Postwar Economy Flashcards
1
Q
What are different terms for the economic miracle?
A
‘les trente glorieuses’, the Wirschaftwunder and miracolo economico
2
Q
How fast did the European real GDP per head grow?
A
− Western Europe’s real GDP per head of population grew about twice as fast as the secular rate
3
Q
What was the ratio of hour worked payment to USA in Italy go from?
A
− Ratio of hour worked payment to USA in Italy went from 38% in 1950 to 74% by the end of the Golden Age
4
Q
What could be said of cyclical fluctuations in the Golden Age?
A
− Cyclical fluctuations were mild-no European country experienced a decline in GDP between 1950 and 1970.
5
Q
Where, in the 1950s, did growth occur the fastest?
A
In the 1950s, countries with greater potential for postwar reconstruction (e.g. West Germany) grew faster than others.
6
Q
What economies performed the best in the Golden Age?
A
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.
7
Q
What happened post-1965?
A
After 1965, shifts in capital -to-labour ratios and technology gaps took centre stage in engineering growth.
8
Q
Describe the impact of trade liberalisation
A
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.
9
Q
Describe European trends of unemployment
A
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.
10
Q
What could be said of the USA during the Golden Age?
A
WWII saw no damage, GNP rise by 2/3rds – growth not impressive in Golden Age
11
Q
What was Italian unemployment during the 1950s?
A
unemployment 8% during 1950s
12
Q
When did popular affluence, full employment and so on become widespread?
A
Society of popular affluence, full employment, did not become apparent until 1960s, when unemployment stood at 1.5%.
13
Q
What could be said of growth in Eastern Europe?
A
Growth in Eastern European nations was only slightly less than in West – apart from in Germany – East lagged behind West.
14
Q
What could be said of food production during the period?
A
Total food production of the poor world in 1950s and 1960s rose faster than in the developed world.
15
Q
What was the situation in 1970s?
A
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
16
Q
What fuelled the golden age?
A
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.
17
Q
What impact had CFCs had?
A
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
18
Q
What was central to economic growth?
A
R&D
19
Q
What were Eurodollars?
A
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
20
Q
Describe the new international division of labour
A
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
21
Q
Student population information
A
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.
22
Q
Detail extensively the nature of regional underdevelopment
A
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
23
Q
What was the GDP ratio in Europe>
A
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.
24
Q
Defence Expenditures
A
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
25
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.
26
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.
27
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.
28
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.
29
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
30
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%.
31
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
32
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.
33
What are the four freedoms?
Four Freedoms: Freedom of speech, from fear, of religion, from want – basis of the lend-lease aid program
34
How many consumers were there in Europe?
The new Europe of the 1960s was a Europe of 221,750,000 consumers
35
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"
36
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
37
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.
38
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.
39
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.
40
What is the OEEC?
Organisation of European Economic Cooperation
41
What is the ERP?
European Recovery Programme – synonym for Marshall Plan – supplying $12 billion to Europe over four years
42
What is GATT?
General Agreement on Tariffs and Trade
43
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
44
Tony Judt, A History of Europe since 1945
1- Integrated Europe had the intent of creating a strong trade relationship with America
45
Barry Eichengreen, The European Economy Since 1945 (4)
1. 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.
2. "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
3. EMU provides significant impetus for endogenous growth which can only be considered after the time period provided
4. ECSC - critical in effect for removing the barriers which would have been in place on German production, predominantly through the antipathies of France
46
Dan Stone, The Oxford Handbook of Postwar European History (6)
1. Changing face of Capitalism had meant a **different approach from the Left was required** – Anthony Crosland
2. The perception of the 1930s - dismal hardship, **mass unemployment, hunger marches**, was perceived as a past which cannot be repeated
3. WWII seen as a **‘good war’** - a war for greater levels of civic engagement in the state
4. 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.
5. **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
6. 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
47
Ivan Berend, An Economic History of Twentieth-Century Europe (6)
1. 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.
2. GATT instrumental in removing trade barriers
3. Underdevelopment was tackled by EU, not ERP effort
4. 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.
5. 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
6. 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.
48
Boltho & Eichengreen, The Economic Impact of European Integration (1)
Discussion of the failings of the IW economy - depression, protectionism, war - reduction of foreign trade
49
Victoria de Grazia, Irresistible Empire (3)
1. 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.
2. 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.**
3. 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.
