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A war economy or wartime economy is the set of contingencies undertaken by a modern state to mobilize its economy for war production. Philippe Le Billon describes a war economy as a "system of producing, mobilizing and allocating resources to sustain the violence." Some measures taken include the increasing of Taylor rates as well as the introduction of resource allocation programs. Needless to say, every country approaches the reconfiguration of its economy in a different way.
A state is a political organization with a centralized government that exerts authority within a certain geographical territory. There is not a single, undisputed, definition of what constitutes a state. A widely-used definition is a state being a polity that, within a given territory, maintains a monopoly on the use of force.
An economy is an area of the production, distribution, or trade, and consumption of goods and services by different agents. Understood in its broadest sense, 'The economy is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the production, use, and management of resources'. Economic agents can be individuals, businesses, organizations, or governments. Economic transactions occur when two parties agree to the value or price of the transacted good or service, commonly expressed in a certain currency. However, monetary transactions only account for a small part of the economic domain.
Philippe Le Billon is a geographer, author and Professor at the University of British Columbia, and a researcher at the Liu Institute for Global Issues. He earned an MBA at the Pantheon-Sorbonne University in Paris and a doctorate at the University of Oxford. He has authored or co-authored several books on the economy and politics of war, and the role of corruption in war.
Many states increase the degree of planning in their economies during wars; in many cases this extends to rationing, and in some cases to conscription for civil defenses, such as the Women's Land Army and Bevin Boys in the United Kingdom during World War II.
A planned economy is a type of economic system where investment, production and the allocation of capital goods take place according to economy-wide economic and production plans. A planned economy may use centralized, decentralized or participatory forms of economic planning. Planned economies contrast with unplanned economies, specifically market economies, where autonomous firms operating in markets make decisions about production, distribution, pricing and investment. Market economies that use indicative planning are sometimes referred to as planned market economies.
Rationing is the controlled distribution of scarce resources, goods, services, or an artificial restriction of demand. Rationing controls the size of the ration, which is one's allowed portion of the resources being distributed on a particular day or at a particular time. There are many forms of rationing, and in western civilization people experience some of them in daily life without realizing it.
Conscription, sometimes called the draft, is the compulsory enlistment of people in a national service, most often a military service. Conscription dates back to antiquity and continues in some countries to the present day under various names. The modern system of near-universal national conscription for young men dates to the French Revolution in the 1790s, where it became the basis of a very large and powerful military. Most European nations later copied the system in peacetime, so that men at a certain age would serve 1–8 years on active duty and then transfer to the reserve force.
President Franklin D. Roosevelt stated if the Axis powers won, then "we would have to convert ourselves permanently into a militaristic power on the basis of war economy."
Franklin Delano Roosevelt, often referred to by his initials FDR, was an American statesman and political leader who served as the 32nd president of the United States from 1933 until his death in 1945. A member of the Democratic party, he won a record four presidential elections and became a central figure in world events during the first half of the 20th century. Roosevelt directed the federal government during most of the Great Depression, implementing his New Deal domestic agenda in response to the worst economic crisis in U.S. history. As a dominant leader of his party, he built the New Deal Coalition, which realigned American politics into the Fifth Party System and defined American liberalism throughout the middle third of the 20th century. His third and fourth terms were dominated by World War II. Roosevelt is widely considered to be one of the most important figures in American history, as well as among the most influential figures of the 20th century. Though he has been subject to substantial criticism, he is generally rated by scholars as one of the three greatest U.S. presidents, along with George Washington and Abraham Lincoln.
The Axis powers, also known as "Rome–Berlin–Tokyo Axis", were the nations that fought in World War II against the Allies. The Axis powers agreed on their opposition to the Allies, but did not completely coordinate their activity.
Militarism is the belief or the desire of a government or a people that a state should maintain a strong military capability and to use it aggressively to expand national interests and/or values. It may also imply the glorification of the military and of the ideals of a professional military class and the "predominance of the armed forces in the administration or policy of the state".
During total war situations, certain buildings and positions are often seen as important targets by combatants. The Union blockade, Union General William Tecumseh Sherman's March to the Sea during the American Civil War, and the strategic bombing of enemy cities and factories during World War II are all examples of total war.
Total war is warfare that includes any and all civilian-associated resources and infrastructure as legitimate military targets, mobilizes all of the resources of society to fight the war, and gives priority to warfare over non-combatant needs. The Oxford Living Dictionaries defines "total war" as "A war that is unrestricted in terms of the weapons used, the territory or combatants involved, or the objectives pursued, especially one in which the laws of war are disregarded."
