A Narrow Market

“VE-Day” (“Victory in Europe”) and “VJ-Day” (“Victory over Japan”) in April and August 1945 signaled the end of the fighting, and with it the end of the demand for tanks, aircraft, ammunition, and military equipment. The evaporation of that demand for military goods left a tremendous amount of slack in the American industrial economy: the items it had retooled to produce so successfully between 1942 and 1945 were no longer needed in such vast numbers, a development that threatened to throw hundreds of thousands of workers out of their jobs. In part to address the new realities, American businesses once again retooled their factories. Plants that had earlier produced equipment for the war effort now manufactured consumer goods like cars, refrigerators, televisions, and dishwashers—like this image of automobile manufacturing from the Budd Company’s facility in Philadelphia, Pennsylvania.

The fact that so many of Europe’s factories, rail lines, and cities lay in rubble created an opportunity for American businesses. Since Europe’s industrial base had been so completely gutted by the fighting, American companies had a virtual monopoly on production, with few European goods to compete against. Tens of millions of Europeans offered a tantalizing market for American exports, as well, but for one problem: the refugees of Europe had no homes, no jobs, and no money. Absent those things, their demand for American consumer goods could not materialize.