The Soviet Union annexed the countries that the Red Army had passed through in the last days of the war, creating the Eastern Bloc. Poland, Bulgaria, Hungary, Czechoslovakia, Romania, and Albania became Soviet Satellite States. Yugoslavia became independently communist. Communist East Germany was created from the Soviet occupation zone in Germany.

- Eastern Bloc, Communist Bloc, or Soviet Bloc – terms used to describe Eastern European states aligned with the USSR. - The U.S.A. was concerned that Western European states, impoverished after the war, would also succumb to communism.

COMMUNIST THEORY  Workers, as a community, own and run all businesses, industry and farms. Economically all people would benefit equally.  Socially this creates a classless society with great freedom where all people would be considered equal. CAPITALIST THEORY Businesses, farms and industry are privately owned by individuals who profit from the sale of goods produced. Individuals pay for the labor of the workers. Pay is based on the efficiency and the skill of the worker. This system creates a social and economic class system.

Marx and Engels’ Communist Manifesto published in ‘The history of all hitherto existing society is the history of class struggles’ Vladimir Lenin seizes control of agrarian Russia after the 1917 Russian Revolution. The world’s first official socialist state is created – the Soviet Union. Joseph Stalin gains total power by the end of the 1920s. Forces industrialization, centralizes power and reduces personal and political freedoms. Takes control of Eastern Bloc. Communist Theory Marxist- Leninism Stalinism Communism in Theory and in Practice

George Marshall (American general) said that every country in Europe was so poor that it was in danger of turning to communism for a solution. A funding plan offered to all European countries including those in the Eastern Bloc. Provided grants (rather than loans) to purchase: -Food - Fuel - Manufactured goods The Marshall Plan made up 10% of the U.S.A.’s national budget.

USSRUSA CubaBritain ChinaAustralia North KoreaFrance North Vietnam

Purpose: -To provide European countries with an attractive alternative to communism - Make the U.S.A. look good! - Pave the way for future financial trade/partnership s between U.S. and Europe

The Marshall Plan and Stalin -Stalin tries to block the Marshall Plan. Prevents Eastern Bloc countries from attaining U.S. aid. - Causes growing friction between Soviet Union and U.S.A.