I’ve started [amazon_link id=”009956355X” target=”_blank” ]Thinking the Twentieth Century[/amazon_link], the final book by Tony Judt, a conversation with historian Timothy Snyder. The first of Judt’s books I read was the supreme [amazon_link id=”009954203X” target=”_blank” ]Postwar[/amazon_link], followed by [amazon_link id=”0718191412″ target=”_blank” ]Ill Fares the Land[/amazon_link] and [amazon_link id=”009955559X” target=”_blank” ]The Memory Chalet[/amazon_link]. So I’ve been looking forward to getting the paperback of this last one.
[amazon_image id=”009956355X” link=”true” target=”_blank” size=”medium” ]Thinking the Twentieth Century[/amazon_image]
One comment in what I’ve read so far brought me to a halt, though, in a passage about the wide and lasting damage inflicted by two wars on European culture but also the economy, due to the retreat from early 20th century globalization. “It took until the mid-1970s for even the core economies of western Europe to get back to where they had been in 1914. … In short, the industrial economies of the west (with the exception of the United States) experienced a 60 year decline, marked by two world wars and an unprecedented economic depression.” Reading this on the Tube, I was sure it was an overstatement – what about Les Trentes Glorieuses, the post-world war 2 golden years of growth?
And so it proves. Turning to the invaluable (xls spreadsheet) Angus Madison database of world GDP over the centuries, per capita GDP (in 1990 Geary-Khamis dollars) in western Europe grew by about half a percent a year between 1914 and 1945, and substantially faster after that. Still, the figures don’t undermine the underlying point about the economic price paid for political upheaval and war in Europe in the first half of the 20th century. Nor do GDP figures capture the destruction of assets – and lives – or the psychological effects of that terrible half century.
Philip Bobbitt in “The Shield of Achilles” argues that the grand wars of the 20th Century did not end until 1990, with the fall of the Soviet Union and the reunification of Germany. The first war was about the defeat of Prussian miliatarism and the clash of empires, the second was about the defeat of fascism and the third about the triumph of liberal democracy and capitalism over communism.
Whether this is a cogent analysis, or not, the reality is that Europe in the 20th century paid a huge human and economic penalty for the apparent resolution of the conflicts between these competing political and economic systems.
I’d be the first to agree that GDP per capita doesn’t capture all the costs, and indeed that you need to take the counterfactual, alternative history, into account. Still, there was a lot of material and educational and cultural progress in the 1950s and 60s to include in the balance.
Thanks for the reminder about Philip Bobbitt’s book – I read it when first in paperback, which is a while ago now. I also met the author once, in rather wonderful circumstances. He was doing a reading and discussion of the book over breakfast one sunny morning in a room overlooking The Mall. He and I both arrived early, and he read me some of the poems quoted in the book until other participants turned up!
In his mid-1970s dissertation the German economic historian Werner Abelshauser follows the same line as Judd. Yet rather than looking at GDP levels he looks at the remarkably stable growth path of ‘economic potential’ set in the 1870-1914 period. He explains the Wirtschaftswunder after ’49 not only as a catch-up to the world technology frontier but also as catch-up towards this domestic frontier, with this potential source of growth levelling out in the 1970s. If you look at this updated graph he has a point. But clearly something else has also happened since the 1970s.
http://192.68.214.70/blz/eup/03_08/images/g1_large.png
That’s a fantastic chart! The ‘missing output’ area under the 1870-1914 trend counterfactual is enormous! Both in the post-war years and post-1970. How interesting.
That’s the original source (in German only I’m afraid):
http://books.google.de/books?id=51IlGwAACAAJ
Abelshauser’s interest was and is the social and economic history of (early) West Germany. His structural explanation stirred some controversy as he dared to deemphasise the importance of politicians (Erhard) or single events (monetary reform) for postwar reconstruction.
So unfortunately he does not look at the determinants of the long-term trend in more depth and its foundations pre-1914. Institutional? Technological trajectory – Kondratiev , etc. Or simply the neoclassical growth model? I’d be really interested to learn if someone like Crafts or indeed Madison has come up with something similar for the UK or Europe.
The closest I can think of at the moment is Carlota Perez, although I don’t remember her applying it empirically in the same way – it’s a model of technological innovation, inducing financial deepening, which paves the way for boom and crisis.
OK. Thanks. What really struck me when I first saw the graph is the stability of the trend of ‘potential output’ 1870-1970s. So yes, Perez makes me think SPRU makes me think van Tunzelman perhaps
Dear Messrs,
It would be a request rather than a comment.
I would like to have the Top tens GDP in the 20th cencury .
I will be very grateful.
Thanks