12 - War economies

Summary

The economic history of the war was characterised by multiple transformations, of the mechanisms that allocated labour and capital and of traditional market arrangements for production and distribution. This chapter discusses war economics in terms of the relationships between governments, markets and business associated with the mobilisation of vast resources and manpower, the creation and allocation of the new capacities for production, and the uncertain outcomes of economic and institutional change over the long run. As the war progressed, it became increasingly apparent that both the weight and the allocation of resources were critical considerations for the prospects of military success. Indeed, in the latter stages of the war, macroeconomic pressures, in the shape of economic crises in supply, manpower and civilian morale, became determining factors. The profound misery of humanity's economic and social experience between the wars flowed more or less directly from the Great War.