Introduction to economic history (Unit 6)

 

Economics of WWII

 

This unit exposes the reader to:

  • The contribution of economics to victory and defeat of the great powers in World War II.
  • The impact of the war on the long-run economic trends and postwar institutions in the economies of the great powers.

Economics in this context includes the war requirements of each nation, the quantity and quality of resources, their availability and mobilization, and the institutions and policies which mobilized them for wartime purposes. Resources on the other hand are not only physical resources (such as minerals, materials, and fixed capital assets, and financial stocks and flows) but also the human resources, particularly the working population –the skill, training and education of this group are also considered– as well as assets represented by scientific knowledge and technological know-how.

Economic factor was an important tool in determining the winning of the war. However at the initial stage of the war, owing to well defined strategy and fighting power, Germany and Japan had the upper-hand over a combination of economically superior powers.

The period was accompanied by a disruption in trade internally and externally. Many of the economies, who were widely agrarian, experienced low productivity rate as the industry was concentrated upon war production.

The war prompted individual countries to draw positive lessons from the war experience dependent on the national circumstances unique to them. Steps were taken towards the integration of the world economy, capital accumulation, and mass production. The experience of Italy, Japan, and Germany (to some extent) revealed the impossibility of autarkic mobilization, and convinced the postwar leaders of these countries that each must find its place in a new worldwide division of labor. Most, if not all, of the participant countries became actively involved in the multinational institutional framework of the postwar global economy such as the IMF, IBRD, and GATT.

An assessment of the war reveals that it was the fact that the Allied Forces’ total GDP was greater than the total GDP of the Axis Powers that contributed to their winning the war.

 
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