apr 26, 2016

It could be construed as a victory of capitalism over communism.

Explanation:

At the end of World War Two Europe was devastated. The split between the Soviet Union and her Western allies meant that the economic regeneration of Western Europe was seen as imperative in preventing the spread of communism, especially in France and Italy both of whom had large communist parties.

On this basis the USA through the Marshall Plan invested billions of dollars to regenerate Western Europe's economies. The development of greater European trade and economic integration initially through the Treaty of Rome in 1956 which set up the EEC, later the EC and now the EU and the growth of capitalism can be contrasted with what happened in Eastern Europe.

Here economic policy was tied into Soviet foreign policy (the same could be said of US policy in the West). Stalin wanted a protective ring of states to prevent further attack from the West.

This included not only a military alliance , the Warsaw Pact set up after Stalin's death but also political union Cominform, and economic union Comecon. Comecon was a way in which the Soviets could exercise highly centralised economic control over Eastern Europe with very restricted trade practices. This in turn led to economic stagnation with member states offloading cheap surpluses onto other member states which no-one wanted.