50
B. Tomka, Western European Welfare States (1)
1- Uses statistical analysis to determine the convergence of European welfare states during the period
51
D. Suß, En Route towards a post-industrial society? (1)
1. Presentation of Germany as the ‘sick man of Europe’ has compound effect in emphasising the Golden Years of the earlier period (GER walked away from neoliberalism in 1979)
2. "German spending power increased by 73% between 1950 and 1960
3. German Ordoliberalism as factor in the creation of strong economy"
52
Mazower
1. Marshall Plan was not a Golden Bullet – only impactful in Italy and Greece. Moreso OEEC, and its function in highlighting the need for productivity gains
2. Change in attitudes to taxation fundamental in understanding the evolution of postwar society
3. Social Democracy was seen as a necessary motion in the wake of Nazism – conditions in 1920s seen as critical in driving radicalism
53
Maddison (1)
1. Creation and termination of the period through exogenous shocks
54
Quote from Michael Kidron, 1968
"High employment, fast economic growth and stability are now considered normal in Western capitalism’ - Michael Kidron, 1968
55
**J. Bradford DeLong**
Why does Alan Milward's suggestion that the Marshall plan was inconsequential not match the reality of European reconstruction?
* Milward (1984) argues that the dollar gap was never permanently solved, only postponed as a result of the Marshall
* DeLong contests contrastingly that expanding exports was infinitely easier as a gradual process in the context of the Korean War boom and the contirbution of a US Army to western European defence that it would have been as a sudden shock in 1947.
56
**DeLong**
What did America insist as a result of European acceptance of Marshall aid?
The fair representation of market forces in European mixed econoimes
57
What introduced military Keynesianism?
The invasion of South Korea - leading to the establishment of NATO
58
What was characteristic of the European Labour Market?
Relatively inflation resistant - typically supplying more labour rather than demanding higher wages.
This was due to:
* Inflation of 4.3% (the 1950s average) was tolerable to central banks. This was OK as, Britain aside, balance of payments crisis' did not often occur. As long as foreign exchange markets were not pressuring the central bank to devalue the currency, central banks were happy.
* Moderate domestic inflation could be combined with no pressure on exchange rates - the Balassa Effect
* As long as central banks focused not on internal balance but on maintaining a fixed exchange rate against the dollar, it did not strike them that the moderate inflation of the 1950s was something to worry about
59
What does **DeLong** conclude about the possibllity of a Great Depression in Post-WWII Europe?
* Flow of unilateral military trasnfers to support NATO
* Automatic expenditures of the expanded western Euriopean welfare state
* Ability to run low interest rates and stimulate investment - through Balassa effect
60
What are elements of the virtuous cycle, what corollaries exist to this question?
* Labour, Management and Government cooperation
* Inflation, strikes, financial disarray, cyclical instability and productivity problems = corollaries
61
What happened in the late 1960s and early 1970s?
Inflation creeped up from 3 to 6%, partly due to American inflation rate increase.
62
what were the available solutions to the inflation crisis of the 1970s
1. Hope for the best - wait for something to improve the situation
2. Attempt corporatism - agreement between labour unions to moderate wage inctreases, and accept falling real wages for a while as the price of restoring stability
3. Hit the economy over the head with a brick - introduce monetarism
63
**Eichengreen - Bretton Woods System (Globalising Capital)**
How did the Bretton Woods system deviate from the gold-exchange standard?
In three ways:
1. Pegged exchange rates became adjustable - subject to fundamental disequilibrium
2. Controls were permitted ot limit international capital flows
3. IMF created to monitor national econoimc policies and extend financing to countries at risk.
64
**Eichengreen - Bretton Woods System (Globalising Capital)**
What was the failing of the three measures in Bw?
1. Pegged ERs did not matter, as parity changes did not occur in central nations
2. IMF surveillance was ineffective
3. Controls did however work
65
**Eichengreen - Bretton Woods System (Globalising Capital)**
How much power did postwar governments have?
Extensive powers of intervention
* Cap interest rates
* Assets in which banks could invest were retricted
* government regulated financial markets
* Controls worked with government functions to hold back the stream
66
**Eichengreen - Bretton Woods System (Globalising Capital)**
What did William Scammell comment about the Bretton Woods system?
"By attempting a compromise between the gold standard and fixed rates on the one hand, and flexible rates on the other the Bretton Woods planners arrive at a condition which ... [was] not a true adjustment at all"
67
**Eichengreen - Bretton Woods System (Globalising Capital)**
Eichengreen's assessment of the longevity of the BW system
the collapse of BW was inevitable. The marvel is that it lasted so long without an adjustment mechanism.
