war economics

[Dis]

I have some ww2 related questions, and general economics questions. Perhaps we need an economics sub forum. . Economics is a subject I'm weak at, so bear with me, and I appreciate any help.

I've always wondered how goverments were set up when land is conquered. I know in some cases the conquerers will assign governors etc. How are taxes collected? how does normal society (ie people going to work etc) work when your nation is conquered?

I've always wondered how a nation functions right after conquering. I've read a little bit about post war Japan, but haven't found a lot of information about that. How was the country turned into a working economy? I remember reading that starvation was a real issue right when we took over, but what about the larger task of getting people back to work, and having money flow through the system again? did they use Japanese currency?

I've also wondered what people of a town do when their town is conquered, but then reconquered. I'm sure in ww2 a lot of people fled, but not everyone did. I do know thousands of french citizens were killed after d day. Did they go to work like usual? What was life like? Were goods sold and taxes collected for the nazi regime?

[Heraclitus]

Depends on the situation, but in most cases people do go to work, taxes are collected. Now these taxes either go directly to the occupier or to the regime they install. Economic exploitation can also take the form of confiscations or forced purchases (at the price set by the occupier).

Currency wise stability and integration are the two most important factors. The currency of the reich was introduced in Poland and parts of Slovenia to facilitate assimilation, the marc was at the time stable as well. The currency of a defunct state can loose value very quickly in a matter of weeks or even days in fact. The populance drops it as fast as they can.

Considering all the history buffs on poly this will be a very interesting thread!

[Kidlicious]

It's very difficult. You've go the normal problems of unemployment and inflation, but you've got to rebuild infrastruction and set up institutions. It's pretty chaotic. On thing you don't want to do is listen to any libertarians regarding policy here.

[Patroklos]

It also depends on the level of the occupation. In the past the actual day to day functioning of a city/state wouldn't change for the most part. All the conqueror wanted was tribute and adherence some basic economic laws and a display of inferiority to a governor every now and again.

[lord of the mark]

Re: war economics

Originally posted by Dis
I have some ww2 related questions, and general economics questions. Perhaps we need an economics sub forum. . Economics is a subject I'm weak at, so bear with me, and I appreciate any help.

I've always wondered how goverments were set up when land is conquered. I know in some cases the conquerers will assign governors etc. How are taxes collected? how does normal society (ie people going to work etc) work when your nation is conquered?

A good question, and one where WW2 is especially interesting.

The short answer is, it varies. A general principle is, that wherever possible its FAR easier, and far cheaper, to leave the local authorities in place, and skim resources off the top, directly or indirectly, than to set up your own administration. The flip side, is that means a risk the locals wont do as you want in detail, and that they might even change sides when its opportune.

In France, under the Germans, the local French authorities remained in charge, though reporting to a nominally neutral, but pro-German, Vichy govt. This saved German admin resources, but meant that Germany collected little direct French support, but instead had to use state to state pressure to get the French economy integrated in the German war effort. Im not familiar with how successful that was. It also meant keeping in place an unreliable Vichy state.

In Poland, the Germans abolished all local autonomy, and ran the place as a colony. This gave them the ability to directly collect taxes, direct the output of factories, etc. OTOH it required a considerable investment of German personnel.

In other occupied areas things varied. In general in the West at least some local officials remained in place. In the East, other than in some puppet states, that was not so.


For Japan, theres been a recent book on the occupation thats supposed to be very good (and whose author warned of the problems in occupying Iraq)

[lord of the mark]

Originally posted by Heraclitus
The currency of the reich was introduced in Poland and parts of Slovenia to facilitate assimilation, the marc was at the time stable as well.

Did Slovenia introduce its own currency in the period after March 1939, and before the war began?

[DAVOUT]

For the people, a war economy is precisely described by three words: dearth of food, penury of everything else, and black market for both. All resources are controlled by the government. Foods and clothes are allocated weekly and/or monthly to all individuals in quantities depending of their age or their work (more food for teenagers and hard workers, milk only for babies). All other resources are allocated to industries with absolute priority to the war industries.
The end of the war does not end the penury; I remember going to school in 1947 with shoes the sole of which was a piece of wood.
When they realize the extent of the lack, people develop their ingenuity and the potential of recuperation. All square meter of land is exploited to grow vegetables and fruits (seeds also controlled by the govmt). A positive consequence : obesity disappears.
It is interesting to observe that the EU founders, who all have experienced war economies and the related dearth, desired to build a tool that would make the EU self-sufficient. Today, when foods are on a dangerous trend, we have that tool which has not yet been destroyed by the fanatics of the free market; the European agriculture will protect us from unpleasant reminders of history.

[germanos]

Good question, although the title doesn't really cover the subject you adress IMO. Apart from the tax, it's more about governing then economics.

From what I have understood about the Nazi occupation in the Netherlands, we practically rolled over once the Nazi's forced us into submission (not the least by (terror-)bombing Rotterdam and threathening to repeat that feat on other cities).
The goverment fled to the UK, and local officials by and large accepted their new overlords. Most of them begrudgingly, but still. These officials (mayors, governors of the provinces, Police chiefs etc.) had always been submissive to the central government (and appointed by them) and thus felt they had no real role in opposing the central government, even though it was now directed from Berlin rather then The Hague.
So, they took it upon them to get the best for the local population they represented and choose beteween the lesser of evils they were confronted with. Through time, a proverb/saying has developed from this: "Burgermeester in oorlogstijd" (being a mayor in time of war)
The bureaucrats kept doing their jobs. Raising taxes never became a problem. Tax had to be collected, nevermind in which coffers it ended up. The civil register had to be kept tidy. Religious heritage had always been kept on record, so there was no reason to stop registring protestants, catholics or jews. In fact, the infamous 'Ausweiss' had been a Dutch invention, which the nazi's happily adopted.
Civil society by and large functioned normally during the occupation. Burocrats eagerly did their jobs. There are several examples where Dutch civil servants went 'beyond the call of duty' to meet summons set by the occupier.

