IH Essays

– – – – – – – – – – – IH Essays Factors for the growth of the global economy (1945-2000) 1.post-war economic reconstruction/role of US/cold war Western Europe beyond leadership role played by USA in the creation of international institutions and systems, US had also undertaken unilateral action in the initial years to spur global economic recovery. US gave $13 billion to European Nations affected by WWII through the Marshall Plan, with a large chunk going to Germany. EV: However, success of Marshall Plan has been debated because some estimated that aid from the MP contributed to less than 5% of Germany’s national income during the time period, and other countries that received substantial MP aid exhibited lower growth than Germany. Moreover, while West G was receiving aid, it was also making reparations and restitution payments well in excess of $1 billion Japan Between 1945 and 1952, the U.S. gave Japan $12 billion in aid, including equipment, loans, and technology. It pegged the yen at 360 to the dollar in 1949 and signed a security treaty in 1951. The U.S. supported Japan’s GATT entry in 1955 and, due to limited export markets, opened its own market to Japanese goods, granting Japan most-favoured-nation status and low tariffs. This allowed Japanese exports to surge —U.S. procurement even helped save companies like Toyota from collapse. EV: with the lowering of trade barriers and entry of Japanese automobiles into US domestic market, US suffered its first trade deficit with Japan in 1965 EV: while USA had a heavy hand to play in the immediate postwar years, it was West EU and Japan that sustained what US started by supporting its open door policy and trading extensively 4.role of Western Europe and Japan/role of the state Western Europe Western European governments, mostly moderate and anti-Russian conservatives, actively pursued economic growth through cooperation and reform. Their strong inter-government coordination contributed to Europe’s postwar recovery, showing European initiative rather than U.S. dominance alone. In West Germany, Chancellor Erhard led key reforms: introducing the Deutsche Mark to replace worthless currency, cutting taxes to boost spending and investment, and reducing corporate tax to a flat 50%. These measures revived the economy—German absenteeism dropped significantly, and by 1958, industrial output had quadrupled since 1948. Japan Japan’s economic growth was driven by socio-economic policies and cultural values. The government promoted high savings by limiting welfare benefits, allowing consumer savings—18% of income on average—to be funneled into cheap loans for key industries. Culturally, traits like discipline, harmony, and group loyalty fostered cooperative labor relations, enabling a unique management system based on mutual trust. Japan’s resource scarcity encouraged efficiency and hard work; by 1986, manufacturing workers averaged 2,150 hours annually but used less than half their v