Economics of wwii
1 / 15

Economics of WWII - PowerPoint PPT Presentation

  • Updated On :

Economics of WWII. From the following sources: The Economics of WWII: An Overview by Mark Harrison a chapter in The Economics of WWII, ed. by Mark Harrison

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about 'Economics of WWII' - forever

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Economics of wwii l.jpg
Economics of WWII

From the following sources:

  • The Economics of WWII: An Overview by Mark Harrison a chapter in The Economics of WWII, ed. by Mark Harrison

  • The Economics of the World Wars by Stephen Broadberry and Mark Harrison, an entry in The New Palgrave Dictionary of Economics, 2/E, 2008.

    Consider two themes (same as WWI themes)

  • The contribution of economic factors to the outcome of the war.

  • The effects of war on long-run economic development

Economics of wwii2 l.jpg
Economics of WWII

The contribution of economic factors to the outcome of the war.

Economic Causes:

  • 1st century of globalization with economic integration was in trouble in the late 19th century and ended in 1914.

  • After WWI instabilities intrinsic to the global economic order increased (based more on nationalism that classical liberalism).

Economics of wwii3 l.jpg
Economics of WWII

Economic Causes:

  • Worldwide trade disintegration due to

    • Formerly dominant British economy is weak and the U.S. as the dominant economy provides no leadership

    • Germany isolated by Treaty of Versailles

    • Russia isolated by Lenin and then Stalin

  • Great Depression

    • Protectionism accelerated disintegration

    • Closed trading blocs organized along colonial lines with rivalry between the trading blocks (not unlike WWI)

Economics of wwii4 l.jpg
Economics of WWII

Economic Causes:

  • Worldwide trade disintegration contributed to the causes of WWII.

  • Economies of Germany, Italy, and Japan were to small to gain economies of scale w/o trade and required external sources of food, energy, and other basic materials.

  • Their external aggression was the attempt to secure these supplies by imposing a colonial trading regime over conquered territorities.

Economics of wwii5 l.jpg
Economics of WWII

Non-economic Causes:

  • WWI ended inconclusively, with a ceasefire and a peace treaty designed to punish the “aggressors.”

  • There was no unconditional surrender and those in Germany that wanted to try again eventually took power in 1933.

  • Germany wished to terminate and rescind the Treaty of Versailles

Economics of wwii6 l.jpg
Economics of WWII

Treaty of Versailles

  • required Germany and its allies to accept full responsibility for causing the war

  • to disarm

  • make substantial territorial concessions

  • pay reparations (economic)

Economics of wwi and wwii l.jpg
Economics of WWI and WWII

One View: Only economic size matters

Goldsmith (1946) “The Power of Victory: Munitions Output in WWII”

Ferguson (1998) The Pity of War

Given the Allied economic advantage WWI should have been over much sooner.

  • Only explanation: mismanagement , “an advantage squandered”

  • Economic advantage came into play after much attrition and the military advantage of the aggressors had almost won the day

Wwii divided into two periods l.jpg
WWII Divided into Two Periods

  • First period: military factors were more important than economic considerations.

    • 1937 (Pacific), 1939 (Europe) until 1942

    • Germany and Japan had advantages in strategy and fighting power, but no decisive military victory

      • Stalingrad (July 1942 – February 1943)

      • Midway (June 5-7, 1942)

  • Second period: brief stalemate then war of attrition with economic superiority determining the outcome

Table 5 allies vs axis soldiers and equipment in world war ii l.jpg
Table 5. Allies vs Axis: Soldiers and Equipment in World War II

Allies Axis Ratio

Combatant-years, million 106.4 76.9 1.4

Weapons Produced:

Rifles and carbines, million 25.3 13.0 1.9

Combat aircraft, thousand 370 144 2.6

Machine Guns, thousand 4827 1646 2.9

Guns, thousand 1357 462 2.9

Armoured vehicles, thousand 216 51 4.3

Mortars, thousand 516 100 5.1

Major naval vessels 8999 1734 5.2

Machine pistols, thousand 11604 1185 9.8

Ballistic missiles 0 6000 …

Atomic weapons 4 0 …

Table 8 the military burden 1939 44 military outlays per cent of national income l.jpg
Table 8. The Military Burden, 1939-44 II(military outlays, per cent of national income)

1939 1940 1941 1942 1943 1944

At current prices:

Allied powers

USA 1 2 11 31 42 42

UK 15 44 53 52 55 53

USSR (constant prices) … 17 28 61 61 53

Axis powers

Germany 23 40 52 64 70 …

Italy 8 12 23 22 21 …

Japan 22 22 27 33 43 76

Tbl 9 war losses attributable to physical destruction per cent of assets l.jpg
Tbl 9. War Losses Attributable to Physical Destruction (per cent of assets)

Human assets Physical assets

national wealth industry fixed assets

Allied powers

USA 1 0 …

UK 1 5 …

USSR 18-19 25 …

Axis powers

Germany 9 … 17

Italy 1 … 10

Japan 6 25 34

Period 1 up to 1942 l.jpg
Period 1: Up to 1942 cent of assets)

  • Prewar rearmament gave Axis powers an early advantage, and

  • Early pure military advantages account for success

  • In Europe after France fell in 1940, U.S. neutral and Russia allied with Germany – advantage Germany


    • U.S. helping Britain with trade

    • Russia, then U.S. in war in 1941

    • With no decisive Axis victory, the war is over in 1942

Inter ally cooperation l.jpg
Inter-Ally Cooperation cent of assets)

  • In WWI and WWII, Germany fails to exploit the advantages economic cooperation with its allies

  • In WWII, Germany was initially “cooperating” with Vichy France and viewed as a “liberator” from communism in the east.

  • The Allies achieved fuller cooperation and on a much larger scale in WWII.

    • U.S. to Britain (Lend-Lease)

    • U.S. and Britain to USSR

    • Supplied free of finance charges

Economics of wwii14 l.jpg
Economics of WWII cent of assets)

Long Run Economic Growth

  • After WWI globalization does not return

    • After war, recovery but

    • Little convergence among the countries to a path of convergence on the global productivity frontier

  • After WWII the second age of globalization begins

    • Convergent economic growth (among western bloc)

    • Allies designed a much better international environment

Conclusions l.jpg
Conclusions cent of assets)

  • Economics mattered

  • Given time, resources won WWI and WWII

  • 1914-1945 was an era of “total war” devoting more than ½ GDP to the war effort

  • Self-sufficiency was self-defeating

  • Total war not viable before 1914

    • Subsistence agriculture resistant to mobilization

  • Total war not necessary after 1945

    • Nuclear weapons