The Pattern of the Postwar Boom

8/19/2019 The Pattern of the Postwar Boom

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THE ECONOMICS OF GLOBAL TURBULNC

he dvanced apitalist conomies fromong oom to ong Downturn, 1945-2005

ROBERT BRENNER

vns

Lod • N1w Yrk


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Ch apter 3

TH E PATTERN OF T HE POSTWAR BOOM

Dung the t quatecentuy the ptwa epch the adanced captat wdepeenced ecd ate gwth. Neethee t etadnay dynamm waey uneeny dtbuted Whe the eae-deepng US ecnmc bc tended

epe new netment the new ecnmc bc wth whch the apanee andeman ecnme wee acated tended t attact t. The ptwa gwth the

S ecnmy wa nt theee epecay mpee ethe n cmpan t that t ma cmpett wth epect t t wn ecd n eae ped. etween950 and 973 the aeage annua gwth DP capta tck and the capta

abu at, a we a the pecentage netment n utput wee thu makedywe than they had been between 890 and 93athugh abu pducttywth wa a bt hghe In hap cntat the ptwa ate gwth enyed by

any upean ecnme patcuay Gemany wee a geate than they hade been whe apan pducte pemance e the ame yea wa wthutua by any the ecnmy e a cmpaabe ped tme n wd hty It

a the US ecnmc bc reliely w path deepment at t agey npaatn m then n nceangy ntene nteactn wth the dynamc deementa taecte thee ate-deepg bc that wa agey epnbe

for the ea patten ptwa ecnmc deepment t dung the bmen dung the dwntun.

Table Comparing the pe-World War I to the posWold War booms.(Aege ul pe cet hage, exep fr I nvesme/GOP atio.)

Gross CapitaGross Investment/

GDP GDP/hour Capital St


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TE ECONOMICS OF GOBA TURB UE NCE

A he pon a whch he opean and apanese econoes copleed herposwa ecovees, oghly arond 5, he US econoy had alead beenexperencng rapd growh for ore han a decade, hereby nceasng s alreadysbsanal lead over all ohe naonal econoes Neverheless, as a conseqence

of he vey developens by whch consoldaed s donan poson, he USeconoy fond dffcl o anan s oen Is nally advancedechnolog as eboded n aeady exsng fxed capal, s ore evolved soco-econoc c as expressed n s hgh degree of ndsalaon andcspndny edced agclal secor, and s nernaonall hegeonc posion as anfesed n he donan global poson of s fnancers, lnaonalcoporaons, and, of corse, s sae, all consed sgnfcan bares o s conned dynas In conas, s leadng rvals, n Geany nd apan, were ableo eale he poenal advanages of ecologcally followng he leader, of soco

econoc backwardness and of a hegeoned' poson

CachUp and th Wigh of Fixd CpIn he corse of a decade-long spr of capal acclaon fro he end of he130s, US prodcers profed fro nerwa and wae waves of nnovaon onsall he os advanced plan and eqpen n he world B he exsence ofhs gea ass of fxed capal ned o o be a xed blessng A he sar of hepeod, he US capal sock was he aeral nsanaon of Aercan frs' overn naona echnologcal leadershp B, as e wen on, s

ssesss, of hei snk capal, were able o dscoage fhe enyo t U mak t , e ces wh lower coss, and hereby o slow he

o o og i a! ng and owh of prodcv whn he USprdu ' di eng as n Geran and Japan faced alos pre-

s t s cod i tions. As a esl of US echncal acheveens, Geannd Jn pdces ad he possbl of cachpdrawng pon a hgebacklog of hhero nsed, advanced echnqes, whch he cold ebody n newfxedcapal nesens a relavel low cos A leas fo a e, oreover, heycold explo hs advanage o an ncreasng degree, becase echnologcal change

ended o ake possble, hogh splfcaon deskllng, he cobnaon ofan eve boader range of advanced eqpen wh labo of relavely low skllo whch he Gean and Japanese econoes had access a a lower pce han heUS Geran and Japanese prodcers were no, oeover, deerred fo pngno place new, oe prodcve plan and eqpen, as were her US conerpars, b he exsence of grea asses of recenl placed fxed capal

