speed at which the industrial North was taking off—in some measure, as we shall see, thanks to Southern workers—what is striking is not the failure of the
Elsewhere, the role of government varied; but it was never negligible. In France, the state confined itself to what became known as ‘indicative planning’—using the levers of power to direct resources into selected regions, industries and even products, and consciously compensating for the crippling Malthusian under-investment of the pre-war decades. Government officials were able to exercise fairly effective control over domestic investment especially because, throughout these initial postwar decades, currency laws and the limited mobility of international capital held back foreign competition. Restricted in their freedom to seek out more profitable short- term returns abroad, bankers and private lenders in France and elsewhere invested at home.[123]
In West Germany, where the abiding inter-war memory was of conflict and instability (political and monetary alike), the authorities in Bonn were much less active than their French or Italian counterparts in designing or directing economic behavior, but paid far closer attention to arrangements aimed at preventing or mitigating social conflict, notably between employers and workers. In particular, they encouraged and underwrote negotiations and ‘social contracts’ designed to reduce the risk of strikes or wage inflation. As a consequence, private industries (and the banks with whom they worked or who owned them) were more disposed to invest for their future because they could count on long-term wage restraint from their workers. Shop-floor workers in West Germany, as in Scandinavia, were compensated for this comparative docility by the assurance of employment, low inflation and, above all, comprehensive public welfare services and benefits financed out of sharply progressive rates of taxation.
In Britain, the government intervened more directly in the economy. Most of the nationalizations undertaken by the Labour government of 1945-51 were left in place by the Conservative governments that succeeded it. But both parties foreswore long-term economic planning or aggressive intervention in labour-management relations. Such active involvement as there was took the form of demand-management—manipulating interest rates and marginal tax bands to encourage saving or spending. These were short-term tactics. The main
Throughout Western Europe, then, governments, employers and workers conspired to forge a virtuous circle: high government spending, progressive taxation and limited wage increases. As we have seen, these goals were already inscribed in the widespread consensus, forged during and after the war, on the need for planned economies and some form of ‘welfare state’. They were thus the product of government policies and collective intention. But the facilitating condition for their unprecedented success lay beyond the direct reach of government action. The trigger for the European economic miracle, and the social and cultural upheaval that followed in its wake, was the rapid and sustained increase in Europe’s population.
Europe had seen demographic growth spurts in the past—most recently in the mid-nineteenth century. But these had not typically ushered in sustained population increases: either because traditional agriculture could not support too many mouths, or because of wars and disease, or else because the newly excess population, especially the young adults, emigrated overseas in search of a better life. And in the twentieth century, war and emigration had kept population growth in Europe well below what might have been expected from the increased birth rate of earlier decades.
By the eve of World War Two, the knock-on effects of the loss of a generation of young men in World War One, together with the economic Depression and the civil wars and political uncertainty of the 1930s, had reduced the birth rate in parts of Western Europe to historic lows. In the UK there were just 15.3 live births per thousand people; in Belgium 15.4; in Austria 12.8. In France, where the birth rate in 1939 stood at 14.6 per thousand, deaths exceeded births not only during World War One and in 1919 and again in 1929, but also for every year from 1935 to 1944. There, as in civil war-era Spain, the national population was steadily falling. In the rest of Mediterranean Europe and east of Vienna the birth rate was higher, sometimes double the rate of the West. But elevated levels of infant mortality and higher death rates in all age groups meant that even there population growth was unremarkable.
It is against this background, and that of the additional demographic calamity of the Second World War itself, that the post-war baby boom has to be understood. Between 1950 and 1970 the population of the UK rose by 13 percent; that of Italy by 17 percent. In West Germany the population grew in these years by 28 percent; in Sweden by 29 percent; in the Netherlands by 35 percent. In some of these cases the indigenous increase was boosted by immigration (of returning colonials to the Netherlands, of East German and other refugees to the Federal Republic). But exogenous factors played only a small role in France: between the first post-war census of 1946 and the end of the sixties, the French population grew by almost 30 percent—the fastest rate of increase ever recorded there.
The striking feature of Europe in the nineteen fifties and sixties—it can immediately be gleaned from any contemporary street scene—was thus the number of children and youths. After a forty-year hiatus, Europe was becoming young again. The peak years for post-war births in most countries were 1947-1949—in 1949 869,000 babies were born in France, compared to just 612,000 in 1939. By 1960, in the Netherlands, Ireland and Finland, 30 percent of the population was under fifteen years old. By 1967, in France, one person in three was under twenty. It was not just that millions of children had been born after the war: an unprecedented number of them had survived.
Thanks to improved nutrition, housing and medical care, the infant mortality rate—the number of children per thousand live births who died before reaching their first birthday—fell sharply in Western Europe in these decades. In Belgium it dropped from 53.4 in 1950 to 21.1 in 1970, with most of the change coming in the first decade. In Italy it fell from 63.8 to 29.6, in France from 52.0 to 18.2. Old people lived longer too—at least in Western Europe, where the death rate fell steadily over the same period. The survival rate of infants in Eastern Europe also improved, admittedly from a far worse starting figure: in Yugoslavia, child mortality rates fell from 118.6 per thousand in 1950 to 55.2 twenty years later.[124] In the Soviet Union itself, rates fell from 81 per thousand in 1950 to 25 in 1970, though with wide variations among the different republics. But fertility rates in Communist states tailed off rather sooner than in the West, and from the mid-sixties they were more than matched by steadily worsening death rates (especially among men).
There are many explanations for the recovery of European fertility after World War Two, but most of them reduce to a combination of optimism plus free milk. During the long demographic trough of 1913-1945, governments had sought in vain to foster procreation: compensating through patriotic urging, family ‘codes’ and other legislation for the chronic shortage of men, housing, jobs and security. Now—even before post-war growth had translated into secure employment and a consumer economy—the coincidence of peace, security and a measure of state encouragement sufficed to achieve what no amount of pro-natal propaganda before 1940 had been able to bring about.
Demobilized soldiers, returning prisoners of war and political deportees, encouraged by rationing and allocation schemes that favored married couples with children, as well as cash allowances for each child, took the first opportunity to marry and start a family. And there was something else. By the early nineteen-fifties, the countries of western Europe could offer their citizens more than just hope and a social safety net: they also provided an abundance of jobs. Through the course of the 1930s the average unemployment rate in western Europe had been 7.5 percent (11.5 percent in the UK). By the 1950s it had fallen below 3 percent everywhere except Italy. By the mid-1960s the European average was just 1.5 percent. For the first time since records were kept, western Europe was experiencing full employment. In many sectors there were now endemic labor shortages.
In spite of the leverage this afforded to organized labor, trade unions (with the distinctive exception of Britain) were either weak or else reluctant to exercise their power. This was a legacy of the inter-war decades: militant or political unions never fully recovered from the impact of the Depression and Fascist repression. In return for their newfound respectability as national negotiating partners, union representatives through the fifties and early sixties often preferred to collaborate with employers rather than exploit labour shortages to their immediate advantage. In 1955, when the first ever productivity agreement in France was struck between the car
