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READ: Economics in the Second World War

Money is a factor in most wars, but WWII took it to another level. Here is a look at how so many of the nations in this devastating conflict came to embrace the idea of a “total war” economy.
The article below uses “Three Close Reads”. If you want to learn more about this strategy, click here.

First read: preview and skimming for gist

Before you read the article, you should skim it first. The skim should be very quick and give you the gist (general idea) of what the article is about. You should be looking at the title, author, headings, pictures, and opening sentences of paragraphs for the gist.

Second read: key ideas and understanding content

Now that you’ve skimmed the article, you should preview the questions you will be answering. These questions will help you get a better understanding of the concepts and arguments that are presented in the article. Keep in mind that when you read the article, it is a good idea to write down any vocab you see in the article that is unfamiliar to you.
By the end of the second close read, you should be able to answer the following questions:
  1. How does the author define a “total war economy”?
  2. What was Japan’s economic motivation for conquering and colonizing in Asia?
  3. Why did the Soviet Union have an advantage in directing resources toward a total war economy?
  4. How did the outbreak of war affect the American economy?
  5. Japan and Britain are both small island nations. Why did the British not have to invade and conquer in order to supply its war effort?

Third read: evaluating and corroborating

Finally, here are some questions that will help you focus on why this article matters and how it connects to other content you’ve studied.
At the end of the third read, you should be able to respond to these questions:
  1. Using the production and distribution frame narrative, explain how the patterns of industrialization helped the Allies win the war.
  2. What developments during the long nineteenth century gave the Allied powers an advantage in this twentieth-century conflict?
Now that you know what to look for, it’s time to read! Remember to return to these questions once you’ve finished reading.

Economics in the Second World War

Propaganda artwork represents the British Commonwealth of Nations. There are soldiers from India, East Africa, South Africa, New Zealand, a Canadian airman, an Australian soldier and a Royal Navy sailor. The men stand proudly together, holding rifles over their shoulders. There is a union jack flag in the background.
By Whitney Howarth
Money is a factor in most wars, but WWII took it to another level. Here is a look at how so many of the nations in this devastating conflict came to embrace the idea of a “total war” economy.

Mobilizing for war

Can we all agree that war is bad? Apparently, we cannot, since along with the violence of war there is also profit. As is the case with most major conflicts, the causes of the Second World War were complicated. But it's clear that many of the people in power, across many of the nations involved, believed that entering the war would benefit their nation's economy. It wasn't just about sending soldiers to fight. When citizens, businesses, and the rest of a nation's infrastructure revolve around the war effort, a total war economy emerges.
A look at the context will help illustrate how various nations, often very distant from each other, had similar economic motives as they mobilized (prepared) for war. For starters, the Great Depression had just caused a global crisis. Germany, still reeling from their defeat in WWI had been hit especially hard. When Adolph Hitler promised to end the economic suffering and humiliation of the German people, his political party rose to power. To create jobs—which the economy desperately needed—Hitler's government increased military spending, and German businesses were given profitable government contracts. One part of Hitler's plan was to use this new military might to invade neighboring countries for resources and industrial goods to further his vision of a Greater Germany. Of course, because his vision also demanded the racial and ethnic "purity" of this expanded realm, this plan also called for the removal or genocide of many of the populations of the conquered regions. Some of the people of these countries, along with minorities within Germany, were also forced to become unpaid laborers—essentially slaves—to the German war machine.
A black and white photograph of many people, marching down the street holding brooms in their hands. Behind them are several large buildings.
Forced laborers in German-occupied Lithuania. Bild Bundesarchiv, CC BY-SA 3.0.
On the other side of the world, Japan was having similar issues. The Depression had caused widespread poverty during this time. Japan had few natural resources, and the government was in debt. Wanting to be less dependent on foreign markets for oil and rubber, the Japanese established colonies in Korea and Manchuria to get access to these valuable resources—to use and to sell. The United States did not approve of this aggression, so they embargoed (blocked) Japan's oil exports in 1940 to slow their economic plan. Japan sped up plans to attack Indonesia and the Philippines for even more resources, and again the U.S. imposed severe restrictions. Japan raised the stakes with their attack on Pearl Harbor on December 7, 1941, putting them at war with the U.S. Japan's prime minister at the time, General Tojo, also commanded the military. As with Germany, he believed Japan needed a total war economy, and took dramatic steps to achieve it.