The fac reas, however, ha cach-p alone can explan lle, for s selfbe explaned, beng anyhng b an aoac pocess Leaders, especall hrogh

he cassic accon of he penay of akng he lead' s found . Vebe, Imprial Gemany, New

Yok 915,u uch oe fy deveoped deas cocenng he advatages f cn - s he nnovave nsttuonal os hat ake possbe the ealzto s vagei reltionhipto the boade pesses o neven developet b tn s r· to b und nthe dscusso amo Russa Marxiss, wen th " 890s o d "930>, nto ly Lenin, Trot•ky, ug-Bnwy and I avs. [n Ecomi Hkwnrl's In 1 tlor: c�fil mbr lt • M!�., I\62, chl ·and 2, A. .NO h�kro fmHy di0VIfN H\1 • of w 1 l n" )ly I hy hi• Rul1fb • " ·l l ly T whoul l r


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H PAERN OF HE POSWAR BOOM 45

hi achd capaciy f chgica ivai f ica hi ad v

aggad ah ha ach i diappa. hi a h iuai ih h S cmyif f h-qua f a cuy bf 950 F mv f ac hcia ucu ad h quii iiuia fam d h abu fc

i xpi h pia f apid pduciviy gai a c pvidd byh cgica achivm f h ad.2 h cachup pc a quiaby ca f h Gma ad Japa c i h quacuy af950 bu hi a y bcau h cmi' capacii f apid capia accumuai ad agca chgica chag had cy b hacd i achca by h dmic cicmic ad piiciiuia afmai fh immdia pWd Wa pid bcau h hih xiig bai h iaia f f f gd ad f capia damaicay d vh cu f h 950 ad 960 ad bcau i paicua h S fuciig a

hgm a iig accp i iva' ad adig pa' aim ad gaid capiaimad a hi pciim ad udvaud cuciid fuh hi pa dyamim ad i hi ay h xpai f maf US xp d badfid f S fig dic ivm

A i a cachup f h cmi a y a pa f h y h pcf cayig hugh va xpai f hi capia c h maufacuigcmi f bh Gmay ad apa cud upaad ppuii yf muai bu a f ivai hugh aig by dig. y ivig aga da a a apid pac hy y quicy gapd chgi bu a

afmd hm. A hy bcam ahi mv h cmi cud abh h piva d h pubic v affd ga xpdiu bh achad dvpm ad aiig ad ducai. cachig up hy cud hff fg ahad f h S ad a hy i fac did v h cu f h 950ad 960 i y iduy af ahxi aumbi machi cum cic

Th Oaion of h abou Movmh S abu mvm had mad ad viaid if i h hiic ug

f iduia uiim f h 930. had hv b pfudyad by aim buaucaiai ad pa piica pi. Si hy ma i hich h S cmy had aivd a d cmic dmiacdd abu ih uxpcd vag. gm pc f iduiaia had agy imiad h v f abu ha c fud iicuu ad ma bui; ay maj av f capia accumuai ud f quicy iduc igh abu ma Mv a a hugh h mid 0 S iduy a iay immu fm h f i va cm

ha cud big ui hi ic bf advacig dmd

plos. S abu hu maid m ha g ad miia ugh puh wge rdly, cay cycica upu puhd d umpymas h m Kor W.

T n rast u rpr i U , nf Gmy d apaw • bl fo swa nsi basis lu r

J1ur fur th diMLMMn uf nl� nf r tH In ntw Pvlnmt, " hlnw,


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46 TE ECONOMICS OF GOBA TURBU ENC

eceied exee ow wages eae o hei si boh socieies, a age paof he woig popuaio eaed agcuue o i sa idusia ad eaishops, uch of i beg disguised uepoed The usa esee aies,suppeeed i he Gea case b agescae iigaio fo he as, coud

hus exe sog dowwad pessue o wages oe a exeded peod, a eashough he ae 1950s The age agcuua ad sa busiess secos of bohecooes aso opeed up a eas pah o ajo poducii gas fo he ecooas a whoe, as abou coud be asfeed a ow cos fo owpoducii opeaios io highpoduci auacug.

