WWII Was Not an Economic Boon

[Aardvark]

Anyone who thinks that WW2 was an economic boon is a fool.

 

The depression was ending already. All over the globe, that means in countries other than the USA, where there was no New Deal. Sometimes Americans seem to have difficulty remembering that the USA isn't the whole world.

 

Broaden your perspectives, it might help you understand things a tiny bit better.

 

 

This thread originally started here, but went massively off-topic and was therefore split.

[atinymonkey]

No, actually he's quite right. You should spend some time thinking about how the development during the war aided economic growth, the improved factory production facilities, new technologies and the introduction of women working in society became the norm. The war forced the principles of quality control, principles alone that save industry billions a year and mean the products you buy are of an expected and measurable quality.

 

I could go on for hours about the vast socio economic changes that the war facilitated, enabling America to become a superpower where previously it was still a fairly under developed economy. I don’t think you really appreciate economics, but you should try and appreciate its effect. Pat Garrett died in 1908 in a country that was still expanding it's frontier, 40 years later the country was fully formed and one of the 5 most powerfull countrys in the world. That's a big jump.

[admiral_ju00]

Anyone who thinks that WW2 was an economic boon is a fool.

 

Well, then I guess that every history Professor I ever had was a fool then.

[jgerlica]

Anyone who thinks that WW2 was an economic boon is a fool.

Well then, I suppose all of us that don't live on the continent are fools. Is it so ethnocentric to look at the facts as they apply to the United States?

[Aardvark]

I'm amazed how wrong you guys can be.

 

Yes, the war did lead to a spurt of technological development. Inventions such as radar and jet engines were introduced more rapidly than they would have been otherwise. But at huge economic cost. World trade was totally disrupted, large areas were physically devasted, government debt rocketed, the subsequent recovery was despite the war not because of it.

 

The socio economic changes 'facilitated' by the war were already underway, Henry Ford had shown mass production and quality control quite some time before the war. The USA was already on the road to being a developed superpower without the need for a destructive war.

 

Incidentialy i think i do appreciate economics and its effect, i just dont appreciate mindless drivel. I repeat, anyone who thinks that WW2 was an economic boon is a fool.

[Sayonara]

Henry Ford had shown mass production and quality control quite some time before the war.

Good old Bokanovsky's Process.

[jgerlica]

Hmmm......Henry Ford as an Avatar.....Interesting concept. I would love to go on forever on this subject, but the ever so well thought out argument of "your opinion is mindless drivel," has me beat. Oh hell, I admit defeat.

[Aardvark]

Efficent, quality controlled, conveyor belt babies. What could more exemplify humane rational progress?

 

I feel such optimism and hope for the future just considering it.

[Sayonara]

So in conclusion, Love's as good as soma.

[jgerlica]

Global Impact?

 

Hmmmm.....There are so many more sources out there....... Shall I continue?

[Aardvark]

Just keep handing out the pills.

 

Suddenly everything will seem just right.

[jgerlica]

I'm sorry, every available resource points to the fact that certain nations whose infrastructures weren't razed saw a curious upswing during the 1939-45 time period. Odd. Truly odd.

[Sayonara]

Errrr... don't really want to take sides in this (even a war is 'just one factor' in the face of such a complex beast as an economy, but there are counter-arguments too), but the most relevant bit I can see in the article you linked to is this jgerlica:

The economy began to recover, slowly, after 1933. However, the Depression did not end until 1939, when the outbreak of the Second World War created demand for war materials.

[Aardvark]

I thought you'd admitted defeat.

 

Putting men in a factory making bombs isnt an economic boon. A temporary increase in demand for materials from some countries at the expense of mortgaging the future of other countries also isnt an economic boon.

 

It's unsustainable and ultimately economicaly disruptive and destructive.

 

WW2 was not an economic boon.

 

Or perhaps you think we should have perpetual war, 1984 style, gosh, just think how good that would be for the economy!

[Sayonara]

Good for tube and rat-hat makers at any rate.

[Aardvark]

Wall fitted TV set installers would probably have a pretty good time of it too.

[jgerlica]

One question, do we want to take the thread in this direction?

[Sayonara]

Not really, but I'm bored waiting for a reply to post #68

[Aardvark]

I've been finding this thread quite interesting, but we can switch back more closely to the original topic if you prefer.

[jgerlica]

As to post 68, I'm sorry, I was looking for a quick bit of non US info. Anyway, we can cite sources all night and explain our opinions until our fingers are bleeding from typing and we'll have accomplished nothing. I'm respectfully backing out. Though nice analogy.....Eric Blair's 1984.

