This entry is part 7 in the series Economics In RPGs

It’s not period-correct, but this image of a biplane by Anja from Pixabay was just too beautiful to refuse!

A word of advice: Each part of the series builds heavily on the content from the previous one. While you may be able to get relevant information without doing so, to get the most of out of each, you should have read the preceding article.

Welcome & General Introduction

With each part of the series, we find ourselves treading ground that is more and more familiar.

That’s both a blessing and a curse. A blessing because it becomes more and more familiar, a curse because it gets harder to offer something new to readers, and because it gets easier for distinguishing features to get lost and confused.

From A Writing Perspective

This blurring is something that I’m keenly aware of, and will be fighting hard to overcome. But it’s not helped by the fact that right off the bat, there’s a half-truth necessary.

I could have called this ‘the Atomic Age’ – but Atomic Energy never had the impact that SF writers of the era anticipated. Why that was the case is one critical element of this article.

I could have called this the ‘Post-Industrial Age’ – but that implies that Industrial growth isn’t relevant, and that’s completely false-to-fact. The cause of ongoing industrial growth as an economic driver changes in this era, but the growth itself remains as relevant as ever – and that’s another central subject of this part of the series.

It could have been called the ‘Home technology Age’, which is completely accurate – and completely ignores the features that distinguish this age from the one that follows, sending entirely the wrong message. So the growth of Home Technology and its social consequences are a third defining factor of this age that needs examination.

In the end, I’ve titled it the “Pre-Digital Tech Age’ – but that implies that computers and digital technology in general play no part in the economy of the time, and that’s true only in comparison with future time-periods to come (‘The Data Age’ and ‘The Information Age’ – names subject to change!). So the nuances of the role of computers in society and the economy is another focal point that needs to be addressed.

it’s actually fairly rare for the title of one of my articles to drive the delineation of content so profoundly; quite often, the titles are amongst the last things that I fix, having used a working title as a placeholder during the writing – but this time around there is so much depth and nuance buried within the title that this discussion serves as something of a table of contents for the article to come!

Beyond those content elements, there are the four items that I’ve been foreshadowing at the conclusion of previous parts of the series – ‘The Gold Standard’ (again), ‘Resources & Regulation’, ‘Inflation & Hyperinflation’, and ‘Commercialism, Deregulation, Privatization, & Greed’, and there is the relevance in various RPG genres to discuss – fantasy, various sub-genres of Sci-Fi, spies & secret agents, apocalyptic visions, and more.

All this and a (mostly) cold war, too! Which adds up to 73 sections and sub-sections. Fortunately, I don’t have to cover all of this in just one article. – I’ve left myself scope to split it in two or even three. I would have preferred to cover it all in one got, so that I could steal the next for the article that I originally intended to write, before it morphed into this whole series, but that’s probably not possible, with so much to cover – unless I can squeeze most of them down into just a paragraph or two.

I have checked (as I usually do when this is a possibility) and the article does break naturally into both 2 or 3 parts. So we’ll just have to see how I get on!

A disclaimer: I am not an economist and I’m not trying to turn anyone else into an economist. An awful lot of this content will be simplified, possibly even oversimplified. Bear that in mind as you read.

A second disclaimer: I’m Australian with a working understanding, however imperfect and incomplete, of how the US Economy works, and an even more marginal understanding of how the UK economy works (especially in the post-Brexit era). Most of my readers are from the US, and number two are Brits. Canadians and Australians fight over third place on pretty even terms, so those are the contexts in which what I write will be interpreted. And that means that the imperfection can become an issue.

Any commentary that I make comes from my personal perspective. That’s important to remember. Now, sometimes an outside perspective helps see something that’s not obvious to those who are enmeshed in a system, and sometimes it can mean that you aren’t as clued-in as you should be. So I’ll apologize in advance for any errors or offense.

I’ll repeat these disclaimers at the top of each part in this series.

Related articles

This series joins the many other articles on world-building that have been offered here through the years. Part one contained an extremely abbreviated list of these. There are far too many to list here individually; instead check out

the Campaign Creation page of the Blogdex,

especially the sections on

  • Divine Power, Religion, & Theology
  • Magic, Sorcery, & The Arcane
  • Money & Wealth
  • Cities & Architecture
  • Politics
  • Societies & Nations, and
  • Organizations, and
  • Races.
Where We’re At – repeated from Part 3

Along the way, a number of important principles have been established.

  1. Society drives economics – which is perfectly obvious when you think about it, because social patterns and structures define who can earn wealth, the nature of that wealth, and what they can spend it on – and those, by definition, are the fundamentals of an economy.
  2. Economics pressure Societies to evolve – economic activity encourages some social behaviors and inhibits others, producing the trends that cause societies to evolve. Again, perfectly obvious in hindsight, but not at all obvious at first glance – largely because the changes in society obscure and alter the driving forces and consequences of (1).
  3. Existing economic and social trends develop in the context of new developments – this point is a little more subtle and obscure. Another way of looking at it is that the existing social patterns define the initial impact that new developments can have on society, and the results tend to be definitive of the new era.
  4. New developments drive new patterns in both economic and social behavior but it takes time for the dominoes to fall – Just because some consequences get a head start, and are more readily assimilated into the society in general, that does not make them the most profound influences; those may take time to develop, but can be so transformative that they define a new social / political / economic / historic era.
  5. Each society and its economic infrastructure contains the foundations of the next significant era – this is an obvious consequence of the previous point. But spelling it out like this defines two or perhaps three phases of development, all contained within the envelope of a given social era:
    • There’s the initial phase, in which some arbitrary dividing line demarks transition from one social era to another. Economic development and social change is driven exclusively by existing trends.
    • There’s the secondary phase, in which new conditions derive from the driving social forces that define the era begin to infiltrate and manifest within the scope permitted by the results of the initial phase.
    • Each of the trends in the secondary phase can have an immediate impact or a delayed impact. The first become a part of the unique set of conditions that define the current era, while the second become the seeds of the next social era. There is always a continuity, and you can never really analyze a particular period in history without understanding the foundations that were laid in the preceding era.

