What better time to be an entrepreneur than a time when the economy is booming? The end of World War II was a time of prosperity for many countries, especially the United States.
Changes in the global economy
Post World War II, the global economy experienced a time of great economic growth and prosperity in many countries. The United States, in particular, greatly benefited from World War II. However, this boom in the economy was surprising to some. Before the war ended, many economists, such as Paul Samuelson, predicted that there would be a great recession after the country stopped employing soldiers.
Samuelson’s prediction about government spending did come true, but it didn’t cause a collapse in spending or unemployment. The factories that were previously building weapons started building consumer products, such as toasters.
Certain goods, whose production had stopped during the war, were produced again. Tax rates were lowered, and the government was no longer directly involved in distributing resources to civilians. Overall, the government stepping back from controlling the economy had a positive impact on the economy and on businesses. People were ready to spend again, and this created an opening for entrepreneurs waiting for the right moment to start a new business or sell their ideas.
Entrepreneurs and the G.I. Bill
One aspect of the booming economy in America post World War II was the G.I. bill, which helped American soldiers after their return from the war. This bill offered soldiers a year of pay while they transitioned back to civilian life. It also allowed servicemen and women to easily get a loan for a home or a business, creating an ideal scenario for budding entrepreneurs.
In the decade after the war, the G.I. Bill helped over 8 million veterans attend college. Veterans were given $500 a year to put towards their college tuition, as well as an additional stipend each month while they attended school.
Even though many entrepreneurs become successful without finishing college, the G.I. bill provided aspiring entrepreneurs an opportunity to learn about running a business or gaining credentials related to their field. Before the war, a college education was considered to be a privilege for the elite, not something available to anyone. But the G.I. bill allowed millions of veterans to go to school in the hopes of a brighter future.
Changes in entrepreneurship
The growth seen in the United States post World War II didn’t occur in every country. In fact, there were countries that experienced a lot of damage from the war and took many years to recover from it. Despite the damages in Europe, many countries had significant economic growth like the United States, but it occurred at a much slower pace.
The United States was developing new technology, but due to the turmoil that occurred between World War I and World War II, many other countries, like those in Europe, weren’t able to implement these technologies right away.
However, entrepreneurship wasn’t just booming in the United States after the war. Japan, for example, began to recover economically and eventually had the fastest growth rates in the world. Even in the United Kingdom, the unemployment rates during the Golden Age of Capitalism were lower than before and after this period of post-war economic growth.
Golden Age of Capitalism
The economic prosperity happening post World War II is often known as the Golden Age of Capitalism. Post World War II, unemployment rates dropped to as low as 2 percent.
Certain industries that were almost completely unused or unnecessary during the war started to prosper. There was increased innovation in this post-war period. Aviation, computer technology, and automobiles are just a few of the industries that began to prosper during this time. Film production was another industry that boomed after the war.
Without this Golden Age, we wouldn’t have products such as Silly Putty. Despite the failure of the original product, which was an attempt at making synthetic rubber, it became a popular children’s toy. This originally failed product ended up in the National Toy Hall of Fame, and just goes to show that even failures can ultimately lead to success.
From government labs to Easter Eggs
Silly Putty, a popular children’s toy from the 20th century, was invented accidentally during World War II. The inventor of Silly Putty, James Wright, was attempting to make a synthetic rubber for the U.S. government. The substance he made in a General Electric Lab was similar to rubber, but with the added bonus of being able to copy the print of a comic book page if you pressed the substance against it.
Unfortunately for Wright, the government had no use for his putty since it was no better than the synthetic putty already invented. But it ended up being incredibly useful for entrepreneur Peter Hodgson. After seeing people enthralled with the substance at a party, he renamed it ‘Silly Putty, and sold it as a children’s toy inside plastic eggs.
Since its creation, over 300 million eggs full of Silly Putty have been sold. As an entrepreneur, Peter Hodgson took something that was otherwise useless and turned it into something profitable.
The first Jeep
The automobile industry continued to grow post World War II. One specific automobile that became very popular after the war was the Jeep. The original design of the Jeep was created because the United States Army was looking for a ‘light reconnaissance vehicle’ that fit their specifications.
