Capitalism's golden age ran roughly from 1950 to 1973
The postwar economic boom—also called the Golden Age of Capitalism—was worldwide expansion after World War II. Against early forecasts, wrecked economies such as Japan, West Germany, and Austria joined the high-growth club in what became the Japanese economic miracle and related recoveries.
The boom touched the United States, the Soviet Union, Australia and much of Western Europe and East Asia, pairing strong growth with full employment until the 1973–1975 recession. Countries flattened by war posted some of the best numbers: South Korea's Miracle on the Han River, France's Trente Glorieuses, and matching surges in Belgium, Italy and Greece, while neutral Sweden enjoyed its own record years. Historians disagree slightly on dates, with Roger Middleton pointing to 1950 as the usual start and Robert Skidelsky to 1951; both put the end in 1973, though some say 1970. National booms had their own clocks, with France counting 1945–1975 and Taiwan's run lasting into the late 1990s.
The figures were exceptional. OECD economies grew by more than 4 per cent a year in real terms during the 1950s and close to 5 per cent in the 1960s, against 3 per cent in the 1970s and 2 per cent in the 1980s. Skidelsky stresses that this happened when Japan was the only big Asian economy racing ahead, and that inequality was generally shrinking. Finance was unusually calm too: Martin Wolf counts 38 crises between 1945 and 1971, compared with 139 from 1973 to 1997.
Explanations compete. Keynesians credit demand management, and Naomi Klein adds Raúl Prebisch's developmentalism for parts of South America. Others cite a permanent war economy of heavy military spending, or financial repression, in which low interest rates and inflation quietly shrank the war debts of countries such as America and Britain. Productivity gains from feedback controllers, forklifts, shipping containers and oil replacing coal all helped, as did Eisenhower's 1956 Interstate Highway System, sold partly as a way to evacuate cities in a nuclear war.
The run ended in the early 1970s as the Bretton Woods system broke down in 1971 and Nixon shut the gold window. Its legacy included consumerism, welfare states, decolonisation, the space race and 1960s counterculture.
Source: Post–World War II economic expansion
