Figure 1.-- World War II was the largest and most cataclysmic war in human history. It was the first truly world war. There had earlier been devestation on a local level, but never as much destruction and loss of life on a global scle. And in contrast to World War I, it was civilians who suffered more than the military. The destruction and loss of life was on a scale never before exerienced by humanity. Economists believed thgat it would take a generation for Europe to recover. Actually it took less than a decade by wich time the populatiin were experiencing higher living standards than ever before. Not well understood, it was not the level of destruction that was the primary factor--this swas the Axis countries (Germany, Italy, and Japan). It was the policies adopted by the countries inviolved. Britain was not one of the most hravily danaged ciountries--but it was one of the slowest to recover. The Soviet Union and its new Eastern European Empire was a special case. It was not inly heavily damaged, bit its Communist policies mean that it was not only slow to recover, but lagged behind dynamic Western Europe and America. Here we children in desestated Germany during 1948. This was a year that West German authorities would adopt polices that led to the German Economic Miracle. Source: Bundesarchiv. Bild 183-2005-0803--519.

World War II was the largest and most cataclysmic war in human history. It was the first truly world war. There had earlier been devestation on a local level, but never as much destruction and loss of life on a global scle. And in contrast to World War I, it was civilians who suffered more than the military. The destruction and loss of life was on a scale never before exerienced by humanity. Europe was in deperate condition after the War. Again famine and starvatin was ony prevented by American food aid. Econonomists after the War believed that it might take Europe and other devestated countries a generation to recover. To the surpise of almost everyone, however, within only a few years an amazing recovery began, although it was highly varried. The immediate post-Wars years were very difficult. This began to change about 1948, in part because of American aid and in part by domestic policy ininitatives in each county. Most surprising of all was the starteling pace of recovry in Germany and Japan, countries with cities that were left piles of rubble and cinders after the War. There was also a rapid pace of recovery in Western Europe. We notice similar deveopments in Belgium, Denmark, France, Italy, the Netherlands, and Norway. Britain here lagged behind its European counterparts and in the post-War era, Britain declined from being the European country with the highest standard of living to one with relatively low per-capita income levels. Overall, the recovery however, would bring unprecedented prosperity to Europe. The countries not only recovered, but soared above pre-War profuction and prosperity levels. The major excption was Soviet-occupied Eastern Europe. The Soviets expected the economic benefits of Communism to propel living standards to unprecedented levels. Just the opposite proved the case as the European Economic Miracle left the Soviet Union and its Eastern European Empire far behind. This was, however, not immediately apparent to all as the Cold War Iron Curtain established by Stalin prevented a free flow of information. Leftists in the West continued to wax eloquently about worker and peasant paradices and many actually believed it. Also important to note is how the economies of the Asian economies fared. Japan with its capitalist ecinomy als enjoyed an economic miracle. India's task was different. Here the goal was development. After independence (1947) under Nehru's socialist policies desite the great optimism made little economic progress. And China under Mao's Communism, also intent on develoment, the econmy languished and actually suffered the greatest famine in world history.

Devestation

World War II (1939-45) was the largest and most cataclysmic war in human history. It was a long war, although not neaely the longest. It was the first truly world war. It began in Europe and spread from there. (If one does not include the early Japanese aggressions.) There had throughout history been devestation on a local level, but never as much destruction and loss of life on a global scle. More people were killed than ever before. And in contrast to World War I, it was civilians who suffered more than the military. This was abnormal, usually it is the soldiers who suffer most. There were enornous civilian casualties primarily because it was an actual Axis policy (primarily German and Japanese) to murder civilans in large numbers in horific killing operations. Civilians also were killed as a result illnesses or starvation--conditions created on purpose by the Axix--such as the NAZI Hunger Plab. Millions perished in concentration and skave labor camps. Jews were the most obvious victims, but non-Jews also perished in huge numbers. And long with that mass mirder was equally horfic destruction. And unlike World War I the devestation was not largely limited to the relativeky narrow band that scared northern France and southern Belgium--the Trench Line. The destruction and loss of life was on a scale never before exerienced by humanity. Whole cities were destroyed. The piles of rubble and glowing embers left by Allied bombers that had once been German and Japanese cities was the most obvious, but there was also widespread destructioin in major battkefield areas, especially Eastern Europe and Italy. Europe as a result was in deperate condition after the War. Again famine and starvation was ony prevented by American food aid. Econonomists after the War believed that it might take Europe and other devestated countries a generation to recover. To the surpise of almost everyone, however, within only a few years an amazing recovery began, although it was highly varried. The immediate post-Wars years were very difficult. This began to change about 1948, in part because of American aid and in part by domestic policy ininitatives in each county. Most surprising of all was the starteling pace of recovry in Germany and Japan, countries with cities that were left piles of rubble and cinders after the War.