It felt like an impossible task, and after soliciting bids from over a hundred companies, only three automakers responded. Bantam Car Co, Willys-Overland Motors, and Ford Motor Co. were the only companies willing to take the risk, representing a genuine entrepreneurial spirit.
Eventually, the Army awarded Willys-Overland Motors the contract, and the motor company began producing Jeeps to be used on the battlefield. The Jeep was the first vehicle of its kind that was able to move troops and weapons as efficiently as the Army needed. It was incredibly versatile because it was both durable enough to carry and transport heavy weaponry, but also small enough for aircraft transportation.
Travel and automobiles
Before the Jeep became a fashionable automobile to drive, Willys-Overland Motors started marketing the vehicle to farmers, claiming that the first civilian Jeep model could do the work of at least 2 of their horses.
With everything but the necessary parts stripped off, the civilian models of the Jeep designed after the war weren’t the most practical vehicles. But they became more popular as new models were designed in the 1940s and 1950s. Jeeps were the precursor to SUVs, and were sold commercially for the first time after World War II.
Between 1945 and 1955, overall car sales quadrupled. 75% of American households owned a car by the end of the 1950s. The peak of the automobile industry was in 1965. The automobile industry thrived during the 1950s and 1960s in America, where automobiles were becoming faster and more stylish than ever before. With the economy booming, Americans were spending money on large purchases such as automobiles and houses.
Behind every booming industry, including the automobile industry, were entrepreneurs finding ways to make more money off the same products through innovation and selling to a different audience.
Mass consumption and its effects on entrepreneurship
As the war came to a close, there was uncertainty surrounding the economy. Since most of the factories and mass production during the war were for the military, there was a reconversion process to using these factories for civilian production. Consumer culture was rampant after the economic boom post World War II.
But the automobile industry wasn’t the only industry booming. The U.S. factories that had built automobiles during the war started producing airplanes, engines, and other necessary supplies.
This worked out well for Americans because after the war, with the economy booming, Americans were ready to spend. Mass consumption and the development of consumer culture opened a world of opportunities for entrepreneurs.
Because most of the production during wartime was for the sake of the military, production after the war allowed entrepreneurs and businesses to create new products for the sake of creating them and making a profit.
Key entrepreneur: Howard Hughes
An American entrepreneur, film director, engineer, and pilot, Howard Hughes was an example of how many entrepreneurs thrived after World War II.
Truly a Renaissance man, Hughes’ first claim to fame was in the film industry, where he became known for producing films such as Hell’s Angels and Scarface. But ultimately, Hughes’ success came from various entrepreneurial endeavors, not just the film industry.
Prior to World War II, Howard Hughes formed the Hughes Aircraft Company, built out of his love for aviation. The Hughes Aircraft Company produced products such as the Spruce Goose. Although it only took one flight, the Spruce Goose was the largest flying boat built by any manufacturer, and it held the record for largest wingspan until 2019.
Hughes extended his empire even further in his final years, investing in real estate, casinos, and hotels in Las Vegas, Nevada. At the end of his life, he became one of the most powerful men in the state and is now credited with making Las Vegas into the city it is today.
Key entrepreneur: Ray Kroc
Born to Czech-American parents, Ray Kroc was an American businessman best known for the global expansion of McDonald’s. Kroc purchased the rights to McDonald’s in 1961 and worked as the CEO from 1967 to 1973.
Ray Kroc started as an equipment salesman for Prince Castle Sales before he realized the potential of McDonald’s. Before McDonald’s became as widespread as it is today, Kroc struggled to gain the profit he was looking for.
But, ultimately, it was Kroc’s strict operating guidelines that made McDonald’s so successful. He ensured the food look and taste the same at different franchises by controlling food prep, portion sizes, and cooking methods at each location. His ability to maintain consistency throughout all his franchises contributed to the success of McDonald’s.
But McDonald’s wasn’t Kroc’s only entrepreneurial endeavor. After retiring from McDonald’s, Kroc purchased the MLB team, the San Diego Padres, and owned the team until his death in 1984.
