The Economic Consequences of U.S. Mobilization for the Second World War

War is not always good for long-term growth, as manufacturing productivity declined between 1941 and 1945 due to changes in the output mix and resource shocks from enemy action. The war forced a shift away from producing goods in which the country had a great deal of experience toward those in which it had little, and learning by doing was only a partial counterbalance to the intermittent idleness and input hoarding that characterized a shortage economy. The conflict distorted human and physical capital accumulation, and once it ended, America stopped producing most of the new goods. U.S. world economic dominance in 1948 was due less to the experience of making war goods and more to the country's productive potential in 1941.

Format: Hardback
Length: 472 pages
Publication date: 22 November 2022
Publisher: Yale University Press

Many people hold the view that, despite its destructive nature, war can ultimately promote long-term economic growth. This perspective is often supported in the case of the United States, with the Second World War being cited as a triumph of production and productivity. However, Alexander Field's research reveals that manufacturing productivity actually declined between 1941 and 1945, primarily due to changes in the output mix and resource shocks caused by enemy action, such as limited access to natural rubber and petroleum on the Eastern Seaboard. The war necessitated a shift towards producing goods in which the country had limited experience, rather than relying on its extensive expertise.

While learning by doing was a partial counterbalance to the intermittent idleness and input hoarding that characterized a shortage economy, it was not enough to boost productivity. The conflict distorted the accumulation of human and physical capital, and after the war ended, the United States ceased producing most of the new goods. The war also temporarily halted basic scientific research and the ongoing development of civilian goods.

It is important to note that U.S. world economic dominance in 1948 was not solely attributed to the experience of making war goods. Rather, it was more influenced by the country's productive potential in 1941. This highlights the complex interplay between war, economic growth, and technological advancements.

Weight: 814g
Dimension: 165 x 242 x 33 (mm)
ISBN-13: 9780300251029