State the factors responsible for the economic advancement of the USA after the end of the First World War?
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Answer:
To explain the outcome of WWI economic historians stress the increasingly mechanised nature of warfare, waged for years on end by massed forces. They emphasise things like numbers of tanks, guns, ships, airplanes and ammunition, or aggregate indices of munitions production. Military historians object that this leaves no room for factors such as leadership, discipline, heroism, or villainy.
The opposition between cold figures and hot blood is to some extent false. Leadership and psychology clearly did matter, but less so than in previous eras. In WWI, multi-million man armies took the field and remained there for years, giving and taking appalling losses without disintegrating. In these circumstances of ‘total war’, numbers of men and the volume of supplies played the decisive role (Chickering and Förster 2000). Before 1914, Total War was not possible because people lived much closer to subsistence. Too many people were required to labour in the fields and workshops just to feed and clothe the population, and it cost too much for government officials to count, tax, and direct them into mass combat. The Total War era lasted only between 1914 and 1945, after which point it became impossible again as nuclear weapons made devastating military force available to any small rich or large poor country.
Which factors mattered most?
Some economic historians stress the importance of size. Ferguson (1998) argues that given the overwhelming size advantage of the Allies in terms of population and production in 1914, the outcome of World War I was inevitable. He also concludes that given the scale of their advantage, the Allies should have won quickly. He sees the Allies as squandering their advantage through mismanagement, with economic factors only coming into play after much time had passed.
But the quality as well as the quantity of national resources mattered. The main factor in quality was the level of peacetime development, which can be measured by the average real income per capita. Richer countries were able to mobilise production, public finance, soldiers, and weapons in disproportion to their economic size; the level of development acted as a multiplier of size. For Britain, control of the vast but impoverished territory of India mattered little compared with access to the rich markets of the US.
Allies versus Central Powers: The quantity and quality of resources, 1914-1918
Quality is measured by GDP per capita expressed in international dollars at 1990 prices. In 1914 the Triple Entente of the UK, France, and Russia was augmented by Serbia and Japan plus the British and French colonies and Dominions, while the Central Powers of Austria-Hungary and Germany were joined by the Ottoman Empire. In 1916 the Central Powers were joined by Bulgaria and the Allies were joined by a second wave of countries including Italy, Portugal and Romania (though Italy defaulted on its treaty obligations). By the beginning of 1918 the Allies had lost Russia to the 1917 Revolution, but had been joined by US and a further wave of countries.
The Triple Entente was hampered by the low level of development in the British and French colonies, but also by Russian economic backwardness. For their part, the Central Powers were held back by low levels of development in the Ottoman Empire, Bulgaria, and also the Hungarian half of the Habsburg Empire. The output of less developed economies was less available for fighting because:
- much of it was needed to meet subsistence requirements of the population,
- it was difficult to mobilise because of the lack of development in the government administration, and
- in the case of colonies, it was also difficult to mobilise because of its distance from the main theatres of war.