Home > economics, General Comment, political-economy, politics, shorter work time > Is serious left criticism of government’s share of GDP possible? (9)

Is serious left criticism of government’s share of GDP possible? (9)

Continued from here.

This is the background for National Security Council Memorandum 68 (NSC-68):

The United States emerged from from World War II – in somewhat better economic shape than it went in.

(We will ignore, for the time being, that this failed attempt at collective race suicide resulted in the slaughter of 72 million persons – roughly 4 percent of the population of the belligerents.)

The Great Depression had receded into the background of American life with a vengeance. Gross Domestic Product is estimated to have nearly doubled during the war, entire industries, built from scratch, and, an almost innumerable list of scientific and technological breakthroughs had added productive capacity of the society.

By 1939, the industries of all major nations were operating full on in a desperate heat to increase their military capabilities against their rivals.

By 1942, every major nation, save France, produced more than it had in 1938.

By 1945, owing to the massive destruction imposed on the Axis powers – Germany, Italy, and Japan – the Allies had increased their GDP from twice to 5 times the former.

The global impact of this massive ramping up of industry was quite simply staggering by the standards of the time: nearly 5 million military trucks produced by all countries; nearly 1 million aircraft of all types; 51 million metric tons of merchant shipping; 193 aircraft carriers.

We include the table below, drawn on data provided by the Wiki to give you an idea of the scale of the war effort:

According to data from the Bureau of Labor Statistics, 30 million voters in the goods producing sector supported themselves, plus another 16.5 million working in the services sector, plus, 6 million more in government, AND, an additional 16 million serving on active military service, in two major combat theaters, stretching more than two-thirds of the way around the globe!

According to another study:

In 1939 the United States devoted less than 2 percent of its national output to war, and about 70 percent to satisfying immediate civilian desires. The rest went to civilian government expenditures, private capital formation, and exports. By 1944, the war outlays were 40 percent of national output. Industrial production doubled from 1939 to 1945 (but 1939 was still a depression year), with production increasing at the rate of 15 percent per year. Manufacturing employment increased from 10,151,000 in 1939 to 16,558,000 in 1944, and the percentage of the work force involved in manufacturing increased from 19 to 26 percent. The rest of the people were neither farm nor factory workers (more women were at home than were in the factories, on the farm as workers, or in the military). All segments of the labor force decreased their percentage of workers except industry, the military and civil service. Agricultural employment fell from 9,450,000 in 1940 to 8,950,000 in 1944, while people in nonagricultural industries went from 37,980,000 in 1940 to 45,010,000 in 1944. Most of the increase came from sopping up unemployment (which was 8,120,000 in 1940 and only 670,000 in 1944) and employing more women.

Despite this massive, sustained war effort, the authors of this study noted:

The War Production Board thought that the American people during the war were “subjected to inconvenience, rather than sacrifice.” By comparison to the situation facing civilians in all other nations at war, it would be hard to argue with that assertion. At the height of the war the government spent $94 billion, and of that $81.6 billion-87 percent-was war spending. The budget was 80 times greater than in 1939, 54 times 1940 and 14 times 1941. But the budget expansion was such that civilians truly did not suffer because of the war, and when one considers that unemployment had all but disappeared and what joblessness remained was usually only temporary, the home front prospered. In terms of calories, people were generally fed better than they had been before the war, and they consumed more meat, shoes, clothing and energy.

Seventy-two million slaughtered human beings, yet, war had become an “inconvenience” for the civilian population.

Cold truth, perhaps, but no colder than this excerpt from an article published during our present war:

Since the start of the Iraq war four years ago this week, Americans have bought more than 110 million cell phones and spent $35 billion on HDTV sets.

They have moved into 5 million new homes, bought about 60 million new cars and trucks and watched the Dow Jones industrial average climb from 8,200 to 12,000 and beyond.

Despite bloodshed in Baghdad from a conflict lasting longer than U.S. participation in World War II, life for most Americans has clicked along without personal loss or even higher federal taxes to cover the fighting.

“We’re in a country where it isn’t clear in our daily routine that we’re living with war,” said Carolyn Marvin, a communications professor and cultural historian at the University of Pennsylvania’s Annenberg School for Communication.

For us as a nation, war has ceased even to be an inconvenience.

War good for business?


Business has become good for war.

Thanks, in large part, to NSC-68

To be continued

  1. Peggy Dobbins
    August 30, 2009 at 3:11 pm

    thanks for posting info re the existence of the 1968 National Security Council’s memorandum you got via freedom of information act, and your analysis of it.

    Two things spring to mind:

    The Iron Mountain Report was published in 1967, maybe earlier but I’m sure it was out by then because I assigned to my Social Problems class at Brooklyn College. The broadly shared rumor was that the author’s
    name was a pen name assumed by Kenneth Galbraith. The gist was that exhaustive research concluded no alternative to war constituted either a sufficient threat for a democratically elected Congressional majority to authorize funding and more fundamentally no alternative to war could absorb the overproduction and labor force required to forestall the law of the tendency of the rate of profit to fall.

    I should have said “to sustain the economy”. I think think iron mt. author may have said “to sustain democracy”. I hadn’t read vol. 3 then but the author should have and maybe that was his core analysis.

    1968 was also the year I clipped the nut report I carried until it crumbled in my wallet about a study projecting tha coming crisis was a crisis ofleisure as //just
    projecting then levels of productivity, in 20 years Americans would need to work only 1:2 as long to sustain their highest in the history of the world standard of living

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