Chapter 8. The Economy since 1920
Probably no period in human history has witnessed such a concentrated attempt to plan and shape the national and international economy as the years after 1944. In the middle of a devastating World War, Western, Allied governments met at in New Hampshire to identify the tools necessary to rebuild the liberal democratic and capitalist order, assuming they could beat the Axis Powers. The and the were two institutions that emerged from Bretton Woods and, along with the (aka the European Recovery Plan or ERP) in 1947, they were geared to restoring Europe’s economic health so to avoid the kind of post-war turmoil that followed the Treaty of Versailles in 1919. As Soviet interest in participating in the ERP waned, these instruments of investment and recovery became imbued with a stronger ideological hue that reflected the sentiments of the emerging Cold War (see Section 9.4). They were about providing legitimacy for capitalism and turning off the appeal of revolutionary movements in the post-war world.
Cold War Capitalism
These measures were important to Canada for several reasons. First, although Canada was one of the very few strong economies left standing at the end of the war, it depended on exports to survive. The United States could absorb only so much, so Western European markets were essential to a Canadian transition to peacetime prosperity. Canada engaged directly in recovery efforts in Europe for this reason, while establishing a role in the as an instrument for economic regeneration. The Canadian establishment also understood that the appeal of communism in Canada was enhanced in the 1940s by the alliance with Stalin’s USSR, the appearance of several new communist regimes in Eastern Europe and, in 1949, the People’s Republic of China. The most effective case against hard-left dissent was high levels of employment, good wages, and overall prosperity at home. Capitalism had to appear as though it was working. To that end, Canada had to strike a balance between sending resources abroad to rebuild markets on the one hand, and investing in jobs at home on the other. Thse two goals weren’t necessarily at odds: Canada sold billions of dollars’ worth of materials to the in the late 1940s, which was a stimulant to economic growth. Almost simultaneously, from 1949 to 1953, tensions and then war in the Korean Peninsula proved to be a fillip to both the Canadian economy and anti-communist rhetoric (see Section 9.4).
More generally, Ottawa and the provinces began to intervene more actively in the economy. New infrastructural projects appeared in these years as the shift to an automobile economy was more fully underway and the demand for cheap electricity grew. Highways and hydroelectric dams were to the post-war era what railways had been to the pre-1914 Dominion. These were the elements of the command-led practices of the past that survived, although Canadian economic planners laid greater emphasis on demand-led (consumer-led) growth. Critical pieces of the puzzle involved stabilizing industrial relations (considered by Peter McInnis in Section 8.12) and encouraging the growth of a working-class with disposable income. Economists had observed the benefits of consumerism in the 1920s and, conversely, what the loss of spending power meant in the Depression. Investing public money to create jobs — a Keynesian approach — worked during the war, and this strategy would be applied during the following three decades.
As we’ll see in Chapter 9, much of this economic growth took place in the suburbs of the nation’s largest cities. The engine that would drive forward a post-war Canadian economy included house construction, the development of services (sewer, electricity, telephone lines), the sale of automobiles for commuters (and gasoline, of course), and the furnishing of every home with appliances and televisions (starting in the 1950s). As Katharine Rollwagen describes below, this process enlisted people at an early age, consciously fashioning generations of consumers.
Youth and Consumerism
Katharine Rollwagen, Department of History, Vancouver Island University
Today’s teen-agers are cuddled, coddled, and courted and their juvenile notions on love, life and the cosmos are eagerly sought and retailed by some of their raisin-brained elders. – Frank Tumpane 
In the 1950s, many young people were coming of age in an era of relative abundance. Goods that families couldn’t afford in the 1930s and couldn’t purchase in the 1940s due to wartime restrictions on production were becoming more common. New consumer products, too, were entering the market. Between 1950 and 1960, homes in Canadian cities and towns acquired items such as automatic washing machines and electric refrigerators (rural homes often didn’t have the electricity and plentiful running water these appliances required). New automobiles were increasingly abundant and affordable. Televisions were growing in popularity; the children of the 1950s were the first to grow up with access to this medium, which brought advertising into the home in a new and — some believed — invasive way.
Although young people had more products to purchase after the Second World War, they were not the first generation to be targeted by advertisers and retailers. In the early decades of the century, advertisements first began offering parents specialized infant foods and clothing. Manufactured toys increasingly replaced homemade ones, and young people had more commercialized leisure options, such as the cinema. Many store owners liked the idea that they might secure customer loyalty early in life. They offered special promotions to draw young people into their stores, hoping to ensure their business as they aged.
