As a first guess, would a PSST theory also predict significant disruption and delay in establishing a healthy ‘new normal’ from such a substantial and rapid transformation in the overall economy as accompanied the huge changes from the post-war demobilization? Would we expect the same thing to happen today?
I think that the rapid adaptation of the economy to peacetime in 1946 and 1947 is surprising from the perspective of patterns of sustainable specialization and trade. I have a couple ideas, both speculative.
1. Workers were much more mobile after the war. Having been overseas, a move to another city did not seem daunting. Also, men had met men from other parts of the country. A guy could say, “My buddy Joe, who lives in California, says that there are jobs near where he lives, and he can help me get settled there.”
2. Economic activity was much less geographically concentrated than it is today. My guess is that the percentage of counties where net business formation was positive was much higher than it is now.
3) The nation had loads of savings and low private debt during the war year and it was easier to move.
4) The nation really was 90%+ together in 1945. They survived the Depression and defeated the Nazis and Japanese while the threat of Soviet communism was increasingly daily. Since everybody was for the troops for four years, everybody wanted to help them back to normal. (The biggest movie of the year was The Best Year Of Their Lives) One reason for the fears of 1946 was 1919 was an awful year in terms of strikes, violence and post war integration. (And there were still people that correlated WW1 long term leading to the Great Depression.)
5) 70 years afterwards the post-war integration looks a lot clean than it truly was and it was not come home straight to Father Knows Best. There was a lot more economic disruptions. For instance the post-war period was th high point of US film noir movies.
The war economy didn’t slow down as fast as you might expect (see: military industrial complex, Korea,…) and war material quickly found employment in civilian purposes (see: trucks, jeeps, planes, ships…). These both assisted in the transition.
But I do think we have a fundamental lack of understanding about the substitutability of detailed consumption and production that drives and underpins this particular coordination/dyscoordination game. When entering a high-dimensional space, many intuitions fail. The classic optimization visualizations, for example, of hill-climbing with local maxima and minima, can be violated by neutral networks that interpenetrate the space.
Both these points make a lot of sense to me, as the mobility of my extended family was quite high in the post-war years.
There might be a third paragraph to add to your two:
As one of those who “started over” in that ’46-’47 period (yes I’m in the 90s)
and looking back, we were probably experiencing the ending of the peek importance of “production” (manufacturing. e.g.) and entering the conversion to a predominantly “distributive” economy, where distribution activities (including direct services) constitute more of what occurs domestically.
With that transition, there were new forms of employment of both humans and “capital.”
Also, my sense is that jobs were less specialized, less dependent on large human capital investments, and less constrained by licensing regimes. Those first two points might really be the same thing: jobs were less specialized in the sense that you could then move into a new job with less new investment of human capital than you can now.
While there are short term declines in measured gdp during demobilization, some quite deep as after WWI, others shallow as WWII, there is not so much a search for new patterns as reestablishment of old ones, and while there may be some uncertainty as to speed and size, there is little as to direction, means, and know how, combined with ready investment and production to replace what was lost in the war. A time of transition more than search. This does point out there is more to growth than just search and time. It also takes knowledge, ideas, a desire for something better, a more balanced view of risk and the future, opportunities, optimism, and speed. Too slow and there won’t be the confidence in success and risk increases.
As an extension of your point about men having served overseas being willing to move, I believe (from watching a documentary whose title escapes me) that many workers, including women, moved cities for work during the war, presumably making them more mobile afterwards.
Is it too simple to say that the end of the war meant the end of a large measure of unpredictability, leading to greatly enhanced willingness to invest in specialized capabilities that could be expected to bear fruit over time? Whether these long-term investments were in skills, capital equipment, or customer relationships, the ability of risk-takers to predict which ones would fit into sustainable patterns of specialization and trade would have benefited from a horizon that suddenly stretched beyond the end of the war. Just as Baby Boomers were sometimes the result of long-term optimism and sometimes short-term desires, post-war growth could be expected, in the PSST mindset, as profit-seekers competed both for immediate opportunities and for opportunities they could only win with the efficiency achievable by sustained investments in complementary capabilities.
There was also a lot of churn in employment during 1946 and 1947. Demobilized men would be hired only to be let go a few weeks/months later when the man who had the job before the war returned with a superior claim. I believe there was a law giving returning soldiers the right to re-employment in their old job. My aunt has told me of this displacement happening several times to my uncle, drafted in the last 18 months of the war, demobilized earlier, but then displaced since he was a kid when the war started and didn’t have a prior claim to a job. This churning may have sparked many more people to move, perhaps to locations that suffered more war losses?
Also, many young teenage girls were given experience with independence, separation from roots and moving as they independently followed their husbands through training. My aunt at 16 moved herself to Florida while my uncle was in training, then back home after he was deployed. They did end up settling back where they started, but that first move is the big leap so the young wives would also have been amenable to relocation.
Seems to me, this churning of jobs for that couple of years probably caused a better adjustment of labor than happens under normal economic adjustment periods where people are reluctant to leave the familiar and family. We can’t discount the savings that also would have been available from pay sent home or earned by wives but without a lot of consumer goods to spend it on due to rationing and war production. Such savings would have made relocation easier.
You also can’t discount that the United States had a built-in pent-up demand for labor in retooling from the war effort.
A portion of this was simply returning somewhat to previous PSST.