The Impact of WWII on America's Political
Economy
Economic issues of war
- inflation
- shortage of consumer goods
- higher demand for labor
- increased supply of money
- financing the war
- funding industrial expansion
- international trade
- concentration of economic power
- alliance between state and defense industry
Roosevelt and war mobilization
- multiple movilization agencies
- sought to maintain executive power
- Defense Commission and Office of Production
Management
- defense production
- civilian production - 1941
- War Productions Board - single authority - limited
success
requirements civilian and military
determine production capacities of economy
allocate materials
Organizing for war mobilization
- involvement of business
- "dollar-a-year-men"
- government agencies
- industrial advisory committees
- complex administrative system
- multiple government agencies
- difficult to coordinate
- resistance from business and Armed Forces
to control
Inflation
- shortages - material, labor
- Office of Price Administration - set prices
- lacked control over wages and agriculture
Labor
- expanding supply of labor
- internal migration
- shift from nagriculture to industry
- participation by women and elderly
- conflicts over wages
- Little Steel "formula"
- United Mine Workers
Financing the war
- taxation - increased to provide 75% of federal
revenues
- lower personal exemptions
- higher corporate taxes
- payroll tax - 1943; forgiveness of 1942 taxes
- borrowing
- bonds
- low interest to pay for war debt
- shortages of financing capital for industry
Financing industry
- direct government financing of war-plants
- government construction and ownership of
shipyards, aircraft production, other industries
- government contracts for small business
Impact of war on economic concentration
- advisory committees over-represented large
corporations
- reliance on large contractors
- defense contracts supported large corporations
- growth of military-industrial complex
- sale of government facilities to large corporations
- slow reconversion of industry benefited large
corporations
Return to main page