The 1940s presented a new opportunity for retailers to reach a somewhat captive audience of teenagers. As my research demonstrates, department stores, in particular, noticed the increase in high school attendance and paid more attention to the school-aged customers in their stores. Stores like Eaton’s and Simpson’s presented the teenager as a new type of customer. The teenaged customer was more mature than little sister or brother — she (or he) shopped without their mother, placed a high value on peer approval, and were decisive, savvy shoppers. Both Eaton’s and Simpson’s joined a North American industry trend by creating teenager advisory boards in the 1940s. These groups of high school students met weekly at department stores in Canadian cities to discuss current fashion trends in their schools and to give their opinions of store merchandise — clothing, music records, shoes, and even furniture. Also in the 1940s, clothing manufacturers began making garments in a new teen size range, and producing style lines specifically for teenaged girls and boys.
In the 1940s and 1950s, women’s magazines, such Canadian Home Journal, ran special teenager features and advertising, while Chatelaine started a monthly teen column called “Teen Tempo.” By the time Chatelaine publishers decided to start their own magazine for teenaged girls in 1966, Miss Chatelaine, Canadian girls had already been reading American teen magazines Seventeen and Young and Modern (also known as YM) for twenty years, and purchasing (or coveting) the products sold in their glossy pages. At mid-century, selling to youth had become an integral part of retail business in Canada.
Owram, Doug. Born at the Right Time: A History of the Baby-Boom Generation. Toronto: University of Toronto Press, 1996.
Rollwagen, Katharine. “Eaton’s Goes to School: Youth Councils and the Commodification of the Teenaged Consumer at Canada’s Largest Department Store, 1940-1960.” Histoire Sociale/Social History 47, no. 95 (2014): 683-703.
By the mid-1950s, the Canadian economy was well into a new industrial revolution during which intersected with popular culture. It was also when success was, for the first time since 1867, measured less against the benchmark of the United States (although that persisted as well) and more against Cold War enemies in the Soviet Bloc. The fact that this was political as well as economic is evident in the uneven division of spoils across Canada in the post-War years. Economic growth took place principally in Ontario and Quebec, Alberta, and British Columbia; the Prairie economies of Manitoba and Saskatchewan struggled, as did those of Atlantic Canada (the subject of Section 8.13). These provinces benefited from equalization payments but continued to lag behind for decades. The fact that the post-war prosperity was not universally shared is further underlined by the experiences of Aboriginal peoples (see Chapter 11).
- The post-WWII economy was built on renewed public sector investment in infrastructure and other measures designed to stimulate the growth of consumer demand.
- Internationally, Canada was part of a project to rebuild the European economy and markets for Canadian exports, while keeping communism at bay.
- Much of the growth in domestic demand came from suburban growth and the creation of a culture of consumerism among adults and children.
Figure 8.17 long description: Picture of a red two-door Frontenac station wagon. A family of five is inside, three children in the back, father driving. The trunk is packed. The advertisement proclaims the vehicle is a “sensible size” with “amazing economy.” Across the bottom of the advertisement, there is a maple leaf before the word “Frontenac” in large letters.
There are two smaller photos in the advertisement. One shows a rear view of the car. Two people inside the car look over their shoulders out the rear window. The caption says “Tailgate has outside window control. With optional power assist, windows can be operated from driver’s seat. You lower tailgate floor-flat with one hand.”
The other smaller photo shows the open trunk from the rear. The trunk is packed with camping supplies, including a sleeping bag, a cooler, a blanket, and some luggage. The caption says “Half ton load capacity for bulky cargo. Stows items as long as 8½ feet without overhang. Tailgate opening is fully 4 feet wide, only 23 inches off ground.” [Return to Figure 8.17]
- 1960 Frontenac Station Wagon (Canada) © Michael on Flickr is licensed under a CC BY-NC-SA (Attribution NonCommercial ShareAlike) license
- Frank Tumpane, “Stop Pampering Our Teenagers,” Macleans, May 26, 1956, 4, 65-66. ↵
Established in July 1944, a system of institutions, principles, and processes by which the international monetary system could be managed. The Bretton Woods system lasted until 1971, when the United States ended the convertibility of the dollar to gold.
Created at Bretton Woods in 1944 to work with the International Monetary Fund to reinvigorate post-war economies. Dominated by the United States, it was used also as an instrument to reduce communist influence in western Europe.
Created at Bretton Woods in 1944 to work with the World Bank to reinvigorate post-war economies by achieving currency stability, stimulating international trade, and rescuing national economies in distress.
Also called the European Recovery Plan (ERP), an American program giving billions of dollars of aid to rebuild European economies after WWII, in part to restore markets but also to offset the appeal of Communism.
Established by the North Atlantic Treaty of 1949 that brought together the Treaty of Brussels nations (Britain, Belgium, Netherlands, Luxembourg, and France), Canada, the United States, Iceland, Denmark, Norway, Italy, and Portugal as a mutual defense league — an attack on one would be an attack on all.
Products that last a long time and which consumers do not have to buy often; for example, cars, furniture, and appliances.
As opposed to "have" provinces, the prosperity of "have-not" provinces is below the average for the country as a whole; equalization payments were designed to address these inconsistencies.