Combatant is the legal status of an individual who has the right to engage in hostilities during an international armed conflict. The legal definition of "combatant" is found at article 43 of Additional Protocol One to the Geneva Conventions of 1949 [AP1]. It states that "Members of the armed forces of a Party to a conflict are combatants, that is to say, they have the right to participate directly in hostilities."
The Union blockade in the American Civil War was a naval strategy by the United States to prevent the Confederacy from trading.
Concerning the side of aggregate demand, this concept has been linked to the concept of "military Keynesianism", in which the government's military budget stabilizes business cycles and fluctuations and/or is used to fight recessions.
In macroeconomics, Aggregate Demand (AD) or Domestic Final Demand (DFD) is the total demand for final goods and services in an economy at a given time. It is often called effective demand, though at other times this term is distinguished. This is the demand for the gross domestic product of a country. It specifies the amounts of goods and services that will be purchased at all possible price levels.
Military Keynesianism is the position that government should raise military spending to boost economic growth. The term is often used pejoratively to refer to politicians who apparently reject Keynesian economics, but use Keynesian arguments in support of excessive military spending.
A military budget, also known as a defense budget, is the amount of financial resources dedicated by a state to raising and maintaining an armed forces or other methods essential for defense purposes.
On the supply side, it has been observed that wars sometimes have the effect of accelerating progress of technology to such an extent that an economy is greatly strengthened after the war, especially if it has avoided the war-related destruction. This was the case, for example, with the United States in World War I and World War II. Some economists (such as Seymour Melman) argue, however, that the wasteful nature of much of military spending eventually can hurt technological progress.
In economics, supply is the amount of a resource that firms, producers, labourers, providers of financial assets, or other economic agents are willing and able to provide to the marketplace or directly to another agent in the marketplace. Supply can be in currency, time, raw materials, or any other scarce or valuable object that can be provided to another agent. This is often fairly abstract. For example in the case of time, supply is not transferred to one agent from another, but one agent may offer some other resource in exchange for the first spending time doing something. Supply is often plotted graphically with the quantity provided plotted horizontally and the price plotted vertically.
The United States of America (USA), commonly known as the United States or America, is a country comprising 50 states, a federal district, five major self-governing territories, and various possessions. At 3.8 million square miles, the United States is the world's third or fourth largest country by total area and is slightly smaller than the entire continent of Europe's 3.9 million square miles. With a population of over 327 million people, the U.S. is the third most populous country. The capital is Washington, D.C., and the most populous city is New York City. Forty-eight states and the capital's federal district are contiguous in North America between Canada and Mexico. The State of Alaska is in the northwest corner of North America, bordered by Canada to the east and across the Bering Strait from Russia to the west. The State of Hawaii is an archipelago in the mid-Pacific Ocean. The U.S. territories are scattered about the Pacific Ocean and the Caribbean Sea, stretching across nine official time zones. The extremely diverse geography, climate, and wildlife of the United States make it one of the world's 17 megadiverse countries.
World War I, also known as the First World War or the Great War, was a global war originating in Europe that lasted from 28 July 1914 to 11 November 1918. Contemporaneously described as "the war to end all wars", it led to the mobilisation of more than 70 million military personnel, including 60 million Europeans, making it one of the largest wars in history. It is also one of the deadliest conflicts in history, with an estimated nine million combatants and seven million civilian deaths as a direct result of the war, while resulting genocides and the 1918 influenza pandemic caused another 50 to 100 million deaths worldwide.
The United States alone has a very complex history with wartime economies. Many notable instances came during the twentieth century in which America's main conflicts consisted of the World Wars, Korea, and Vietnam.
In mobilizing for World War I, the United States expanded its governmental powers by creating institutions such as the War Industries Board (WIB) to help with military production.Others, such as the Fuel Administration, introduced daylight saving time in an effort to save coal and oil while the Food Administration encouraged higher grain production and “mobilized a spirit of self-sacrifice rather than mandatory rationing.” Propaganda also played a large part in garnering support for topics ranging from tax initiatives to food conservation. Speaking on Four Minute Men, volunteers who rallied the public through short speeches, investigative journalist George Creel stated that the idea was extremely popular and the program saw thousands of volunteers throughout the states.