The gas o capa o his ase pocess wee poeced, oeoe, houghhe decisie deea o poswa abou eos ad he eegece i he wae ofew bugeoig coseae ade uio ogaiaos which gae op pioio he eeds of capia accuuaio Duig he 1930s, boh Gea ad Japa,

fascis ad auhoiaia egies had desoed doesic abou ogaiaos Bua woe ebeos boe ou boh coues he wae f iia deea,iiia ecouaged b he pouio poicies of he occupig oces Wih heade of he Cod Wa, howee, S Occupaio auhoiies did a abouacehe joied coseaie goees ad hadie epoes o sseaicaepess (as i Japa) o coai (as i Gea) hese upsigs I is ue ha aeWod Wa , wh he cosodao of oa deocac egies boh couies, he Gea ad Japaese abou oees acheed o he is ie a ecur ad ecogized pace i he poiica ecoo This gae he co

s eble leverge inm

aa ii g woig cass iig sadads Bu he face s tha, especa l ly in w of h segh ha he woig casses i boh a Japan had manage o bief accue o he oow o Wod Wa

l , t p a boom i oh cs as pedicaed oe o he defea o abou a o i s r ogniion, more on he expici subodiaio of abou ha he cool idat on of ny puae capiaabou accod paicua, he exeded waesof capal accuuaio ha fouded he og upu duig he decade o he 1950swee codioed o he acheee of exaodai hgh aes of pofi, whchwee hesees peised upo he suppessio o abou ad s coseque

accepace of ow ad (eaie o podui gowh) sow iceasig wages was hus he og poswa expasio ise whch ade possibe abous subsaia aeia gais ad is ueio (paia) sociopoiica iegaio houghhe eege ade uo bueaucaceso ce esa

The deea ad subodaio o abou cao, o couse, be desood eeas a efeco o hese ecooies' ae deeope, bu was he esu, i bohGea ad Japa, of agescae cass sugge, eeess pusued b heepoes io he ea ad idde 1950s. Neeheess, oce suficie cooeso as o fid adca isuioa chage of he ageda, Gea ad Japaese

woes eded o see ie choice bu o hch he ae o ha o e ow' firs.


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T E PATTERN OF T E POSTWAR BOOM 7

or he more precse adusmen o workers' demands o he requremens o proalynerprise uons in apan, works councs n Germany

Free Trade and Stae Inervenion

Rapd economc rowh n he US durn he decade rom he lae 1930s o he lae

940s rased arrers o urher mproemen y lean n s wake masses o edcapal capale o deerrn urher enry and nesmen, y usn up aco supples, especally surplus laour, and y aclan laour ressance. Bu dd so,n addon, y n rse o a consellaon o leadn socal orces whch wereeher ncapale o nerenn polcally o reerse wha had ecome he relaelyunaourale condons or capal accumulaon a home, or posely commedo mpron condons or economc epanson aroad, een a he epense odomesc manuacurn US producers had rsen o her poson o domnance yeplon her unquely lare domesc marke Bu, especally n he wake o henesmen oom o he 940s, her leadn represenaes, he rea manuacrn corporaons and neaonal ankers, undersood ha many o he esopporunes or pro would henceorh le aroad, as he oher adanced capals economes reul and epanded, soon under a proecons umrella Whahese orces needed om he US oernmen was suppor or a polcy o ee lowo oods and nesmen unds ha would allow he mulnaonals and nernaona ankers o make drec nesmens and oans aroad and aow mpors oow ack no he counry. Ther aly o secure hs suppor was enhanced y hec ha, a eas hrouh he rs poswar decade, USased eporers ended oneed ree rade o enale her prospece cusomers aroad o sell sucenly nhe US o earn he currency ha hey needed o uy US oods

