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Comment by WalterBright | Hacker News Reader

There is precedent - losing a war. Economies do recover. Germany recovered from being bombed/burned/bankrupted flat in WW2 to become the economic powerhouse of Europe.

Other countries did not recover so well, mainly because they chose more socialist economic polices.

No, it wasn't because of the Marshall Plan. Most of the MP money went to other countries, not Germany.

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Unfortunately it took a couple of generations! At a macro level, everything will be fine eventually, you're right. But short term pain regardless.

It took from 1948 or so to the 1960s, less than one generation.

Germany also had the problem of wholesale death of its men of working age. The currency was repudiated. The government at all levels had ceased to function.

But there was also a lot of capital brought in from outside (which isn't quite the same as a money printing spree that happens everywhere at once) and what was left of pre-war financial elite was more concerned with keeping a low profile and pretending that they were on vacation or something like that for that last ten years than with leveraging their power into an even firmer grip. It's a very different situation and those differences could be very meaningful for the outcome.

I don't see any reference to that in things about the German Economic Miracle.

After the 1st world war, Germany was paying crippling amounts of reparations to the winner countries. That wasn't so successful, lead to hyperinflation and the Nazi power grab. So after the 2nd world war you had the Marshall plan, debt forgiveness, and trade integration between the western European countries. This was the basis of the EU pacts that live till now.

Just to fill in the gaps. Countries in the Russian sphere of influence actually refused the Marshall plan because it would make the commies look bad. And they didn't have nearly as good recovery as Western Europe. So it probably had some effect.

The eastern bloc countries never caught up with any of the western countries. Their economies didn't really get into gear until after the collapse of the USSR.

The strong correlation of postwar prosperity is with how much of a free market was embraced.

It's the same with post-war Japan. They embraced the free market after being burned flat in WW2, and rose to world dominance by the 1980's.

Alternatively, one could argue that postwar prosperity was strongly correlated with friendly diplomatic relations with the US, the only major world power that didn't have its entire industrial capacity reduced to rubble during the war. Saying that the Eastern Bloc countries floundered solely because of a lack of a free market when they were militarily occupied by a disastrously incompetent foreign power sounds like an oversimplification to me.

It was more about central planning, collectivisation of private property, and lack of management (directors where assigned based on politics), than occupation by force. Austria was under soviet occupation till 1955, but they were still lucky to become a free market country afterwards. Romania was occupied till 1958, Hungary from 1956, Czechoslovakia from 1968. Poland and Bulgaria were not occupied after 2nd world war, but their economy was still in shambles.

I need to ask, what so socialist policies are you suggesting and which countries?

This should give a start:

https://www.britannica.com/topic/socialism/Postwar-socialism

https://thehill.com/opinion/campaign/479355-socialism-ruined...

And for Germany:

https://www.investopedia.com/articles/economics/09/german-ec...

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