> Table 1.1 shows annual rates of growth in per-capita GDP for each of three decades, the 1950s, 60s, and 70s, in a range of rich countries. Contrary to our perception of the U.S. as a growth dynamo and the Europeans as sclerotic, France and Germany tremendously outperformed the U.S., as did most of the other countries.
It's easier to grow fast if you're a country that has been blown to bits and is putting everything back together, rather than one that's already prosperous.
Yes but why did Britain become "the sick man of Europe" at the same time?
"Germany and Japan did well because their special interest groups were shattered by military defeat. When new labor unions formed in Germany and Japan, they tended to be very broad-based and therefore had an incentive in the overall welfare of their societies.
'Great Britain, the major nation with the longest immunity from dictatorship, invasion, and revolution, has had in this century a lower rate of growth than other large, developed democracies. Britain has [a] powerful network of special-interest organizations. The number and power of its trade unions need no description.' " (2nd quote written pre-Thatcher)
Britain also rebuilt but at a slower rate. The point is the longer a society remains (politically?) stable the more cruft it accumulates, like the dirty copper bottom of a long sailing ship.
Germany and Japan, once the war was over, were prevented from re-arming.
Think of the amount that the UK and US spend on expensive weapons systems, compounded over that period of time.
It's not really surprising, given those additional funds that Germany was able to do so well. I can't speak at all to Japan, since they have had their own problems.
The end and contraction of the empire probably had a lot to do with it. The Commonwealth was so widely spread it may have led to the Britain having the greatest exposure... (Perhaps?).
>> It's easier to grow fast if you're a country that has been blown to bits and is putting everything back together, rather than one that's already prosperous.
Yup. In 1949 the US had had something like 80% of the world's manufacturing capacity. From there, it had no place to go but down. Or more exactly, the others had no place to go but up.
Also, we think of the Euro-zone economies as being sclerotic because for the last 20 years most of them have been. The book was published in 1982, before the European regulatory and welfare spending onslaught. Averaged over the last ten years, Germany has had little growth.
The East Germans were incredibly well educated. Yes, their physical infrastructure was far behind West Germany's, but reunification should have been profitable almost from the beginning.
Reunification should have been like the end of WWII but with less damage and more and better help.
A deep education according to Marxist principles that explain all economic growth as being the result of central planning, and all problems as being the result of competition is worse than no education at all.
For evidence of this, look at Eastern Europe.
...or the humanities department at any Ivy League college.
It's easier to grow fast if you're a country that has been blown to bits and is putting everything back together, rather than one that's already prosperous.