Quotation of the Day…

Tweet

… is from page 372 of economic historian Alexander Field’s excellent 2022 book, The Economic Consequences of U.S. Mobilization for the Second World War:

In 1948 the United States stood astride the world, both militarily and economically. Japan, having endured two atomic bombings and the earlier fire-bombing of Tokyo and most of its larger cities, lay prostrate. Germany and much of Europe were in ruins. The Soviet Union had suffered 20 million war-related deaths. England had sold off much of its remaining overseas economic empire to pay for military spending. The United States appeared relatively unscathed, and it was easy to connect the country’s success in producing hundreds of thousands of aircraft and other military hardware with the level of its potential output after the war and the large productivity gap between the United States and the rest of the world then evident. But the connection is a mirage. The economy’s postwar capabilities are almost entirely attributable to conditions already in place in 1941.

DBx: Diverting physical and human capital into the production and use of military materiel of course is necessary to wage effective war. But any such diversion will worsen rather than improve the operation of the economy at producing and distributing non-military goods and services. This reality as it played out in the United States just before, during, and after the Second World War is amply and carefully documented in Field’s book. The fact that waging war is not a source of economic growth or prosperity is confirmed – contrary to countless fables – by America’s experience with WWII.