In 1982, the economist Mancur Olson set out to explain a paradox. West Germany and Japan endured widespread devastation during World War II, yet in th

The American Renaissance Has Begun

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2021-06-20 12:30:03

In 1982, the economist Mancur Olson set out to explain a paradox. West Germany and Japan endured widespread devastation during World War II, yet in the years after the war both countries experienced miraculous economic growth. Britain, on the other hand, emerged victorious from the war, with its institutions more intact, and yet it immediately entered a period of slow economic growth that left it lagging other European democracies. What happened?

In his book “The Rise and Decline of Nations,” Olson concluded that Germany and Japan enjoyed explosive growth precisely because their old arrangements had been disrupted. The devastation itself, and the forces of American occupation and reconstruction, dislodged the interest groups that had held back innovation. The old patterns that stifled experimentation were swept away. The disruption opened space for something new.

Something similar may be happening today. Covid-19 has disrupted daily American life in a way few emergencies have before. But it has also shaken things up and cleared the way for an economic boom and social revival.