The Inter – War Economy

The Inter – War Economy

The First World War (1914-18) was mainly fought in Europe. But its impact was felt around the world. During this period the world experienced widespread economic and political instability, and another catastrophic war.

WARTIME TRANSFORMATIONS:

The First World War was a war like no other before. The fighting involved the world’s leading industrial nations which now harnessed the vast powers of modern industry to inflict the greatest possible destruction on their enemies. This war was thus the first modern industrial war. It saw the use of machine guns, tanks, aircraft, chemical weapons, etc. on a massive scale. These were all increasingly products of modern largescale industry. To fight the war, millions of soldiers had to be recruited from around the world and moved to the frontlines on large ships and trains.

Wartime Production of Weapons

The scale of death and destruction – 9 million dead and 20 million injured – was unthinkable before the industrial age, without the use of industrial arms. Most of the killed and maimed were men of working age. These deaths and injuries reduced the able-bodied workforce in Europe. With fewer numbers within the family, household incomes declined after the war.

During the war, industries were restructured to produce war-related goods. Entire societies were also reorganised for war – as men went to battle, women stepped in to undertake jobs that earlier only men were expected to do.

The war led to the snapping of economic links between some of the world’s largest economic powers which were now fighting each other to pay for them. So, Britain borrowed large sums of money from US banks as well as the US public. Thus the war transformed the US from being an international debtor to an international creditor. In other words, at the war’s end, the US and its citizens owned more overseas assets than foreign governments and citizens owned in the US.