The demographic upsurge (or ‘baby boom’) was a product of a new confidence, and added to the upswing in consumption. It reversed the long-run decline of birth rates in most western European countries since the beginning of the century. The pessimistic predictions of a rapidly shrinking population of inter-war Europe proved for the moment at least unfounded (until the widespread use of the contraceptive pill in the 1960s and its consequence for fertility brought back this interpretation). While in France the birth rate in 1935-9 had been 14.8 per thousand, it rose to 20.1 after the war in 1945-9. The German birth rate in the years immediately after the war was very low, but climbed steadily during the 1950s and reached a peak, later than in other west European countries, in the early 1960s.
The availability of a labour supply alone need not produce growth. Inter-war Europe had been torn by divisive labour conflicts. Labour and capital had seen their interests as fundamentally opposed; labour often tried to use its political muscle to extract a larger wage share, and employers reacted by making pessimistic assessments of the future and cutting back investment. The post-war miracle depended on a new approach to labour relations, in which both sides realized that they could benefit from growth. The most effective models for such cooperation had been prepared already at the end of the 1930s, in some of the smaller European countries. Both Switzerland and Sweden had had a past of highly conflictual industrial relations, but had resolved their problems at the end of the 1930s. Austrian labour relations were reformed on the basis of what was termed ‘Austro-Keynesianism’. In West Germany, the same effect was achieved through the passing of the law on co-determination of 1952, which gave workers a representation on the Supervisory Boards of corporations.
The post-war miracle was characterized by a mixture of confidence but also of lingering doubts. The savings ratios of a population made nervous by the deprivations of the past decades were unusually high. Later, with greater optimism about the future, and also with the establishment of well-
Functioning social security systems, these ratios fell once more. The initial high savings levels generated a major domestic source of investment.
World History