(exchange controls substituted for the missing adjustment mechanism, bottling up demand for imports when the external constraint began to bind)
68
**Eichengreen - Bretton Woods System (Globalising Capital)**
What did the British attain from the Mutual Aid Agreement of Feb 1942 and the Atlantic Charter of 1941?
UK pledged to restore sterling's convertibility on current account + accepted non-discrimination in trade in return for US financial assistance, whilst accepting the priority of full employment to the British.
69
**Eichengreen - Bretton Woods System (Globalising Capital)**
What did the British attain from the Mutual Aid Agreement of Feb 1942 and the Atlantic Charter of 1941?
UK pledged to restore sterling's convertibility on current account + accepted non-discrimination in trade in return for US financial assistance, whilst accepting the priority of full employment to the British.
70
**Eichengreen - Bretton Woods System (Globalising Capital)**
What was the basis of the BW system?
Open, multilateral trade.
Inhibited by the maintenance of controls long into peacetime
71
**Eichengreen - Bretton Woods System (Globalising Capital)**
How much headway did the first round of GATT achieve?
General Agreement on Tariffs and Trade
* First round - US cut tariffs by 1/3, other 23 participants made minimal concessions.
72
**Eichengreen - Bretton Woods System (Globalising Capital)**
What was the convertibility crisis in the UK?
* Monetary overhang - money supply tripled, nominal GNP only doubled due to controls.
* UK sterling balances paid overseas exceeded £3.5 billion, only had 0.5 billion in gold
* American decision to restore convertibility in 1947 - **"height of recklessness"** UK had to comply due to $3.75 billion loan. Came back at $4.03
* Six weeks saw massive reserve losses - suspended with US consent
* Only with devaluation did the UK recover
73
**Eichengreen - Bretton Woods System (Globalising Capital)**
What was the EPU?
* European Payments Union - committed to return countries to convertibility
* Code of Liberalisation - removal of restrictions on currency conversion for purposes of current account transactions
74
**Eichengreen - Bretton Woods System (Globalising Capital)**
What is notable about the French stance on currency preference?
* Would not accept, since 1922
* That Paris was never a financial centre comparable to London or New York limited the liquidity of franc-denominated assets and hence attractiveness as foreign reserves
75
How can the American funds model be critiqued?
Firstly, regarding Marshall as a critical exogenous driver of European recovery and performance is to endorse the traditional Solow model of economic understanding, which has broadly been dismissed as overlooking key endogenous sources of growth. Mazower suggests on the contrary that domestic European investment was more important in longer-term quantitative respects compared to the Marshall Plan. The substantiation of this argument is convincing – Eastern Europe, which did not have the benefit of external investment, was able to maintain parity of growth with West.
76
What does Crafts concede about the rate of European growth during the period?
real GDP growth per annum averaged at 4.6 percent, over triple the previous forty years, and over double the subsequent twenty years
77
**Robert Heywood** | London, Bonn, the Konigswinter Conferences and the Problem of European Integration
What was the intial postwar understanding, from the British perspective, of the role of a 'European Union'?
Britain would essentially act as a 'friend' or 'sponsor' to the French-German axis at the core of the European project; in line with the British tradition of insularity.
78
**Robert Heywood** | London, Bonn, the Konigswinter Conferences and the Problem of European Integration
Why was Britain hesitant to follow the US line of the rapid recovery of Germany?
Germany represented a formidable industrial competitor - hence why Britain, after the war, destroyed harbour installations in Hamburg and Kiel - and attempted to force through industrial dismantling.
79
What did Lord Balfour of Inchyre state in the Birmingham Speech during the Labour administration of 1945-51?
"We have the right to some explanation of the anomalous and irritating position that German food rationing has been abolished and petrol is availablem while Britain continues under peacetime siege economy."
Also questioned the existence of truly non-Nazi sentiment in Germany.
80
**Robert Heywood** | London, Bonn, the Konigswinter Conferences and the Problem of European Integration
What did Britain believe concerning the Russo-European axis in 1950?
detente was possible and desirable - and the recognition of the Oder-Neisse line should be rapidly considered. This was against Adenauer, who strongly toed the Dulles line of a show of strength to bring about reunification.
Britain, especially post-Suez, wanted a European 'Locarno' which would free her from dependency on the US.
81
**Robert Heywood** | London, Bonn, the Konigswinter Conferences and the Problem of European Integration
What was the tone toward the Köingswinter meeting?
Britain was irritated and disappointed with the Common Market members - specifically Germany - who held a key position in the negotiations Britain depended upon.
Britain felt Germany wanted to exile the UK in order to dominate the six nations in the alliance.
