The Cold War Economy - Essay Example

The Cold War Economy Essential question: Which of these terms best describes the American Cold War economy: 'laissez-faire,' 'mixed,' or 'command' (socialist)? Why? In its quest to evade fiscal anguish similar to the period after WWI, American regime resulted to the use of mixed economy. This entailed the then incumbent president through state’s respective authorities come up with effective authorities meant to support private sector (Whitfield, 2008). This was through establishment of varied acts and strategies, which economists of the day thought would not only boost the private sector but also the entire economy (Whitfield, 2008). This is by availing its population with reliable employment opportunities and other essential services like housing, education for the veterans and other services, hence comprises some of the strategies during then aimed at empowering private sector. The American regime during cold war adopted or utilized mixed economy in its quest to evade fiscal anguish evident in the way it boosted private sector. In order to ensure the then depression did not cripple banking industry, the state intervened with the intention of cushioning loaning process especially. As Mooney explains, “The Federal Housing Administration (FHA) established during the Great Depression to revitalize the real estate and home construction industries played a central role in creating postwar suburban America (Mooney, 147).” Hence, boosting housing market by instituting FHA such that private sector did not have doubt in recovering their invested resources. This is through subsidizing long-term loan mortgages that acted as a great boost to the private sector towards doubling their efforts. This led to the creation of American suburb areas, which the private sector during then could not manage. The government in its efforts to empower war veterans economically, it embarked on devising effective strategies aimed at making their lives easy through education besides other benefits for a predetermined period until they acquired means meant to be stable. As Mooney expounds through G.I. Bill of rights, it “rewarded veterans for wartime service and eased their reentry in three ways, it provide one year of unemployment assistance; it assisted veterans who wanted to go to college or technical school; it also helped millions of veterans purchase homes by guaranteeing mortgage loans made by private lenders (Moony, 139).” The aim of this Bill entailed to evade burden of the returned population from the war as they started to age. Since, once they do not have anything to rely on will be the burden of the state to cater for their respective upkeep in terms of medical care. By imparting them with appropriate knowledge and varied skills within few years, they will be able to depend on themselves. In addition, the government will channel financial support meant for their care to other sectors, hence boost economy. The government also came up with tight laws meant to secure firms’ interests such that employees backed by their respective unions could not result to “wildcat strikes” which extremely expensive. According to lecture notes, “1947 Taft-Hartley Act established certain Presidential powers to be used to retain order in certain emergency situations (such as a strike or lockout that would likely cause adverse effects on an entire industry or would threaten national health, safety or security) (Lecture notes, November 13, 2013).” Hence, showing the then relationship between private sector and central regime in ensuring both private sector, which in this case encompassed industries and workers coexisted well. This is by ensuring both parties once there were any misunderstandings they were capable of resolving them adequate and effectively without resulting to injurious incidences. Some of these injurious or detrimental incidences encompassed unnecessary strikes and sometimes firms retrenching workers due to their respective union persuasions. The government also embarked on boosting varied scientific projects with the intention of enhancing its technological knowhow. Compared to other projects, boosting of technological advancement remained the most core agenda for the American regime, which is evident by the long duration and even big percentage of its involvement in terms of resources. As stated by Janeway in his speech, “federal sources accounted for more than 50% of national R&D (Janeway, “Can government play a positive role in economic development?”).” US’ dedication into enhancing technology is still evident to date whereby as a superpower intends to be the leading state not only in economy but also in the way it undertakes varied processes technologically. Similarly, this was also evident in other sectors including those encompassed security where US did not assume but embarked on full involvement in terms of resources. As Eisenhower explains that, “…the peace is our military establishment (Eisenhower, “Farewell Address”).” The government through its varied initiatives encouraged specialization in the industrial sector, which led to the venturing of numerous emergent players whereas those who were in the field like ford focusing on areas that they could deliver as necessitated. As relayed by NPR staff, “... companies such as Ford built everything from jeeps to bombers (NPR Staff, “Ike's Warning of Military Expansion, 50 Years Later”).” However, monopolization by one corporation came to an absolute end after Korean War whereby more players came in with each specializing on a certain field. This step besides encouraging more players in the field contributed to the increase of revenues not only for the respective firms but also by the government through tax. This is evident in the U.S. News and World Report that stated, “Profits, though, will be favorable in many industries this year. Worker efficiency often will be higher”. Similarly, enhancement of private sector was also evident in the boosting of the then greatest project that intended to highway. According to lecture notes, “National Highway Act was the biggest public project in the America history (Lecture notes, November 11Th 2013).” In conclusion, American regime during cold in order to strengthen and advance economically yielded to embracing mixed economy whose focus encompassed boosting private sector. This is in terms of devising strategies that intended to ensure both the government advanced simultaneously with private sector. For instance, it resulted to funding R&D project, educating war veterans to establish themselves economically, devising laws that will ensure harmonious coexistence between workers and industries besides prompting more players to venture in the industrials sector, which led to both specialization and revenue increment. Work Cited “Ike's Warning Of Military Expansion, 50 Years Later.” NPR. 17Th January 2011. Eisenhower, Dwight, D. “Farewell Address”. 1961. Janeway, William H. “Can government play a positive role in economic development?” 27Th December 2012. Lecture notes. 11Th November 2013. Lecture notes. 13Th November 2013. Mooney, Matthew. History of the U.S. To 1865; Researched and written especially for SBCC History 101. 2013 Fall. Print.  U.S. News and World Report. "Newsgram from the Nation's Capital" 26Th May 1950. Read More