The general principles contained within these bullet points are important enough that I’m going to be repeating them in the ‘opening salvos’ of the remaining articles in the series.

Beginning & End-Points of the “Pre-Digital Tech Age”

Defining the beginning and end points of these eras grows more complex with each additional part of the series, because these are thematic dividing lines, drawn somewhat arbitrarily; it would be easy to select different start and end points just by tweaking the thematic definitions.

Deciding whether or not make such changes ultimately comes down to whether or not the significance of those themes would be buried, confused, or lost by the change, so there are limits that have to be recognized. I’ve chosen definitions and end-points that I think recognize those limits, but this is subjective to a certain extent.
<.ol>

Sidebar: A storytelling parallel

When you have a strongly serialized campaign, you can encounter similar questions regarding the points at which one ‘adventure’ ends and the next begins. I use the same basic criteria – thematic content and whether or not those themes become muddied, confused, or lost by expanding the end-point. That’s not the only way of handling the issue, but I think it’s the one that adds the most value to a campaign.

A far more difficult question would be whether or not I have chosen this approach to this article because I’m used to using it in RPG campaigns. I’ll leave that assessment to others, though.

The Rise Of Fascism

The beginning point is easy, because I announced it in discussing the end point of the previous part of the series. Fascism held a great appeal in the early part of the mid-twentieth century, something that I’ll look at as the article proceeds.

The original intent was to set the dividing line at that point in which Fascism began to have influence at an international level, but I soon found that this was much harder to pin down than I had expected – and the earliest possible interpretation of that definition intruded into a time when the previous era had clearly not yet run its course.

Overlap with The Age Of Electrification

This requires a softer boundary between the two eras, in which the transition is slower, more gradual, and more nuanced. A little reflection should have told me this would the case; after all many parts of the US did not achieve electrification until the 50s, and some took twenty years longer than that again.

Either the earlier era didn’t end so much as peter out, or some arbitrary dividing line had to be drawn, beyond which those communities who had not yet achieved full electrical supply were considered pockets of exceptions to the general rule. Ultimately, a hybrid of the two options seemed the best choice, one in which this era gradually becomes dominant over the previous one; priorities change, themes differ, points of distinction morph and shift, and one historical period becomes another.

Local vs National vs International

The dominance of issues on the national scale, rather than a uniform transition nation-wide, became the (rather nuanced) dividing line. So this era starts with the rise of ultra-nationalism in the 1920s and early 30s, first at a local scale and then as a significant national trend, even though the previous era had not yet reached its conclusion.

Beginning Of The End: The 1970s Oil Crisis

A similar problem arises when contemplating the end of the era. It’s not as though there was some watershed moment in which the perceptions of reality shifted; instead, there was a gradual drift from one set of policy priorities and agendas to another.

Thematic definitions make it clear when things started to change – the 1970s Oil Crisis, when suddenly scarcity of available resources intruded upon world consciousness like a bolt from the blue. This is so profound a change relative to the preceding period that it makes a natural demarcation point.

End Of The End: Windows 3.0 or The Fall of The Wall?

But not every thematic element of the era came to an end at the same time. Others persisted, creating another fuzzy boundary. It proved impossible to choose between two quite different end-points for the transition, simply because they had such different spheres of influence.

The two flagship contenders were the rise of personal computing (another somewhat amorphous boundary, represented by the release of Windows 3.0 on May 22, 1990) or the fall of the Berlin Wall (on 9 November 1989), symbolic of the end of the Cold War that had been such a dominant part of international relations and national economics & society through the 1950s and 60s.

Windows 3 began the transition to Graphical User Interfaces, and commercialized computing for the business and personal worlds. It’s easy to draw a straight developmental line from that point to the ubiquitous dominance of the modern smartphone, a thematic connection that is definitive of the era that follows; so that is a strong contender.

And the sudden and completely unexpected (at the time) fall of the Wall was a cultural landmark that sharply divides the Pre-Digital Tech Age from the era that follows it.

As with the beginnings of this era, I decided to answer the question by avoiding it completely. So that six-month period marks the transition between eras that defines the end of this historical period.

A rejected flagship moment: 20 July, 1969

Another watershed moment that, from a whole-of-planet perspective, at least deserves consideration was the first manned landing on the Moon. yet, it took hardly any thought to dismiss it as a contender.

The first moon landing was the culmination of years of effort on an international scale, but it did not mark the end of man’s exploration of space; arguably, the first weather and communications satellites (Vanguard 2, launched February 17, 1959, and Project SCORE, launched 18 December 1958, respectively) were better signposts to the long-term impact on human society.