Western Europe

There was an incredibly rapid pace of recovery in Western Europe after the Western Allies broke with the Soviets and went ahead with a currency reform in occupied Germany. Various factors were involved: 1) the wealth generating power of capitalism, 2) European integration, 3) the American security umbrella, 4) the American Marshal Plan, and 5) the energy and talent of the European people. We notice similar developments in Belgium, Denmark, France, West Germany, Italy, the Netherlands, and Norway. Surprisingly, Britain lagged behind its European counterparts. In the post-War era, Britain which was only moderately damaged by the War voted in a Socialist Government. The Labour Party Government prioritized building a welfare state over bulding a prospeous economy. As a result, Britain declined from being the European country with the highest standard of living to one with relatively low per-capita income levels. Portugal and Spain were still in the hands of Fascist-like governments with their socialist economic policies continued to fail economically. Finland remained independent, but languished because its economy had major ties to the Soviet Union. The Scandinavian countres prospered, but soon found that their massive welfare system was unsustainable (1970s). Overall, the European recovery would bring unprecedented prosperity to Europe. The countries of Western Europe not only recovered, but soared above pre-War production and prosperity levels.

Eastern Europe

Just the opposite proved the case as the European Economic Miracle left the Soviet Union and its Eastern European Empire far behind. The situation in Soviet-occupied Eastern Europe was very different. Stalin did not allow his Eastern European satellites partivcipate in the Marshal Plan. The Soviets expected the scientifically determined economic benefits of Communism to propel living standards to unprecedented levels. Of course wev know now that Coounism with its Socialist economy is a recipie for economic failure. It is why the Soviet Union failed andc why Communist China adopted a capitalist economy. This was, however, not immediately apparent to all as the Cold War Iron Curtain established by Stalin prevented a free flow of information. Leftists in the West continued to wax eloquently about worker and peasant paradices and many actually believed it.

Asia

Also important to note is how the economies of the Asian economies fared. Japan with its capitalist ecinomy also enjoyed an impressive economic miracle. Wihin only a few years the Japanese economy was functiining again and the Japanese living standard far exceeded what it had been before the War. India's task was different. Here the goal was development. After independence (1947) under Nehru's socialist policies desite the great optimism made little economic progress. And China under Mao's Communism, also intent on develoment, the economy languished and actually suffered the greatest famine in world history. Then the Asian Tigers (Hong Kong, Singapore, South Korea, and Taiwan) adopted capitalidt policies -- leading to spectactkar growth. Eventually Communist China amd India followed.

America

The United States unlike Europe was not damaged by World War II. In fact the War proved o be a huge boost to the American economy. There was a short period of adjustment after the War as American companies shifted from war production back to civilian consumer-driven production leading to the economic boom of he 1950s. The American economy experienced a remarkable economic transformation before, during, and after the War. Americans went from 1) the Roaring Twenties, 2) he Great Depression to 3) a Government-fuled war economy and 4) finally to the boom years of the 1950s. Americans had to adjust from mass unemployment to the labor scarcity of the Arsenal of Democracy. And finally there was the post-War era off low unemployment, real consumer-driven unprecedented growth, and unprecedented prosperity. Full employment, new technologies developed during the War meant consumer spending fueling the boom. The United States was already the worlds leading economic power. The post-War boom, however meant America reach even higher levels. The United States did not have physical damage to rebuild. t did have a huge national debt accumulated during the Depression and even more so the War. And this began to occur during the 1950s boom. (Here is no so much the actual nominal debt, but the debt as a percentage of GDP that is important to look at.)

Created: 2:43 AM 8/20/2018
Last updated: 2:31 PM 4/10/2025