Content •Military economies •General trends after WWII •After-war development Charecteristics of the period •economies destroyed by the war • •USA as dominant power •lessons from the development after WWI • •very successful period = golden era •the end in the 1970s • Military economies •Germany •GB •USA Germany •success at the beginning ð territorial gains •ð raw materials (x WWI) •after the USSR-DE agreement about the division of Poland - supply of raw materials nad food from USSR •ð labour force • •large-area economy •political and economic integration under German supremacy • • •winter 1941/1942 = Moscow ð economic reorganisation •Albert Speer = total war mobilisation • • •1943 Stalingrad ð intensification of effort ðò non-military sectors + ñ war production • • •sept. 1944 = collapse of transport system • • •Allies – economic supremacy ð unavoidable defeat Great Britain •unprepared ð foreign policy •effort to keep peace with DE – policy of appeasement •after the defeat of FR -> military economy •ñ state interventions •mobilisation of national sources - ñ T + domestic loans •resources from USA - cash and carry •AU + securities (sale of capital shares on the American continent) •1941 - ò resources ð lend and lease •approx. 5% GDP of GB •after-war loans – strong tool against Imperial Preference • •in total almost ½ of GB expenditures covered by foreign resources •except supply from USA – sale f assets + help from dominium and colonies • •ò role of GB - separatist and liberation movements ... USA •in the course of WWII conjuncture • similarly as WWI •in USA and GB support of the war • volunteers, military bonds, … •1930s insufficient use of capacities •during the war ñ ind. and agr. •ñ role of state •¾ of new capacities built by state but rented by private sector Gross Government debt as % of GDP • General trends after WWIi •Bipolarity •Technological changes •Demographic changes •Decolonization •Keynesianism •Welfare state Bipolarity •Yalta Conference (Feb. 1945) ð bipolarity •division of Germany •creation of CPE •The Cold War •local conflicts in DC •ñ military expenditures •ò reciprocal trade •shift of borders of Poland na Germany •Truman Doctrine – prevention of communism • •NATO (1949) X Warsaw Pact (1955) • •DC – to the side of W or E •important – China 1949 Europa in 1970 World during the cold war •USA emphasis on integration in Eur x USSR •effort to integrate FRG into western structures •Schuman Plan (1950) … •after Stalin´s death (1953) 1st relaxation of tensions – policy of détente - Khrushchev •later ups and downs • in relations Crises and conflicts •Korean War (1950-53) •serious worldwide economic impacts– JP, Eur, CPE •ñ production ð econ. recovery of Eur •Berlin Crisis I. - 1948 •airlift to Berlin •Berlin Crisis II. - 1961 •building of the Berlin Wall •Suez Crisis - 1956 •nationalization of the Suez Canal •Cuban Crisis - 1962 •USSR nuclear missiles to Cuba •Vietnam War (1964 – 1975) Decolonization •after WWII – collapse of the colonial system •during the war – weakening position of powers ð ñ liberation efforts ð after the war – recovery but unsustainable situation •+ USA X colonialism •prior to decolonization – attempts to educate pop. and self-government •independence = mostly chaos + civil wars + dictators or communism •1947 Indian subcontinent •India and Pakistan (1971 Bangladesh) •1947 – I. Kashmir War + 2 other wars + atomic club + unrest •after WW2 Myanmar (Burma) - GB (1948), Indonesia – NL (1949) and Laos, Cambodia and Vietnam – FR (1954) ð instability •communism (Laos, Cambodia and Vietnam) •territory (Indonesia) •dictatorships in Myanmar •Africa – first Arab nations • 1. country - Libya in 1949 - 1969 y. generals –> coup d´état •Egypt 1922 – coup d´état (1952) Nasser - 1956 GB military withdrawal •Algeria 1954 - FR wanted to rest- de Gaulle 1962 •Sub-Sahara Africa only at the end of 1950s and 1960s Technological changes •spread of older technologies – television, air transport, telephone, telegraph, automobiles, … • •+ new technologies - nuclear reactor, semiconductors, transistors, plastic materials, new chemicals, laser, supersonic airplanes, rockets and spaceships, … •1950s the process of electrification completed ð el. appliances •USA high expenditures on R&D (public and private) •after WW2 USA INV to Europe ð shift of technologies = progress •influence of WWII •influence of cosmic research • Demographic