Moon landings continued until 14 December, 1972, and three more planned missions were canceled. In terms of the cultural big picture, the fact of these cancellations looms just as large as the first success, so it can be seen that the ‘definitive moment’ quickly gets spread out over a substantial time frame.

More telling even than this uncertainty is the fact that social and economic trends already extant continued beyond them all. As a human achievement, Apollo 11 is a globally-significant landmark, but in terms of delineating one historical period from another, it is somewhat lacking.

Sci-fi economic footnotes of significance

There are two scenarios in which the first manned Moon landing would be a valid end-point, and they deserve amplification, however brief:

Scenario 1: Lunar Colonization

Had a successful case been mounted for ramping the Apollo program up rather than shutting it down, the next stage would have been lunar colonization. The case would need to be made that this would have a marked impact on terrestrial problems and cost-effectiveness would need clear demonstration, probably achieved through the opportunities for commercialization of colonial activities. While this scenario seems unlikely, given the existing social trends, it is at least a plausible possibility. The impact on society – technologically, socially, and economically – would have made the first landing a sufficient watershed moment that it would define a new socioeconomic era in human history.

The problem was that NASA was so busy working on achieving success that they never planned beyond it, simply taking it for granted. Had a credible plan for the development of Lunar resources been formulated and presented as taking effect after the initial success (whenever that was to be achieved), and all subsequent missions designed as stepping stones to that development, then the cost to date could have been redefined as an ‘investment in future prosperity’ that could have undercut the harshest criticisms of the Program.

Changes to our history would have to have predated Apollo 11, though they probably would not have attracted public attention. It’s also arguable that the landing difficulties experienced by Apollo 11 would have mandated Apollo 12 proceed as it did, historically, establishing the capacity for precision landing. But from that point on, history would have been increasingly divergent.

Scenario 2: Delayed Lunar Landing

It’s arguable that the Apollo program was a victim of it’s own success, that it took every shortcut to achieve that success because of the Space Race, and that the long-term national interests of the US might have been better served had it taken a different direction – aiming not for the showy Moon Landings but for sophistication in technological capabilities and a 25-year plan that focused on efficiency, reliability, and the development of foundational technologies. Unmanned Satellites / Mercury; Space Platform / Gemini; Space Station / Apollo; Colonization. This would have had the mantra ‘never a backwards step’, with each stage having a clear technological target with planned commercial .spin-offs after the achievement of that target, and each step building on the one before it.

Under this plan, instead of ‘before the end of the decade’, the lunar landings would have come in 1980 or 1985. Personally, I don’t think this scenario is as realistic as the first, failing to fully account for the cold war mentality and imperative; the goal of doing things ‘better’ instead of ‘first’ is a much harder sell. There’s too much hindsight in the mix, in other words, too much that was not obvious at the time.

Setting such criticism aside, however, it makes for a compelling sci-fi foundation. It especially makes sense in an environment in which the US government is receiving advice from non-terrestrials, being a more logical developmental program. A bold move, risking war, to handicap the Russian space program through an act of sabotage would have minimized the fallout from the delays, resulting in an environment well-suited to dramatic adventure in an RPG with just enough plausibility to succeed – as a piece of fiction.

Once again, it is the ongoing economic impact that makes the resulting Lunar Landing a significant-enough event to delineate the end of a socioeconomic era.

Themes Of The Pre-Digital Tech world

Having defined, however loosely, the boundary points of the era, the themes that dominate society and economics in the resulting period can be observed. I have to emphasize that these are not being identified from a perspective of assessing the ‘dominant themes’ of a defined span of history; instead, these themes are what give the era its cohesion, and define those end-points.

There are 12 of these themes to which I want to call attention.

    Theme 1: Liberty Vs Collectivism Vs Authoritarianism

    A hangover from the previous era is the conflict between the principles of individual liberty, collective welfare / security, and the abdication of liberty to perceived authority. The conflict between Business and Unions is an ongoing aspect of this broader theme; the political conflict between Democracy and Communism (in various forms) is another, that did not really exist prior to this era, and in its most overt form, one that is fully self-contained by it; and, of course, the perception of an authority greater than the will of the populace, to which individual liberty should be sacrificed, is both an element of the Democracy / Communist confrontation and of the earlier Fascism / Rest-of-the-world conflict.

    Perhaps less obvious is that any form of ‘planned society’ – including those who abdicate personal liberty to the will of a religious authority, and those who call for a technocratic society – also falls under this heading. Such planned societies were popular concepts among sci-fi writers and futurists, and there was an actual political movement aimed at achieving one in the 1930s as an answer to the Great Depression (see Technocracy Movement.

    Theme 2: Golden Hangover: A Mixed Blessing

    There was a growing sentiment at the start of the era that the benefits of a Gold Standard or other form of fixed currency were not worth the liabilities. Such standards for national currencies can function reasonably effectively in isolation, but as soon as international trade enters the picture, problems arise. As explained previously, the Gold Standard is now considered responsible (at least in part) for the Great Depression becoming a global phenomenon rather than being confined to the USA. It was also my conjecture that it also played a significant part in creating the economic conditions that led to the rise of Fascism; blaming war reparations for those conditions now seems an oversimplification and superficial.

