Postwar Economy Flashcards
What are different terms for the economic miracle?
‘les trente glorieuses’, the Wirschaftwunder and miracolo economico
How fast did the European real GDP per head grow?
− Western Europe’s real GDP per head of population grew about twice as fast as the secular rate
What was the ratio of hour worked payment to USA in Italy go from?
− Ratio of hour worked payment to USA in Italy went from 38% in 1950 to 74% by the end of the Golden Age
What could be said of cyclical fluctuations in the Golden Age?
− Cyclical fluctuations were mild-no European country experienced a decline in GDP between 1950 and 1970.
Where, in the 1950s, did growth occur the fastest?
In the 1950s, countries with greater potential for postwar reconstruction (e.g. West Germany) grew faster than others.
What economies performed the best in the Golden Age?
Both in the 1950s and early 1960s, countries with large agricultural sectors (e.g. Italy) performed relatively well by transferring resources from low- to high-productivity sectors.
What happened post-1965?
After 1965, shifts in capital -to-labour ratios and technology gaps took centre stage in engineering growth.
Describe the impact of trade liberalisation
Trade liberalization and movement towards multilateral payments and currency convertibility raised income levels not only by promoting more efficient resource allocation but also by enhancing technology transfer, competition, and the realization of both internal and external economies of scale. Technology transfer played a relevant role in helping Europe to reduce the technology gap with the United States.
Describe European trends of unemployment
Unemployment dropped below 4% in West Germany only in the late 1950s, and in Italy after 1960, whereas in Britain, Sweden, and the Netherlands it kept that level throughout 1945-60 and was usually much lower.
What could be said of the USA during the Golden Age?
WWII saw no damage, GNP rise by 2/3rds – growth not impressive in Golden Age
What was Italian unemployment during the 1950s?
unemployment 8% during 1950s
When did popular affluence, full employment and so on become widespread?
Society of popular affluence, full employment, did not become apparent until 1960s, when unemployment stood at 1.5%.
What could be said of growth in Eastern Europe?
Growth in Eastern European nations was only slightly less than in West – apart from in Germany – East lagged behind West.
What could be said of food production during the period?
Total food production of the poor world in 1950s and 1960s rose faster than in the developed world.
What was the situation in 1970s?
1970s – it became cheaper to buy Dutch cheese on Caribbean islands than in the Netherlands – due to EEC dumping of overproduced goods at below market price
What fuelled the golden age?
the Golden Age was golden was that the price of a barrel of Saudi oil averaged less than $2 throughout the entire period from 1950 to 1973, thus making energy ridiculously cheap, and getting cheaper all the time.
What impact had CFCs had?
CFCs: At the end of the war they had barely been used, but by 1974 over 300,000 tons of one compound and over 400,000 tons of another were being released into the atmosphere each year
What was central to economic growth?
R&D
What were Eurodollars?
Eurodollars/ Eurocurrency - Dollars held on deposit in non-US banks and not repatriated, mainly to avoid the restrictions of US banking law, became a negotiable financial instrument
Describe the new international division of labour
A new international division of labour therefore began to undermine the old one. The German firm Volkswagen set up car factories in Argentina, Brazil (three plants), Canada, Ecuador, Egypt, Mexico, Nigeria, Peru, South Africa and Yugoslavia - as usually, mainly after the mid-l960s. New Third-World industries supplied not only the swelling local markets, but also the world market
Student population information
Before the Second World War even Germany, France and Britain, three of the largest, most developed, and educated countries with a total population of 150 millions, contained no more than 150,000 or so university students between them, or one tenth of one per cent of their joint populations. Yet by the late 1980s students were counted in millions in France, the Federal Republic of Germany, Italy, Spain and the USSR.