It was not untill the autumn of 1944 that this changed. The allied offensive had reached the southern netherlands and the government-in-exile called for a general strike. That's when the 'lower government' collapsed. Railway workers striked, civil service came to a hold.
Unfortunately, this did not trigger the collapse of the Nazi occupation, neither did it hasten the liberation of the Netherland above the big rivers (Rhine and Meuse). All that it did accomplice was the starvation of the Dutch in the west, since supplies didn't reached the major population centers in the west of the country.


While this is actually a sad story on the history of the nazi occupation of Holland, I guess the answer to your question is to leave the local government intact, as long as they serve you.

[Dis]

interesting stuff.

What about big corporations and business? I'm not sure how much it existed in those countries during that time. I was going to make a separate thread on big business in america. I always wondered exactly how the transformation occurred. Were Ford forced to convert to making airplanes, or did they do so willingly? Or did the market dictate the practiality of producing something that is in demend? I heard less than 200 cars were produced during the war. But I imagine they worked like general contractors today, just on a larger scale.

And I've always wondered if people went to work as usual. Obviously they did. But it had to get bad when the front lines were by their homes, and their homes and towns were destroyed. That had to be a complete breakdown in the local economy. How were they fed? I imagine relief agencies provided essentuals. I believe this was necessary in Japan at the end of the war. As the most pressing problem was not insurgency, but starvation of the Japanese people.

[Heraclitus]

Originally posted by lord of the mark


Did Slovenia introduce its own currency in the period after March 1939, and before the war began?

No, but rationing was set in place long before the invasion.

[VetLegion]

Originally posted by lord of the mark


Did Slovenia introduce its own currency in the period after March 1939, and before the war began?

No. Slovenia, unlike neighbouring Croatia, didn't have own currency during the war.

[VetLegion]

Re: war economics

Originally posted by Dis
I have some ww2 related questions, and general economics questions. Perhaps we need an economics sub forum. .

One thing to keep in mind is that economic principles are always valid, be a country in a state of war or not. Supply and demand determine prices even in concentration camps.

On the other hand, a defining characteristic of war economies is state control, and an important aspect of that is control of prices.

This resulted in black markets everywhere, and a wide perception that there were "war profiteers" and thus support of the population for the state control of the economy.

A few notable things that happened:

- Germany's stated goal before the war was autarky (self-sufficiency), and it largely had one during the war as trade with the rest of the world was cut

- Shortage of men improved positions of women in many workplaces (US is named as an example of this, but not Germany)

- By the end of the war, Soviets had to tap into 17 and 16 year olds for soldiers, obviously women worked in factories

- Germany had trouble integrating economies of conquered countries into its own. It is said that potential of France's large weapons factories was barely tapped

- By the end of the war Soviet Union alone outproduced Germany in tanks and airplanes, quite a feat considering huge losses of people and territory it suffered

- Many countries expirienced an almost "full employement", not seen since

- Germans were pretty successful at operating coal->petroleum factories until those were bombed by the Allies

- Russians keeping Baku oilfields is what kept them in the game

- Most countries involved accrued huge debt

- There were practically no strikes worth mentioning

[DAVOUT]

Re: Re: war economics

Originally posted by VetLegion

One thing to keep in mind is that economic principles are always valid, be a country in a state of war or not. Supply and demand determine prices even in concentration camps.

On the other hand, a defining characteristic of war economies is state control, and an important aspect of that is control of prices.

This resulted in black markets everywhere, and a wide perception that there were "war profiteers" and thus support of the population for the state control of the economy.

Are you meaning that black market is an economic principle? This would ignore that under black market supply and demand, particularly in a war economy, are extremely different from their classical function.
- supply is limited to inventory available at one point (found by opportunity, or stolen, or misappropriated from official productions; black production is limited to foods as part of controlled production); therefore, increased demand cannot result in additional production; the prohibition in the US, with its enormous production of alcool, cannot be compared with black market in Europe during WWII;
- demand cannot be globalized for security of the seller and the buyer; consequently, the black market can only be compared to a multitude of sales by auction in which one item is offered to a very limited number of potential buyers.

In addition, a classical market needs a currency which was not available in concentration camps; in that case exchanges belongs more to barter than to supply and demand.

[molly bloom]

It was simpler when armed forces had only to raid temples or churches, make off with large amounts of gold or silver or take away slaves, food and so forth.


Of course the Nazis also did this in WWII, showing that they weren't economically terribly much more advanced than Charlemagne, the Cordoban Caliphate, Mahmud of Ghazni or the Hephthalite Huns.


Rather than genuinely attempt to restart the economies of occupied countries, the Nazis rounded up able bodied workers in Poland and the Netherlands (for instance) and deported them to Nazi Germany as, effectively, slave labour.

Similarly, they also dismantled factories and workshops and shipped them to Germany.


The Japanese 'Co-Prosperity' Sphere in the Pacific was also nothing of the sort for the supposedly liberated allies of Greater Japan- caloric intake amongst the occupied populations went down, and the countries and provinces taken over by Japan were treated as vast raw material resources, not as trading partners or equals.

[VetLegion]

Re: Re: Re: war economics

Originally posted by DAVOUT
In addition, a classical market needs a currency which was not available in concentration camps; in that case exchanges belongs more to barter than to supply and demand.

Wrong! There's currency all right, even Gresham’s Law applies

http://www.oddgods.us/articles/2006n24a