    Throughout the early part of the era, governments would flirt with the concept of floating currencies as fixed valuations of currency came and went. By its end, the jury had made its call, and fixed currencies were largely relegated to the dustbin of history. The repeated turbulence of that transition would be another hallmark of the era.

    In particular, World War II showed the extent to which industrial productivity was hamstrung by a fixed currency; in order to afford the war, without the now-evident problems of reparations, the US abandoned the Gold Standard (only to restore it at War’s end), but the writing was now on the wall for the concept.

    That’s not to pretend that a floating currency doesn’t have its own problems, amongst them the temptation to run a deficit economy, spending tomorrow’s money to better one’s political today. When justifications for such spending are economic in nature – smoothng over rough economic waters, for example, by taking the top off anticipated future prosperity, or investing in creating the conditions necessary for such future prosperity – they can be justified; as soon as rationales move beyond these limits, however, cracks begin to show.

    Currency controls are a hybrid option that has become more widely known of late, but ‘managed economies’ were largely viewed as a pipe-dream capturing the weaknesses of both systems through this period of time. Even now, the jury is still out on that front. During the era in question, a ‘responsive’ floating currency became the dominant choice, globally, despite the shortcomings.

    Theme 3: Unlimited Resources

    Although some were sounding warnings about limited natural resources through the latter part of the era, if not sooner, they were mostly ignored; both populations and governments operated under the presumption that there were unlimited resources waiting to be found.

    No-one was so foolish as to deny that commercial quantities were clustered and concentrated in different parts of the world; this was viewed as the very foundation of international trade, and the basis of an ever-increasing standard of living.

    Theme 4: Unlimited Opportunities

    It followed that there were unlimited opportunities for those willing to seek them out, and this also colors international relations throughout the period. In particular, diplomacy became perceived as a means of achieving those opportunities in the post-war world.

    Theme 5: Unbounded Optimism

    The combination of the two meant that there was a perception that mankind was heading for a golden age, if only the horrors of extreme nationalism and atomic annihilation could be avoided. Much of the appeal of this era lies rooted in this perception, and it is still often viewed through rose-colored glasses because of it. This nostalgic preference for simpler times continues to be a political factor to this day; this lies at the heart of the MAGA movement, for example.

    Theme 6: Legacy of the New Deal: Big Government

    Throughout the preceding Age Of Electrification, the influence of Government had been waning, blamed for all sorts of social shortcomings. In particular, the failure of social engineering programs like Prohibition had highlighted the limitations of government. The Great Depression, and the need for government regulation, and the New Deal, combined to redefine the value of Government to the lives of the ordinary citizen.

    Ongoing manifestations of this theme include the regulation / deregulation principles of many opposing political forces throughout this era, often characterized as Big vs Small government, and anti- vs pro- business conflicts. These competing social movements had existed long before this era began, and would continue long after it ended; what changed was the way in which they were perceived, both politically and by society at large.

    In particular, progressive movements embraced the regulatory principle and conservative movements, the deregulatory principle. This is true not only of the Republicans and Democrats of US Politics; it manifests in the policies of many political parties in many countries around the world, and has become largely definitive of what those parties represent.

    During the Pre-Digital Tech Age, Big Government and progressive movements dominate in the US, with conservative governments largely restricted to a social pattern of ‘two steps forward, one step back’. Many of the institutions and principles established in this era, and in the preceding Age Of Electrification, are still present and relevant today, though many have come under direct attack recently. The responsibilities accepted by governments and the institutions created to discharge them are characteristic elements of the era.

    Theme 7: Delegated Responsibility

    Are American readers familiar with the term “Nanny State“? It is more widely applied, and has many more interpretations in different parts of the world, than most readers will recognize, but in general it is held to describe a government that is perceived as overprotective of some segment of the nation under its authority. None can argue that there have been instances of overreach by governments in the past – Prohibition is the red-letter example. In general, the term is over-used, in my opinion – but there is a truth at the heart of it that manifests in the Pre-Digital Tech Age: the abdication of personal responsibility because the Government is there to act like a protective parent.

    It can be argued that there is a line beyond which government protection should not extend, so that people are forced to stumble and fall and learn for themselves. The alternative is just as authoritarian as Fascism, albeit with a greater concern for the welfare of the citizens at its heart – a genuine Nanny State. I’m not going to try to debate that argument, or even take a stand on the issue, at least not in the course of this article; what matters in this context is not political philosophy, it is simply that the practice of delegating responsibility for personal safety of citizens begins in this era, and is characteristic of it.

    Theme 8: The Power of Greed

    Frequently cast as in opposition to protection of its citizens by Government is the ability of business, and individuals, to profit. In particular, the conservative position is to support business in an alleged environment in which that ability is constrained by excessive regulation. I think that this is a particularly short-sighted interpretation of Government regulation; you can’t get blood from a stone, and a smaller profit sustained over a much longer time-span will accumulate to a vastly greater sum. The real problem is impatience, the demand for immediate profit-gratification; make your money as quickly as possible, sell up, and hook your sleigh up to the next cometary rising star.