he US oernmen was sronly commed o he ndusral reconsrucon os leadn poenal rals as a cenral aspec o s srule aans communism. Ias hus een more wln han mh oherwse hae een o sere he needs os reaes capalss y suscrn o an nernaonals economc perspece,despe he ac ha hs approach would, n he medum run, pu hose o s manacurers who were manly domesically ased a a dsinc dsadanae whspec o her leadn oerseas compeors ac, he nernaonal economcrranemens consued a Breon Woods, as acually mplemened n pracce,ed ou o nsanae an inormal aran on he one hand, he US, wh s dollarey currency, was enaled o run lare alance o paymens decs o inance serseas mlary ases nd s oren ad, as well as he oren dec nesmensof s corporaons on he oher hand, hose counres whch were a once s allesd economc rals were allowed o conrol n arous ways access o her domesckes or commodes and capal On he condon ha s alles/rals wouldnot seek o cash n oo many o her doars or od, he US oeen opened the S arke o her epors, whle accepn whou complan her proec ad hr scons on he ouward and nward moly o capal, een t push o r o f e reesalshmen o currency coner

i y . I r by J p ae h on s r e secular declne o s f i g Bu th v-ald

p > s go r'! 1t


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8 TE ECONOMICS OF GOBA TURBUENCE

mutinatina catns awing them t uchase the facts f ductin nthe chea and t send at f the utut that they duced in thei veseas affiates bac t the US as imts, ften in the fm f intemediate gds t be wedu int fina gds by thei hme ants.

The cnsteatins f eading scia fces that emeged t shae the stwaGeman and aanese ecnmies wee the cnvese f thse fund in the US. The

advantages ssessed by Geman and aanese manufactues by vitue f theiate devement thus went beynd thse that wee bund t be exhausted vetimechea abu ecuited fm the cuntyside access t the atest techniquesby bwing fm the US, and the benefits f a aticua sitin in the ductcyce. Thei advantages came t incude me emanent iticinstitutinaaangements which had a ngetem imact maing f the maintenance ffavuabe cnditins f caita accumuatin. Because Geman and eseciay

aanese manufactuing fims wee abe t embed themseves within advancedinstitutina fms f ganiing intamanufactuing, financemanufactuingand cataabu eatins that had n cunteat in the US, as we as t secuestate sut f industy f a ind unavaiabe in the US these fims wee abet achieve a eve and quaity f investment and a caacity t cnt csts inexicabe in uey maet tems. These itica and ecnmicinstitutinaaangements awed manufactues access t cheae caita inceased sciaiatin f is, geate tectin (even if atia and temay fm intenatinacmetitin, nge time hins f etuns n investment, me favuabe

tunts t invest in human caita and geate investments in sciay necry, bu id v iduay unfitabe, endeavus, aticuay infastuctuedui, d rec and devement.

P ily hw d hy these aangements iginated when they did inG d aan is a histica questin made me cmex by the fact thath y g and undewent maj tansfmatin ve a ng tem, ging baco the secnd haf f the nineteenth centuy. Sti fwe ecnmies such asaan and Gemany have, as a ue vided me favuabe gund f the cnstitutin f such aangements than ecnmic eades. Because f thei initia

eative weaness with esect t thei cunteats in the eading ecnmies,thei manufactues financies and gvenments have quied such aangements as a cnditin f successfuy cmeting thugh tade. Industy andbaning have thus tended t ay mege', and t eceive the sut f thestate in ceating thugh ecnmic and itica means, the caacity t cntestthe duces f the dminant ecnmy f shaes f the wd maet. In cntast the eading manufactues and financies and the gvenments f theeading ecnmytyified by nineteenthcentuy Bitain as we as the stwaUShave fund it in thei inteest t eschew such institutina fms and tye

f inteventin. This is in at because they have needed them ess But it is abecause as a cnsequence f thei suei cmettiv, hy hv b bl

