Tanner Hollrith
Mr. Reuter
Economics
17 March 2014
How War Affects Economy.
World War I and II are the greatest and
the worst wars that ever happened. The U.S. was involved in both and the
economy changed drastically. Wars should never happen, but when they do the
economy changes in both directions.
During the First World War, the United
States was neutral for most of the war. They didn’t start fighting until 1917
but they were selling U.S. good to the European allied countries. This was good
for the U.S. because selling their product makes the country grow in money. In
1917 the U.S. joined and that meant more jobs were made. The unemployment rate
declined from 7.9 percent to 1.4 percent in the time period. During the Second
World War the United States didn’t enter until 1941 when Pearl Harbor was
attacked. All of the men went to war and this is the time period when women
took over. Women took the jobs that men had. This was the solution for the
unemployment rate because women finally got jobs instead of staying home. This
graph below shows the unemployment rate during the two world wars. The big drop
in unemployment rate is caused from World War 2.
Also when it comes to war, the goods people need to
survive become scarce. During war time, the supply and demand curve changes.
The supply decreases and the demand increases. During World War 2 rationing and
price control impacted the civilians that made most families have trouble
providing food for their family. Rationing and price control was invented to not
have the same problem that occurred during World War 1. Rationing is this U.S. government making the
distribution of goods fair for everyone because the resources are scarce. Some
goods that are rationed are gasoline,
tires, sugar, meat, silk, shoes, and nylon. Citizens get booklets and tokens so
they can buy what they want for the ones that are rationed. Rationing is a way
to decreases inflation that occurred in the First World War. The war had to be
paid and inflation occurred. Prices increased and the value of money changed. Every
war causes come inflation but not at an extreme as the one from World War 1.
Below is a picture of what a ration booklet looked like.
When war occurs, it just doesn’t affect the
people the fight. The economy affects in a good way and a bad way. The great
depression is the worst drop in the stock exchange in the history of United
States. The economy was hit so hard, that according to gwu.edu a glossary
on The Great Depression “By spring of 1933, when FDR took the oath of office,
unemployment had risen from 8 million to 15 million”. But one of the ways that
the United States did to help the Great Depression to end is the start of World
War 2.
These two
wars changed the way the economy is today. These are just two wars that the
United States were a part of. Countries need money for wars and they will find
ways to get it. Also supplies are needed and they will make more jobs or ration
goods. Either way, wars impact differently. It could either be good or bad it
depends on the country fighting.
Works Cited
"The Economics of World War
I." National Bureau of Economic Research. N.p., n.d. Web. 16 Mar.
2014. <http://www.nber.org/digest/jan05/w10580
"The Great Depression (1929-1939).
17 Mar. 2014.
<http://www.gwu.edu/~erpapers/teachinger/glossary/great-depression.cfm>.
While in many history classes we have discussed the physical, emotional, and mental effects of war, it is interesting to examine the economic effects it posses upon a country. Especially during a time of total war, a country puts all of its resources into producing products solely towards war efforts. Even for countries across the ocean, like the US in World War I, the woman and children left behind are greatly affected. A trade off of producing everything for the war, is that all the woman and children left behind need to sacrifice what they would normally be able to buy, because it is no longer on the market. As well, the demand for woman and children in factories greatly increased. I like how you looked into the effect of the post war—the great depression. This goes to show that every choice has a trade off—war efforts are expensive for an entire country.
ReplyDelete