Cold War:

1940’s

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• Theory of Capitalism

• Vocabulary

• Review Questions

Theory of CapitalismUnited States

• “All industry, business, and agriculture should be owned by private people or firms. Competition between rival factories or shops or farms will cause prices to fall, and make firms more efficient.”

• Any person should be free to start a business and employ people.

• Any profit he or she makes is reward for hard work.• Opportunity for all.• Average standard of living higher than under Communism,

but a wide spread between rich and poor.• A free economy.• A choice of many parties of government, chosen by the

people, democracy.

Theory of CommunismSoviet Union

• Communism – Soviet Union• “Everything belongs to the state and should be run by the

government on behalf of the people. A classless society achieved by overthrowing Capitalism by revolution.”

• No private person should be allowed to profit from the work of other citizens.

• All profits, instead of going into the pockets of one owner or even shareholders, goes to the state – everyone benefits.

• Lower average standard of living, but (in theory) everyone is equal.• Fairness and equality for all.• A controlled economy.• Only one party of Government, no need for any more.

Vocabulary

• Berlin WallDefinition:A 28-mile wall that separated the city of Berlin into two parts —East Berlin and West Berlin — and that kept the people of East Berlin cut off from the rest of the world. The Berlin Wall came down on November 9, 1989.Context:If people from East Berlin attempted to scale the Berlin Wall and escape to the West, they could be shot.

• Cold WarDefinition:A term describing the intense competition and mistrust between countries in the West and those in the East; over time, the Cold War came to represent the nuclear arms race between the United States and the Soviet Union, as well as the competition to conquer space.Context:Because citizens of the United States were worried about the threat of nuclear war during the Cold War, they built bomb shelters and practiced ways to take shelter during an attack.

Vocabulary (continued)

• CommunismDefinition:A form of government and an economic system adopted by the Soviet Union and many countries in Eastern Europe. Communism fell in Eastern Europe in 1989 and in Russia in 1991.Context:Under the communist system, government ownership of property is stressed over private ownership, and the overall goal is to provide economic security for all people.

• Cuban Missile CrisisDefinition:A confrontation between the United States and the Soviet Union that occurred in 1962 over the presence of Soviet-supplied missiles in CubaContext:Many historians believe that the Cuban Missile Crisis was the closest the world ever came to a full-scale nuclear war.

• Iron CurtainDefinition:A term used to describe the separation and isolation of Eastern Europe from the West as a result of Soviet barriers against the WestContext:Winston Churchill coined the phrase when he said that "an iron curtain had descended across the continent of Europe."

1. Because citizens of the United States were worried about the threat of ___________ __________ during the Cold War, they built bomb shelters and practiced ways to take shelter during an attack.

a. Soviet Union Invasion

b. Nuclear War

c. German Invasion

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That’s right!

2. The belief that “no private person should be allowed to profit from the work of other citizens” is associated with _______________.

a. Communism

b. Capitalism

c. Democracy

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3. Capitalism is based on __________________.

a. Democracy

b. Competition

c. Truman’s administration

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