[Aardvark]

Fair enough, i think we've made our cases clear to each other.

 

It wouldn't do to start shedding blood over our keyboards would it?

[atinymonkey]

I'm amazed how wrong you guys can be.

 

Yes' date=' the war did lead to a spurt of technological development. Inventions such as radar and jet engines were introduced more rapidly than they would have been otherwise. But at huge economic cost. World trade was totally disrupted, large areas were physically devasted, government debt rocketed, the subsequent recovery was despite the war not because of it.

 

The socio economic changes 'facilitated' by the war were already underway, Henry Ford had shown mass production and quality control quite some time before the war. The USA was already on the road to being a developed superpower without the need for a destructive war.

 

Incidentialy i think i do appreciate economics and its effect, i just dont appreciate mindless drivel. I repeat, anyone who thinks that WW2 was an economic boon is a fool.[/quote']

 

 

The positive effects of the world War (on the American Economy) can be best focused on using microeconomics.

 

In the 1930's Roosevelt pumped billions into the 'New Deal' program, focusing on building public works to provide jobs for the jobless. This was not a self perpetuating process, the limit was preset on both the available public works to be used (bridges, dams, roads) and the availability of Govenment funds to pay for this process. It was also limited by the dissent among the rich in America, who were essentially paying for the New Deal from their own pocket via taxation. By 1939, 9.5 million people remained unemployed and the short term gain the New Deal provided was beginning to subside.

 

The war provided many advantages:-

 

$175 billion in government contracts

Decrease in private investment

War bonds released government capital

War debt was offset by deficit that was used until the economy was self funded

Disused factories were reopened for munitions

Unemployment dropped to 670,000 in '44

Trade between Europe and America opened, providing resources previously unavailable

Propaganda played on patriotism to get people back into work, and attitude that persists to this day

The formation of the military-oil-industrial complex occurred, which remains the cornerstone of the American industry

The labor force multiplied, with the addition of women to the general workforce

Manufacture and Industry streamlined processes 'under pressure' and worked to the same page of the book

Factory management improved, with times scales and processes dictated by the government

Influx of skilled, fit workers returing from War found factorys primed for industry looking for employees.

 

WWII quite simply save the US economy. You find me an economist who says differently.

[Sayonara]

$175 billion in government contracts

Unemployment dropped to 670' date='000 in '44

 

etc[/quote']

Can I point out that those figures mean nothing unless you can contrast them with average figures outside war time.

[atinymonkey]

Hey, I did post the pre war (1939) figure as a comparison.In 1933 1 in 4 Americans were unemployed. Big pretty graphs, all simple and shiny:-

 

http://www2.sjsu.edu/faculty/watkins/recovery.htm

 

Fair point about the government contracts. I can't find the comparisons from work, ref books are at home. Take it as representative of a shot in the arm to industry, regardless of it being significantly more or not.

[Sayonara]

There's also the question of what happened to those figures after the war.

 

If you look at the graph of unemployment from 1933-1937, there is a downward trend. If you map the trend onwards it aligns very well with the average rates from 41-44, and the only abnormality is the declining peak from '38-40, which directly precedes the USA entering WWII (I imagine some of this could be attributed to shaky nerves due to the situation in Europe, but that's speculation and irrelevant). This suggests that the trend would have taken the unemployment rate down to WWII levels anyway, give or take a couple of years.

 

Continuing down the page we see a graph of GDP, the defining characteristic of an economy's strength. The GDP obviously sank during the depression but if we look at 1938-41 (the financial years preceding the USA's active involvement in the war) the figures are higher than they were before the depression began. Clearly in the following years the requirements of a nation at war drove higher production, but I don't think anyone is claiming that the war had no economic impact - just that it was not the economic saviour of the USA.

 

Move further down the page to the table headed "The National Income Accounts for the Great Depression in the U.S."

The consumption and investment figures corrolate well to the GDP which is indicative of a consumer economy that is gathering confidence (it may also be indicative of an expanding population, but we don't have the population figures to play with). The only significant war-time anomaly shown in that data is the rise in government purchases in '41 and the leap in '42. This is not surprising but hardly an indication of war bolstering the economy.

 

The next section deals with the autonomous aggregate demand in the US. The author even makes it clear that "the relationship between GDP and AAD is strong but the World War II years do not fall on the line because consumers were not allowed to buy as much as they wanted to and had the income for."

 

Look at the final graph. The trend from '35 to '41 is general economic recovery that has already exceeded pre-depression levels. The figures for 1945 hint at a trailing off.

 

The only conclusions I would be willing to draw from this data are that the war did not save the US from the depression, but it did provide a necessarily unsustainable boost to the GDP.