3 Te are, it must emphazd, is 01 the f u iona� o t h lona •eqremsof te vlopn c d be p by I tc v � Ct H J L t n ar· •e o sccef u ev \ 'X why t ly L't 1l h1to x ! iM, 'r \l n b nuli" d vp1 •d l rqll�, w ,k pi C UNM !y, N MilnM W�l Mlly I P ! Jy R


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THE PATTERN OF TH POSTWAR BOOM 9

to orent temseves mu more tan ave ter ounterparts n te foowereonomes to searng for te best opportuntes for prot-makng on a wordsae eter troug dret overseas nvestment or nternatona endng andbeause te nsttutona and po requstes or su atvtes are so ver

derent rom and obvous qute oten opposed to tose needed for te deveopment o domest manuaturngLke su produersi oter aterdeveopng eonomes German and apanese

anuaturers tended to subjet temseves to te dspne o te banks and testate beause te were more dependent upon tem or aess to desperateneeded nvestment funds and proteton aganst overseas ompetton te setoken banksiGerman and apan ke tose o oter ater-deveopng eonomestended n vew of ter own ompettve weakness as nteatona enders as weas te ompettve weakness o ter ounterparts n manuarng to nd ter

prots to be more dependent tan tose of ter ounterparts n earer-deveopngeonomes on seurng te ompettve-produtve suess o domest ndustr nnternatona markets Te tereore tended to nvove temseves more deepwt and oud terefore gve mu greater matera assstane to domest manuaturers not on troug provdng eaper ne but aso troug oerngta eonom normaton and b epng to seure varous orms of e�onom oornatonartes verta and/ or orzona ntegraton and te ke

na reatve to ter U ounterpart te German and apanese govements

ound temseves subjet to te oordnated nsstent pressure o ombned man

aturng and fnana nterests to provde poes orented to te growt ofomest produton rater tan nvestment and endng overseas At te same tmeer own genera nterest n supportng suessu apta aumuaton as te basndton or reang ter own needs or state sa sodt g empomentd soa stabt ed tem more unambguous to provde mproved andoteted ondtons or apta nvestment at ome espea to buttress exportented manaturng Tese governments not on attempted to provdenufaturng exporters wt undervaued urrenes as we as subsdes and

rous degrees of proteton rom oregn mports Te sougt to seure n add

io, ow pressure' maroeonom envronments mposng baaned budgets andtve tgt redt to aeve ow naon n te nterest of overseas saes

ontrast as overseas ompetton ntensed te separaton n teUS and teUK o pure domesta based produers rom te g nfuenta banks and utnatonas put tem at a proound dsadvantage n ter attempts to seure

m te state favourabe exange rate tarf and ndustra poes Postwar Uents tereore ond temseves far reer to pursue te genera qute om- ib le eurements o ensurng te stabt and seurt of te nternatonacpia is stem and provdng or te nterests o ter own mutnatonas and

n ks Te min o o ad provded b e U government to domest manua ui g wa y way of t b of eand troug te onstruton o a arge newt o h v y r d o the m iy, ofen at te expense o oter more produ i v ' s o pu p i Th idy to mad nreagl nvoved1 �H bu • f i no oubt i · e bi b sg bi- 0 '· Bt ·I ) d • p i i i ht o i

'1 1 I ry •o 1 1 y • l I h • I " K ;


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0 TE ECONOMCS OF GOBAL TURBUENCE

mnufing mpeiivene. Wee fu n e U me d iiyexpeed e unpeled eng f U dmeiy bed mnufuing, igwing, nd inegy embed, nfinemen me in e queenuy fe Wd W I mnifeed i gwing wene.

