But these factors are not, in themselves, a sufficient explanation for the length and continuity of the boom. They do not explain why profit rates did not resume their downward slope once new productive investment came into effect. Had capitalism continued on its pre-war trajectory there would have been crises at least every ten years or so. Yet, although there were periodic dips in growth rates, sometimes described as "growth recessions", there was only one brief spell of falling output in the US (in 1 949) and none in the other major industrial countries for more than a quarter of a century.
Attempts have been made to explain the boom as a result of rapid technological innovation, the waves of immigration of young workers in the 1950s and 1960s, or the cheapening of raw materials from the non-industrial countries. But such things had not been able to prevent cyclical crises previously. Technological innovation might have reduced the cost of each unit of new investment, but it would also have reduced the life span of old investments, so increasing deductions from profits due to depreciation costs; massive immigration to Britain from Ireland and to the US from Europe had characterised the 19th century without stopping pressures on profit rates; the cheapening of raw materials was in part caused by the way the boom itself encouraged capitalists to produce synthetic substitutes within the industrial economies (artificial fibres, plastics, etc).
There was, however, one new factor that could explain what was happening. There was an unprecedented level of peacetime arms spending. It had been only a little over 1 percent of GNP in the United States before the war. Yet post-war "disarmament" left it at 4 percent in 1948, and it then shot up with the onset of the Cold War to over 13 percent in 1950-53, remaining between five and seven times the level of the inter-war years throughout the 1950s and 1960s.
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