Skip to main content Accessibility help
×
Hostname: page-component-586b7cd67f-2plfb Total loading time: 0 Render date: 2024-12-03T19:46:48.758Z Has data issue: false hasContentIssue false

6 - War and the American Economy in the Twentieth Century

Published online by Cambridge University Press:  28 March 2008

Michael Edelstein
Affiliation:
Queens College, City University of New York
Stanley L. Engerman
Affiliation:
University of Rochester, New York
Robert E. Gallman
Affiliation:
University of North Carolina, Chapel Hill
Get access

Summary

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.

Type
Chapter
Information
Publisher: Cambridge University Press
Print publication year: 2000

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Adams, Gordon, The Iron Triangle: The Politics of Defense Contracting (New York, 1981).Google Scholar
Baran, Paul and Sweezey, Paul, Monopoly Capitalism (New York, 1966)Google Scholar
Barro, Robert J., “Government Spending, Interest Rates, Prices and Budget Deficits in the United Kingdom, 1701–1918.” Journal of Monetary Economics 20 (1981)Google Scholar
Barro, Robert J., “The Neoclassical Approach to Fiscal Policy,” in Barro, Robert J. (ed.), Modem Business Cycle Theory (Cambridge, MA, 1989).Google Scholar
Berman, Larry, Lyndon Johnson’s War (New York, 1989)Google Scholar
Berman, Larry, Planning a Tragedy: The Americanization of the War in Vietnam (New York, 1987)Google Scholar
Bernstein, Michael, The Great Depression: Delayed Recovery and Economic Change in America, 1929–1939 (New York, 1987).CrossRefGoogle Scholar
Blum, John Morton, From the Morgenthau Diaries: Years of War, 1941–1945 (Boston, 1967).Google Scholar
Bordo, Michael D. and White, Eugene N., “A Tale of Two Currencies: British and French Finance during the Napoleonic Wars,” Journal of Economic History 51 (1991)CrossRefGoogle Scholar
Bordo, Michael D. and White, Eugene N., “British and French Finance during the Napoleonic Wars,” in Bordo, Michael J. and Capie, Forrest (eds.), Monetary Regimes in Transition (Cambridge, England, 1994)Google Scholar
Brownlee, W. Elliot, “Tax Regimes, National Crises, and State-Building in America,” in Brownlee, W. Elliot (ed), Funding the Modem American State, 1941–1955: The Rise and Fall of the Era of Easy Finance (Washington, D.C., 1996).Google Scholar
Brownlee, W. Elliot, Federal Taxation in America: A Short History (Washington, D.C., 1996)Google Scholar
Burns, Richard D. and Leitenberg, Milton, The Wars in Vietnam, Cambodia, and Laos, 1945–1982 (Santa Barbara, 1983).Google Scholar
Choucri, Nazli and North, Robert C., Nations in Conflict: National Growth and International Violence (San Francisco, 1975)Google Scholar
Clark, John Maurice, The Cost of the World War to the American People (New Haven, 1931).Google Scholar
Clayton, James L., “Statement,” in ,U.S. Congress, Joint Economic Committee, Hearings, The Military Budget and National Economic Priorities, 91st Congress, 1st. Session, Part I, June 1969.Google Scholar
Cooling, B. Franklin, Gray Steel and Blue Water Navy (Hamden, CT, 1979).Google Scholar
Darby, Michael, “Three-and-a-half Million U.S. Employees Have Been Mislaid: or, an Explanation of Unemployment, 1934–1941,” Journal of Political Economy 84 (1976)CrossRefGoogle Scholar
Easterlin, R. A., “Does Economic Growth Improve the Human Lot? Some Empirical Evidence,” in David, P. A. and Reder, M. W., (eds.) Nations and Households in Economic Growth (New York, 1974).Google Scholar
Edelstein, Michael, “Were U.S. Rates of Accumulation in the Twentieth Century Investment or Savings Driven?,” Research in Economic History 13 (1991).Google Scholar
Edelstein, Michael, “What Price Cold War? Military Spending and Private Investment in the United States, 1946–1979,” Cambridge Journal of Economics 14 (1990).CrossRefGoogle Scholar
Friedman, Milton and Schwartz, Anna Jacobson, A Monetary History of the United States, 1867–1960 (Princeton, 1963).Google Scholar
