Interdependence and Economics:
the Limits of Reform
Today experts are agreed that the shape of the postwar economic order in Western Europe was discernible from 1949 onwards. It was the year when the fruits of continued high investment and of expanding production became visible at last to the long-suffering populations of the Old World. The American reporter Howard Smith described how from the autumn of 1948,
. . . continuing transfusions of American goods plus the first good harvest since the war brought material improvement and a perceptible return of color to the collective patient's cheeks. . . . Britain felt able to relax austerity just enough to devote some labor to replanting her public squares; gray residential London became speckled with bright, freshly painted front doors. 1
The turning point proved to be the decisive one. From those months 'the greatest and longest economic boom' in history was assured, an 'astonishing period of increasing output and incomes', opening up prospects of consumption and plenty undreamed of at any time in the past, least of all in the dire years just endured.
From the longer-term perspective, say economic historians such as Alan Milward (quoted above), 'Western Europe's greatest boom began with the end of the war and proceeded without interruption until 1967.' In this view 1949 was the year when the boom changed gear. So much momentum had been built up by the successful, more-or-less organised effort to rebuild after the war that a shift to rapid modernisation of structures and of consumption patterns became imaginable. With West German recovery at its heart, and American aid its underpinning, an unprecedented expansion in investment, trade and