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Date:         Fri, 2 Oct 1992 11:03:21 -0400
Reply-To:     Marty Rosen <crosen@andy.bgsu.edu>
From:         Marty Rosen <crosen@ANDY.BGSU.EDU>
Subject:      RE: The myth of the "economic miracle"
Comments: To: words-l@uga.bitnet

Greetings,

On rare and momentous occasions, I find myself in agreement with Steve
Karlson on matters of substance.  In the present instance, we agree that
American industrial claims that postwar capital formation in Germany and
Japan placed US industries at a disadvantage are bogus.  I base my
observation on analysis of some of the historical evidence; Steve invokes
his faith in the ease and inevitability of capital formation: if the
manufacturers believed "their prewar plants were obsolete, all they had to
do was...demolish them and build new plants." Which of these approaches is
more meaningful or interesting is an inconsequential issue, I suppose,
since we agree.

Of course, the main point of my post was that there was *not* an economic
miracle in either postwar Germany or Japan.  Whether or not there was is a
question Steve begs in the following passage (which I should perhaps
ignore, in view of the fact nobody else bothered to respond at all).  He
writes:  "I'm not sure that 'state-supported capital formation' is the
key, either; after all, Joe Stalin laid the foundations for a Soviet steel
industry that poured more tonnage than the U.S. or Japan almost right up
to the end of the Evil Empire.  Possibly the Protestant and Confucian work
ethic had something to do with the postwar 'miracles.'"

If I'm reading this properly, Steve is suggesting that Japan and Germany
outperformed the USSR during the postwar period because of social values!
In fact, of course, economic development under the repressive czarist
regimes prior to the Russian Revolution was far behind development in
Germany and Japan.  State-supported capital formation in the USSR
beginning in the 1920s led to an immense expansion in industrial capacity
and production during the following 60 years (the big problems in the USSR
economy, after all, have always been agricultural).  During the 1939-1945
war the USSR suffered much greater loss of capital than did either West
Germany or Japan.  Yet, during the ensuing years, the USSR not only
recovered from immense devastation but made noteworthy strides in heavy
industry and military technology (though not, of course, in the production
of consumer goods, which were not as great a priority in the early days of
the cold war).  By the time Gorbachev took office, the USSR's economy was
second only to that of the US.  One might, indeed, argue that the USSR's
growth during the 20th century constitutes an economic miracle of sorts,
particularly since it was achieved through a bootstrap process that
certainly wasn't necessary in either Japan or Germany after the
second world war.

I'm a great admirer of the Analects, but if Steve seriously thinks
Confucianism had anything to do with the Japanese economic miracle (which
I have already suggested was no miracle at all), he may want to explain
why it is that China, where confucianism originated and was practiced for
a few millenia, languished economically during the 19th and early
twentieth century, and hardly led the industrial revolution.  I'm also a
big admirer of Martin Luther, a great fighter against tyranny, oppression,
and the powers that be (though hardly a supporter of democratic
principles).  Nevertheless, I snicker when people suggest the mythical
"protestant work ethic" accounts for economic growth.  This Gott ist mit
unsere values" analysis smacks of buchananist ethnocentrism.  Since Steve
only mentions the possibility that the protestant work ethic had something
to do with these "miracles" I claim never happened, it may be unfair to
ask for any evidence supporting the proposition; I would still be happy to
hear any.

Incidentally, I take issue with the newbie-influenced poll that rated Bill
S. as a more staunch conservative than Steve.  More often than not,
Steve's posts are founded in some kind of analysis (albeit usually
misguided).  Bill S., on the other hand, usually restricts himself to
posting reactionary one-liners.  As the consensus staunch liberal (if only
because Neal and Jim T have been laying back and Pryluck bailed out), I
should know.

Marty
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