19.2 The Western Democracies and Japan

Despite the tensions of the Cold War, the United States enjoyed a period of great prosperity and growth in the postwar decades. Its booming economy became a symbol of the power of capitalism and democratic freedoms in the ongoing propaganda war against communism.

Photo of a tall glass building next to a shorter, curved white building with several flags.

New York City was chosen as the headquarters of the new United Nations.


  • Analyze the postwar American economy.
  • Identify developments in American society and government.
  • Explain how Western Europe rebuilt and moved toward greater unity.
  • Describe how Japan changed after World War II.

Key Terms

  • suburbanization
  • interdependence
  • recession
  • segregation
  • discrimination
  • Dr. Martin Luther King, Jr.
  • Konrad Adenauer
  • welfare state
  • Margaret Thatcher
  • European Union
  • gross domestic product (GDP)

Postwar Prosperity in the United States

In the postwar decades, the American economic system flourished. American businesses expanded into markets around the globe. The dollar was the world's strongest currency. Foreigners flocked to invest in American industry and to buy U.S. government bonds. America's wealth was a model for other democracies and a challenge to the stagnant economies of the communist world.

America in a Central Role

During the Cold War, the United States was a global political leader. The headquarters of the League of Nations had been symbolically located in neutral Switzerland. The headquarters of the newly formed United Nations was built in New York City.

The United States also played a leading economic role. America had emerged untouched from the horrendous destruction of the Second World War. Other nations needed American goods and services, and foreign trade helped the United States achieve a long postwar boom. The long postwar peace among democratic nations helped to spread this boom worldwide.

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Table of Contents

World History Topic 1 Origins of Civilization (Prehistory–300 B.C.) Topic 2 The Ancient Middle East and Egypt (3200 B.C.–500 B.C.) Topic 3 Ancient India and China (2600 B.C.–A.D. 550) Topic 4 The Americas (Prehistory–A.D. 1570) Topic 5 Ancient Greece (1750 B.C.–133 B.C.) Topic 6 Ancient Rome and the Origins of Christianity (509 B.C.-A.D. 476) Topic 7 Medieval Christian Europe (330–1450) Topic 8 The Muslim World and Africa (730 B.C.-A.D. 1500) Topic 9 Civilizations of Asia (500–1650) Topic 10 The Renaissance and Reformation (1300–1650) Topic 11 New Global Connections (1415–1796) Topic 12 Absolutism and Revolution Topic 13 The Industrial Revolution Topic 14 Nationalism and the Spread of Democracy (1790–1914) Topic 15 The Age of Imperialism (1800–1914) Topic 16 World War I and the Russian Revolution (1914–1924) Topic 17 The World Between the Wars (1910–1939) Topic 18 World War II (1930–1945) Topic 19 The Cold War Era (1945–1991) Topic 20 New Nations Emerge (1945–Present) Topic 21 The World Today (1980-Present) United States Constitution Primary Sources 21st Century Skills Atlas Glossary Index Acknowledgments