Friedman, Milton and Schwartz, Anna Jacobson, Monetary Trends of the United States and the United Kingdom (Chicago, 1982)CrossRefGoogle Scholar
Goldin, Claudia, “War,” in Porter, Glenn (ed.), Encyclopedia of American Economic History (New York, 1980)Google Scholar
Goldin, Claudia, Understanding the Gender Gap: An Economic History of American Women (New York, 1990).Google Scholar
Gordon, Robert J., “Postwar Macroeconomics: The Evolution of Events and Ideas,” in Feldstein, Martin S. (ed.), The American Economy in Transition (Chicago, 1980).Google Scholar
Hamburger, Michael J. and Zwick, Burton, “Deficits, Money and Inflation,” Journal of Monetary Economics 7 (1981).CrossRefGoogle Scholar
Hammond, Paul Y., “NSC-68: Prologue to Rearmament,” in Schilling, Warner R., Hammond, Paul Y., and Snyder, Glenn H., Strategy, Politics, and Defense Budgets (New York, 1962)Google Scholar
Higgs, Robert, “Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s,” Journal of Economic History 52 (1992).CrossRefGoogle Scholar
Huntington, Samuel P., The Common Defense: Strategic Programs in National Politics (New York, 1961)Google Scholar
Kahin, George McT., Intervention: How America Became Involved in Vietnam (New York, 1986)Google Scholar
Kendrick, J. W., Productivity Trends in the United States (Princeton, 1961)Google Scholar
Kesselman, J. R. and Savin, N. E., “Three-and-a-half Million Workers Were Never Lost,” Economic Inquiry 16 (1978)CrossRefGoogle Scholar
Kidron, Michael, Western Capitalism Since the War (London, 1968).Google Scholar
Kolodziej, Edward A., The Uncommon Defense and Congress, 1945–1963 (Columbus, 1966)Google Scholar
Kuznets, Simon S., “Government Product and National Income,” in Lundberg, Erik (ed.), Income and Wealth (Cambridge, England, 1951)Google Scholar
Lebergott, S., Manpower in Economic Growth: The American Record since 1800 (New York, 1964).Google Scholar
Maxfield, David, “Vietnam War,” Congressional Weekly Report (April 16, 1975).Google Scholar
McMillan, W. Douglas and Beard, Thomas R., “The Short Run Impact of Fiscal Policy on the Money Supply,” Southern Economic Journal 47 (1980).Google Scholar
Millett, Allan R. and Maslowski, Peter, For the Common Defense: A Military History of the United States of America (New York, 1984).Google Scholar
Mitchell, B. R., British Historical Statistics (Cambridge, England, 1988).Google Scholar
Mueller, John E., War, Presidents and Public Opinion (Lanham, MD, 1985).Google Scholar
Nordhaus, William and Tobin, James, “Is Growth Obsolete?” in ,National Bureau of Economic Research, Fiftieth Anniversary Colloquium (New York, 1972)Google Scholar
Offer, Avner, The First World War: An Agrarian Interpretation (Oxford, 1989).Google Scholar
Olson, James S. and Roberts, Randy, Where the Domino Fell: American and Vietnam 1945–1990 (New York, 1991)Google Scholar
Rockoff, Hugh and Mills, Geofrey, “Compliance with Price Controls in the United States and the United Kingdom during World War II,” Journal of Economic History 47 (1987).Google Scholar
Rockoff, Hugh, Drastic Measures: A History of Wage and Price Controls in the United States (New York, 1984).CrossRefGoogle Scholar
Stevens, Robert Warren, Vain Hopes. Grim Realities (New York, 1976).Google Scholar
Studenski, Paul and Krooss, Herman E., Financial History of the United States (New York, 1963).Google Scholar
,U.S. Bureau of the Census, Historical Statistics of the United States, Colonial Times to 1970 (Washington, D.C., 1975).
,U.S. Department of Commerce, Bureau of Economic Analysis, The NIPA of the U.S., 1929–1982. Statistical Tables (Washington, D.C., 1986).
,U.S. Department of Commerce, Bureau of the Census, Defense Indicators, 1968–1973 (Washington, D.C., no date).
Wein-stein, Michael, Recovery and Redistribution Under the NIRA (New York, 1990)Google Scholar
Witte, John, The Politics and Development of the Federal Income Tax (Madison, 1985).Google Scholar

Save book to Kindle

To save this book to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×