Here's a bonus posting, because I'm on vacation this week and currently procrastinating.
US GNP in chained 2007 dollars, 1939-1950. (St.Louis Federal Reserve.)
1939-01-01 1162596 1940-01-01 1264999 1941-01-01 1488930 1942-01-01 1770295 1943-01-01 2072020 1944-01-01 2237532 1945-01-01 2215925 1946-01-01 1959037 1947-01-01 1937567 1948-01-01 2018005 1949-01-01 2006981 1950-01-01 2181876
I've taken this out of the Internet's preferred table form because this way you don't have to squint at the squiggly lines and eyeball your estimate. Fortune's "194Q" estimate is a 53% increase in GNP over 1939. Historically, using the 01/01/48 numbers for "194Q," I get 73.5%. Now throw in a swingeing federal budget surplus of 4.6% of GNP, per Lord Keynes'* numbers at Social Democracy for the 2st Century. Comparing the coming-out-of-recession 01/01/47 with the end-of-1939 01/01/1940 numbers gives 53%. That's not bad for a Stone Age economic writer, but throw in the pro-cyclic 1.7 billion dollar surplus and you get a worst-case historical "194Q" that significantly outperforms the projected, utopian "194Q" of 1943.
I am utterly unqualified to draw a conclusion, but it seems to me that there is an "X" factor. It is not productivity growth, as that is already factored in to the "194Q" projection. Perhaps it is higher-than-expected labour force growth? But, if so, where are the people coming from? More likely, it seems to me, is a major excursion from the historical rate of productivity growth. See why I am "unqualified" to draw a conclusion? I want to look at these numbers and see a major component of learning-by-doing coming out of a war time economy-of-knowledge transaction. (That is, "I'll fight for you if you'll let me fiddle with these here proto-computers.") I want to see that so bad that I think I am going to exclude my highly motivated analysis until someone else tells me that it's okay.
By the way, I swear that I did not make up "Professor Wilfred Brimley," (EDIT: "Wilford Brimley") "Wheeler McMillen" or "Ladd Haystead" up. Though I'll cop to wondering if Haystead's column was taking the wind out of Eliot Janeway.
Edit again: Googling around for a historic series of housing starts, I found this. Image, because I'm lazy.
It doesn't inspire complete confidence, in that this is preliminary to a study that tries to use Census data to revise pre-1945 housing start data up by as much as 50%, but even if the comparison to the previous highs of the 1920s is rendered suspect, there is enough here to show the way that housing starts spiked, as suspected, with the end of the war and remained high through the "technical depression" of 1945/6 and fails to reveal the impact of the 1948/9 recession. Single-residence construction does not seem like the obvious place to look for a war-caused skills/technology boost, but, classically, the light construction trades have absorbed a very large proportion of veterans, and there is plenty of technological change to implicate here. I'm thinking bulldozers and plywood.
Edit again: Googling around for a historic series of housing starts, I found this. Image, because I'm lazy.
It doesn't inspire complete confidence, in that this is preliminary to a study that tries to use Census data to revise pre-1945 housing start data up by as much as 50%, but even if the comparison to the previous highs of the 1920s is rendered suspect, there is enough here to show the way that housing starts spiked, as suspected, with the end of the war and remained high through the "technical depression" of 1945/6 and fails to reveal the impact of the 1948/9 recession. Single-residence construction does not seem like the obvious place to look for a war-caused skills/technology boost, but, classically, the light construction trades have absorbed a very large proportion of veterans, and there is plenty of technological change to implicate here. I'm thinking bulldozers and plywood.
*I'm thinking that this might not be the real Lord Keynes.
Let's see here. From looking at my notes from Harrison, ed. The Economics of World War Two, I don't see anything supporting that directly. I do see the following things that relate: Real US Civilian GNP in 1944 was actually only slightly below that of 1939 (which is why so many American civilians remember the war fondly). In 1948 the US produced about as much munitions as 1941 with VASTLY more civilian production.
ReplyDeleteWhere did the production come from? average work hours increased in 1944 but only slightly (up about 7% from 12/41- 43.9 hours to 47 hours) but not even to their pre-Great Depression peak (1929 was 48 hours/week) and returned to antebellum levels when the war ended. One big improvement were that all the people who had been doing low wage, low productivity agriculture who had moved to Detroit, Ohio, or Southern California for high paying, productive factory jobs stayed in those areas doing highly productive, well paying things after the war.
Another was a large increase in the workforce. The author of the chapter on the US reckoned that 40% of the labor force gain in 1948 was decreased unemployment, 30% was an extra 5 million women workers, and 30% was an extra 5 million male workers versus 1939. (Some of those men would have been discouraged pre-1939 workers, but also people doing CCC, WPA, etc. were counted as unemployed, so it probably balances out.)
I suspect that some combination of soft skills learned in the wartime factories, improved organization and bureaucracy, and improved technology (again both soft and hard) are responsible for the improvements.
Also, too. See the current edit.
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