    But that’s neither here nor there. In the context of this article, it is sufficient to note that shortsighted governments erode long-term protections to facilitate short-term satisfaction of greed; or, at least, that such satisfaction is the objective of short-sighted corporate executives, creating a perception – rightly or wrongly (probably both, depending on which example is drawn upon) – that a dominant social force is a conflict between business and the individual (which includes the customer). This perception is fostered throughout the era by politicians of all stripes for political advantage.

    Theme 9: The Restraint of Greed

    There is a principle in contract law that states that no agreement is legally-valid if there is an inequity in power between the parties. Thus, an agreement obtained under duress is legally invalid. This principle is frequently forced to apply well outside the boundaries of contract law, however – there are those who apply it to “Big Government” (implying that there is an inequality of power between government and those who elect them), and those who apply it to “Big Business” (implying that no contract with a commercial operation of any scale can ever be equitable). These interpretations give rise to “Sovereign Citizen” nonsense, but also give rise – through the delegation of protective responsibility of citizens to government authority – to the premise that it is a function of government to restrain the rapacious greed of large corporations.

    This is the source of power of the belief that there is a conflict of interest between profits and customers, and that the maximizing of one must be detrimental to the other. This perception is at its height in this era, at least in some circles.

    Theme 10: Regulation and Deregulation

    These perceived tensions, often artificial in nature, give rise to the ongoing cycles of regulation and deregulation that have already been mentioned.

    In this historical era, the forces of regulation are dominant, as already explained; short-term profiteering by corporations with no sense of responsibility to the public create a need for regulation that is hard to argue with. The problems generally arise through the implementation of regulation, and the inherent decrease in efficiency that results.

    The forces advocating deregulation generally throw the baby out with the bathwater; rather than advocating the efficiency of regulation (not a very ‘sexy’ political position, but a responsible one), they favor complete deregulation because of the business and social costs of inefficient regulatory mechanisms.

    Theme 11: Socialism Vs Authority

    One can never completely ignore the lure of naked power, either; there are those who advocate against the welfare of others simply because it creates a pathway to power. When generalized into easy-to-digest soundbites, this becomes a conflict between Authority and Socialism, with the latter generally conflated with other political systems such as Communism. The polarizing effect of the Cold War pushes extremists into positions with respect to this perceived conflict. Although this line of argument had little impact in this era, because the focus was on the direct conflict of the Cold War, it has since become more tenable and overt as a political stratagem. But that didn’t stop politicians from trying, throughout this era, to paint any policy of which they didn’t approve as ‘socialist’, however accurate or inaccurate the characterization.

    This frequently pushed their opponents into a position of being perceived as supporting policies and doctrines that they actually opposed, giving rise to the term “spin”. There were also times when public messaging would be subjected to “spin” as a defensive move. While this is a minor and secondary theme of this era, it starts here and will only grow worse in subsequent historical periods.

    Theme 12: Anti-Fascist Hangover: Privatization

    Finally, another minor theme that would become far more widely-applicable in subsequent eras is Privatization – the sale of a public utility or service contract to an outside entity that can be operated for a profit. In Australia, where the sugar rush of deficit economics was deemed by the culture to be unacceptable, this became a way of infusing treasuries with sizable chunks of cash; more importantly, by estimating the proceeds of such sales, even though they had not yet taken place, governments could spend the money in advance. This is deficit economics behind the curtain.

    Citizens were rarely given advance notice or the ability to veto such sales; at best, some sort of guarantee of service standards could be demanded, for whatever they were worth.

    It is noticeable, though, that many of the institutions privatized by various Australian governments were always in private hands in other nations. Locally, the attitude was that this guaranteed service delivery at the most affordable price; the anticipation was that service standards would slip, or the costs of those services would increase, or both. At first, there was little evidence of this, but those success stories were followed in time by others that were not so well-received, and still more that lived down to expectations. Those still lie in the future, beyond this era.

    That is not to say that there were no examples of privatization elsewhere; there were. Because of the Big Government flavor of the era, though, I have a sense that most of them occurred afterwards: National carriers (airlines, train services), banks both central and not, telecommunications providers, city bus lines and metro rail services, health services, even prisons and energy grids. While the majority of these fall outside the extent of this era, there are some notable exceptions that demonstrate that this economic practice was as much a part of this era.

    Fascist Germany privatized almost everything, in direct opposition to the public perception of the policies of the regime.

      “It is a fact that the government of the National Socialist Party sold off public ownership in several state-owned firms in the middle of the 1930s. The firms belonged to a wide range of sectors: steel, mining, banking, local public utilities, shipyard, ship-lines, railways, etc. In addition to this, delivery of some public services produced by public administrations prior to the 1930s, especially social services and services related to work, was transferred to the private sector, mainly to several organizations within the Nazi Party.”

      — Germa Bel, “Against The Mainstream: Privatization in 1930s Germany 1”, The Economic History Review, quoted by Wikipedia – Privatization.

      Great Britain privatized its steel industry in the 1950s, and the West German government embarked on large-scale privatization, including sale of the majority stake in Volkswagen to small investors in public share offerings in 1961.

      — Wikipedia, same page

    Perhaps more than the actual practice, though, the era was characterized by ongoing threats of privatization. Governments through the era of electrification were increasingly perceived as the neutral power-broker forging balanced agreements between business owners and unions, and there was an ongoing perception of bias when the government itself was one of the parties to labor disputes, for obvious reasons; privatization was seen as a way to cut this Gordian knot. Other motivations would dominate the argument in the 1980s, and that might be one reason why so many acts of Privatization too place then.

