Golden Years Flashcards
years of golden years
1947-1971/1973
positive stats for positive countries
real GDP growth rates, merchandise exports, employment, affluence
real GDP growth rates - 4% in 1950s, 5% in 1960s vs 3% 70s and 2% 80s
merchandise exports grew 290% between 1948 and 1968/a 20 year span
nearly full employment for OECD countries after 1960
increased affluence - Italy’s cars from 496k to 15 million over the course of the golden years
positive stats for developing countries
growth of real GNP per capita @ 3.3%
by early 1970s, many developing economies became semi-industrial/developed eg Greece, Israel, South Korea, Japan, Taiwan
green revolution reduced famine
not equally golden - industrialised countries
US - inefficient, burden of the Vietnam War ($140 billion)
- -> ran first trade deficit in 1969
- -> slowing growth since 1960s
UK - inefficient, sluggish growth, militant trade unions
–> 2.7% GDP growth (50s-60s) and 2.3% (60s-70s) contrast with the rest of the decade
not equally golden - 3rd world countries
undiversified economy which primarily focused on primary commodities
huge global inequalities in wealth distribution
o Zambia depended on copper for a high proportion of its export earnings and Ghana similarly depended on cocoa
why were the golden years so successful? (list handles)
international cooperation less terribleness for 3rd world countries cold war new economic world order cheap energy/oil
international cooperation
systems like Bretton Woods, EEC (European Economic Community), GATT (General Agreement on Tariffs and Trade), International Monetary Fund, International Bank of Rebuilding and Development (IBRD) etc
- -> promoted international trade, setting the standard for international peace and affluence
- -> Bretton Woods system increased certainty and security in the new economic system with the gold standard
- -> GATT reduced/removed tariffs, putting a stop to barriers and beggar-thy-neighbour policies: eg in the first round they signed 45000 tariff concessions affecting $10 billion of trade
less terribleness for 3rd world countries
World Bank/IBRD: funded education, transport, social projects, etc.
generally the liberalisation of the trade system allowed for 3rd world countries to make use of their areas of comparative advantage to export their way to growth (eg primary production la)
technology eg Green Revolution helped them not starve to death
cold war
2 levels: proxy war spending and actual defensive money
- -> Korean War military spending from 1951-56 paid for 60-70% of their exports (2 billion)
- -> actual military defense: US ‘defensive shield’ for Germany, $5.2 billion on West European defense spending, $15 billion Marshall Plan spending. NATO.
US dedication to rebuilding wartorn economies
- -> SCAP, Dodge Plan
- -> $221 million for Thailand
new economic world order
start of state interventionism
eg Ludwig Erhard, Germany’s Minister for Economics
eg Ikeda and METI ministry of economy, trade, and industry
unevenly golden aka the ultra bling bling ones
Japan and West Germany
- -> protectionism allowed
- -> state dedication towards economic growth and efficiency
eg Japan was allowed to maintain a low/weak yen against the strong USD, practice dumping in the US textile industry (late 60s) steal US R&D (US Jeeps) and protectionism in the form of keiretsus
how unevenly golden ones fricked shit up
US suffered - Japan’s gains were tbh US’ losses. also uneven nature of the US-Japan relationship where the US was allowing Japan to import cheaply and export expensively but vice-versa for itself. sad
competitiveness of these countries caused others to fall behind when their efficiency was lacking
why did it end?
fundamental unsustainability of the new economic order
- -> predicated on certain requirements eg low factor costs, US sacrificing itself
- -> in many ways growth occurred at the expense of the US
- -> eventually the US had to protect itself ala CRISIS DECADES
