Post-War Boom essay



Economicprosperity experienced in the U.S immediately after the World War twowas referred to as the post-war boom. The Gross National Product andPer Capita Income doubled. However, most Americans were speculativeabout the return of the depression following the decline in militaryexpenditure. Most were concerned about the domestic economy. Despitethe fact that the war had contributed towards increased rate ofemployment which led to the country emerging from the greatdepression, many still believed that the war economy was onlyshort-lived.

Differentfactors contributed to the post-war economic boom. One of the sourcesof the post-war prosperity was the automobile industry which wascharacterized by rapid technological change leading to massproduction (Kozmetsky and Yue, 2005). Greater profits and innovativedesigns were attributed to the economies of scale in addition to thestiff competition between the automakers. The potential for massproduction was made possible due to the improvement in the existinginnovations in addition to the discovery of innovations. Theautomobile industry rose to become the largest industry division inthe USA resulting in the employment of many Americans. Other factorsthat contributed to the growth of the automobile industry includedurbanization in addition to the interstate highway system whichfacilitated the migration of people.

Thepost-war era also witnessed a housing boom. The contributing factorwas the eagerness of most Americans to have children due to thefuture prediction of peace and prosperity. This period was referredto as “baby boom”. Most Americans moved from the inner citiesinto the suburbs. The demand for houses led to mass productiontechniques that were efficient during construction. William J. Levittis one of the developers credited for building new communitiescomprising of prefabricated houses using mass production technology.Additionally, the Montgomery G.I. Bill provided a means through whichthe veterans returning from war could re-enter the job market. Themortgage cost for returning veterans was subsidized through this billmaking it easier to purchase homes. Farms and business loans werealso provided to the veterans as outlined in the bill. Much credithas been given to this bill for its contribution to the economic boomin the 1950s. It also aided in the improvement of worker’sproductivity through enabling access to education.

Thegrowth of suburbs led to the establishment of businesses in theseareas changing the consumer patterns. There was a significant rise insuch centers by the 1960s as compared to the period marking the endof world war two (Brenner, 2003).

Thebiggest corporations in America witnessed a significant expansionafter 1945. Even though there were some mergers in the 1890s and1920s, similar waves occurred in the 1950s. There was an emergenceof conglomerate companies. For example in the automobile industry,three companies (General Motors, Ford, and Chrysler) becameconglomerates through the acquisition of smaller automobilecompanies. Large corporations began to establish their firms inforeign countries where the cost of labor was significantly low.International Telephone and Telegraph Co. is also an example of aconglomerate which purchased various properties such as ContinentalBanking, Sheraton Hotels among others.

Theeconomic boom was further fueled by the extraordinary defensespending and industrial production in the 1950s and 1960s. Themanufacturing infrastructures in other countries such as Germany,France and Britain had been damaged following the war in contrast tothe American industries which were untouched by the war. Theseindustries benefited profoundly from the war.

The1956 Federal Highway Act boosted the transportation infrastructurewhich played a critical role towards economic development. Severalroads were built linking different parts of the country. The newhighways facilitated access to the suburbs and shops.

Additionally,the post-war boom was ignited by the economic shift in which therewas little reliance on agriculture and manufacturing sector towardswith a preference for “white-collar” jobs. Agriculturalproduction was characterized by the use of machinery which proved tobe more efficient as compared to human labor. There was a rapiddecline in “blue collar” laborers due to the increase in“white-collar” jobs. In the 1950s, the number of workersproducing goods was surpassed by the number of employees providingservices. Labor union members enjoyed various benefits such aslong-term employment contracts.

Discoveriesin the scientific and technological field spurred economicdevelopment. Companies were encouraged to invest in research anddevelopment as a result of federal grants. The development ofcommercial airlines was subsidized through government funds. Theresult was an efficient transport system that facilitated movement ofpeople and goods. The public health sector wasn’t left behind asevident by the discovery of polio vaccine in 1952 by Jonas Salk whichwas a great achievement.

Thepost-war boom was interrupted by the persistent inflation in the1970s. The prices of oil were pushed higher by the Arab oil embargowhich occurred between 1973 and 1974. This led to fuel shortagesthroughout the USA. The prices of oil did not drop even after the endof the embargo. This further contributed to inflation that resultedin higher unemployment rates.

Thespiraling rates of inflation contributed to budget cuts by thefederal government, intense competition from the foreign markets inaddition to the stagnant demand.

TheAmerican people expressed their dissatisfaction with the policiesused by the federal government in the 1970s hence the election ofPresident Ronald Reagan in 1981. People feared a return towards thedepression period. Under his rule, the United States economy bouncedback following tight regulations imposed by the Federal Reserves.This was followed by a longer period of sustained economic growththat’s still witnessed up to present.


Brenner,R. (2003). Theboom and the bubble: The US in the world economy.Verso.

Kozmetsky,G., &amp Yue, P. (2005). TheEconomic Transformation of the United States, 1950-2000: Focusing onthe Technological Revolution, the Service Sector Expansion, and theCultural, Ideological, and Demographic Changes.Purdue University Press.