Detail extensively the nature of regional underdevelopment
A region was deemed underdeveloped if its per capita GDP was less than 75% of the Community’s average. From the 1970s, most of the newly accepted member countries – first Ireland, then Greece and Portugal, plus most regions of Spain – were considered to be underdeveloped. In addition, underdeveloped areas within prosperous countries were designated: the Mezzogiorno in Italy, France’s over-seas departments and Corsica, Britain’s declining industrial regions and Northern Ireland, the new “L¨ander,” the former East Germany in unified Germany. Altogether nearly one-quarter of the Community’s population lived in such areas
What was the GDP ratio in Europe>
The ratio of per capita GDP between the ten most and least prosperous regions was 5:1; unemployment in the twenty-five regions with the highest rate averaged 21%, while the twenty-five regions with the lowest rate of unemployment had only 4% unemployment in 1993. Income parity and prosperity were ambitious goals.
Defence Expenditures
In the 1960s–1970s, roughly half of the U.S. budget was spent on defense, including military R&D expenditure. This share was practically the same in Britain, while France spent one-third and Germany between one-fifth and one-tenth of their budgets on defense research and development
Detail the composition of the French economy
− Until the early 1980s, France had a mixed economy with a strong state sector comprising 94% of energy industries, 83% of telecommunications industries, 46% of transportation, 44% of banking, and 6% of other industries.
Describe the capital stock of Europe
In 1950, the capital stock of France, Germany, Britain, and the Netherlands amounted to only 40% of that of the United States. By 1991, the same capital stock surpassed the U.S. level by about 8%, while the U.S. level itself increased nearly fourfold.
Describe the disappearance of the agricultural population
− “Disappearance” of the agricultural population – its percentage share of the active population declined from 20–25% in 1950 to roughly 10% by the 1970s.
Detail the French agricultural economy
In France in 1946, 36% of the population worked in agriculture, but this fell to 10% by 1975. Mechanization became a major force of growth. During the 1970s and 1980s, virtually all aspects of farm production experienced mechanization: sowing, hoeing, and harvesting, including potatoes, sugar beets, grapes, and fruits.
What impact did artificial fertiliser have?
The use of artificial fertilizer and other chemical agents, a second major factor of industrializing agriculture, appeared around the turn of the century but made relatively slow progress during the first fifty years
Detail information about the Germany economy
− Germany: Technologically advanced and research intensive branches, such as the chemical, electrical, and precision engineering industries, along with the business machinery and road vehicle industries increased their contribution to industrial value added from 26% to 42%.
What supported consumerism?
Consumerism was also strongly assisted by modern mass distribution systems: supermarkets, unit price stores, shopping malls, various mass marketing chain stores, and consumer cooperatives spread from the second half of the 1960s
Stats on durables
Durable goods flooded households after World War II. By 1974, as a general phenomenon in Western Europe, 59% of Belgian families had a car, 82% owned refrigerators, 88% watched TV, and 62% used washing machines.
What are the four freedoms?
Four Freedoms: Freedom of speech, from fear, of religion, from want – basis of the lend-lease aid program
How many consumers were there in Europe?
The new Europe of the 1960s was a Europe of 221,750,000 consumers
Stance of the French Government 1946
- “All property and all enterprises . . . shall have the character of a national public service, or a monopoly in fact must become the property of the community”
English Labour Government 1945
to secure for the workers . . . the full fruits of their industry and the most equitable distribution thereof that may be possible, upon the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of popular administration and control of each industry or service.” – nationalized coal mines, waterways and railways
Germany - What can be said about the state?
The Federal Republic of Germany, the most neo-liberal country in post-war Western Europe, also had a large state sector. It mostly originated from the Nazi regime. “During the Second World War roughly half of the capital of the German joint stock companies was, directly or indirectly, in the hands of public companies” In the early 1950s, 90% of gas production, 70% of aluminum smelting, 60% of electricity output, 50% of the automobile industry (including Volkswagen Werke), iron ore, lead, and zinc production, and 20% of coal, coke, crude oil, pig iron, and steel production were in the hands of state-owned companies.
Detail the conditions of Austria
Austria became one of the most radically nationalizing countries in the West, with the goal of nationalizing all German-owned companies to avoid having them confiscated as war compensation under the Potsdam agreement.
Detail the conditions in Italy
Italian fascist and a copycat Francoist economic dirigisme, which created huge state-owned sectors long before Western Europe turned toward a mixed economy, easily adjusted to the Western model after the war.
What is the OEEC?
Organisation of European Economic Cooperation
What is the ERP?
