It is an issue that can be resolved by looking at contradictions within the long boom already being highlighted in the early 1960s by those who explained the boom in terms of the massive level of arms expenditures.
Arms spending was very unevenly distributed among the most important economies. They consumed a very high proportion of the national output of the US and the USSR in the 1950s (up to 13 percent in the first case, probably 20 percent or more in the second case), a lower proportion in Britain and France, and a much smaller proportion for Germany and Japan. This did not matter unduly in the first years after the Second World War, when there was a relatively low level of foreign trade and most firms were subject to low levels of international economic competition. The taxation to pay for the US arms budget cut into the profits of American firms, for instance, but this did not greatly disadvantage any one such firm in its domestic competition with another. And there was little for capitalists to complain about so long as the overall rate of profit did not decline much from its high level in the immediate post war period. The positive effects of arms spending more than compensated for the negative effects.
But over time the unevenness did come to matter. The US, as part of its programme to use its dominant economic position to cement its hegemony outside the Russian bloc, allowed access to its markets to the West European states and Japan. But economies with low levels of arms expenditure could invest proportionately more and achieve faster growth rates than the US could. Over time they began to catch up with its levels of productivity and to increase their relative importance in the world economy.
Capital growth in Japan over the period 1961-1 971 was 1 1 . 8 percent per year, while i n West Germany over 1950-62 it was 9.5 percent; these compared with figures for the US for 1948-69 of only 3.5 percent.36 Japan accounted for 17.7 percent of the combined advanced countries' GNP in 1977 and West Germany 13.2 percent; in 1953 the figures had only been 3.6 and 6.5 percent respectively. Meanwhile, the US share had fallen to 48 from 69 percent.37 The shift was explained by the benefits Japan and Germany gained from the high level of worldwide arms expenditure, especially by the United States, without having to sacrifice their own productive investment to pay for it. Had all countries had comparable levels of productive investment to that of the West Germans and Japanese there would have been a very rapidly rising global organic composition of capital and a downward trend in the rate of profit. As it was, capital had grown in Japan "much more rapidly than the labour force-at more than 9 percent a year, or more than twice the average rate for the Western industrialised countries . . . " 38 Non-military state capitalisms could only expand without crises because they operated within a world system containing a very large military state capitalism.
198
Capitalism in the 20th Century