The World War thing was massively overblown. Yes, we did the Marshall Plan, but this was a small part of the US economy. It’s mostly a myth that we had the booming middle class because everyone else had their industrial base destroyed in the war. Look at an actual plot of exports as a share of GDP:
Today exports make up three times the amount of our national economy than they did in the mid 1950s.
Yes, you can find figures that show the US absolutely dominating the global production of certain goods like cars in the 1950s. But what’s important to note was that almost all of this production was consumed domestically. The US produced a lot of stuff, but it also had a ton of wealthy consumers. And that’s the other thing. People living in bombed out ruins don’t have the money to buy brand new Fords. Yes, the other countries weren’t producing much, but they also weren’t buying much either.
We musn’t overlook the most impactful financial leverage the US acquired from the war. Centuries of colonial wealth were transferred to the US as European allies, decimated by the war, depleted their treasuries to buy US weapons. The Nazis bombed the British empire into insolvency and nearly all of that wealth went to buying American weapons. By the end of the war the US held three quarter of the world’s gold reserves, allowing it to institute the Breton Woods system, making the US dollar the world’s reserve currency. This with America’s disproportionate manufacturing capacity left intact - more than 50% of global manufacturing from a nation with less than 10% the global population - and the Marshall Plan which contributed to persistent demand for American goods created a feedback loop which allowed America to become the world’s factory, banker and strongest consumer simultaneously.
American lore focuses on some type of intrinsic exceptionalism but the reality is the stars aligned for them in this particular period and they, credit to them, they took full advantage of it. Doubt it ever happens again though. The game’s different when you’re at the top, as I’m sure they’re all too familiar with now.
The World War thing was massively overblown. Yes, we did the Marshall Plan, but this was a small part of the US economy. It’s mostly a myth that we had the booming middle class because everyone else had their industrial base destroyed in the war. Look at an actual plot of exports as a share of GDP:
Today exports make up three times the amount of our national economy than they did in the mid 1950s.
Yes, you can find figures that show the US absolutely dominating the global production of certain goods like cars in the 1950s. But what’s important to note was that almost all of this production was consumed domestically. The US produced a lot of stuff, but it also had a ton of wealthy consumers. And that’s the other thing. People living in bombed out ruins don’t have the money to buy brand new Fords. Yes, the other countries weren’t producing much, but they also weren’t buying much either.
We musn’t overlook the most impactful financial leverage the US acquired from the war. Centuries of colonial wealth were transferred to the US as European allies, decimated by the war, depleted their treasuries to buy US weapons. The Nazis bombed the British empire into insolvency and nearly all of that wealth went to buying American weapons. By the end of the war the US held three quarter of the world’s gold reserves, allowing it to institute the Breton Woods system, making the US dollar the world’s reserve currency. This with America’s disproportionate manufacturing capacity left intact - more than 50% of global manufacturing from a nation with less than 10% the global population - and the Marshall Plan which contributed to persistent demand for American goods created a feedback loop which allowed America to become the world’s factory, banker and strongest consumer simultaneously.
American lore focuses on some type of intrinsic exceptionalism but the reality is the stars aligned for them in this particular period and they, credit to them, they took full advantage of it. Doubt it ever happens again though. The game’s different when you’re at the top, as I’m sure they’re all too familiar with now.
I think this graph is more relevant:
How so?