    It was also seen by some as a way to “shrink” Big Government, placing regulatory powers ‘where they belonged’ (in the hands of industry players), but in a broader context, the privatization debate was all about expectations of government, which were changing throughout this era.

Twelve themes, not all equal in impact or scope, but all characteristic of the era in one way or another.

Having erected the goal-posts and tied the backdrop to those pillars, we’re now in a position to see how those themes impacted history, and how history shaped those themes.

World War 2: Economics

Fascism was seen by many as the path of the economic future, so successful did it appear through the 1930s.

    By late 1923, the Wiemar Republic of Germany was issuing two-trillion mark banknotes and postage stamps with a face value of fifty billion marks. The highest value banknote issued by the Wiemar government’s Reichsbank had a face value of 100 trillion marks (10^14; 100,000,000,000,000; 100 million million). At the height of the inflation, one US dollar was worth 4 trillion German marks. One of the firms printing these notes submitted an invoice for the work to the Reichsbank for 32,776,899,763,734,490,417.05 (3.28 × 10^19, roughly 33 quintillion) marks.

    — Wikipedia, Hyperinflation

Hyper-inflation in Germany. Image by Wolfgang Chr. Fischer, licensed under the Creative Commons Attribution-Share Alike 3.0 Unported, via Wikipedia.

The history of this period in the Wiemar Republic is replete with stories of people turning up to buy a loaf of bread with a wheelbarrow full of banknotes; while these may be an exaggeration, they are close enough to characterize the impact of the Great Depression on the German economy. In 1923, prices of goods were doubling every two days because the purchasing power of the currency was devaluing so quickly.

Eventually, the currency was replaced with a new one that sliced twelve zeroes off the value and indexed the value of the new currency to the value of gold at the same rate as the old currency prior to the period of inflation; while there was some slippage of value, in general, the new currency held.

That alone wasn’t enough to restore prosperity, though, just to stop the slide. The period of ill-will toward the government that followed was instrumental in bringing the Nazi Party to power.

The fascists set about restoring economic vigor by selling off a range of significant publicly-owned utilities, and reinvesting the proceeds – a lot of it in military equipment, much of which was supposedly banned by the Versailles Treaty, but some of it in engineering and industrialization. And it worked, or seemed to – and that was what caught the attention of the rest of the world.

    The Economic Truth of Fascism

    What wasn’t appreciated at the time – in fact, was completely unknown until relatively recently, because the Nazis burnt almost all the records (for reasons that will become obvious) – was that the reality was a house of cards. While there is no doubt that Hitler and his fascists had ideological grounds for their repressive actions against various population segments, the money generated by the seizure or assets were enough to keep the regime’s economic heads above water, at least for a while.

    But they were spending money that they didn’t have, and hiding the fact with every dirty bookkeeping trick under sun (and then hiding that fact by literally burning the books and issuing blanket statements of economic vitality with no substance behind them). Having spent big on a significant military, as much for the economic benefits of funneling cash into the industrial base as for any other reason, they now had no option but to use it.

    Initial attacks were carried out with an ulterior motive: the banks were seized and any wealth within, confiscated. One source estimated that at the time of the invasion of Poland, the Reich had liquidity to pay its civil servants for no more than three weeks.

    Once on the treadmill, every act of conquest had to be paid for with another, though each enlarged the industrial and economic base, slowly stabilizing the system.

    So well-hidden was this economic reality that a myth of stolen / hidden Nazi gold remains in vogue even today; assuming that the economy was stable meant that all the stolen wealth had to have been hidden away somewhere, just like the stolen art and cultural artifacts. In reality, it was spent almost as fast as it rolled through the door of the counting-house, the ultimate game of economic smoke-and-mirrors.

World War 2: Nationalism

The war had many impacts and repercussions. Most of this is already well-known, so I’ll only hit a few high-points and connect a few inobvious dots that may have escaped popular perception.

The first of these was a profound impact on a sense of nationalism. Every nation affected by this experienced it a little differently. Malta resisted conquest with grit and determination that remained unmatched until the invasion of Ukraine a little over a year ago, and this remains a unifying point of pride to the entire small country. England pulled together to resist the Blitz; rationing persisted into the 1950s as a consequence of the war, and these were as responsible as any other factor for the downfall of the Churchill government, post-war. Notably, the damage inflicted on their manufacturing capacity permitted modernization that helped bring prosperity back. Denmark’s covert resistance and France’s more overt resistance movements became points of national pride, too, and helped stitch these countries back into unity far more quickly and resolutely than anyone could have predicted. Germany was flattened by the combined militaries of the allied powers, necessitating almost total refurbishment post-war; this investment eventually made West Germany prosperous enough to enable it to stand alone, post-War, and even to absorb East Germany. A new wave of modernization there made Germany the economic powerhouse that it is today.

    Cold War

    With the conclusion of the War, Russia went its own way, abrogating just about every agreement that Stalin had made at the Malta Conference. Russia created a web of puppets around itself that became the USSR. But everyone else was accustomed to thinking of the collective over parochial national interests – or, more correctly, perceived that without unity as a backdrop, those parochial interests were under threat. So they were strongly invested in the United Nations and NATO, when the latter arose in response to the Eastern Bloc. Subjugation vs Internationalism – the first brought a forced conformity, the latter brought the freedom to have national interests within the scope of the larger picture.

