On War and Planes

A frequently repeated statement by Jacques Fresco and the Venus Project, even being quoted in the first article on TVP’s webpage on what a Resource Based Economy is, is regarding the miraculous increase of wartime airplane production, born by the US Government’s supposed decision to produce as many aircraft as their metal reserves permitted them, without caring about it’s monetary costs:

“At the beginning of World War II the US had a mere 600 or so first-class fighting aircraft. We rapidly overcame this short supply by turning out more than 90,000 planes a year. The question at the start of World War II was: Do we have enough funds to produce the required implements of war? The answer was no, we did not have enough money, nor did we have enough gold; but we did have more than enough resources.”¹

Except...

It would have been a nice story, if nothing else in the structure of the US economy would have changed except for pumping out more aircraft.

The truth is, the US didn’t have enough of any of those(nor did it need to, given the United States wouldn’t enter the War on the side of the Allies until 7 December 1941, more than 2 years after the invasion of Poland).

At the start of WW2, the US military budget was 9.98 billion. By 1945 it was 716.24 billion.
In other words, it overcame that lack of money, by increasing military spending by more than 70-fold(!), or percentage wise, by the time American boots were in Germany, they were more than 7176% better funded than at the time of British Prime Minister Neville Chamberlain‘s famous “Peace for our time” declaration.
 

And where did this all this money come from?

Well, a lot of it came from the common people.

The US Government enacted a huge war bonds campaign, encouraging people to donate cash to the american war effort.

And their motivations went from the patriotic…

to the funny…

to the racist…

to the disturbing...

But let’s go beyond simple increase in money, though that is pretty disruptive to the narrative on it's own.

Let’s delve into the other changes in the economy that allowed the US to be the industrial juggernaut that played a huge economic part in winning the War for the Allies.

Indeed, a lot of the requisitioning involved the encouragement of donating raw materials for recycling into war supplies, as seen in the next war-time posters.

But again, it wasn’t some surplus miraculously born of the wonders of modern technology.

To make it happen, the US had to restrict massively the amount of metal-and-other supply using objects in civilian use, and even teach them to make most of their food and other needs on their own.

As a sidenote, similar restrictions during World War I resulted in the modern brassiere becoming popular.²

Thanks, WW1?

It also determined the search for resources to replace those traditional sources.

To quote dummies.com³:

“When metals became scarce, plastics were developed to take their place. Copper was taken out of pennies and replaced with steel; nickel was removed from nickels. War-inspired pragmatism even affected fashions: To save material, men’s suits lost their pant cuffs and vests, and women painted their legs to take the place of nylons.

Other sacrifices were made as well. Gasoline and tires were rationed, as were coffee, sugar, canned goods, butter, and shoes. But the war proved to be more of an economic inconvenience than a real trial for most people.

Of course, all that military hardware had a hefty price tag. The federal government spent about $350 billion during World War II — or twice as much as it had spent in total for the entire history of the U.S. government up to that point. About 40 percent of that came from taxes; the rest came through government borrowing, much of that through the sale of bonds.

All that money had to go someplace. A lot of it went to the West, especially California, where 10 percent of all the federal war spending took place. But the American economy rose just about everywhere else too. The civilian workforce grew 20 percent. The Gross National Product (the total of goods and services produced) more than doubled between 1939 and 1945. Wages and corporate profits went up, as did prices.

In October 1942, Congress gave the president the power to freeze agricultural prices, wages, salaries, and rents. The Roosevelt Administration created the Office of Price Administration (OPA) to oversee prices and wages. But the OPA proved generally ineffective, and the economy mostly ran itself.”

And far from happily abolishing the concerns of the free market out of some revelation that communally sharing metal is superior, war production was very corporatist, sometimes disturbingly so, with large factions in the government cared to rectify this anomaly and make it more free-market, for example, with the financing of Reynolds Aluminum as a competitor and financial incentive for ALCOA to produce more aluminum in a competitive way, and prevent it from becoming the sole supplier of the US Government⁴.

I might hear some of you saying:

“Well, yes, Jacques talked about how an RBE in many way resembles a balanced state war economy, except instead of funneling those restrictions into killing people, we use them to build wonderful machines and products for the people“⁵

Well, the problem is, war economies can’t last long.

It’s a known fact nowadays (and even at the time, as shown by the quote below) that the Nazi war economy was unsustainable. Basically, every german economic policy from 1933 onwards was bought by sacrificing the entirety of it’s economy to develop military infrastructure, and only the plundering of Austria’s, Czechoslovakia’s and Poland’s monetary and gold reserves, either via direct requisition, or via forcing the central banks of their new territories to exchange their money for Reichsmarks at a very low exchange rate kept it at bay, almost miraculously so.⁶

Economic shenanigans were not only limited to domestic markets.

During Operation Bernhard, and it’s predecesor, Operation Andreas, the SS and SD would embark on a massive campaign of forging british notes, with the aim of bringing their economy to it’s knees.⁷

Box of fake british pounds

But getting back to the point, a wartime economy’s negative effects are not limited only to the wartime.

One need only look at the massive problems that plagued western continental Europe had until several years after the war, when they managed to recover, helped in large part by the 13 Billion dollar(more than $110 billion today) capital infusion from Uncle Sam, via the Marshall Plan.

Even Britain, which had suffered less infrastructure damage, continued to have rationing for years after the war.

Female customers learning how the ration-coupon system worked, January 1940

The weekly portion of rationed foods for 1 person, in 1951

But hold on...

If you think it's contradictory i’m saying war economies are unsustainable, but America did just fine afterwards, it’s not.

The American economy was the only game in town after World War II. The world's investment capital poured into New York. The U.S. dollar was all-powerful. There was a massive demand for U.S. exports, and a domestic market with two decades of unmet consumer needs finally unleashed (along with a baby boom that further spurred domestic spending).  

The US ended up pretty well out of the war, AT THE EXPENSE of everyone else.

In conclusion:

Beyond some simplistic communal resource sinkbucket that just turned out warmarchines, the entire economic landscape of the decade preceding and following World War 2 was a huge financial conflict, with massively increased funds, and where the problem of keeping the currency stable, was just as important as where to get raw materials.

While a monumental inspiring task that showed the sacrifice and solidarity of the American people, it’s definitely way more mundane than Fresco pretended it to be, and the only lesson one can draw from it is that massively increasing your budget, while getting your raw materials and labour at a very significant discount, and selling assembly line made goods to a market where demand is insatiable, results in huge production increases, which shouldn’t come as a shock to anyone.

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1 https://www.thevenusproject.com/tvphistoryevent/resource-based-economy^↩
2 https://www.npr.org/2014/08/05/337860700/bra-history-how-a-war-shortage-reshaped-modern-shapewear^↩
3 http://www.dummies.com/education/history/american-history/u-s-economy-and-industry-during-world-war-ii/^↩
4 http://prospect.org/article/way-we-won-americas-economic-breakthrough-during-world-war-ii^↩
5 can't find the source now, it's somewhere in the the Venus Project FAQ, IIRC; ^↩
6 https://www.reddit.com/r/AskHistorians/comments/1e0hmf/to_what_extent_was_nazi_germanys_economic/ with the source used there being Adam Tooze's Wages of Destruction: The Making and Breaking of the Nazi Economy ^↩
7 http://www.britishnotes.co.uk/news_and_info/prefix_sightings/bernhard/index.php^↩