War has always been a costly endeavor, and World War II was the most expensive war in human history. The economic cost of World War II greatly changed the world by altering the power structure of the world. For hundreds of years, the old European powers like England, France, Germany, and Italy had controlled most of the world's military power and economic resources. During the war however, these European countries spent about $958,275,000,000 (nine hundred fifty-eight billion dollars) on war production. America's spending at $341,491,000,000 is roughly one-third of what all of Europe spent on the war (Above data is from table below).This represents an immense shift as America was able to spend such vast quantities on the war, more than any other country in the world, and remained a world economic power after the war ended, while many of the old powers of Europe declined during the postwar period. This revolutionary modification to the world order still plays a role in world politics and economics today, a testament to the force of change the war created.
One reason for this re-adjustment of world power was that America suffered very little damage to its infrastructure during World War II outside of the Pearl Harbor attacks. In Europe where the war was fought however, many countries suffered near-debilitating damage to public infrastructure through bombings and artillery strikes. For example, the Battle of Britain was a prolonged German bombing campaign of targets of interest in southern England to weaken it for an assault. "During the Blitz more than 2,000,000 houses were destroyed. 60,000 civilians were killed; a further 87,000 were seriously injured. Many of these were women and children - indeed, during the early years of the war civilians were at greater risk than combatants" (BBC). The destruction of so many residences greatly impeded recovery after the war, resulting in England, among other nations to lose some power after the war. In Germany, Allied bombings destroyed far more nearly flattening several cities. "The raids left more than 7 million people homeless; approximately 600,000 civilians died and approximately 850,000 civilians were injured. AAF raids also destroyed or heavily damaged approximately 20 percent of the total housing stock in nationwide and 45 percent of the housing stock in the large cities. In Wurzburg, for instance, 89% of built-up area was destroyed, while the figure in Remscheid and Bochum was 83%, in Hamburg and Wuppertal 75%"(Akbulut-Yuksel 7). These numbers are extremely high, and damages similar to this that occurred in other countries easily explains how the economies of these countries were nearly ruined.
In addition, there were several economic costs related to the war that changed the balance of power in the world by making America stronger. Firstly, to pay the $341,491,000,000 America spent on the war, the citizens were taxed. During this period, the tax rates were the highest the U.S. had ever seen. "In 1944-45, “the most progressive tax years in U.S. history,” the 94% rate applied to any income above $200,000" (Scranton 2). For reference, tax rates today are around 20% in the U.S.. This was an economic cost for the people that was a direct result of the war. This made America stronger by creating a better union between the people and the government and increasing the power of the government. It was costly for the people but made them better on the whole. Also, many substances were rationed during the war, such as cloth, meat, oil, rubber, butter, grease, tin, and aluminum. "War ration books and tokens were issued to each American family, dictating how much gasoline, tires, sugar, meat, silk, shoes, nylon and other items any one person could buy. Across the country 8000 rationing boards were created to administer these restrictions. Even chicken wire fencing was rationed. A wartime edition of the American Woman's Cook Book even contained revised recipes and gave advice on dealing with food shortages" (Ames Historical Society). This kind of restriction almost seems autocratic, but the people's sacrifice helped strengthen America's military power and caused great change in American culture by creating an economic boom of postwar consumerism after the war ended. Finally, an example of how the world economy was changed by the war was the Marshall Plan. The Marshall Plan was an American initiative to pour money into the rebuilding effort of Europe. European countries had to sign up to receive funds to bolster their recovery efforts. "Between 1948 and 1951, the United States contributed more than thirteen billion dollars (nearly $100 billion at present-day U.S. prices) of economic and technical assistance toward the recovery of sixteen European countries which had joined in the Organization for European Economic Co-operation" (George C. Marshall Foundation). Just fifty years before that, the idea of the U.S. giving charity funds to the all-powerful European empires such as England and France would have been laughable, nay, unthinkable before the middle of the twentieth century. The economic costs of the war greatly effected the world through the rearrangement of the economic power in the world.
