My colleague Alex Field presented a working paper on productivity growth legacy of WWII. Robert Gordon has argued that war production led to huge learning by doing that carried over into manufacturing. Alex strongly disagrees, amassing lots of data suggesting that most of the total factor productivity growth and innovations that lead to post-war prosperity happened in the 1930s rather than during the war. The war, if anything, slowed and delayed the application of those productivity innovations, rather than generate a new set. Some of my colleagues pushed back a little: the social, organizational, and political changes (e.g. wage compression norms in industry) may have been more important in enabling the rapid growth of the 1950s and 1960s. Those effects are harder to measure. but it did make me think of the great post-WWII movie, “The Best Years of Our Lives” which ends precisely on this theme. As the former pilot works out his demons in the huge airfield of mothballed planes being melted down by “the junkman”, he realizes life must go on, and asks for a job:
“We’re using this material to build prefabricated houses.”
“Do you know anything about building?”
“No. But I know how to learn. Same as I learned that job up there.”
“Up there” meant when he was flying bombing runs. I notice he didn’t say, “I learned how to learn up there.” His productivity potential was already in place, before the war!