In the case of the Second World War, the U.S. government took similar measures in increasing its control over the economy. The Japanese attack on Pearl Harbor provided the spark needed to begin conversion to a wartime economy. With this attack, Washington felt that a greater bureaucracy was needed to help with mobilization.The government raised taxes which paid for half of the war's costs and borrowed money in the form of war bonds to cover the rest of the bill. “Commercial institutions like banks also bought billions of dollars of bonds and other treasury paper, holding more than $24 billion at the war’s end." The creation of a handful of agencies helped funnel resources towards the war effort. One prominent agency was the War Production Board (WPB), which “awarded defense contracts, allocated scarce resources – such as rubber, copper, and oil – for military uses, and persuaded businesses to convert to military production." Two-thirds of the American economy had been integrated into the war effort by the end of 1943. Because of this massive cooperation between government and private entities, it could be argued that the economic measures enacted prior to and during the Second World War helped lead the Allies to victory.
The United States has been involved in numerous military endeavours within the Middle East and Latin America since the 1960s. Having been in a continuous state of war since the September 11 Attacksand having a military budget over double of its two largest military rivals, some consider the United States to be a war economy or at least a country with an economy largely backed by the Military Industrial Complex.
Germany has experienced economic devastation following both World Wars. While this was not a result of faulty economic planning, it is important to understand the ways that Germany approached reconstruction. In World War I, the German agricultural sector was hit hard by the demands of the war effort. Not only were many of the workers conscripted, but lots of the food itself was allocated for the troops leading to a shortage.“German authorities were not able to solve the food scarcity [problem], but implemented a food rationing system and several price ceilings to prevent speculation and profiteering. Unfortunately, these measures did not have the desired success."
Heading into the Second World War, the Nazis introduced new policies that not only caused the unemployment rate to drop, it created a competent war machine in clear violation of the Treaty of Versailles. The Third Reich implemented a draft and built factories to supply its quickly expanding military. Both of these actions created jobs for many Germans who had been struggling from the economic collapse following World War I. 151 billion 2009 euros)." After World War II, Germany was discovered to have exploited the economies of the countries it invaded. The most important among these, according to historians Boldorf and Scherner, was France and “her highly developed economy… [being] one of the biggest in Europe.” This is further supported when they later reveal how the French economy provided for 11 percent of Germany's national income (during the occupation) which covered five months of Germany's total income for the war. Using extortion and forced labor, the Nazis siphoned off much of France's economic output. For example, during the early months of the Nazi occupation, the French puppet government was forced to pay a "quartering" fee of twenty million Reichmarks per day. Supposedly, the fee was payment for the Nazi occupation forces. In reality, the money was used to fuel the Nazi war economy. Germany employed numerous methods to support its war effort. However, due to the Nazi's surrender to the Allies, it is hard to tell what their economic policies would have yielded in the long term.However, it is worth noting that while unemployment rates plummeted, “by 1939, government debt stood at over 40 billion Reichsmarks (equivalent to
The Marshall Plan was an American initiative passed in 1948 to aid Western Europe, in which the United States gave over $12 billion in economic assistance to help rebuild Western European economies after the end of World War II. Replacing the previous Morgenthau Plan, it operated for four years beginning on April 3, 1948. The goals of the United States were to rebuild war-torn regions, remove trade barriers, modernize industry, improve European prosperity, and prevent the spread of Communism. The Marshall Plan required a reduction of interstate barriers, a dropping of many regulations, and encouraged an increase in productivity, as well as the adoption of modern business procedures.
The Morgenthau Plan by the Allied occupation of Germany following World War II was a proposal to eliminate Germany's ability to wage war by eliminating its arms industry, and the removal or destruction of other key industries basic to military strength. This included the removal or destruction of all industrial plants and equipment in the Ruhr. It was first proposed by United States Secretary of the Treasury Henry Morgenthau Jr. in a memorandum entitled Suggested Post-Surrender Program for Germany.
Nazism and the acts of the Nazi German state profoundly affected many countries, communities, and people before, during and after World War II. The regime's attempt to exterminate several groups viewed as subhuman by Nazi ideology was eventually stopped by the combined efforts of the wartime Allies headed by Britain, the Soviet Union, and the United States.
Victory gardens, also called war gardens or food gardens for defense, were vegetable, fruit, and herb gardens planted at private residences and public parks in the United States, United Kingdom, Canada, Australia and Germany during World War I and World War II. George Washington Carver wrote an agricultural tract and promoted the idea of what he called a "Victory Garden". They were used along with Rationing Stamps and Cards to reduce pressure on the public food supply. Besides indirectly aiding the war effort, these gardens were also considered a civil "morale booster" in that gardeners could feel empowered by their contribution of labor and rewarded by the produce grown. This made victory gardens a part of daily life on the home front.
