Detailed Summary
The Rebuilding a World Economy section covers the significant transformations initiated after World War II, which was fought from 1939 to 1945, resulting in approximately 60 million deaths and widespread destruction. The aftermath led to two main influences that shaped economic reconstruction—the emergence of the United States as a dominant power and the Soviet Union's significant military and economic presence.
Economists and politicians synthesized lessons from the inter-war period, prioritizing the need for stable incomes and full employment to bolster mass production and consumption. They established the Bretton Woods system, which created the International Monetary Fund (IMF) and the World Bank to stabilize currencies and facilitate economic growth. This system encouraged international cooperation to reduce economic volatility.
The early post-war years experienced unprecedented growth in trade and incomes among Western nations, with world trade growing at over 8% annually from 1950 to 1970. However, newly independent nations faced challenges as they needed resources and support from institutions not originally designed for their development needs.
As the Bretton Woods system faltered in the 1970s, the rise of multinational corporations (MNCs) and the shift of production to low-wage countries, such as those in Asia, marked the onset of 'globalization,' altering the global economic landscape once more.