The Ascent of the Second World

What I like to call the ascent of the Second World (that is, the second world of the 1950s) took place mostly between 1950 and 1980, though in some countries, the strongest phase of the ascent ended in the early 1970s.

Note that the ascent of the Second World was an era of the convergence of much of the Second World of the 1950s with Britain and the United States, not a narrowing of income gaps within that group of countries. In fact, the income gaps between the countries that were second-world in the 1950s had, on average, grown by 1973, only shrinking a little in the 1973-1980 period.

The countries, lands, and peoples I consider to have been a part of the Rise of the Second World include

1. Japan (but stronger than all those below, leading Japan to become the first of the East Asian Miracle countries).

2. PIGS+Israel

2.1 Southern Italy (Hat Tip: pseudoerasmus)

3. Puerto Rico

4. Mexico and Brazil (but not the rest of LatAm).

5. Communist Eastern Europe (variable).

6. to a small extent, Canada, Denmark, and Finland (not shown).

7. Black America (a third-world people in a first-world country make a second-world society), especially 1959-1973. See Thomas Sowell on this. Note that this occurred during the Golden Age of American Black residential segregation.

8. Austria (though it was already close to the First World due to its unification with Germany in 1938-1945).

Turkey was an interesting outlier in all this, as while its electricity consumption per capita and economic complexity of goods exports (can’t find the link, but in 1960, virtually all of Turkey’s meager exports were pistachios -I think it was a PDF with export treemaps) grew at a reasonable pace since 1960, it didn’t experience the sort of economic miracle seen in the PIGS+Israel. Indeed, it only experienced any sign of convergence with the U.S. only after 2003. Its economic trajectory seems to be similar to that of Argentina, only less volatile. Turkiye delenda est.
Screenshot (160)
https://research.stlouisfed.org/fred2/graph/?g=396n

Marked is the line between First and Second-World countries (around 44.2% of U.S. GDP/capita (PPP)), and the years 1973 (lots of things, but most importantly supply shocks and rough natural end of much convergence), 1982 (Latin American debt crisis), and 1991 (peak of the Axis Powers). I mentioned the Portugal-Mexico gap a couple days before.

Due to lack of data, much of Eastern Europe isn’t pictured. It is clear, however, that Romania suffered during the 1990s, and that, while it benefited from the E.U. integration, it has not yet finished its process of convergence (and if it has, that speaks poorly of the Romanians).

Puerto Rico and its transformation is a really interesting case and speaks much of the economics of imperialism and how might imperialism have progressed had it not disappeared. It will hopefully be dissected more thoroughly in a later post.

What are the causes of the ascent of the second world? The first thing to note is that the Southern Cone did not experience a process of convergence with the U.S. between 1950 and 1980, while Southern Europe, southern Italy, and American Blacks did. Causes include increasing prevalence among the leadership of Southern Europe of support for European (not just NATO) integration, thus leading to positive institutional change, urbanization, rising agricultural productivity resulting in technological unemployment, the adoption of old productive technology by previously long-stagnant countries in a process of acceleration of modernization, the ease of moving people into productive industrial and service sectors at the time, even for partly rural Mexico and Brazil, though not for the already upper-middle-income, highly urbanized, and red-tape filled Southern Cone, institutional changes in the Axis Powers resulting from the Allied occupation, and the decline of First World trade barriers and the rise of the container ship and the automobile. The rise of the automobile and changes in agricultural technology were, perhaps, the most important factors in the rise of Black Americans and of Puerto Rico.

Author: pithom

An atheist with an interest in the history of the ancient Near East. Author of the Against Jebel al-Lawz Wordpress blog.

10 thoughts on “The Ascent of the Second World”

  1. “Austria (though it was already close to the First World due to its unification with Germany in 1938-1945).”
    I don’t get what the unification with Germany for seven years, six of them during World War II has to do with the Austrian convergence.

      1. I see, but what the unification seems to have done was to cure a mismanagement of monetary/fiscal policy (Germany also had suffered a violent deflation in the early 1930s– even the Social Democrats, except the trade unions, were for the austerity policy).
        I guess WW II provided a kind of clean slate for all defeated countries, and in Austria it meant sweeping away Austro-fascist Austerians and Nazis, which was good.

        1. “and in Austria it meant sweeping away Austro-fascist Austerians and Nazis, which was good”

          -Yeah; same thing in Italy. Yet, on the other side of the ocean, there were the Philippines…

          1. Nowhere in the Third World (except in East Asia) decolonization worked as it should. If I remember right, Japanese nationalist politician Shintaro Ishihara, former Governor of Tokyo, boasted that former Japanese colonies/ puppet states fared much better after decolonization than Western ones (I guess the Japanese domination in the Philippines was too brief — not even two years– for it counting as a Japanese failure). He had a point, but I think is just luck: the nearby peoples, that Japan could conquer, are just like the Japanese in the most important ways,

            1. Well, there were Botswana and Lesotho, but they got AIDS. Also, there’s Cabo Verde, Mauritius, and Malaya.

              And you’re right about Japan mainly being able to conquer peoples that were similar to them. Malaysia and Singapore also did well after being freed from British rule.

            2. Singapore (to be honest, I unconsciously considered it part of the East Asia exception to decolonization disaster due to its ethnically Chinese population) and Mauritius (immigrated Indians, Hinduism has a plurarity of worshippers in an African country, how cool is it?) don’t surprise me (with the benefit of hindsight). Malaysia is an interesting case (and a Muslim one at it– I really would like to understand it better). I would not have predicted it (the differences between Singapore and Malaysia remind of the old story:a former Brazilian president used to say there was no German Miracle, it was just the Germans being their usual smart, hard-working, disciplined, thrift selves. When some asked about the Italian Miracle, he thought for a few seconds and replied, In this case, it is a miracle all right. No matter what the jokesters say, the Malaysians– and the Italians– must have done something right). Botswana (I have no idea about Lesotho, being small and trading with South Africa?) seems to have stuck to common sense/orthodoxy: democracy and (relatively) free markets. I do not know how they managed it. Cabo Verde is an outlier among former Portuguese colonies turned Communist in the 70s. They got the hang of this democracy thing (the former ruling socialist party can be beaten, and the press is free) and they did it faster than Brazil itself did. Maybe they are different from Angola due to the “resources curse”.
              So the few decolonization successes can be divided into three cathegories:
              East Asia (more or less overlaps with “experienced Japanese domination”) or heavily influenced by East Asia (I guess Vietnam as of late can be considered a success); Countries populated by peoples you would not expect to find there (Chinese in the Malay Archipelago, Indians in an Africa); Miracles.

            3. I strongly suspect Malaysia’s success is mostly due to the Chinese population there, which is now roughly a fifth of the population (it was higher at independence). I’m not sure how strong the Chinese influence was on the Malaysian government, though- it was always mostly ethnically Malay.

  2. They clear are an economic powerhouse, but I, too, have doubts about their political influence.

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