1944 1994 economics essay in international
The war decisively ended the depression itself. The federal government emerged from the war as a potent economic actor, able to regulate economic activity and to partially control the economy through spending and consumption. American industry was revitalized by the war, and many sectors were by either sharply oriented to defense production for example, aerospace and electronics or completely dependent on it atomic energy. The organized labor movement, strengthened by the war beyond even its depression-era height, became a major counterbalance to both the government and private industry. Similarly, the substantial increases in personal income and frequently, if not always, in quality of life during the war led many Americans to foresee permanent improvements to their material circumstances, even as others feared a postwar return of the depression.
Heinz Arndt
The war decisively ended the depression itself. The federal government emerged from the war as a potent economic actor, able to regulate economic activity and to partially control the economy through spending and consumption. American industry was revitalized by the war, and many sectors were by either sharply oriented to defense production for example, aerospace and electronics or completely dependent on it atomic energy.
The organized labor movement, strengthened by the war beyond even its depression-era height, became a major counterbalance to both the government and private industry. Similarly, the substantial increases in personal income and frequently, if not always, in quality of life during the war led many Americans to foresee permanent improvements to their material circumstances, even as others feared a postwar return of the depression.
The global conflict which was labeled World War II emerged from the Great Depression, an upheaval which destabilized governments, economies, and entire nations around the world.
In Germany, for instance, the rise of Adolph Hitler and the Nazi party occurred at least partly because Hitler claimed to be able to transform a weakened Germany into a self-sufficient military and economic power which could control its own destiny in European and world affairs, even as liberal powers like the United States and Great Britain were buffeted by the depression.
For instance, after the American gross domestic product declined for four straight years, then slowly and haltingly climbed back to its level, which was finally exceeded again in Watkins, ; Johnston and Williamson, Between and , the American unemployment rate averaged In the summer of , about 5.
Darby, , 7. For somewhat different figures, see Table 3 below. In spite of these dismal statistics, the United States was, in other ways, reasonably well prepared for war. The wide array of New Deal programs and agencies which existed in meant that the federal government was markedly larger and more actively engaged in social and economic activities than it had been in In many industries, company executives resisted converting to military production because they did not want to lose consumer market share to competitors who did not convert.
Conversion thus became a goal pursued by public officials and labor leaders. In , Walter Reuther, a high-ranking officer in the United Auto Workers labor union, provided impetus for conversion by advocating that the major automakers convert to aircraft production. Still, the auto companies only fully converted to war production in and only began substantially contributing to aircraft production in Even for contemporary observers, not all industries seemed to be lagging as badly as autos, though.
Merchant shipbuilding mobilized early and effectively. The industry was overseen by the U. Maritime Commission USMC , a New Deal agency established in to revive the moribund shipbuilding industry, which had been in a depression since , and to ensure that American shipyards would be capable of meeting wartime demands. With the USMC supporting and funding the establishment and expansion of shipyards around the country, including especially the Gulf and Pacific coasts, merchant shipbuilding took off.
The entire industry had produced only 71 ships between and , but from to , commission-sponsored shipyards turned out ships, and then almost that many in alone Fischer, Though scholars are still assessing the impact of Lend-Lease on these two major allies, it is likely that both countries could have continued to wage war against Germany without American aid, which seems to have served largely to augment the British and Soviet armed forces and to have shortened the time necessary to retake the military offensive against Germany.
Between and , the U. The war dictated that aircraft, ships and ship-repair services , military vehicles, and munitions would always rank among the quantitatively most important Lend-Lease goods, but food was also a major export to Britain Milward, Pearl Harbor was an enormous spur to conversion. From the perspective of federal officials in Washington, the first step toward wartime mobilization was the establishment of an effective administrative bureaucracy.
From the beginning of preparedness in through the peak of war production in , American leaders recognized that the stakes were too high to permit the war economy to grow in an unfettered, laissez-faire manner. American manufacturers, for instance, could not be trusted to stop producing consumer goods and to start producing materiel for the war effort.
Though both the New Deal and mobilization for World War I served as models, the World War II mobilization bureaucracy assumed its own distinctive shape as the war economy expanded. Most importantly, American mobilization was markedly less centralized than mobilization in other belligerent nations. The war economies of Britain and Germany, for instance, were overseen by war councils which comprised military and civilian officials. In the United States, the Army and Navy were not incorporated into the civilian administrative apparatus, nor was a supreme body created to subsume military and civilian organizations and to direct the vast war economy.
Instead, the military services enjoyed almost-unchecked control over their enormous appetites for equipment and personnel. With respect to the economy, the services were largely able to curtail production destined for civilians e. In parallel to but never commensurate with the Army and Navy, a succession of top-level civilian mobilization agencies sought to influence Army and Navy procurement of manufactured goods like tanks, planes, and ships, raw materials like steel and aluminum, and even personnel.
One way of gauging the scale of the increase in federal spending and the concomitant increase in military spending is through comparison with GDP, which itself rose sharply during the war. Table 1 shows the dramatic increases in GDP, federal spending, and military spending.
To oversee this growth, President Roosevelt created a number of preparedness agencies beginning in , including the Office for Emergency Management and its key sub-organization, the National Defense Advisory Commission; the Office of Production Management; and the Supply Priorities Allocation Board. None of these organizations was particularly successful at generating or controlling mobilization because all included two competing parties. On one hand, private-sector executives and managers had joined the federal mobilization bureaucracy but continued to emphasize corporate priorities such as profits and positioning in the marketplace.