    The cold war was as much about post-war unity and reactions to the Fascist Regime of Nazi Germany as British pride at having weathered the Blitz.

World War 2: Industrialization

I’ve touched on this already, but it’s worth adding to the discussion – war damages forced rebuilding of industrial infrastructure throughout Europe and Japan. This was never like-for-like; modernization was at least as cost-effective as simple replacement.

But the country that industrialized the most during the war was, arguably, the US, and it lost virtually nothing of its pre-existing industrial capability. What it discarded was a lot of its economic and social preconceptions and assumptions. At the height of the war, tanks and aircraft were rolling off production lines faster than anyone would have believed possible at the start of the conflict. In part, this was because people pulled together in a way that would never happen outside wartime; in part, it was because national pride had been deeply wounded by the affront of Pearl Harbor.

    In 1939, total aircraft production for the US military was less than 3,000 planes. By the end of the war, America produced 300,000 planes. No war was more industrialized than World War II. It was a war won as much by machine shops as by machine guns.

    Aircraft companies went from building a handful of planes at a time to building them by the thousands on assembly lines. Aircraft manufacturing went from a distant 41st place among American industries to first place in less than five years.

    — Wikipedia, United States aircraft production during World War II.

Similar scales of production were achieved in the production of armored vehicles (see Wikipedia – American armored fighting vehicle production during World War II) and Naval production (refer Wikipedia – Naval history of World War II).

Post-war, the awareness of what was possible in terms of industrial production underpinned both expectations and policies for business, government, and workers. Neither of the first two groups listed made sufficient allowance for the unwillingness of workers to shoulder the economic burdens that had been acceptable during wartime; the coalition that had brought about the conditions that had achieved so much production quickly fell apart, eventually leading to confrontations. In time, more balanced positions were found on the key issues and more realistic targets were adopted, but even at the resulting diminished scale, the US was the world’s largest manufacturer and economy for the remainder of the era.

World War 2: Technology

There was a perception that technology advanced by leaps and bounds during World War I, but in that respect, the earlier conflict was blown out of the water by developments during WW2.

In the five years (or so) prior to the outbreak of war in 1939, there was FM radio, Nylon, the Z1 (the first freely programmable computer), Nuclear Fission and the Defibrillator.

During the war, the cavity magnetron (the root technology of both Radar and the Microwave Oven), Polyester, the V-2 rocket, the non-infectious viral vaccine, the Jet Engine and the Atomic Bomb. There were developments in all forms of armament, in tanks and armored vehicles, in troop transportation, in devices for remote sensing, navigation, communications, cryptography, surgical techniques, chemical medications, naval vessels, aircraft design, engines, small arms, anti-tank weaponry, bomb design, and engine technologies – and that list is not exhaustive. You can throw in everything from artificial fuels and fuel additives through to aerodynamics on top of that, and literally hundreds more – most of them little things that made some existing product or process just that little bit better or more efficient to use or manufacture..

While a few of these had only military applications, most of these developments would play prominent roles in the post-war world, both directly and as the foundations of technologies to come.

Post-war: Industry

Every time a technology was refined into a domestic application, it needed a manufacturing plant to deliver the resulting product to the customers waiting for it. While the industrial boom that may have been expected after the standards st during wartime may not have eventuated, the diversification that followed made up for it. This was another aspect of the ‘golden age’ perception of the 1950s.

Cold War Tech & Secrecy

Technological advance didn’t stop with the end of the war, of course. Fueled by the Cold War that officially started in 1947 but whose origins could be traced to late February 1946 and George F Kennan’s Long Telegram, discussion of which was instrumental in formulating post-war strategy against the Soviet Union.

Aside from the general drive to out-produce and out-advance the perceived enemy, there were continual efforts to safeguard existing secrets – and for the US, that started with Atomic Weapons and ended with anything else that could be obtained, or delivered, by espionage. Ongoing efforts were invested into protecting such secrets and developing technologies that could assist in the pursuit..

    Paranoia in Nationalism

    It was very easy to slip over the mark into paranoia in the intensity of the cold war environment. In the US, this led to the House Un-American Activities Committee hearings and Joseph McCarthy.

    In England, they did their best not to fall into that rabbit hole, and – arguably – tried a little too hard; the exposure of the Cambridge Five struck their intelligence services like a thunderbolt, and – internally, at least – they became even more paranoid than the Americans, as shown by the extraordinary lengths to which they went during the Spycatcher incidents.

    Once again, the manifestations may vary from nation to nation, but most were touched by cold war paranoia in one way or another.

Post-war Personal Prosperity

The more of something you make, the lower the unit price tends to become; there are all sorts of efficiencies that become possible through scale.

The lower the unit price of many things become, the more individuals from any given economic class can afford without significant increase in payment beyond compensating for inflation, of course.

The technology / industrial boom that followed the war thus manifested in a steadily-rising standard of living even for those in the lower rungs of the economy.

    New Products: Home Tech

    Of course, the higher your income bracket, the sooner you could afford the latest must-haves and the better the toys that you could afford, so there were distinct phases of technological adoption.

