Cicero once said that the "Sinews of war were infinite money."
Never has that been more true than in the second World War.
This little bonus extra history series is going to be all about
the complex economic struggle that underpinned the most colossal conflict in human history.
These episodes are happening courtesy of the good folks at Paradox.
who, after seeing those old Punic Wars episodes we made,
approached us asking to sponsor a few episodes about the economic aspects of World War II.
in anticipation of the upcoming release of Hearts Of Iron 4.
And it's a great topic idea, so lets jump right in.
First, let me set the stage.
The year is 1939
Storm clouds are gathering over Europe. Hitler has already grabbed Austria,
And Czechoslovakia is being gobbled up.
The Italians have conquered Albania. Even as many tried to deny it, every nation knows.
War is coming.
Meanwhile, in the east, the Japanese have annexed Manchuria, and are pushing further into China.
Chinese resistance movements have flared up. For all intents and purposes, the east is already at war.
But most of the major players all have one goal in mind.
Resources.
Economic power, industrial installations, natural resources.
These all needed to be gathered and hoarded as quickly as possible, because every state knows
when war truly breaks all bounds, all the trade that keeps the world economy functioning will grind to a halt.
Or so it was thought, in fact, many expected that the European nations would avoid war
because their economies couldn't survive economic isolation.
But, that assumption hadn't kept the first World War from breaking out.
And it wouldn't keep the second.
In truth, many of the pre-war planners had learned from the first World War
And started preparing for just such a breakdown in trade years in advance.
So let's take a look at the economies of some of the major players right at the outset of the war.
The first big three are Germany, France, and Great Britain.
These are the major European nations that would be in direct conflict with each other from the get go.
Germany, having been disarmed after World War I, had come roaring out of the Great Depression with
One of the largest armaments programs the world had ever seen.
France had invested heavily in static defenses.
And Great Britain had restarted its fleet construction program, after the lull from the Washington naval treaty.
But to really compare these countries we're going to have to talk numbers.
The way I see it, there are four statistics you really have to consider when talking about countries involved in a global war.
First, GDP. Or Gross Domestic Product.
This tells you roughly how big an economy is.
How much raw production it's capable of.
Which, of course, translates directly into tanks, bombs, guns, the materiel of war.
Second, population.
When we're looking at massive global conflicts that are gonna determine the very survival of nations,
you've gotta look at the manpower they can draw upon.
The larger the population, the larger the armies that nation can field.
With more of industrialized countries being able to draw on larger sections of their populace without disrupting the flow of basic goods like grain.
If a conflict becomes a long term struggle
population count becomes increasingly important as attrition starts to mount.
Third, territorial extent.
This isn't a perfect measure by any stretch, but it serves to give us a surface level idea of relative natural resource control.
In modern economies that require every thing from oil, to rubber, to aluminum to run.
Territorial extent gives us a very rough idea of how self sufficient these economies might be if cut off from global trade.
It also tells us how much ground a nation can give up without being knocked out of the fight.
Though, it is worth noting that greater territorial extent also generally makes mobilization more difficult.
And defense more complex, so it's kind of a trade-off in some ways.
Fourth, per capita income.
Individual wage may seem like a strange metric when thinking of war time economy,
but it gives you a good idea of how developed an economy is.
The higher the individual wage, the more advanced an economy you're usually dealing with.
And this is actually super important, because in general,
larger economies can take bigger hits without crumbling.
Bombing one factory won't cause production to grind to a halt.
They'll have a greater ability to synthesize or find alternatives for natural resources they don't have.
They have a better internal network for transportation and distribution and such.
So a nation that has a more advanced economy, even if it has the same GDP as another country,
it can remain an effective combatant much longer than a nation with a less advanced economy.
This is why china collapsed into a guerrilla war almost immediately, rather than fronting a centralized state effort.
And it's why Italy capitulated so much quicker than Germany.
It's also fascinating to think about in terms of the incredible Soviet effort to actually to pick up and move their entire industrial base
in the face of a German invasion.
But we'll get to that later.
For right now, let's look at some numbers.
Now all of the monetary figures I'm going to use here are in 1990 U.S dollars.
Just because thats how the most comprehensive data set I found converted it
So, the U.K has a population of 47 and a half million.
A territorial reach of 245 thousand square kilometers.
A GDP of 284.2 billion dollars.
And a per capita income of about 5,983 dollars.
Now, when compared to Germany's numbers with a population of 68.6 million
473 thousand square kilometers of territory
A GDP of 351.4 billion
And a per capita income of 5,126 per head
The U.K's numbers may look a bit low, but
first we've gotta factor in France.
Which had a population of 42 million.
A territorial reach of 551 thousand square kilometers.
A GDP of 185.6 billion,
and a per capita income 4,424 dollars.
And perhaps far more importantly, we also have to factor in the British empire.
If you add in all of the colonies and dominions that Britain held at the time,
that's a whopping 483.8 million people
34,179,000 square kilometers in territory,
and 391 billion in GDP.
But granted, if you leave out some of the more economically advanced dominions like Canada and Australia,
the colonies' collective per capita GDP was only 627 dollars.
So, less great.
Sorry, I know that was a lot of numbers, but what does it all tell us?
All of those numbers basically tell us that Germany needed to win this war before
the U.K could bring it's empire to bear.
But it also tells us that British empire was unwieldy.
It was spread out and had an incredibly low per capita GDP in a lot of places.
which meant that there wasn't a lot in those places that could be diverted to war production.
and those sections of the empire would probably collapse at the first show of hostile force.
And that reality very much played into the overarching strategy of the war.
Blitzkrieg was not only a tactical or even a strategic idea
but an operational one.
Germany had stockpiled materiel before the war.
They believed that they had better military leadership,
and better esprit de corps
Their great hope was to expand fast enough using those early advantages to win total victory,
But their more realistic planning told them that they still had no choice but to expand rapidly.
So that they could bring in the resources, population, and industrial capacity
that they would need to fight a protracted war.
Seizing an early advantage was Germany's best chance.
Meanwhile, on the other side of the world,
Japan was in much the same situation.
The famous Japanese admiral Yamamoto estimated that he could win for 6 months
If the U.S entered the war.
But if Japan had not secured victory by then, loss was assured.
If we look at the statistics for Japan and China,
which I'll put down below just so I don't belabor you with more numbers
We can see that China has a substantially higher population, and thus also a higher GDP
but, a much lower per capita GDP.
Meaning that China would probably lose a conventional war but they'd still be
very hard to occupy if they got any outside help.
And then there were the two wildcards.
The United States and the Soviet Union.
The Soviet Union had vast natural resources, a huge population and a high GDP.
but, with a low per capita wage.
Meaning they had a less advanced economy than many of the other European powers.
Russia would play an enormous role in the struggle to come,
But economically it's entire focus would be using what
industrial resources it had to arm and equip the vast forces it could muster.
The United States on the other hand, for the entire length of the war,
From 1938, well before it was involved, to the war's conclusion in 1945
Had a GDP greater than every major Axis power combined.
A GDP which was also greater than all the other major Allies put together.
Not only that, but the U.S was protected by oceans from the conflict itself.
This is why the United States would serve as the arsenal of democracy.
Join us next time as we talk about Lend-Lease,
and how American industrial output would be used to keep its beleaguered soon to be Allies afloat,
before the American nation gathered the will to fight.
See ya then.