Wartime Economy

It has been said that here in the US, our economy works best on a "wartime" footing, and is mostly unsustainable during peace time.

Looking back to WWII, it's easy to see the basis of this position.

Despite the almost-continual crises of the civilian war agencies, the American economy expanded at an unprecedented (and unduplicated) rate between 1941 and 1945. The gross national product of the U.S., as measured in constant dollars, grew from $88.6 billion in 1939 — while the country was still suffering from the depression — to $135 billion in 1944. War-related production skyrocketed from just two percent of GNP to 40 percent in 1943

In 1944, unemployment dipped to 1.2 percent of the civilian labor force, a record low in American economic history and as near to "full employment" as is likely possible

source

As we emerged from the war, we were riding high. Personal per-capita income was up, vast fortunes were made (the morality of which have been oft discussed here), the Depression was a distant memory (to be fair, there was the inevitable recession as industry came off of the wartime footing, but nothing to compare with the Depression), we were officially a "superpower.

Fast forward to today.

Although we are involved in at least two wars (Afghanistan and Iraq), and who knows how many other, lesser military involvements around the world, our economy is obviously tanking. It looks to me that only a handfull of companies are making profit off of military contracts, keeping the money "in the family" as it were. Large corporations are going bankrupt, unemployment is on the rise, wages are going down.

Obviously, most military production is in the hands of the high-tech world, but even there it seems to be just the chosen few who are making the money.

It seems to me that, even though we are at war, the economy is most definitely not benefitting from any "wartime footing". In fact, things seem to moving in the opposite direction, with the rich getting richer and the common man getting deeper in the hole.

So the question here, obviously, is why? Why is being at war not helping the economy like WWII? Around here, the pat answer would be "because that's how the PTB want it". That could very well be. It could also be the fact that there are more huge corporations that cover more of what the military needs as opposed to the early '40s, so there's not so much of a "spreading the wealth" effect happening. It could have a lot to do with the way the banking/credit industries are set up now, and their being tied more closely to those who give and get the military contracts.

It could be a lot of elements, tied together in a sinister web of greed, power, and corruption (cue "Phantom of the Opera" music). On the other hand, it could be a reflection of the difference in public support between then and now.

Whatever the reasons (and I would be interested to hear your opinions of the reasons), those who maintain the the US economy is only viable on a wartime basis should perhaps re-think that position, because it doesn't seem to be working out to well in these times of ours.

edit:typo




[edit on 26-6-2009 by subject x]

The face of War has changed, a major contributory factor towards making money off of a war would be getting the populace involved ie: a draft - unemployment goes down as the economy gears towards the war machine. Lots of the draftees aren't coming back and most of them are going to be working class people, not the rich.

War is now high technology coupled with minimal troops, most fighting these days is on a guerilla basis as opposed to old-fashioned field warfare, so the emphasis is on small, highly trained units.

in 1945 the US population was 132,481,000 and there were 7,994,750 soldiers in the army (according to wiki answers.) that's about 5% employment in the army alone. it makes a big dent in unemployment.

then you have to factor in the fact that in 1945 most women wouldn't be considered part of the work force, in some states i don't think black people were included either, and as such, they wouldn't be included in unemployment figures.

Hey, thanks for responding, Jokei! I was sure that this thread was doomed to sink to the bottom amid the swirling chaos of the Michael Jackson maelstrom.

I take it that you believe that the "economy is only viable on a wartime footing" concept is a thing of the past? I would have to agree with you on that one, and I think you make some good points as to the reasons.

I also think it might have something to do with the that we are not nearly as production oriented a country as we were in the '40s, and that production was where most of the money was made.



[edit on 26-6-2009 by subject x]

Yeah, totally agreed. Much more of the economy is geared towards "white-collar" work - IT and service industries.

My own opinion, but I think there will be a war coming to solve a lot of the economic issues, but it'll be a war against the people.

reply to post by pieman

Yes, those numbers would definitely add to the employment figures, but as the military has never been the place for the average fella to get rich, it wouldn't have much to do with the GNP or personal per-capita income increases.

As I'm sure you know, women were a huge part of the workforce in WWII America. "Rosie the riveter" was well known to all from posters that encouraged women to go to work in the defense industry. They were practically another army, working on the home front to see that our soldiers were equipped with whatever they needed.

Thanks for replying!

Originally posted by jokei My own opinion, but I think there will be a war coming to solve a lot of the economic issues, but it'll be a war against the people.

Interesting thought. How do you figure a war against the people would solve the economic issues? I could see that, after such a war, there would be less people to fill the available jobs which would make a dent in the unemployment numbers. But at the same time, the people that the war would be against are the same people who would be doing the work that made the money for the companies, and I don't see a lot of people going to work while a war was being waged against them, most especially I don't see them working for the same huge interests that would be attacking them.

This is, of course, assuming an actual shootin' war, not a legislative assault.