THE ECONOMICS OF WORLD WAR I: A COMPARATIVE QUANTITATIVE ANALYSIS
Stephen Broadberry and Mark Harrison
This paper offers an in depth look at the differing economic factors of the countries involved in World War I. It begins with the fact that at the beginning of the war, Germany had an unparalleled advantage over all other countries. Germany had been preparing for war while other countries had no reason to think about aggression. Germany’s downfall however was the thought that the war would take at most 6 months, not four and a half years. America began to produce war supplies to be sold to European nations and eventually became a participant in the war itself. By this point, the allied powers had stepped up their production and would eventually far surpass the production of Germany. This ability to produce more supplies, everything from rations to airplanes allowed the allies to gain the upper hand in the war. Without this domestic production, it would have been difficult for the allied countries to gain the upper hand on their adversaries. http://www2.warwick.ac.uk/fac/soc/economics/staff/mharrison/papers/ww1toronto2.pdf II. WHY THE ALLIES WON What did economic factors contribute to victory and defeat in World War I? Before the event, so to speak, the answer should have been nothing; after the event, it turned out to be nearly everything. From the standpoint of the German war plan for 1914, economic factors were not expected to count. The German general staff hoped for victory in the west within six weeks. The war was intended to be won by military, not economic means, and was to be finished off long before economic factors could be brought into play. It was only after this plan had failed, as the leaders on each side contemplated the ensuing stalemate, that belts began to be tightened and sleeves rolled up for the mobilisation of entire economies (Chickering and Förster, 2000). Once plans were redrawn for a longer haul, a war of attrition developed in the west where the opposing forces of Germany, France, and Britain, each backed by large, rich, and successful economies, ground each other down with rising force levels and rising losses. In battles that were intended to be won by the last man left standing, resources counted for almost everything. Once the German military advantage had failed to win an immediate victory in the west, it seems inevitable that the greater Allied capacity for taking risks, absorbing the cost of mistakes, replacing losses, and accumulating overwhelming quantitative superiority should eventually have turned the balance against Germany. The realization of this advantage took time, which seems to have misled Ferguson (1998: 248-81) into writing about an “advantage squandered”. However, there is simply no need to conclude that “the Germans were significantly better at mobilizing their economy for war than the Western powers” just because the war had not ended by the winter of 1916-17 (Ferguson, 1998: 256-257). Total war is, by definition, a drawn out affair. Eastern Europe, the Balkans, and the Near East formed the theatre of combat for the economically weaker powers: Russia, Italy, and the Austro-Hungarian and Ottoman empires. The British and Germans wished to be more involved there, but neither could withdraw significant forces from the western front. In the east, therefore, the immediate outcomes of battles were less determined by economic factors, at least in the short run. Over a period of years, however, the battles drained the weakest economy first, and this led to Russia’s exit from the war in 1917. Then, 3 the Central Powers’ chance for victory in the east was destroyed by Germany’s defeat in the west. The economic advantage of the Allies over the Central Powers was substantial at the outbreak of war and rose steadily as the composition of the belligerents changed on each side. The most striking change was that during 1917 Russia was defeated and abandoned the Allies, but was replaced by the United States. Thus the richest great power stepped into the gap left by the poorest, and this led to a further increase in the Allied advantage.1 In some ultimate sense economic advantage did determine the outcome, but only after much time had passed and purely military advantage had failed to win the day.