Appendices - Hirohito's War
ECONOMICS OF THE PACIFIC WAR – THE NEW DEAL MOBILIZED
Was the Depression a boon or hindrance to US War Mobilization? In looking at the US economy in the context of the operation and eventual success of the prosecution of World War II, it is interesting to note that in terms of the development of US military capabilities the depression of the 1930s had good and bad consequences.
First, although the 1930s has often been thought of as a lost decade in the history of the US economy, in reality it was a decade of rapid development in technology and applied engineering. These factors that significantly raised the US economy’s potential for economic growth, combined with a large amount of spare capacity in the US economy, laid the preconditions that made possible the rapid expansion of the American war economy after 1941. As Alexander Field convincingly argues in Economic Growth and Recovery in the United States: 1919 – 1941 , the 1930s “made possible the successful prosecution of the Second World War.”51
The hindrance of the depression was that despite technological advances in the commercial sectors, very little had been transferred to the military sector. Desperately under resourced, by the time that Roosevelt woke up to the escalated international crisis in 1939, US defense capabilities were wholly inadequate both in scale and technological sophistication. The United States, by far the world’s largest economy in 1939, was a military pigmy with armed forces less powerful than nations such as Belgium and Holland. From this date onwards the US began a desperate rush to play catch-up.
By 1941, when Japan’s intent to adopt the ‘go-south’ strategy became clear, combined with its signing of the tripartite pact with Hitler, it led Roosevelt to the conclusion that war was all but inevitable. During the course of that year the President pursued two strategies. He attempted to arm twist Japan into retreating from their ‘go-south’ strategy and in particular their invasion and occupation of French Indochina. In addition he demanded their pull back from China. Both he and the Japanese knew that the US bargaining chip was only the potential, not the actuality of US military power.
When Japan’s access to oil was embargoed in July 1941, an act of war in all but name, Roosevelt and his advisers knew that Japan would almost certainly have to fight; FDR knew that the possibility of a complete surrender by Japan to US terms was the most unlikely of long shots. At best Roosevelt hoped to gain 4-6 months delay to the opening of hostilities that would give time to propel the US economy further along the road to rearmament. Even spring or summer of 1942 would have been too soon however, because it took until the first quarter of 1943 for the avalanche of war material to arrive. What was most remarkable in the economic transformation that was eventually achieved was that America managed to move to a war economy more rapidly than its totalitarian enemies.
In spite of the intrigue, machinations and power games, which was the grist of daily life in Washington during the war, somehow, Morgenthau, Knudson, Baruch, Eberstadt, Nelson, May, Jones, Somervell, Hillman, Ickes, Byrnes and the rest of the bureaucrat ‘Generals’ in Washington managed to cobble together a system that worked. Whatever the politics and internecine feuding involved, the astonishing outcome of the American war machine, as shown by the production and assembly of the largest array of war matériel ever produced, was testament its success. Nonetheless, if the bureaucrats set the preconditions and organized the enabling of war production, America’s astonishing productive advances in World War II were ultimately achieved by the energies of the US private sector and its citizens.
In this transformation, the depression was actually a boon to America. Militarization of its economy was cost free in the sense that spare capacity of labor, capital and equipment could be turned to war endeavor without the difficult ‘guns or butter’ choices faced by Germany or Japan. In spite of much harrumphing by the US press, American citizens were only a little inconvenienced by war, except for the hardships and possibility of death and injury for those serving on the front lines in the army, at sea or in the air. Given that some 12.2m Americans served in the armed forces in World War II of which just over 400,000 died there was a 1:30 chance of not surviving war. For the twenty-nine out of thirty who survived, as the war progressed, living standards actually rose, particularly after 1943.
Rearmament and increased prosperity were also achieved with minimal impact on the level of inflation. In part this was enabled by the absorption of the spare capacity provided by the depression and also by the remarkable productivity gains achieved through the widespread application of technology and the techniques of mass manufacture developed largely in the auto industry. Exceptionally in World War II, unlike in subsequent wars in Korea and Vietnam, there were no deleterious consequences for living standards to turn American citizens against its foreign military expedition to regain its imperial assets and to crush Japan, its Asian geopolitical competitor. Almost uniquely in the annals of warfare, America’s militarization of its economy and the fighting of a global war from 1941 - 1945, on a scale never seen before and unlikely ever to be seen again, was achieved with a rising tide of economic benefit to its citizens.