Economic I ntenaonalizaion and Expor-Orented Meraniisme inedependen evuin f e ineinlig eding enmy f e Und f e expiened fwe enmie f Gemny nd pn uned u innie igy dynmi, bu uimey igy unbe, ymbii. Wile epnee nd e Gemn enmie my ve funded ei enmi dynmimn ei biiy devep e me me, ey wee be ieve u impeive gw jeie nly by mximiing e gw f exp, nd ee eibiliy pppie me fmely eld by U nd ) pdue uned u

be deiive. b enmie, muu feedb beween invemen-divennd exp-diven gw pee w e e f devepmen. ue in nining , vi eivey w wge gw depie ig e f piumuin) nd elivey ig pduiviy gw mde pibe by ig ef pi umuin), u pvided e dipenbe ndiin f e puuif exp-iened jeie f gw n, ee jeie mde f ewie uninbe leve f pduiviy dvne. ey did , in e fi pe, byfiiing ene f le mde pibe ug e expiin f e wdmee ge ee iin individu pdu ine ey did , endy, by

ing pibe e minenne f mnufuing e f ie wi wudhve been iuppble by e me me ne: infed mnufuing e ouh ppedup e f ve pduiviy inee, ine mnufgl ie of e ppuniie f pduiviy gin n m e.

Th ac remains e vey ppuniy undee dynmi expn gow depended n nly n e emegene, duing e p ep,f f-gwing wd enmy w demnding, i inme gew, evegee quniie f e vey gd wi Gemn nd pnee pdue wee wee beming) epeilly wel-fied pvideminey, me, emi

, veie, nd e iebu even me n e uge, dependble, nd eilypeneble me f e U nd me exen e UK. B e Gemn ndpnee enmie ppeed n ml degee by viue f ei biiy dynmie pidy pgeing egin enmi b in Eupe nd E Ai byupplying em wi ineingy ig-pweed pi gd. ill, i w ebiiy f Gemn nd pnee mnufe we ever greter shres f ewd me fm U nd UK) pdue uimey mde pible eipw mie Agin, weve, i piy eie me e ud nyme in ply beue f e wlingne f e U gvenmen ee n ny

e bd pening f e U enmy vee penein, bu even eindeline U mnufuing mpeiivene in e inee f miliy nplii egemny, inenin enmi biliy, nd e p epn ov-e f U muininl pn n bs

4 Kaldor, ' onOi IR 1 N tl I t nom\ bJ t lv EO }0m11, Vt>\ , IKXK, M r ·h 9 1 ,5 F th vo· f M W tn � 0 A. M lw d, 'rh : rl{'nt R


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TE PATTER OF TE POSTWAR BOOM 5 1

s he exy ges les sul ply gesejye by Gemy espelly Jp he suppy sde-e gemesf eepg mes em up h pu s he s f

Keyessm' syhh ee hus espsble f he uusully pgh shp s he e sul gemes ples h

helpe se m em he US emy pe peless eme s supplyse sbles eese h ue u be s ey

mpesse pe f gh. f mb h s feee feeesme pph he el emy he US geme's Keyessbses em pye sgf p fhe spug he exps hus pl umul f US mufues eg mpes fs

gely lgse bu ulmely f h h f he US. ee heflue f US UK pues pee Gem espelly Jpese mu

fues fm pppg beg ble coun on pppgeegee shes f he me fm he US he UK shu be ess he spesble on he demand sde f he Gem Jpese mufug emes puse sh exly p ph f plumul

shu be le he use h p gh hs me s hy upbem ee f he Gems Jpese The gh f he mes ems hel b s s eep ss heeby buess he gh f expsBu he esulg eey f he Gem Jpese emes sus lge

exe supuses he uug f mps by exps bugh pessues fehe pes he uey se The hhuse gh f exps ee he be selfuemg e he lg u em eepme bhGemy Jp se uphll suggle mpe puy fseh he uey ( hus ele ss) ppee suggle ege lyh ge ffuly by eh

he ge u he s ee ee me pfu. he bese sef Gem Jpese mufug exp suess s he eel elef S mufug mpeeess he ee se f S exe efs

he eel ele f he US uey. mple s he eg pyf he US me bsb s lles ls' gs hus see s hem f ls es' f he ees. The ey pesses by hh he Gem Jpese emes hee p gh ug he ps bm ee esy he fus f he suess. Dug he 19s muh f he 96s

Gemy Jp ee he US suh pblems ee lgey he fuue.Bu hey ul be pu ff efely

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The Pattern of the Postwar Boom