How are Germany and Japan so rich?

So less than a single lifetime ago, Germany and Japan and just lost the largest war in human history, and had been bombed into tiny little bits, had a huge percentage of their population killed, and were generally in very bad shape.

Now, they are the 2nd and 4th richest countries in the world.

How is this possible? Comparing 1945 Germany and Japan to 1945 to other countries at the same time like Canada or Brazil or Spain or New Zealand or India that were not absolutely demolished in a vicious war to the death, what would you point at and say “due to X and Y and Z, Germany and Japan will be richer and more powerful than all those countries in a fairly short period of time”?

Sometimes starting from scratch is a good thing. The countries also weren’t massively debt laden, unlike say the UK in 1945.

They had a lot of things going for them, including well-educated populations, relatively free markets, openness to innovation from outside, and a general respect for authority and the rule of law.

This didn’t hurt Germany any (or France for that matter, also damaged badly by the war).

There is some speculation that the Korean War had a positive impact on economic growth in Japan as well. We pumped a lot of money into Japan during the Korean War.

I wish I had my copy handy, because there’s a big speech in Catch-22 about how losing a war is much better for a country in the long run than winning.

Only if you lose to the Americans or British. Losing to Imperial Japan, Nazi Germany, or Communist Russia, not so much.

Also, see this documentary about the Duchy of Grand Fenwick.

Well, first off they got help.

Secondly, probably most importantly, Germany wasn’t exactly backwater mickey mouse nation to begin with - they just got bloodied up a bit. If you look at Germany’s economic peers at the time WWII struck (hint, not Canada or Brazil or Spain or New Zealand or India) it’s not like they’re doing terribly, either.

Next, it probably takes a lot of national, let’s work together and get our shit together solidarity to have the pair of nuts that it requires to start a major offensive global war. So maybe there was some spirit (no, I don’t mean National Socialism) in their population that made coming back from economic devastation a bit easier.

Japan was economically underdeveloped at the time of the war, but then again its economic situation (i.e. no food stocks, no natural resources) was well suited to capitalize on the emerging technological boom (namely, their comparative economic advantages were very closely related to processing stuff, rather than extracting stuff). And, see my point above , this may have been especially important vis a vis the Japanese who are a relatively insular and xenophobic people. So it’s not entirely surprising that they were also able to collectively pull themselves up by the bootstraps.

Not sure I would call Japan with MITI ‘relatively free market.’ It also had massive scale government manipulation of foreign exchange markets to depress domestic demand for imports and boost demand for Japanese exports. Germany too had large scale government involvement in industry, with strong elements of corporatism being present.

Neither was a command economy to the extent of the Soviet bloc, but both would give Milton Friedman and his ilk kittens.

Also, both nations spend very little on their armed forces. The USA has taken on the role of “world policeman”-and we are going bankrupt maintaining armies arpound the world, fleets in all the oceans, etc.
Meanwhile, Germany and Japan, freed of ruinous defense spending, use the money on infrastructure, modern factories, healthcare, etc. …while the USA taxpayers are spent into bankruptcy!

And MILLIONS of dead young men. To me that just seems like an equalizer and yet it wasn’t, why?

I suspect the people of once powerful nations have a different sort of national pride. Different from say Switzerland. If England was defeated in WWI say I think they’d have a similar resurgence under German rule given similar financial backing of the victors.

Leaving aside the over the top hyperbole, I’d say that this has definitely been a factor…as was the fact that the US poured a lot of money into rebuilding both countries as counters to the Soviets. We helped rebuild their infrastructure and their industry, and we act as the 800 lb gorilla for both countries (as well as many others), which allows them to spend less on defense and more on other things that help them become economic powers.

Also, both Japanese and Germans are pretty driven peoples, and I think that this is a large factor in why they are so successful economically.

-XT

On a similar and unexpected note, why are Germany and Japan also the two countries where scatological pornography is the most “popular” ?

Even if Great Britain had been defeated in World War I it is extremely unlikely it would have spent any time at all under German rule.

Well, no. Germany and Japan spend more on defence than any country that isn’t a permanent member of the Security Council. Link. They just don’t get involved in too many neo-imperialist adventures. I wonder why that might be?

That’s why I said “relatively free”: government intervention to boost parts of the economy doesn’t remove the benefits of a free market, particularly that people get rewarded for hard work and innovation. Countries like Czechoslovakia, Hungary and Poland, that are reasonably similar to Germany in other ways, got held back for a long time by being part of the Soviet command economy.

And the United States doesn’t believe in a completely unfettered free market either, with examples like the Marshall Plan in post-war Europe, and agricultural subsidies back home.

Japan always takes the long view. After the war, they began manufacturing on a small scale and exporting much of it to America. When I was a kid, “made in Japan from old tin cans” was our dismissive taunt for Japanese products. They were cheap and largely disposable, but they kept getting better. Suddenly, if you wanted a transister radio or a good camera that wasn’t going to take too much of your paycheck, Japanese was the way to go. Then the motorbikes and cheap, tinny cars started making an appearance. Now they dominate the market and are largely quality products, along with Japanese electronics. South Korea has followed this business model and is now a serious contender in the electronics market. Unlike America, Japan has built their economy slowly and carefully, with an eye to longevity.

Well, I’d argue that Japan and Germany’s markets were less free than many of the Western economies which they outperformed. Explaining why Germany and Japan outperformed Poland, Czecheslovakia, Hungary and Poland isn’t hard. Explaining why they outperformed other western countries is harder.

Obviously, you need the right mix of centralised economic policy and free market economy, and what’s the right mix may vary according to external and internal conditions. But that’s just part of what you want: you also need other things, which might explain why Germany has been doing better than France, Italy and Spain.