82
**Philip M Coupland** | Western Union, Spiritual Union, and European Integration
(2004)
What did Diane Kirkby suggest was vital to the Western Union?
A notional 'spiritual union' or 'spiritual federation'. This could broadly mean a belief in a 'western civilisation' rather than Christianity specifically.
83
**Philip M Coupland** | Western Union, Spiritual Union, and European Integration
(2004)
What ecumenical movement promoted the deeper integration of nation-states into an international community?
The World Council of Churches - WCC
84
**Philip M Coupland** | Western Union, Spiritual Union, and European Integration
(2004)
What was further inherent in the discourse of communism?
"the specter of communism haunted the evening and there was an unmistakable polarisation in the speeches between Christian, democratic West and the totalitarian East"
85
**Philip M Coupland** | Western Union, Spiritual Union, and European Integration
(2004)
How did Britain break apart from the general European trend?
Rate of secularisation faster in Britain (however those in power were still deeply devout)
86
**Philip M Coupland** | Western Union, Spiritual Union, and European Integration
(2004)
How did Britain break apart from the general European trend?
Rate of secularisation faster in Britain (however those in power were still deeply devout)
87
**Philip M Coupland** | Western Union, Spiritual Union, and European Integration
(2004)
What underscored the spiritual union?
Beneath the surface of spiritual union, be it in the vague secular form envisioned by Bevin’s Western Union or as the churches’ reborn Christen-dom, lay barely repressed differences of ideology, theology, history, culture, and identity, which any move from the rhetorical to the concrete brought to the surface.
88
**Erica Carter** - How German Is She?
What did the women of Germany do?
* German women migrated from a legacy of Nazism through consumer culture.
* Politically, Germans were numb in the postwar era - being particularly hostile to ideology - and economic expression became a key facet to political identity
* Citizenship came through consumption
89
**Erica Carter** - How German Is She?
How was the economy politicised?
* Free market as distinction from planned market of Nazism
* Rebuke of totalitarian East
* Realisation of 'capitalism with a conscience'
90
**Erica Carter** - How German Is She?
What was the housewife as consumer-citizen?
* Consuming women were to play a vital role in defining boundaries between East and West.
* Shopping malls became urban sites for women's legitimate occupation of urban public space
* Emergence of the perlon curtain - Carter explores through the advertising and marketing of synthetic stockings. East and West defined by sexual difference.
* Late 1950s - concern women would consume too much
* Not a suppressive instrument, contrastingly, consumer-citizen was politically defining.
91
**Erica Carter** - How German Is She?
What was the housewife as consumer-citizen?
* 1990 CDU Campaign line - "Wohlstand für alle" - prosperity for all - unabashedly borrowed from Ludwig Erhard during the 1950s
92
**William I Hitchcock**
What has happened over time to the perception of the importance of the Marshall Plan?
Downgraded in significance, from integral to supplementary in importance
93
**William I Hitchcock**
What is the Marshall plan sometimes connoted with?
The instigation of the Cold War, however Hitchcock denies this - and refers to Pechatnov's argument
94
**William I Hitchcock**
What was the inherent issue with the Potsdam settlement on the status of Germany?
It negated the importance of German economic growth to European recovery as a whole.
95
**William I Hitchcock**
What was the inherent issue with the Potsdam settlement on the status of Germany?
It negated the importance of German economic growth to European recovery as a whole.
96
**William I Hitchcock**
What division was there in American opinion?
Wanted to impose a tough settlement on Germany, however did not want to risk destabilisation of the country + making it open to communism
97
**William I Hitchcock**
Why did the Americans get involved with US recovery?
The rate of recovery in Western europe was not considered fast enough - injections of capital were seen as a "cure rather than a palliative" to the problem.
98
**William I Hitchcock**
What blunder did Molotov make?
He decided to withdraw from the Paris meetings - which would prevent the USSR from engaging in the recovery plan
99
**William I Hitchcock**
What was the CEEC?
Committee on European Economic Cooperation - "The cockpit of competing national economic interests"
100
**William I Hitchcock**
What did the CEEC request from America?
$19.3 billion - Washington only approved $5.3 billion, which would require annual renewal.
The US found several critics of ERP.
101
**William I Hitchcock**
What was the discursive intent driving Marshall?
Individual liberty, free institutions, genuine independence - with the intent for independence from extraordinary outside assistance
102
**William I Hitchcock**
What does Milward conclude from his studies of Marshall?
Marshall was not necessary to restart the European economy - through analysis of Western European archival material.
Despite the prognostications of Clayton and Acheson, by the end of 1947, both Britain and France had reached or surpassed their prewar levels of industrial production.
