What were the economic impacts of the Cuban Missile Crisis?

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The American economy grew as a result of the Cuban Missile Crisis. The crisis demonstrated that the United States needed to have the best delivery systems for its nuclear weapons and needed to be able to use these weapons in order to deter Soviet aggression. Kennedy was elected on the claims of a missile gap between the United States and the Soviet Union, and the Cuban Missile Crisis only reinforced the message that the United States should put more funds into its military-industrial complex. The Cuban Missile Crisis also sparked new interest in technology, especially early computing. Scientists looked for the most efficient ways to send a payload thousands of miles into Soviet territory. This same technology was also used in the Space Race on American rockets.

The Cuban Missile Crisis also placed Cuba firmly into toe Soviet camp, thus making them reliant on Soviet aid. What little hope that Castro would moderate evaporated with the island nearly turning into the first battlefield of WWIII. After the crisis, the Soviet Union distanced itself somewhat publicly from Castro in order not to spark another potential escalation. The Soviet Union would remain Cuba's strongest ally, but it would receive less aid as the Soviet Union started to fail. Once the Soviet Union fell, what little economy there was in Cuba died. The US embargo enacted during the 1960s hurt the average Cuban and even today, much of the island is still quite poor.

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The Cuban Missile crisis had some pretty major ancillary effects on the economy, mainly because it enhanced the idea of a nuclear threat from a hostile country. There are two main effects that this crisis had on the American economy.

The first effect was the perpetuation and escalation of the Cold War. The perpetuation of this conflict actually contributed greatly to the American economy because funds were diverted towards research and development as well as to staffing a military presence throughout the world. The fear it created also led to a lot of saving and rationing; this resulted in some shortages, but for the most part, the economy saw development because of military staffing and efforts.

The second effect was the development of technology. The technology sectors thrived during the Cold War; the threats posed by nuclear war (which were escalated by the missile crisis) necessitated much more advanced monitoring and computing power. Because of this, the technology sector saw much growth, causing more economic development.

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The Cuban Missile Crisis resulted in the further economic isolation of the Cuban people, as the United States's embargo on Cuba solidified following the resolution of the Crisis. The aftermath of the Cuban Missile Crisis resulted in the Cuban economy being even more dependent on the Soviet Union and the Eastern Bloc for economic aid. As the Soviet Union began declining and eventually collapsed, the Cuban economy entered into a deep economic crisis, losing over 80% of its foreign imports and exports. One of the largest import/export products that it lost was petroleum from the Soviet Union. Cuba depended on this import for power and depended on using any excess petroleum for export to other nations. As the Soviet Union began dealing in strength and eventually collapsed, Cuba was forced to follow more capitalist market policies in order to survive in a capitalist-dominant world market. The resolution of the Crisis also intensified military spending and growth in the United States and continued to situate the United States as a military and economic world power.

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The Cuban Missile Crisis ensured that the United States' embargo on Cuba would continue indefinitely. Although the crisis had been resolved without a single shot being fired in anger, animosity and distrust of the Castro regime was now greater than ever in Washington, ensuring that a normalizing of economic relations between the two countries was out of the question for the foreseeable future. Naturally, this had a more damaging impact on Cuba than on the United States. The United States was an economic superpower, with far more goods to sell than the Cubans and far more available markets in which to sell them. As for the Cubans, the intensification of the embargo after the Cuban Missile Crisis made them even more economically reliant on the Soviet Union and the Eastern Bloc countries.

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I would say that one of the most relevant impacts of the Cuban Missile Crisis was the continued growth of the military industrial complex.  Even though the Crisis was solved through back channel communication and adroit diplomacy, the reality is that the military industrial complex recognized that "hot spots" anywhere and everywhere in the world could lead to government spending on defense.  This has relevance economically because the complex is dependent on legislators awarding large defense contracts to companies who end up generating immense profit from the business of war. Some have been able to draw a line between the Cuban Missile Crisis and the military industrial complex's feeding frenzy in the Vietnam Conflict.  Seymour Melman argues that the Cuban Missile Crisis' economic impact was to directly intensify the growth of the military industrial complex's role in the Vietnam War.  The argument goes that while diplomacy averted a major crisis in Cuba, the military industrial complex understood that there would be times when diplomacy would not work.  In these settings, the economics of war would prove beneficial to companies who were directly a part of the structure.  In this, one can see how the economic impacts of the Cuban Missile Crisis might not be entirely evident on face value, but do show some relevancy in expanding the discussion to economic life after the crisis.

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