    Non-portable Color TVs, for example, started off $500-$750 in the 1970s (when the technology was new). By the mid-80s, a decade later, a price somewhere in between those two would not only buy you a comparable TV, it would buy you one with stereo sound – despite the shrinkage of the dollar with inflation. These days, for a comparable unit, we’re talking USD $85 to $120 – and you can get a lot bigger and better, again despite all the shrinkage in the size of the dollar over the last 40 years and the massive improvement in display quality. In fact, if I correct for inflation, the price of a modern TV in 1985-dollars is $30-$40.

    If it’s new, it costs a lot more. If it’s been around for a while, a new one costs a lot less, in relative terms.

    That means that standard of living was rising faster than wages were, and that was a source of consumer confidence. Again, golden age, right?

      The God Of Convenience

      Somewhere along the line, somewhere in the 1950s, Convenience and comfort became the new Gods of home life. The scene in Back To The Future in which Alex’s grandfather puts the TV on wheels so that the family can watch Jackie Gleason while they eat will always exemplify this development to me, but there were many more manifestations – everything from remote controls to air-conditioning to auto-changing turntables to TV dinners.

      This was another manifestation of the conspicuous rise in standard of living; simply having a capability was no longer enough, you had to have its usage or operation that little bit more convenient than it might have been, even if that cost a little more.

    New Markets: Rise Of The Teenager

    Those factors alone would have been enough to create prosperity for the business owner, but the 1940s also saw the rise of a newly-invented market – the teenager, initially characterized as a Bobby soxer (a female teenage fan of then-contemporary pop music, especially that of Frank Sinatra.

    It wasn’t long before teenaged subcultures flourished. The concept that these subcultures might have their own product preferences and could be marketed to directly with products designed to appeal to them, not to children or to adults, took a little while to develop, but by the 1950s it was in full swing, both in retail and in society in general.

    In order for a subculture to become a viable market, they have to have some earning capacity. There were two viable choices for teens looking to earn coin of the realm – they could work in the new Supermarkets, or they could work in a fast-food franchise, both of which boomed in the 1950s.

      Supermarkets

      Supermarkets evolved from the grocery stores of the 1930s and 40s. The primary point of differentiation was that customers took products directly from the shelves rather than interacting with a shopkeeper who could advise on product choice. The purchase was then completed by a cashier who totaled the payment owed, usually accompanied by a packer who placed purchases in bags to make them more convenient to carry.

      The fact that product knowledge and judgment was not required made these roles tailor-made for teenagers, who cost a lot less to employ than an experienced grocer would demand in earnings. The speed and ease of shopping (and lack of waiting) also made them attractive in the new convenience-first environment. This also permitted a sharp rise in the variety of products on offer, so they were soon outperforming grocery stores on almost every front.

      Fast Food

      Fast food had been a ‘coming thing’ since 1916, or perhaps 1912, or maybe 1902, or even 1896 – but it didn’t really arrive until the first White Castle in 1921 or the first McDonald Brothers restaurants in the 1940s. And the milk bars of the 1950s swamped both – for a while, at least.

      Being served food prepared by someone of similar age (and presumably tastes) proved a powerful marketing tool, but not a recognized one – teens were hired because they had to be paid less. Anything else was just a bonus!

      Retail Outlets

      A comparatively minor source of teen employment that should not be overlooked is working in the retail outlets that catered to the teen market. These were people who spoke the same language as the customers, with whom those customers could identify, and the marketing benefits were far more strongly recognized (if still not the dominant employment factor).

    It’s an interesting question whether or not the teen market would have arisen spontaneously anyway, given the combination of factors that created the employment opportunities for the age group. The more cynical could suggest that, given a subculture (however unidentified) with cash in their pockets, people trying all kinds of methods of extracting that wealth would have arisen, and inevitably, one of them would have stumbled across the magic formula.

    I’m not sure of the answer, but I’m completely confident that once stumbled across, the teenage market would be just as thoroughly and permanently embedded into the culture.

    Distribution

    The final factor that is needed for an economic boom is some method to convey product from maker to potential customer – mass distribution, in other words. This is where the New Deal paid unexpected post-war dividends; rail is constrained in its destination, and expensive to lay; it needs those costs to be amortized (“spread over”) multiple customers over a substantial period of time to recoup those expenses. On top of that, the motive power units were also expensive and took time to earn back the investment – but they were absolutely essential to earning anything from a railroad.

    Roads are comparatively cheap (and come in a variety of standards with different price points), can be constructed relatively quickly, create a web or network of destinations, all of which are equally-accessible, and can be used by a basic vehicle that the road-builder doesn’t even need to supply!

    While the major cities could be serviced more cheaply by rail, and a subsidiary road transport network, and a few places could be serviced by river traffic, road freight was the obvious solution then, as it largely is now.

    Air freight was a restricted choice back then, though unit costs have come down with increasing services; but rising costs have begun to bite, and its my impression that air freight is right on the cusp of becoming less economic than road transit once again, save only internationally.

Okay, that gets me to the 1/3 mark, and about 40 minutes past deadline – which becomes an hour and 40 minutes once I allow for edits, spellchecking, etc. So the decision is made to split this article into three parts….



Discover more from Campaign Mastery

Subscribe to get the latest posts sent to your email.