The Impact of WWII on America's Political Economy

Organizing for war mobilization

• involvement of business

  • "dollar-a-year-men"

  • government agencies

  • industrial advisory committees

• complex administrative system

  • multiple government agencies

  • difficult to coordinate

  • resistance from business and Armed Forces to control

Inflation

• shortages - material, labor

• Office of Price Administration - set prices

  • lacked control over wages and agriculture

Labor

• expanding supply of labor

  • internal migration

  • shift from nagriculture to industry

  • participation by women and elderly

• conflicts over wages

  • Little Steel "formula"

  • United Mine Workers

Financing the war

• taxation - increased to provide 75% of federal revenues

  • lower personal exemptions

  • higher corporate taxes

  • payroll tax - 1943; forgiveness of 1942 taxes

• borrowing

  • bonds

  • low interest to pay for war debt

• shortages of financing capital for industry

Financing industry

• direct government financing of war-plants

• government construction and ownership of shipyards, aircraft production, other industries

• government contracts for small business

Impact of war on economic concentration

• advisory committees over-represented large corporations

• reliance on large contractors

• defense contracts supported large corporations

• growth of military-industrial complex

• sale of government facilities to large corporations

• slow reconversion of industry benefited large corporations