In January , as part of another effort to mesh civilian and military needs, President Roosevelt established a new mobilization agency, the War Production Board, and placed it under the direction of Donald Nelson, a former Sears Roebuck executive. Nelson understood immediately that the staggeringly complex problem of administering the war economy could be reduced to one key issue: balancing the needs of civilians — especially the workers whose efforts sustained the economy — against the needs of the military — especially those of servicemen and women but also their military and civilian leaders.
Though neither Nelson nor other high-ranking civilians ever fully resolved this issue, Nelson did realize several key economic goals. He thereby also established a precedent for planning war production so as to meet most military and some civilian needs. The CMP obtained throughout the war, and helped curtail conflict among the military services and between them and civilian agencies over the growing but still scarce supplies of those three key metals.
By late it was clear that Nelson and the WPB were unable to fully control the growing war economy and especially to wrangle with the Army and Navy over the necessity of continued civilian production. Beneath the highest-level agencies like the WPB and the OWM, a vast array of other federal organizations administered everything from labor the War Manpower Commission to merchant shipbuilding the Maritime Commission and from prices the Office of Price Administration to food the War Food Administration.
However, these agencies were often quite successful in achieving their respective, narrower aims. Beginning in , the government extended the income tax to virtually all Americans and began collecting the tax via the now-familiar method of continuous withholdings from paychecks rather than lump-sum payments after the fact. The number of Americans required to pay federal taxes rose from 4 million in to 43 million in Over that same period, federal tax revenue grew from about 8 percent of GDP to more than 20 percent.
The average income tax rate peaked in at Though the bonds returned only 2. Bonds served as a way for citizens to make an economic contribution to the war effort, but because interest on them accumulated slower than consumer prices rose, they could not completely preserve income which could not be readily spent during the war. Fiscal and financial matters were also addressed by other federal agencies.
Between April and June , the period of the most stringent federal controls on inflation, the annual rate of inflation was just 3.
With wages rising about 65 percent over the course of the war, this limited success in cutting the rate of inflation meant that many American civilians enjoyed a stable or even improving quality of life during the war Kennedy, Improvement in the standard of living was not ubiquitous, however. In some regions, such as rural areas in the Deep South, living standards stagnated or even declined, and according to some economists, the national living standard barely stayed level or even declined Higgs, Labor unions and their members benefited especially.
By , approximately Despite the almost-continual crises of the civilian war agencies, the American economy expanded at an unprecedented and unduplicated rate between and The gross national product of the U. War-related production skyrocketed from just two percent of GNP to 40 percent in Milward, As Table 2 shows, output in many American manufacturing sectors increased spectacularly from to , the height of war production in many industries.
The wartime economic boom spurred and benefited from several important social trends. Foremost among these trends was the expansion of employment, which paralleled the expansion of industrial production.
In , unemployment dipped to 1. Table 3 shows the overall employment and unemployment figures during the war period. Not only those who were unemployed during the depression found jobs.
So, too, did about Almost 19 million American women including millions of black women were working outside the home by Though most continued to hold traditional female occupations such as clerical and service jobs, two million women did labor in war industries half in aerospace alone Kennedy, Employment did not just increase on the industrial front. Civilian employment by the executive branch of the federal government — which included the war administration agencies — rose from about , in already a historical peak to 2.
Migration was another major socioeconomic trend. The 15 million Americans who joined the military — who, that is, became employees of the military — all moved to and between military bases; Continuing the movements of the depression era, about 15 million civilian Americans made a major move defined as changing their county of residence. African-Americans moved with particular alacrity and permanence: , left the South and , arrived in Los Angeles during alone.
Migration was especially strong along rural-urban axes, especially to war-production centers around the country, and along an east-west axis Kennedy, , For instance, as Table 4 shows, the population of the three Pacific Coast states grew by a third between and , permanently altering their demographics and economies.
Workers at the lower end of the spectrum gained the most: manufacturing workers enjoyed about a quarter more real income in than in Kennedy, Again focusing on three war-boom states in the West, Table 5 shows that personal-income growth continued after the war, as well.
Source: Nash, Despite the focus on military-related production in general and the impact of rationing in particular, spending in many civilian sectors of the economy rose even as the war consumed billions of dollars of output. Hollywood boomed as workers bought movie tickets rather than scarce clothes or unavailable cars.
Americans placed more legal wagers in and , and racetracks made more money than at any time before. Department-store sales in November were greater than in any previous month in any year Blum, Black markets for rationed or luxury goods — from meat and chocolate to tires and gasoline — also boomed during the war. While all of the major belligerents were able to tap their scientific and technological resources to develop weapons and other tools of war, the American experience was impressive in that scientific and technological change positively affected virtually every facet of the war economy.
For instance, the Manhattan Project to create an atomic weapon was a direct and massive result of a stunning scientific breakthrough: the creation of a controlled nuclear chain reaction by a team of scientists at the University of Chicago in December Under the direction of the U.
Army and several private contractors, scientists, engineers, and workers built a nationwide complex of laboratories and plants to manufacture atomic fuel and to fabricate atomic weapons. Though important and gigantic, the Manhattan Project was an anomaly in the broader war economy.
Technological and scientific innovation also transformed less-sophisticated but still complex sectors such as aerospace or shipbuilding.
Essays in International Economics [H. W. Arndt] on parrotsprint.co.nz *FREE* shipping on qualifying offers. Hard to find. This is intended as a counterpart to 50 Years of Development Studies, essays on economic development written between and , and published in.
This volume consists of selected essays in international economics written between and The essays are grouped under various headings: external balance; exchange rates; international capital movements; trade in services; protection; regionalism. They deal with analytical and policy issues, some going back to the early post-World War II years but the majority written in the past decade, and written in non-mathematical language.
Arndt gained two degrees at Oxford and taught at the London School of Economics and University of Manchester before settling in Australia in
Essays in international economics, Heinz Wolfgang Arndt.