changes •differences •DC – population explosion •developed countries- moderate growth •Higher in countries with more liberal migration policy •labour shortage (e.g. Germany)ð import •ñ U of women •ñ quality of LF •ñ education ðñ productivity ðñ standard of living Role of state •continuous ñ •A. economic theory •B. welfare state •C. economic policy •nationalisation •planning A. economic theory •prior to the Great Depression liberalism ð Keynesianism •practically = neo-Keynesianism X Keynes •state interventions to the economy – fine-tunning •successful economic doctrine •developed countries (USA) until 1970s •BUT of inflation and role of money ð stagflation •ð return of conservative econ. theories at the end of 1970s B. welfare state •origin - Bismarck´s social legislative •after WW2 every state in certain form •W. H. Beveridge •objective to provide subsistence for all inhabitants BUT keep initiative of inhabitants •X reality C. economic policy •public support for bigger role of state •impact of USSR + the Great Depression • •nationalisation •GB •coal mines, power plants, land transport, gasworks, ironworks, … •FR • almost whole coal mining, big power plants and gasworks, central bank and 4 commercial banks, majority of insurance companies, 4 air companies + enterprises of collaborates •USA •Truman´s attempt to nationalise steelworks x the Supreme Court • •planning •GB •1st plan for the period 1948-52 ð conservatives = abandoned ð labourists return to planning in 1966-70 •FR •1st 4-year plan for the period 1947 - 50 + … •USA •Employment Act (1946 ) ð Council of Economic Advisers = planning •nationalisation and planning X market mechanism, but corrections • After-war development •Consequences •Situation •Marshall plan •International trade •Capital flows •Growth of WE Consequences •WWII – territory of 40 states affected •110 mil persons mobilized •military expenditures and damages: 3 000 - 5 000 bill. pre-war $ •causalities (without China) 50 - 55 mil. •the biggest share USSR 27 mil. •destruction of 1710 cities and more than 70 000 villages and 65 000 railways •Poland 6 mil. •FR 650 000 •GB 375 000 •USA 450 000 •Czechoslovakia 360 •DE 6 - 9,7 mil. + IT 400 000 + JP 2 mil. Human and material loss caused by WWII Country Casualties Year in which GDP corresponded to figures of 1945 Belgium 82,750 1924 Denmark 4,250 1936 Finland 79,000 1938 France 505,750 1891 Netherlands 250,000 1912 Italy 355,500 1909 Germany 6,363,000 1908 Norway 10,250 1937 Austria 525,000 1886 Sweden 0 1939-45* Switzerland 0 1939-45* Great Britain 325,000 1939-45* •the highest direct damages - USSR •Germany •reparations – BUT lessons from WW1 •relatively small + natural •foreign assets + ships + … •mainly USSR in the Eastern zone x Western zones •free access to patents and trade secret •limits on production of certain goods or total prohibition •Four-D Programme – demilitarization, denazification, decartelisation, democratisation Situation •USA leader + further strengthening •ñGDP real by more than 50 % x before WW2 •60 % of world industrial production •1st exporter + nautical carrier + strategic sources of food and raw materials +majority of AU •economic policy – non-isolationism •lessons + X communism ð Bretton - Wood, Marshall plan, Truman doctrine •similarly Canada and other states of Commonwealth • X Europe •situation in Eur catastrophic •threat of famine + spread of diseases + lack of clothing + destroyed cities + ò production ð poverty • Eur share on world GDP, trade, … •GDP p.c. ½ USA + similarly labour productivity • Economic strength and standards of superpowers in 1950 (in USD of 1964) GNP (in billions) GNO p.c. USA 381 2,536 USSR 126 699 Great Britain 71 1,393 (1951) France 50 1,172 Germany (BRD) 48 1,001 Japan 32 382 Italy 29 626 (1951) Marshall Plan •first aid- UNRRA = the United Nations Relief and Rehabilitation Administration •help to countries destroyed by war •1943/49 - 11 bill. $ - 2/3 from USA •in Eur big demand + need of INV + purchases only in USAð •Marshall plan (1948 - 52) •G. C. Marshall – not the author of MP •basis = supply of goods and loans Objectives of MP •X to avoid development after WWI •X lack of $ •to be able to import machines and raw materials •to avoid econ. ðnationalism, political instability, communistic ideas, … •X in USA (questionable) •US firms to Eur markets •July 1947 Paris Conference •all Eur countries(except USSR and ES) •USSR invited BUT Molotov rejected •later rejected by Eastern Eur •ð finally 16 countries •MP approved in April 1948 •conditioned by self-reliance after 1952 •1948/52 in total 12,970 bill. $ •(approx. 