Allied powers

With Axis powers clearly mobilizing for war, the Allies prepared for another global conflict. Soviet Russia (U.S.S.R.), fearing German aggression, used the peacetime economy to build up their military—just as Germany had done. From 1938 to 1941, Russian leader Joseph Stalin doubled the size of his army to five million troops. To pay for it, all Russian households had to consume less food, fuel and other resources. This would not have gone as smoothly in most nations, but Soviet Russia had a "command economy" that gave the state control of all industries, including farms and the food they produced. This level of government control gave the U.S.S.R. an advantage when it came to mobilizing its resources and industrial labor for war. Most nations struggled to adapt to the total war economy, but Russia's command economy was already so close to that concept it was easier to require citizens and businesses to join the war effort.
Photograph of three children, sitting at a small desk, smiling and holding their lunch as if about to take a bite. They sit outside, next to a pile of rubble.
Children in a bombed-out British school eating food from the US sent as part of the lend-lease program. By Ministry of Information Photo Division Photographer, public domain
The economy in the United States was another story. A clear shift in economic priorities had begun even before the U.S. actively entered the war in December of 1941, when Japan attacked the U.S. air base Pearl Harbor. President Roosevelt had signed legislation nine months earlier to create the Lend-Lease program. This allowed the U.S. to supply warships, planes, and munitions (and food for civilians) to help the Allied nations that were fighting Germany, Italy, and Japan. It meant that long before officially joining the fight, the U.S. was already participating. The Lend- Lease program aimed to make the United States into what Roosevelt called "the great arsenal of democracy."

Total war economy

When the Japanese bombed Pearl Harbor, the U.S. declared war on both Japan and Germany. As with so many other nations, it was not just about sending soldiers and weapons. The U.S. wanted all of its citizens to make an effort and move toward a—you guessed it—total war economy. The government gave incentives to private companies to transform their manufacturing plants into centers of production for weapons, munitions, airplanes, and ships. All citizens were asked to ration their use of certain resources and support the war effort by collecting scraps of rubber, paper, and metals. Every person, at every level of society, was asked to pitch in and sacrifice for the cause.
An advertisement for Canada shows an image of a glowing, orange wheat field. Behind the field stands a large factory. Text reads: “DO YOU KNOW THAT CANADA besides growing millions of acres of wheat has great mineral wealth: that 90% of the world's nickel is mined in Canada: that Canadian mass production of aeroplanes and munitions is in full swing. THESE ARE THE SINEWS OF WAR.”
A poster advertising Canada’s contribution to the British war effort. Public domain.
In the process, the U.S. economy, which like most other countries was reeling from the Depression, was suddenly doing great. Production sped up, new factories were built, closed factories reopened, and millions of jobs were created in both private and public sectors. Tanks began to roll out of car factories. Assembly lines that used to make vacuums and kitchen appliances started turning out bombs. In order to stabilize the economy, the government controlled both wages and prices. As millions of men went off to war in Europe and the Pacific, housewives, students, and retired people took up the jobs they left behind. Two thirds of the American economy had been integrated into the war effort by the end of 1943 and unemployment dropped to record lows. Even scientists, such as physicists and chemists, expanded their research to develop new weapons and technologies that might give the U.S. military a greater advantage. One result of this was the Manhattan Project, which produced the first nuclear weapons.
Over in the United Kingdom and Canada, similar economic changes were made to meet the needs of war. The food shortage was even worse for the British than the people in the U.S., making rationing essential. Britain also relied on Canada for dairy and meat products. So even though Canada started producing much more food during the war, Canadians still had to ration their own consumption. This was so they could keep feeding British citizens, who desperately needed more resources.
Within the U.K. a desperate need for agricultural labor brought tens of thousands of British women from the cities to rural areas to serve as "land girls." Rural areas were safer places to be anyway, since the Germans were targeting cities with large civilian populations. That's why hundreds of thousands of children were also evacuated to rural areas of the island for safety. In total, more than 450,000 British civilians lost their lives.

The empire advantage

Island though it was, the United Kingdom controlled the world's largest empire, and that meant its total war economy had a global reach. The U.K. used its influence to aid in the fight. During the war, the U.K. imported oil for military usage from Persia, Iraq, and North America. Over 15 million subjects joined the British forces in the Allied fight against the Axis Powers. In addition to boots on the ground, members of the empire had skilled people, provisions, industrial materials, and natural resources that Britain needed. This network of support stretched from Australia to the Caribbean, from East Africa to India. Britain's ability to mobilize this enormous military industrial capacity is a major part of how they survived the war.
In India alone, over 2.5 million subjects were recruited to fight in the war in a variety of African, Asian, and European countries. Over 150,000 non-British subjects gave their lives for the British Empire, even as political leaders in Africa and in India were organizing movements to liberate themselves from British rule. Wartime disruptions had caused severe food shortages, leading to a famine that killed hundreds of thousands there. On various global battlefields, the Indian subcontinent sacrificed 87,000 soldiers. The economic and human costs of war were unbearably high for millions more colonial people who were wounded, widowed, and orphaned.

Conclusion

It's impossible to argue with the old saying: "War is hell." In the paragraphs above, we've only glimpsed a portion of the death toll of the Second World War. We have not mentioned genocide of Jewish people, the bombings of Hiroshima and Nagasaki, and the many other horrors of this massive war. Economics, on its own, does not sound like a violent topic. Yet we see countless examples in this war and others that the pursuit of economic prosperity can leave terrible devastation in its wake.
Author bio
Whitney Howarth, is an Associate Professor of History at Plymouth State University where she specializes in modern world history and the history of India. Dr. Howarth has taught world history at the college level since 1999 and was, for nearly a decade, a research fellow at Northeastern’s World History Center, where she assisted in the research, design and creation of professional development programs for high school world history teachers, hosted seminars by top world historical scholars, and produced multi-media publications (1995-2004).

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