The Second World War (1939-1945) was a major economic disaster. However, the integration of countries and their desire to regain economic potential was strong. As a result, some countries like the USA, Japan, and Western Europe have managed to restore their economies, which significantly contributed to global economic development (Frieden, 2020). In this answer, the USA, Japan, England, and France will be discussed to revive their financial power.
The USA is the only country whose economy emerged from the Second World War much stronger. Moreover, during the war years, the country’s national income doubled. After the war, the United States accounted for 60% of industrial production, two-thirds of the gold reserves, and one-third of the exports of the capitalist world (Frieden, 2020). Gross National Product (GNP) index The US has increased, while technological superiority, the highest labor productivity, and many profits have made it possible to finance new investments both at home and abroad.
Other countries occupy a special place in the post-war foreign economic policy of the United States. In its relations with this region, the United States moved from patronage to a relationship of relative equality in the post-war period. In the first post-war decades, the leading position of the United States in the global capitalist economy was indisputable (Frieden, 2020). But the economic rise of Western Europe and the industrial breakthrough of Japan have significantly changed this situation.
The new challenges facing the state were reflected in the program “New Frontiers” by J. Kennedy in the early 60s. A group of neoliberal economists developed the program. It provided a consistent course to balance the supply of goods and services and aggregate demand to ensure continuous balanced economic growth. In January 1981, Reagan became President of the United States (Frieden, 2020). His monetary policy, dubbed “Reaganomics,” was a variant of the neoconservative policy in all developed capitalist countries throughout the 80s and 90s. At the end of the 80s, the US economy entered a period of a sharp slowdown in growth. American experts have no consensus on the decline in labor productivity growth and the lag in this indicator from Japan and Western European countries. The United States is inferior to Japan and almost all Western European countries regarding GNP per capita.
After the end of the war, the Japanese economy was almost destroyed. Losses amounted to up to 20 percent of the country’s pre-war wealth. The government, however, took steps that allowed the economy to get back on track in a reasonably short time and even lay the foundation for a future Japanese miracle. Nevertheless, industrial and financial associations held significant economic and political resources in their hands. The GDP growth rate in the 50s reached 14.9%, the economy developed rapidly, and high growth rates were maintained due to a high rate of accumulation (Frieden, 2020). Hence, its GDP was better than ever before, and it was a salvation for the country.
Immediately after the end of the war, agrarian reform was carried out, which eliminated large landholdings and gave impetus to developing capitalist relations in the Japanese hinterland. In addition, consumer demand has significantly expanded. Until the 90s, it was possible to observe a gradual slowdown in economic growth, which began after the oil crises in the early 70s (Frieden, 2020). The Japanese miracle remained a memory after a one-time four-fold increase in world oil prices broke out, and a long-term downward trend of dynamics was established.
During the war years, Great Britain lost its national wealth as well. Industrial production decreased by 10%, while the UK’s share of world exports declined from 11.3% in 1937 to 9.8% in 1947. The economy of the British Empire after the Second World War weakened not only because of the natural consequences for the belligerent country but also as a result of the gradual collapse of the colonial system.
In the post-war period, the Labor government developed a revival program for the future. A specific role in the economic recovery of England was played by its accession to the Marshall Plan in 1948, receiving food supplies and cash loans following it. In the 50s, the economic development of England accelerated under the influence of NTR (Frieden, 2020). In the 80s, labor productivity grew at 2.5% per year, second only to Japan. Even more convincing was the increase in the efficiency of the use of fixed capital in terms of capital return. England, apart from Japan, was the only developed country where this figure increased compared to the 70s. The economic recovery began in mid-1985, although it was not stable in the next two years (Frieden, 2020).
The most dynamic factors of domestic demand were the consumer spending of the population. Finally, the war and the four-year occupation caused significant damage to France. The country was experiencing an acute shortage of industrial equipment, raw materials, food, and the transport system were utterly disrupted. People’s financial situation deteriorated sharply; about three-fourths of the urban population was malnourished (Frieden, 2020). As a result of nationalization in Eastern Europe and France’s payment of war debts, its position as a global moneylender was finally undermined (Allen, 2001). Industries such as electric power, coal mining, gas industry, aviation industry, maritime shipping, air transport, and automobile plants were nationalized. According to the Marshall Plan, France has received food, weapons, and significant monetary subsidies from the United States for several years (Frieden, 2020). At the end of the 1960s, complex political events took place in France, which were associated with economic problems, particularly rising prices and rising inflation.
In 1973, a sharp rise in oil prices shocked industrialized countries, including France, which imported almost all oil. The country’s energy and oil crisis has begun, which has hit the entire economic system. In the 1980s, the privatization process unfolded in France (Frieden, 2020). At first, banking groups and industrial companies with high-profit levels were privatized. Thus, after World War II, France faced some economic and political problems. To get out of the current situation, partial nationalization was carried out in the country, and the inflow of capital investments into the national industry increased.
References
Allen, L. (2001). The global financial system 1750–2000. Reaktion Books.
Frieden, J. (2020). Global capitalism: Its fall and rise in the twentieth century, and its stumbles in the twenty-first. Ww Norton & Co.