Supple Flashcards
Why is the “Great War” frequently seen as a great transformation?
Destabilizing the global economy, transforming the balance of international economic and financial power, and radically changing the economic and social role of the state.
Is it fair to see the “Great War” as a great transformation, even if, “in a longer perspective … some of the relevant institutional and geopolitical shifts … were already prefigured in the world before 1914”?
Yes. “Nevertheless, the global economy did enter a new and dramatically destabilized stage. … The war itself therefore had a substantial and abrupt influence on economic performance and global stability. … the war helped re-shape the course of world economic and social history and therefore, the evolution of capitalist institutions.”
What was the German strategy in 1914?
To take the initiative in the West to secure a quick victory.
Why was it important for the Germans to secure a quick victory?
If they could not secure a quick victory, then “the outcome of the war would be determined by the relative economic strengths of nations.” “In November 1914, the combined GDP of the United Kingdom, France, and Russia exceeded that of their opponents, Germany, Austria-Hungary, and the Ottoman Empire, by about 33 per cent.”
Why were markets “the enemy of national survival”?
“The prolonged immobilization of mass armies in the battlefield led to insatiable demands for labor and munitions.” Presumably if the government had to pay market wages to the soldiers and to the workers producing munitions and to the companies (if they were indeed private enterprises) producing the munitions, they might lose on the battlefield, and the nation not survive.
Did pre-war planners accurately estimate the requirements for munitions?
No. For example, the French and British expended munitions at a rate 6-10 times their estimates.
How much did government expenditures grow during the war?
Germany and France grew government shares of GDP from 10% of GDP to 50%. Britain from 8% to 33%. The largest percentage of percentage increase was the USA (2% to 17%)
What effect did the large increase in government expenditures and the large mobilization have on the economy?
“Governments were bound to assume much more explicit roles in the organization and management of economic activity.”
Which economy failed first?
The Russian, which began to collapse in 1916.
Why was government intervention necessary?
Because otherwise, “shortages or excessive costs” would “undermine the flow of essential supplies to armies and civilians.”
What were some financial impacts from the war.
(1) As government expenditures rose to 40-60% of GDP, taxes and public borrowing greatly increased. These never returned to pre-war levels (2) Capital markets came under greater influence (or outright control) of governments (3) Monetary, stock, and currency markets became tightly controlled.
What is the basic resource in any war?
Manpower.
How did the need for manpower raise conflicts?
The wartime mobilization reduced the availability of workers (for example coal miners in Britain, and munitions workers in France). This mean the government had to become involved in who went to war and who produced war materials.
Which nations centralized transport decision-making?
All of them. Even the USA controlled its merchant shipping before the war and nationalized its rail network. However, “Control depended on cooperation, and cooperation had to be purchased.” For example, in Britain, pre-war profits were guaranteed. So many businesses prospered.
Were there general outcries from the businesses about these new tighter regulations?
No. While the details differ, businesses did not complain about wartime arrangements. While the prices they could charge the Government were often capped, so were the prices they paid for their raw materials because supplies were to be rationed according to strategic need rather than through the price system. While they might have been restricted from selling to consumers, the Government purchase often guaranteed them a profit. “Open competition was an early casualty of the war.”
