Wednesday, July 14, 2010

Why did Germany and Japan thrive after WWII?

John Stossel thinks he knows why:

On Stuart Varney’s FBN program this morning, they debated whether the financial “reform” bill  will kill job creation. I can’t see how a two-thousand plus-page law ever avoids doing that. Politicians, many of whom are lawyers, share the conceit that they can manage life with paper and procedure.  They don’t understand that just the quantity of their rule cause entrepreneurs to simply say: “I won’t even try.”

Why did German and Japan thrive after WWII? Because American bombs destroyed years of accumulated bureaucracy. Well, that’s probably one big reason. Their new governments started from scratch. With fewer rules, German and Japan prospered. America now moves in the opposite direction.


  1. "Why did German and Japan thrive after WWII? Because American bombs destroyed years of accumulated bureaucracy..."

    time to change his name to John Tosser?

  2. From what I understand, they didn't start entirely from scratch. Eg the Nazi anti-homeschooling law is still on the books to this day. That being said, it's clear that in a lot of ways, both countries did start over again.

    I also remember reading that in America back in the 19th century, every few decades the Feds would basically start over again too, instead of just leaving laws on the books forever.

  3. It's a fun idea (that treads dangerously on the "natural disasters are great for the economy because it gives people an excuse to spend on rebuilding!"-side of logic) but I believe both West Germany and Japan were under military occupation/dictatorship following the end of WW2. I know for a fact Japan was, I just don't know how long or how "de facto" it was in W. Germany so I can't say for certain (too lazy to Wiki it right now).

    Point is, you could get into a debate about which is more "benign" to economic development (military dictatorship or rampant bureaucracy... not that the two are mutually exclusive!) but I don't think that's the game Stossel or anybody else wants to play.

    As I hinted at before, the bombs also destroyed much critical economic infrastructure. Is that a reason Germany and Japan thrived, too?

    Finally, bureaucracy is for the most part a method. I assume he's being metaphorical but the bombs did not destroy the bureaucracy, the chaos and upheaval of war and its aftermath did. Any individual bureaucrats that died could easily have been replaced and the bureaucracy would live on.

  4. This topic is a can of worms, really. The legacy of Japan and Germany is an unsustainable declining birth rate.

    Germany benefited from Marshall Plan pork. Japan benefited as well from the conflict in Korea, but their economy didn't really take off until after SCAP left and Korea ended.

    Both countries focused on rail/industrial transportation and built export-based economies. Both countries' cultures accepted a notion of deferred gratification. Both countries' peoples would rather try harder next time than complain.

    Such admirable qualities are the antithesis to what happened in America where mostly only the entrepreneurs focus on production, accept deferred gratification, and stay persistent until they succeed. Most of the rest of America is too complacent by feelings of entitlement.

  5. I would bet good money that this is a garbage statistic.

    Before the war, the Germans owned parts or all of, or formed the ruling class or parts of the ruling class of, Poland, the Czech Republic, Austria, Lithuania, and Romania.

    After the war, all the survivors with a belief in the Capitalist system, i.e. those who wanted to work, convened on a much smaller patch of land. You just simply can't compare the FRG to the land it occupied before the war.

    I would bet good money that if you'd look at how the Germans living in what were German areas before the war fared after the war, you'd find that in aggregate they did significantly worse.

    You also have to consider that the Versailles Treaty guaranteed that Germany would suffer dire economic straits.