88 bill. in current $) •10% loans and 90% help and donations •= 1% of US product •problem: participation of DE •changes in commodity structure •initially food and later materials for production Distribution of help provided by the Marshall Plan in % Country Share Country Share Country Share Great Britain 24.9 Germany 10.8 Austria 5.3 France 21.2 Netherlands 7.7 Belgium 5.3 Italy 11.8 Greece 5.5 Other countries 7.5 •to coordinate distribution of the help •European Economic Co-operation (OEEC) in Eur •Economic Co-operation Administration (ECA) in USA •good organization of the help •apolitical •to sum up •MP contributed to rapid recovery •Only approx. 5% Eur GDP BUT considerable importance for stability Industrial and agricultural production in countries participating in the Marshall Plan Year Industrial Production 1938=100 Agricultural Production 1938/39=100* 1947 87 86 1948 98 97 1949 110 104 1950 122 110 1951 134 114 1952 135 International trade •positive impact on trade •GATT – ò of tariff and no-tariff barriers •Bretton – Woods institutions + Eur integration •lessons from the development after WWI •progress in transportation •In developer countries ò importance of railways b/c relative ñ efectivity of road transportation •since the end of 1950s containerization • after 1945 ñ aviation •convertibility of currencies (Eur after 1959) • •high dynamic of ñ trade ð ñ specialisation Growth of the world trade and production, 1950-2005 (in %) Trade Production Volume of the world trade, 1850-1971 (1913=100) Year Volume Year Volume 1850 10.1 1938 103 1896-1900 57 1948 103 1913 100 1953 142 1921-1925 82 1963 269 1930 113 1968 407 1931-1935 93 1971 520 World export from given territories (% of total) •changes in commodity structure •ñ share of trade with manufactures x materials •territorial structure •the biggest and ñ share of developed countries Foreign trade (export and import) in USD million, 1948 - 1971 Capital flows •desintegration of international market from WWI to mid 1960s •no mutual convertibillity of currencies •gradual relaxation of the control of capital flows •many years after WWII only USA able to EX capital in larger scale •mostly to developer countries •lower risk – no threat of nationalization •qualified LF •GB •after 1950s to states of Commonwealthu ð in 1960s closer to EC ð more INV on the continent •Eur countries • most of INV on the continent or to ex-colonies •JAP •at the end of 1960s started to EX capital ð grand part to USA Economic growth •participants of MP – in 1949 production > pre-war level •DE, IT, AT (2 years later) + JP (1954) •BUT rationing + problems in transportation + shortcomings of housing fond … •after-war period very successful •average ñ p.c. 1950/73 = 4,5% •ñ world industrial production by 6% Production of the world manufacturing business, 1930 - 1980 (1913=100) Overall production Yearly growth rate 1830 34.1 (0.8) 1860 41.8 0.7 1880 59.4 1.8 1900 100 2.6 1913 172.4 4.3 1928 250.8 2.5 1938 311.4 2.2 1953 567.7 4.1 1963 950.1 5.3 1973 1730.6 6.2 1980 3041.6 2.4 •25 years after WWII – longest period of growth in industrial countries without interruption+ high dynamics •economic recovery •ñ new technologies •from A to I and S •shift of LF from nonproductive to productive sectors •ñ LF – migration to Eur •ñ international trade •huge ñ capital •cheap raw materials and sufficient supply •economic policy •stable price levels •smaller fluctuations – mostly no ò production, mostly only ò growth Growth of the world GDP, 1951-1973 (in %) •in Western countries – different dynamics •Different range of destruction by war • higher ñ in relatively less developer countries ð convergence •ñ Eur •DE economic miracle •successful period for IT •X lagging behind of GB •in 1950s and 1960s new competitor - JP •ò importance of USA •BUT USA still superpower – ahead of the rest of the world absolutely and also in labour productivity •industrialisation also in DC Average yearly growth of national income, 1950-1960 and 1960-1970 (in %) Share of western powers in the total of the world production in the early 1970s (in %) Country Share USA 40 Japan 9 BRD less than 9 GB 6 France 5 Italy 3.5 Good bye Thank you for attention