European Recovery Programme – synonym for Marshall Plan – supplying $12 billion to Europe over four years
What is GATT?
General Agreement on Tariffs and Trade
Eric Hobsbawm, The Age of Extremes (7)
- “where there’s muck there’s brass” was still followed
- 1960s will probably go down as the most disastrous decade in the history of human urbanization.
- Golden Age was just another Kondratiev upswing, like the great Victorian boom of 1850–73
- Golden Age depended on the overwhelming political and economic dominance of the USA which acted - sometimes without meaning to - as the stabilizer and guarantor of the world economy.
- intellectual contributions from Bell, Myrdal and Crosland were invalidated by the 1960s - self legitimating narrative of excellent performance
Tony Judt, A History of Europe since 1945
1- Integrated Europe had the intent of creating a strong trade relationship with America
Barry Eichengreen, The European Economy Since 1945 (4)
- Promoted the notion of a corporatist arrangement -high postwar investment rates were possible if both capitalists and workers agreed to defer part of current compensation (dividends and wages) in return for future gains.
- “EMS was seen as the only effective solution to monetary stability in the EU, following the collapse of Bretton Woods the realisation of much closer European integration into the 1980s and with the subsequent Maastricht Treaty
- EMU provides significant impetus for endogenous growth which can only be considered after the time period provided
- ECSC - critical in effect for removing the barriers which would have been in place on German production, predominantly through the antipathies of France
Dan Stone, The Oxford Handbook of Postwar European History (6)
- Changing face of Capitalism had meant a different approach from the Left was required – Anthony Crosland
- The perception of the 1930s - dismal hardship, mass unemployment, hunger marches, was perceived as a past which cannot be repeated
- WWII seen as a ‘good war’ - a war for greater levels of civic engagement in the state
- Emergence of the Christian Democrats on the European front as a significant force which pushed for social reconstruction, corporatist pragmatics, and post-fascist democratic recognition.
- Social Democracy was to some extent stifled in countries such as Germany and Italy, where division among the working classes prevented the emergence of any form of strong class solidarity
- Christian democrats were drawn away from Christian socialism due to the implicit fear of Marxism - exceedingly prevalent to Germany which was proximate to a communist regime
Ivan Berend, An Economic History of Twentieth-Century Europe (6)
- Between 1950 and 1973 Europe experienced a breath-taking economic growth. Britain and France, along with Holland, had an annual growth rate 3–4 times faster than they had experienced between 1913 and 1950.
- GATT instrumental in removing trade barriers
- Underdevelopment was tackled by EU, not ERP effort
- West European states introduced a strong income redistribution policy. High taxation, concentration of an ever-growing portion of the GDP into the state budget and used for public expenditures became the most characteristic feature of West European states after World War II.
- West European states increased their expenditures accordingly. In most before World War I, roughly 10–12% of the GDP went toward public expenditures; by 1935 this figure was 20–33%; after World War II this share increased dramatically
- The real engine of postwar West European prosperity was Germany. Based on its strong domestic market and its integration into the European Community, Germany’s economic growth also relied on an impressive structural transformation. A great part of the labour force was shifted to industry, so that the number of industrial workers increased from 8.7 million to 13.2 million between 1950 and 1965.
Boltho & Eichengreen, The Economic Impact of European Integration (1)
Discussion of the failings of the IW economy - depression, protectionism, war - reduction of foreign trade
Victoria de Grazia, Irresistible Empire (3)
- Levels of living were still stratified by social inequality, encoded in radically divided political outlooks about the meaning of the good life, and subject to all nature of government and private checks and controls.
- Issue with Western Europe assessment – ignores marginal periphery, notably Spain, Portugal, southern Italy, and Greece; nor did they compare the tenor of life in the latter countries with the rising standards in fast-industrializing Poland, Yugoslavia, and Hungary.
- With remarkable rapidity as western Europe passed from an “era of scarcity” to an “era of abundance,” ideologues of European consumer society began to speak of the new “ civilization” of consumption without the dread of out-of-control desires that the prospect of mass consumption had sparked among the bourgeoisie in the first half of the century.
