Blackwell Reference Online

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While western and eastern Europe pursued profoundly different approaches to organizing their economies after 1945, the two regions shared some similar experiences in terms of their economic fortunes in the second half of the twentieth century. Despite the slump of the 1930s, the western Europeans remained committed to capitalism and the market economy. The eastern European nations, however, traveled in a radically different economic direction. Before World War II the Soviet Union had achieved relatively high levels of growth through central planning, and, with Moscow's determination to build a strategic sphere of influence as a means of preventing encirclement by the capitalist nations, communism was imposed on several central and eastern European countries during the 1940s. Whereas western European capitalism was characterized by the interplay of the private and public sectors of the economy, Soviet-style central planning rejected the private market in favor of state direction and ownership of the economic means of production.Nevertheless, both western and eastern Europe enjoyed a substantial period of economic growth from the early 1950s to the mid-1970s. As this chapter will demonstrate, economic growth was achieved in the two regions by radically divergent objectives and means. During the 1970s, moreover, western and eastern Europe endured an arduous phase of economic decline ... log in or subscribe to read full text