The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War (The Princeton Economic History of the Western World Book 70)

by Robert J. Gordon

Production miracles during 1941–45 taught firms and workers how to operate more efficiently, and the lessons of the wartime production miracle were not lost after the war: productivity continued to increase from 1945 to 1950. In addition to the increased efficiency of existing plant and equipment, the federal government financed an entire new part of the manufacturing sector, with newly built plants and newly purchased productive equipment. Chapter 16 shows the staggering amount of this new capital equipment installed during the war—its acquisition cost in real terms was equal to fully half the stock of privately owned equipment that had existed in 1941 and was more modern, and hence more productive, than the old equipment.