1 - The economics of World War II: an overview

Summary

Introduction: economic factors in the war

This book deals with two issues in the economics of twentieth-century warfare. First is the contribution of economics to victory and defeat of the great powers in World War II. Second is the impact of the war upon long-run economic trends and postwar institutions in the economies of the great powers.

What was the contribution of economics to the outcome of the war? As far as this first question is concerned, the authors share a broad understanding of ‘economies’, which comprises the national requirements of the war, the quantity and quality of resources, their availability and mobilization, and the institutions and policies which mobilized them for wartime purposes. As for resources, we understand them to include not only physical resources such as minerals, materials, and fixed capital assets, and financial stocks and flows, but also the human resources represented by the working population, its health and literacy, its degree of skill, training, and education, as well as assets represented by scientific knowledge and technological know-how.

How important were these economic factors in deciding who won the war, and who lost? In answering this question it has always made sense to distinguish two periods of the conflict. In the first period, economic considerations were less important than purely military factors. This was the phase of greatest success for the powers of the Axis, and it lasted roughly until the end of 1941 or into 1942 (the exact turning point differed by a few months among the different regional theatres).