The Economic Boom in Post-World War II Europe: A Q&A

Summary

After World War II, Europe experienced a period of sustained economic growth and prosperity, known as the “golden age”. This growth was due to various factors, including the release of stored-up demand, low-cost labor, and significant technological advancements. Investment, initially from public spending on big infrastructural projects, encouraged confidence, leading to further investment and a positive growth spiral. The role of the state was also important, especially in the early stages of economic recovery, as the deployment of Keynesian economics resulted in significant economic stimulus. The sustained high rate of growth resulted in increased profits, wages, and salaries, and allowed governments to gain additional tax revenue to fund social welfare programs. This growth was widespread, though concentrated in West Germany, Austria, and Italy, with the United Kingdom experiencing the lowest growth. The planned state economies of Eastern Europe and the Soviet Union saw average rates of growth of gross domestic product per head only a little below those of capitalist Western Europe.

Table of Contents

• Factors that Led to Economic Growth
• The Role of the State
• Uneven Spread of Economic Growth
• Population Changes
• Immigration and Racial Prejudice
• The Economic Performance of Britain
• The “Golden Age” and Its Benefits and Disadvantages

Q&A

Q: What were the factors that led to economic growth in post-World War II Europe?
A: The growth was the result of numerous factors, such as the release of stored-up demand, the availability of low-cost labor, and significant technological advances made during the war. The necessary rebuilding of ruined towns and cities also provided a boost to growth.

Q: What was the role of the state in the economic recovery after the war?
A: The role of the state was an important part of the economic recovery, especially in the early stages, as the deployment of Keynesian economics resulted in significant economic stimulus. Investment, initially from public spending on big infrastructural projects, encouraged confidence, leading to further investment and a positive growth spiral.

Q: Were there any disparities in economic growth across Europe?
A: Yes, the growth was not evenly spread. In Western Europe, it was greatest in West Germany, as well as in neighboring Austria, and in Italy, especially the north. It was lowest in the United Kingdom. In the Soviet bloc, the growth was concentrated in heavy industry, but living conditions did start to improve modestly from the mid-1950s onwards for the great majority of the population.

Q: What population changes occurred during this time?
A: After World War II, birth rates in Western Europe increased while child mortality rates dropped in both Eastern and Western Europe. Agricultural employment dropped dramatically, causing urbanization to accelerate, especially in Southern and Eastern Europe. Labor movement across national borders increased significantly, with over 7.5 million migrants employed in Western Europe by 1973.

Q: How did immigration impact Europe during this time?
A: Britain recruited cheap, unskilled labor from its former colonial territories in the Commonwealth, with the right to permanent residence and British citizenship, causing immigration to become a significant political issue. Immigration was prevalent in industrial regions, particularly in northwest England, the Midlands, and London, leading to ingrained racial prejudice that sparked race riots and caused rising anti-immigrant sentiment directed mainly at non-white immigrants.

Q: What was the economic performance of Britain during this time?
A: Britain’s economic growth was lackluster compared to other countries, primarily due to outdated methods of production, complacent management, and a multiplicity of trade unions, among other factors. Britain’s preference for Atlanticist and Commonwealth links instead of continental links also hindered its growth and left it unable to fully benefit from expanding intra-European trade. The mid-1960s saw the beginning of an economic downturn in Western Europe, which was resolved with measures to stem inflation and overheating economies. Despite the downturn, the period of economic growth from 1948 to the mid-1960s, known as the “golden age,” had lasting benefits for the population of Western Europe, including improvements in living standards and increased welfare provision.

Conclusion

The post-World War II era in Europe was marked by a period of sustained economic growth and prosperity, known as the “golden age”. This growth was due to various factors, such as low-cost labor, technological advancements, and significant investments, including public spending on big infrastructural projects. The role of the state was an important part of this, as Keynesian economics resulted in significant economic stimulus. However, the growth was not evenly spread across Europe, with concentrated growth in countries such as West Germany, Austria, and Italy. Population changes, including increased birth rates and labor movement across national borders, occurred during this time. Immigration was prevalent in industrial regions, leading to ingrained racial prejudice and a rise in anti-immigrant sentiment. Despite the serious worsening of environmental damage, the period of economic growth had lasting benefits for the population of Western Europe, including improvements in living standards and increased welfare provision.