The term Wirtschaftswunder, also known as the Miracle on the Rhine, describes the rapid reconstruction and development of the economies of West Germany and Austria after World War II. The expression referring to this phenomenon was first used by The Times in 1950.
Military production during World War II includes the arms, ammunitions, personnel and financing which were mobilized for the war. Military production, in this article, means everything produced by the belligerents from the occupation of Austria in early 1938 to the surrender and occupation of Japan in late 1945.
In politics and military planning, a war effort refers to a coordinated mobilization of society's resources—both industrial and human—towards the support of a military force. Depending on the militarization of the culture, the relative size of the armed forces and the society supporting them, the style of government, and the popular support for the military objectives, such war effort can range from a small industry to complete command of society.
The home front covers the activities of the civilians in a nation at war. World War II was a total war; homeland production became even more invaluable to both the Allied and Axis powers. Life on the home front during World War II was a significant part of the war effort for all participants and had a major impact on the outcome of the war. Governments became involved with new issues such as rationing, manpower allocation, home defense, evacuation in the face of air raids, and response to occupation by an enemy power. The morale and psychology of the people responded to leadership and propaganda. Typically women were mobilized to an unprecedented degree.
Military chocolate has been a part of the standard United States military ration since the original Ration D or D ration bar of 1937. Today, military chocolate is issued to troops as part of basic field rations and sundry packs. Chocolate rations served two purposes: as a morale boost, and as a high-energy, pocket-sized emergency ration. Military chocolate rations are often made in special lots to military specifications for weight, size, and endurance. The majority of chocolate issued to military personnel is produced by the Hershey Company.
The reconstruction of Germany after World War II was a long process. Germany had suffered heavy losses during the war, both in lives and industrial power. 6.9 to 7.5 million Germans had been killed, roughly 8.26 to 8.86 percent of the population. The country's cities were severely damaged from heavy bombing in the closing chapters of the War and agricultural production was only 35 percent of what it was before the war.
The home front of the United States in World War II supported the war effort in many ways, including a wide range of volunteer efforts and submitting to government-managed rationing and price controls. There was a general feeling of agreement that the sacrifices were for the national good "for the duration [of the war]."
Alexandre Galopin was a Belgian businessman. He was director of the Société Générale de Belgique, a large Belgian company founded in 1822 by William I, and chairman of the board of the armaments company Fabrique Nationale d'Armes de Guerre. Galopin was behind the Galopin Doctrine, a "lesser evil" (moindre-mal) tactic that allowed industrial development in the occupied Belgium during World War II, under the auspices of the Belgian government in exile. In February 1944, he was murdered by Flemish collaborators from the DeVlag group.
The German economy, like those of many other western nations, suffered the effects of the Great Depression with unemployment soaring around the Wall Street Crash of 1929. When Adolf Hitler became Chancellor of Germany in 1933, he introduced policies aimed at improving the economy. The changes included privatization of state industries, autarky, and tariffs on imports. Although weekly earnings increased by 19% in real terms in the period between 1932-38, average working hours had also risen to approximately 60 per week by 1939. Furthermore, reduced foreign trade meant rationing in consumer goods like poultry, fruit, and clothing for many Germans.
American food policy in occupied Germany refers to the food supply policies enacted by the U.S., and to some extent its dependent Allies, in the western occupation zones of Germany in the first two years of the ten-year occupation of Western Germany following World War II.
The home front during World War I covers the domestic, economic, social and political histories of countries involved in that conflict. It covers the mobilization of armed forces and war supplies, but does not include the military history. For nonmilitary interactions among the major players see Diplomatic history of World War I.
The economic history of World War I covers the methods used by the First World War (1914–1918), as well as related postwar issues such as war debts and reparations. It also covers the economic mobilization of labor, industry, and agriculture leading to economic failure. It deals with economic warfare such as the blockade of Germany, and with some issues closely related to the economy, such as military issues of transportation. For a broader perspective see Home front during World War I.
The United Kingdom home front during World War II covers the political, social and economic history during 1939–1945. See also Timeline of the United Kingdom home front during World War II, Military history of the United Kingdom during World War II and Diplomatic history of World War II.
The Soviet Union took part in World War II from 1941 on wards till the wars end in 1945. At the start of the war, the Soviet Union suffered loss of valuable lands with economic and agricultural potential, great industrial losses and human casualties. This was all caused by the invasion of the Soviet Union by Axis forces in Operation Barbarossa and it resulted in a rapid decline in industrial and agricultural production. This required the country's leadership to take urgent measures to strengthen the nations economy, with a primary focus on the defense industries.
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