One reason for this re-adjustment of world power was that America suffered very little damage to its infrastructure during World War II outside of the Pearl Harbor attacks. In Europe where the war was fought however, many countries suffered near-debilitating damage to public infrastructure through bombings and artillery strikes. For example, the Battle of Britain was a prolonged German bombing campaign of targets of interest in southern England to weaken it for an assault. "During the Blitz more than 2,000,000 houses were destroyed. 60,000 civilians were killed; a further 87,000 were seriously injured. Many of these were women and children - indeed, during the early years of the war civilians were at greater risk than combatants" (BBC). The destruction of so many residences greatly impeded recovery after the war, resulting in England, among other nations to lose some power after the war. In Germany, Allied bombings destroyed far more nearly flattening several cities. "The raids left more than 7 million people homeless; approximately 600,000 civilians died and approximately 850,000 civilians were injured. AAF raids also destroyed or heavily damaged approximately 20 percent of the total housing stock in nationwide and 45 percent of the housing stock in the large cities. In Wurzburg, for instance, 89% of built-up area was destroyed, while the figure in Remscheid and Bochum was 83%, in Hamburg and Wuppertal 75%"(Akbulut-Yuksel 7). These numbers are extremely high, and damages similar to this that occurred in other countries easily explains how the economies of these countries were nearly ruined.
In addition, there were several economic costs related to the war that changed the balance of power in the world by making America stronger. Firstly, to pay the $341,491,000,000 America spent on the war, the citizens were taxed. During this period, the tax rates were the highest the U.S. had ever seen. "In 1944-45, “the most progressive tax years in U.S. history,” the 94% rate applied to any income above $200,000" (Scranton 2). For reference, tax rates today are around 20% in the U.S.. This was an economic cost for the people that was a direct result of the war. This made America stronger by creating a better union between the people and the government and increasing the power of the government. It was costly for the people but made them better on the whole. Also, many substances were rationed during the war, such as cloth, meat, oil, rubber, butter, grease, tin, and aluminum. "War ration books and tokens were issued to each American family, dictating how much gasoline, tires, sugar, meat, silk, shoes, nylon and other items any one person could buy. Across the country 8000 rationing boards were created to administer these restrictions. Even chicken wire fencing was rationed. A wartime edition of the American Woman's Cook Book even contained revised recipes and gave advice on dealing with food shortages" (Ames Historical Society). This kind of restriction almost seems autocratic, but the people's sacrifice helped strengthen America's military power and caused great change in American culture by creating an economic boom of postwar consumerism after the war ended. Finally, an example of how the world economy was changed by the war was the Marshall Plan. The Marshall Plan was an American initiative to pour money into the rebuilding effort of Europe. European countries had to sign up to receive funds to bolster their recovery efforts. "Between 1948 and 1951, the United States contributed more than thirteen billion dollars (nearly $100 billion at present-day U.S. prices) of economic and technical assistance toward the recovery of sixteen European countries which had joined in the Organization for European Economic Co-operation" (George C. Marshall Foundation). Just fifty years before that, the idea of the U.S. giving charity funds to the all-powerful European empires such as England and France would have been laughable, nay, unthinkable before the middle of the twentieth century. The economic costs of the war greatly effected the world through the rearrangement of the economic power in the world.
Wartime Expenditures During the Second World War 1939-1945
|
Country
U.S.A. Germany Soviet Union China United Kingdom Canada Italy Japan France Belgium Poland Netherlands Latin American countries (total) Greece Yugoslavia |
Billions USD
$ 341.491 $ 270.000 $ 192.000 $ 190.000 $ 120.000 $ 15.680 $ 94.000 $ 56.000 $ 15.000 $ 3.250 $ 1.550 $ 0.925 $ 1.000 $ 0.220 $ 0.200 |
The table above outline the approximate expenditures of various world nations during World War II. The U.S.A. spent the most on the war, at less than 350 billion dollars. All together, this table, which includes more than 15 countries, totals 1.299 trillion dollars. That's $1,299,766,000,000 for reference.
Table courtesy of http://ww2-weapons.com/History/Production/
Table courtesy of http://ww2-weapons.com/History/Production/
Left: Destruction in downtown Coventry, England from German bombs. Hundreds of homes were destroyed.
Left: Bombed out ruins of Frankfurt, Germany. Two young girls cart their belongings away from their destroyed home. Roughly 68% of the city was ruined by Allied bombings.
Left: U.S. Army officials meet with people in poverty stricken post-war Lorient, France. In the background, the shells of buildings watch over the survivors.
