War Economies

When World War I broke out in 1914, few had foreseen that it would turn into a stalemate lasting for 4 years and that it would be decided by the physical exhaustion of one side of belligerents. The widespread sentiment was the boys will be home by christmas.
Britain declared a BLOCKADE of Germany's coasts, thus preventing imports from overseas to reach the country. Germany answered by sending out it's fleet of submarines (U-BOATS) in order to sink ships destined for Britain and France.
The war created a new situation, characterised by a huge consumption and demand for articles of war (weapons, ammunition, vehicles, uniforms, boots etc.), the task to find a replacement for the many workers who were called to arms, the task to deal with a very limited supply in raw matrerials and in consumer goods.

This problem was addressed by introducing a WAR ECONOMY, slightly different in the various belligerent nations. Elements of the war economy were (a) state interference (1) in form of the state managed distribution of scarce and critical raw materials, (2) in form of ordering certain factories to switch from consumer good production to the production of war essentials, (3) in form of ordering adult women to work in administrations, factories etc., (4) in form of price control for scarce consumer goods such as bread, sugar, fat (butter), meat, and the distribution of COUPONS to ensure that everybody gets his/her share.
Another element of the war economy was that (b) every individual citizen was asked to contribute additionally to the war effort by (1) signing WAR BONDS, (2) collect scarce raw materials (certain metals, such as lead), (3) plant VICTORY GARDENS (i.e. turn flowerbeds and lawns into vegetable gardens). (4) Women were asked to use energy-efficient cooking methods, such as HOTCHPOTCH.

These combined efforts did not prevent that all belligerents suffered from severe SHORTAGE in many areas. Lack of food soon became critical. Britain, which had little agriculture left as it had grown dependent on food imports from it's colonies, had to reconvert pasture into farmland and still struggled to produce enough food. In Germany the lack of imported FERTILIZER and insufficient workforce resulted in a drop of food production to one third of prewar level.
There was not only a decline in food quantity, but also in quality. Tasty and nutricious vegetables were replaced by ones which grew fast and required little fertilizer. Bakers added fill-ups such as saw dust to flour, to bake more bread from the limited amount of flour they had (KOMMISSBROT).

There was still a general lack of many goods, bad in England, France, Italy, worse in Germany and Austria-Hungary, worst in Russia. A side-effect of the war economy was the BLACK MARKET; buying and selling there was penalized, and police RAZZIAS were conducted to suppress it. The universities were asked to focus their energies on research of ERSATZSTOFFE (synthetic replacements of scarce war esentials) such as rubber, fertilizer, explosives. German chemists developed synthetical explosives and synthetical rubber during the war, synthetical fertilizer soon afterward.
The war lead to improvements in weaponry, especially in aircraft.

The Entente powers had to take up huge loans from American banks in order to finance the war - the United States, neutral until late in 1917, was profiting from the war as many markets were opening to their industries (the British and Germans, their old competitors, now had to focus on the war).

In 1917 the Russian Revolution broke out; now the western Entente powers, in a desperate attempt to keep Russia in the war, attempted to supply the country via (neutral) Persia; too late.
1917 saw a hunger winter in Germany as well, with considerable numbers of people actually starving to death. In Russia people were willing to end the war, at any cost, a sentiment Lenin used for his OCTOBER REVOLUTION. Germany, in the spring of 1918, searched a decesion - either a quick victory of a quick end of the war; the country could not bear continued warfare.

The Impact of WW I on the Economy : Belligerent Countries

France Germany Austria Russia

The Impact of WW I on the Economy : Neutral Countries

Netherlands Switzerland Spain


This page is part of World History at KMLA
Last revised on February 15th 2002

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