Even more critically, investment in new industrial capacity-after 1940, almost all directed and financed by Washington-could only be decided if future supplies of critical raw materials were known. Materials like steel, copper, aluminum, and rubber were in short supply, exacerbated by hoarding by contractors who wanted to ensure that their own orders were filled. Even before Pearl Harbor, it was clear to the leaders of the mobilization effort that the peacetime system of allocating industrial inputs by markets was breaking down in the face of a rapid expansion of military production. Wilson is certainly right that the federal government played a central role in this vast expansion of productive capacity.
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Industrial productivity-output per hour-also rose rapidly. At the same time, workers shifted from less productive activities (especially agriculture) to more productive jobs in industry. (This includes people leaving the Works Progress Administration and similar jobs programs.) Over the same period, private employment and military employment each rose by 10 million, implying 10 million new entrants to the labor force-mostly women. Between 19, unemployment fell by about 10 million.
Making history the second world war end turn length full#
Much of this growth came not in the recovery from the Depression, but in the post-1940 period, when the country was already more or less at full employment. The Second World War was certainly an economic success story, in that it coincided with the most rapid economic growth in U.S. The book is animated by the idea that wartime planning represents a lost model for effective public direction of the economy: “If American policymakers had applied the lessons of World War II mobilization to the toughest challenges of the later twentieth century, people around the world would be better off today.” His new book Destructive Creation is a defense of the management of the war economy by “clerical, mathematical equation,” against those on the right, who attribute wartime production to the genius of private business, and those on the left, who see the wartime state as an engine of profiteering and monopoly. It was as though a clerical, mathematical equation had been worked out, as a calculated risk.” For historian Mark Wilson, whose attention is fixed on the home front, there’s no such ambivalence. It was weird and wacky and somehow insane. Think of Corporal Fife in The Thin Red Line, watching his transport ship coming under attack by Japanese planes: “A regular business venture, no war at all. What are we to make of the fact that economic life was “quite completely regimented” (in the approving words of Admiral Harold Bowen) during the war? For novelists of the front lines, it could appear as part of a vast impersonal machine, consuming human lives as means to an inscrutable end. For millions of Americans, the photograph of Ward’s adamantly anti-Roosevelt chairman Sewell Avery being carried from his headquarters by a squad of soldiers crystallized the new relationship between government and capital. Thousands of private businesses that failed to comply with the planners’ instructions were simply taken over by the government-including some of the country’s largest corporations, like Montgomery Ward.
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The large majority of investment was directed, financed, and, in most cases, owned by the federal government.
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Key prices and wages were administered, not left to markets. Strategic resources were produced in quantities set in Washington, and allocated among end users by the public officials sitting on the War Production Board. University of Pennsylvania Press, 2016, 392 pp.ĭuring the Second World War, the United States had a centrally planned economy. Mason ▪ Fall 2017Ī young woman sells war bonds and stamps and distributes War Production Drive literature, circa 1943 (National Archives)ĭestructive Creation: American Business and the Winning of World War II What lessons can we take from the war economy today? J.W. During the Second World War, the United States had a centrally planned economy-and the most rapid economic growth in U.S.