103
**William I Hitchcock**
What else does Milward conclude from his investigation?
Marshall represented a small fraction of the total gross national product of the recipient nations. First year of operation:
* 2.4% of Britain's GNP
* 6.5% of French GNP
* 5.3% of Italian GNP
* 14% of Austrian GNP
104
**William I Hitchcock**
What was the Marshall plan good for?
It was essential to foot the dollar shortage which occurred in 1947 - Europe's sudden resurgence economically saw products and mateirals drawn in from overseas, which could not be paid for without dollars.
105
**William I Hitchcock**
What is Hitchcock's conclusion on Marshall?
It did not restart European economic growth, but it allowed European states to continue along a path of industrial expansion and investmnt in heavy industry upon which they had started.
106
**William I Hitchcock**
How did the French use the Marshall plan?
* Massive industrial investment - through the Monnet plan in 1946
107
**William I Hitchcock**
How did the French use the Marshall plan?
* Massive industrial investment - through the Monnet plan in 1946
108
**William I Hitchcock**
How did the English use the Marshall plan?
* Not really needed - no real communist threat
* 30% went towards foodstuffs
109
**William I Hitchcock**
How did the Italians use the Marshall plan?
* Italy went down a highly deflationary path, and chose to only use Marshall in reconstruction efforts, *putting little into new manufacturing capacity.*
110
**William I Hitchcock**
What is often seen as the clear case study of the success of the Marshall plan?
* FRG
* 1950s industrial exports tripled
* Unemployment sunk from 10% to 4%
* FRG exports = 10%
*
111
**William I Hitchcock**
What obscures the direct impact of the Marshall plan?
* German industrial stock intact from war
* Massive immigration from East Germany provided "immense pool of labour"
* Dramatic impact of currency reform
112
**William I Hitchcock**
What was German currency reform?
* To alleviate mass-inflation caused by Nazi Reichmark overprinting, the Deutsche Mark was introduced in 1948, at a ratio of 10:1
* This transition moved Germany from a barter economy into an efficient and thriving economy
* Purchasing power increased
* Productivity surged
* Ratios removed
113
**William I Hitchcock**
What happened following the massive increase in German output?
* To alleviate mass-inflation caused by Nazi Reichmark overprinting, the Deutsche Mark was introduced in 1948, at a ratio of 10:1
* This transition moved Germany from a barter economy into an efficient and thriving economy
* Purchasing power increased
* Productivity surged
* Rations removed
114
**William I Hitchcock**
What happened following the massive increase in German output?
* Marshall Aid covered a substantial amount of Germany's import needs:
* 70% in 1946-7
* 65% in 1948
* 43% in 1949
Private capital markets followed the strengthening of the economy
115
**William I Hitchcock**
What happened following the massive increase in German output?
Marshall aid acted "like the lubricant in an engine - not the fuel - allowing a machine to run that would otherwise buckle and bind"
116
**William I Hitchcock**
What happened following the massive increase in German output?
Marshall aid acted "like the lubricant in an engine - not the fuel - allowing a machine to run that would otherwise buckle and bind"
117
**William I Hitchcock**
What did Marshall allow the US to do RE: Ruhr?
Using the Marshall plan as carrot and stick, the Americans demanded the fusion of the bizone with the French zone of occupation. Following this, the Americans created an International Authority which wouljd oversee control of the coal and steel production in the Ruhr valley - a vital French demand
118
**William I Hitchcock**
What did Marshall allow the US to do RE: Ruhr?
Using the Marshall plan as carrot and stick, the Americans demanded the fusion of the bizone with the French zone of occupation. Following this, the Americans created an International Authority which wouljd oversee control of the coal and steel production in the Ruhr valley - a vital French demand
119
**William I Hitchcock**
Did Marshall cause the Cold War?
No - firmly entrenched by 1946 - but did mark the point of no return.
120
**William I Hitchcock**
how did Marshall bring about the rise of the Christian Democrats?
Forced European parties to pick between Marshall and Washington
Marshall helped create centre-right pro-Atlanticist leaders who shaped the postwar
121
**William I Hitchcock**
What was the innovation of the French in the 1950s?
Franco-German alliance over coal and steel - would overcome the threat of German recovery
122
**William I Hitchcock**
What is important to note about the ECSC?
Developed independently of Marshall - in fact, whilst the OEEC stalled, the French formed its own distinct community.
123
What was the Morgenthau Plan (1944)?
Plan to pastoralise Germany - preventing chance for industrial capacity growth
