Michael Edelstein

War and the American Economy in the Twentieth Century

INTRODUCTION On four occasions during the twentieth century major international confrontations led American society to shift substantial amounts of labor, capital, and technology from peacetime employments to production for national defense and international war: World War I, 1917–1918; World War II, 1941–1945; the Korean War, 1950–1953; and the Vietnam War, 1964–1973. Significant resources were also committed to national defense during the four decades of the Cold War, 1947–1989. With the exception of the Civil War, the typical nineteenth-century share of military expenditures in U.S. gross national output, expenditure, and income (hereafter GNP) was well below 1 percent. Conquering and pacifying the Western regions of the nation and defending the lengthening land and sea borders were the principal aims of nineteenth-century national security policy. U.S. foreign policy deliberately sought to insulate the nation from the international conflicts of the imperial European nations. In the last quarter of the nineteenth century several factors began to change American national security policy. First, American overseas trade and investment interests expanded; as the last continental frontiers were settled, overseas economic opportunities gained attractiveness. Second, the major European powers expanded their imperial rule in Africa and Asia, areas where the United States heretofore had had relatively unfettered, though largely untapped, trade access. Finally, the major European powers became involved in a naval arms race. In the mid-1880s the U.S. Congress began to appropriate substantial funds for heavily armored and gunned naval vessels to patrol the Atlantic and Pacific Oceans thousands of miles off the North American shoreline.

The Determinants of U.K. Investment Abroad, 1870–1913: The U.S. Case

Perhaps because the world had never before or since seen such a large proportion of national income devoted to accumulating overseas assets, the processes of British accumulation in the period from 1870 to 1913 have long been given disproportionate attention in the study of modern British economic history. Calculations based on C. H. Feinsteins latest studies of U.K. income, expenditures and product suggest that roughly half of the nations annual savings took the form of net foreign lending during these years, savings averaging slightly less than ten percent of net national income. Undoubtedly, interest in these matters has been further augmented by the intriguing problem of the United Kingdoms loss of world leadership in both industrial output and per capita income during these same years.

The size of the U.S. armed forces during World War II: Feasibility and war planning

The size of the American armed forces in World War II resulted from early decisions which reflected the nature of the threat, the capital intensity of American combat strategy, the immediate need to aid the heavily engaged Allies, and the degree of American popular commitment. A key decision followed the feasibility dispute of 1942. In this dispute the immense supply demands of the President, the War Department and the Navy Department were challenged by the GNP and labor force analysis of Simon Kuznets and Robert Nathan of the War Production Board. Based on an examination of War Production Board documents, this paper shows how Kuznets and Nathan used the infant theory and practice of GNP accounting to frame the case for the infeasibility of the first war plans. Kuznets and Nathan not only had an immediate impact on war spending in 1942 and 1943 but the standard of living constraint that they identified remained a crucial element in the economic shape of Americas entire war.

Foreign Finance in Continental Europe and the USA, 1815-1870: Quantities, Origins, Functions, and Distribution.

Preface 1. Introduction 2. France 3. Russia 4. Austria and her neighbours 5. Spain 6. United States 7. Conclusion