Second Year (1949-1950): Toward Economic Growth ... - PDF, 101 mb

The Marshall Plan and Its Meaning
not yet up to 80 percent of the prewar volume. But requirements had
increased. Population had grown by approximately 8 percent between
1937 and 1947 13 and was continuing to mount. Productivity-or output
per man-hour-remained far below prewar levels. Increases in production
after the war had been achieved, in some countries, only by increasing
the size of the labor force and the number of hours worked.
Undernourishment was a significant cause of low productivity. In
1947 the consumption of foodstuffs in western Europe was only about
80 percent of prewar, and roughly two-thirds of the average for the
United States. In some countries the level was even 10wer. 14
Another factor in reduced productivity was the long interruption in
the training of skilled workers for peacetime industry. Furthermore,
much of Europe's labor force had been dislocated by the war; many
workers had been killed or disabled; others had been unable to reestablish
themselves in their former work. Few areas had been able to
keep up with technological advances in agriculture and industry.
Destruction and obsolescence of equipment was yet another cause of
low productivity. Replacement and proper maintenance, impossible
from 1940 to 1945, had been only partially provided since the war
through UNRRA and other aid. Almost every country of western Europe
stood in urgent need of a large-scale investment program well beyond
its capacity, unaided, to initiate or sustain.
Scarcity of basic materials, due partly to the loss of eastern Europe
as a source of supply, presented a further difficulty. Coal and steel
shortages, which were particularly acute, were traceable in some
measure to a prolonged delay in the conversion of the German economy
to peacetime production. The lack of coal was accentuated during
the severe winter of 1946-1947; many nonessential activities, and some
which were essential, had to be curtailed as fuel stocks declined. The
coal shortage continued through 1947; thawing snows flooded the
mines, and a prolonged summer drought,decreased the supply of hydroelectric
power, placing additional demands on alternative sources of
energy. The drought had a particularly serious effect upon food production.
Bread grain yields in France fell by 30 percent in the worst
13 U.N., World Economic Report (New York, 1948), p. 220.
14 The official ration in western Gennany, for example, was only about 1,500
calories per day during a large part of 1947-approximately 30 percent under the
western European average. Although this ration was frequently supplemented by
food produced individually or purchased on black markets, the time involved in
obtaining additional nutrition in these ways cut down on other productive effort.