US objectives during the Cold War were to prevent Soviet attacks on the United States and its allies and to prevent the spread of Communism as a political and economic system to other countries, whether by force or by threat, subversion, persuasion, or bribery. The principal instrument to prevent attack was an extensive build-up of defensive and retaliatory military forces, combined with political and military alliances that extended US protection to other countries in exchange for their engagement and support. The principal instruments for preventing the spread of Communism by nonmilitary means involved building an international economic system conducive to economic prosperity; engaging in persuasion, providing incentives, and occasionally imposing economic sanctions; and, not least, promoting a robust US economy that could serve as a stimulant to others and as a beacon for the benefits of a free, enterprise-based, market-oriented economy.

This chapter will examine the second set of instruments, usually neglected by historians of the Cold War in favor of a focus on the actual or threatened military actions and the diplomacy associated with them. Following some introductory remarks, the chapter will discuss developments in the world economy and will highlight the comparative economic performance between Communist countries and what was called the “free world.” I will then analyze the actions taken by the United States, including public expenditures on national security and international affairs that were motivated, at least in part, by their international implications.