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So World War II is one of the pivotal events in human history.
And it is one of the biggest events in human history, by any measure.
Millions-- tens of millions-- of human beings die in World War II.
And the lives of billions of human beings
would be indelibly affected by World War II, what happened in World War II,
and how it turned out.
So, of course, we could teach a whole course on World War II
and we would still be only scratching the surface
of the things that happened, and the consequences that
came out of World War II.
But maybe we could look, just for a couple of minutes,
at the way that World War II shapes American capitalism.
American capitalism is very important for World War II.
Let me just give you a few of the key points of why that is so.
First of all, American capitalism, particularly
American industrial capitalism organized by the government,
is far better than any other economy-- than any other variant of capitalism
or socialism or anything like that-- at producing war material.
And that, in turn-- the power of the American industrial economy
to produce an industrial war machine-- is
absolutely crucial to the outcome of the war.
The war would have come out very different without that ability.
And in fact, the Allies might very well not have won.
And the success of American industrial capitalism-- organized
by the government, and the particular way that works during the war--
is very important to post-war America, and in fact to the post-war world.
We will see the roots of many of the things
that happened over the next few decades, both in the United States
and outside the United States, in the way
that the American industrial economy is organized during World War II itself.
Now when the war starts, the American economy
actually isn't that well prepared for war.
If you contrast it to Germany, which has been preparing for war
since Hitler took office in 1933, the American economy,
even by the time of Pearl Harbor, in December, 1941,
is only beginning to prepare to fight.
But what you see is that the American economy, directed by the US government,
tools up for war very quickly.
In contrast, Germany, which has been preparing since 1933,
really doesn't convert to a full wartime mode until 1942 or 1943.
And that fact is crucial in assuring the success of the Allies.
Now once the United States government and economy
start to convert onto a war footing-- and they really
start a little bit before Pearl Harbor, because already the draft has been
re-instituted, and the United States is building up its stocks of war materials
and supplying large amounts of them, in fact, to Britain--
but once the war starts in particular, you
see a real transformation of almost every single corner
of life in the United States.
This is obviously the most true for the 12 million
or so individuals who end up serving in the armed forces,
most of them actually drafted into the armed forces.
Their lives are completely transformed.
But the lives of civilians are transformed in almost total ways
as well.
Let's talk about some of those transformations.
And you'll see how they affect every single area of life
and every single level of the economy.
So one way to think of the American war effort
is to see it as a gigantic public-private partnership.
The federal government works very closely--
in particular with large corporations like General Electric, Ford,
or US Steel-- to ensure that production is converted from a consumer market
to goods for the war machine itself.
So thus we see factories in Detroit being converted
from making autos for consumer production to making tanks for the army
and so on.
Now, in order to regulate this and organize this,
the government actually creates a series of new agencies built, to some extent,
on the New Deal Model.
But these ones bring together executives of major corporations
with government policy makers themselves.
And these are organizations like the OPA,
the Office of Price Administration, which
sets the prices for consumer goods throughout the economy
to prevent runaway inflation from undermining the living
standards of consumers.
For the War Production Board, which make sure that resources
go to the factories that need them most, and make sure
that the maximum amount of efficiency and the lowest possible amount
of reproduction of effort-- duplication of effort-- ends up in the war economy.
As production for the war effort grows more intense, and as the government
and its big corporations begin to work more and more closely
and more and more successfully together, the economy becomes,
essentially, a part of the war machine itself.
And you can see this by looking at the way
that the federal budget increases, from $9 billion in 1940-- about 9%
of all economic activity in the United States--
the budget increases to about $72 or $73 billion in 1945.
And that's 30% of the entire economy.
And that probably understates the amount of activity
that actually is going into the war effort directly.
In order for all of this to take place, taxes rise to some extent.
But, in particular, the government has to borrow.
To a large extent, it borrows from its citizens, selling war bonds.
But it also borrows from financial entities, from banks, and corporations,
and so on.
Ultimately, by 1945, the federal budget deficit-- the yearly deficit--
will reach the level of 30% of the entire economy.
With factories expanding and, in many cases,
popping up in parts of the country which simply had not
been industrial centers before-- in particular, many
small, southern and western cities growing rapidly as shipyards
and aircraft factories are located there--
internal migration is a common experience in World War II.
Millions of Americans move, sometimes thousands of miles, to find new jobs.
And, in many cases, economically, this is a tremendous success for them.
And they're able to radically expand and increase their own economic welfare
by finding highly paid war work.
And of course it means some disruption in their lives
as they move many miles away from family,
from the places where they grew up.
But for African Americans moving out of the South, in many cases,
this is experienced as a new kind of freedom.
As they move away from Jim Crow and into environments which are not necessarily
unmarked by segregation, but at the same time,
offer all kinds of new opportunities for them.