Government and Economies in the Postwar World: Economic Policies and Comparative Performance, 1945-85

Government and Economies in the Postwar World: Economic Policies and Comparative Performance, 1945-85

Government and Economies in the Postwar World: Economic Policies and Comparative Performance, 1945-85

Government and Economies in the Postwar World: Economic Policies and Comparative Performance, 1945-85

Synopsis

The chance to begin anew seldom occurs. Yet the nearly complete breakdown of the world economy between 1939 and 1945, together with the dominant position of the United States at the end of the war, provided just this opportunity. A new international economic order was built on the ruins of the old. How this happened - and the role of government in economic performance - is the subject of this important and timely book. Written by political scientists, contemporary historians and economists, it includes ten country studies covering all the major industrialized nations in the West: the USA, USSR, Japan, Germany, the United Kingdom, France, Italy, Spain, Eastern Europe, and Scandinavia. In each chapter readers will find information on the main objectives and instruments of economic policy, the institutional framework, where the country started from at the end of the war, and a summary of what happened thereafter both in terms of policies and outcomes. Each chapter also contains data on the country's economic performance, a list of selected dates of important events, and a guide to further reading. The book begins with an overview of the sytem of international trade and payments since the war, and ends with five commentaries drawing attention to contrasts and similarities between the nations. The commentaries feature David Henderson, Head of the Economics Division of the OECD, on the overall economic performance, Charles Feinstein on the influence of different starting points, David Marquand on the effect of different political and institutional structures, and Sidney Pollard on economic policies and traditions. Learning from other countries' experience as well as understanding how they see their own problems is increasingly important with 1992, glasnost', and the problem of international policy coordination between the USA, Japan, and Germany so high on the agenda. No other book provides such a wide-ranging account of how the industrialized world came to be where it is today.

Excerpt

Andrew Graham

There are literally hundreds of books on the principles of economics, rather fewer on particular economies and very few on comparative economic performance. There is one good reason and one bad reason for this relative paucity of comparative material.

The good reason is that it is difficult to establish firm results. This is partly because there are no agreed criteria by which performance should be judged and partly because there is no way of establishing the counterfactual-what would have happened otherwise. Is the performance of Eastern Europe, for example, to be compared with what its performance might have been under capitalism (whatever precisely that may mean) or under 'economic reforms', or under more decentralized planning? The mere posing of these questions illustrates that the particular counterfactual chosen is at one and the same time both important and highly arbitrary. Also, even when chosen, it is incredibly difficult to describe-we simply do not have this degree of knowledge of the social world. Economists have models and carry out simulations, but, at best, these are no more than crutches to our thoughts; and, at worst, such simulations contain so many unrealistic assumptions that they hide more than they reveal. An alternative to the counterfactual is to make a comparison either with early periods of history or with other countries for the same period. This approach, which is used extensively in this book, has the advantage of being more straightforward-we know what we are doing-but, inevitably, many factors change at once and, for all its apparent simplicity, this method is ultimately just as arbitrary.

The bad reason for the lack of comparative work is the fallacious argument that because little can be established nothing can be learned. On the contrary, looking at different countries and at similar, if not identical, policies in different contexts can be a stimulus to our imaginations. It would be stupid to suppose that one country can transplant institutions from another-the circumstances are always subtly different-but looking at one country from the perspective of another may suggest possibilities that would not otherwise have been considered.

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