Skip to main content Accessibility help

Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s

  • Robert Higgs (a1)

Relying on standard measures of macroeconomic performance, historians and economists believe that “war prosperity” prevailed in the United States during World War II. This belief is ill-founded, because it does not recognize that the United States had a command economy during the war. From 1942 to 1946 some macroeconomic performance measures are statistically inaccurate; others are conceptually inappropriate. A better grounded interpretation is that during the war the economy was a huge arsenal in which the well-being of consumers deteriorated. After the war genuine prosperity returned for the first time since 1929.

Hide All
Abramovitz, Moses, “The Welfare Interpretation of Secular Trends in National Income and Product,” in Abramovitz, Moses et al. , The Allocation of Economic Resources (Stanford, 1959), pp. 122.
Anderson, Benjamin M., Economics and the Public Welfare: A Financial and Economic History of the United States, 1914–46 (Indianapolis, 1979).
Barro, Robert J., “Unanticipated Money, Output, and the Price Level in the United States,” Journal of Political Economy, 86 (08 1978), pp. 549–80.
Blum, John Morton, V Was For Victory: Politics and American Culture During World War II (New York, 1976).
Brinkley, David, Washington Goes To War (New York, 1988).
Buchanan, James M., “General Implications of Subjectivism in Economics,” in Buchanan, James M., What Should Economists Do? (Indianapolis, 1979), pp. 8191.
Catton, Bruce, The War Lords of Washington (New York, 1948).
Clinard, Marshall B., The Black Market: A Study of White Collar Crime (Montclair, NJ, 1969).
Cowen, Tyler, “Why Keynesianism Triumphed or, Could So Many Keynesians Have Been Wrong?Critical Review, 3 (Summer/Fall 1989), pp. 518–30.
Darby, Michael R., “Three-and-a-Half Million U.S. Employees Have Been Mislaid: Or, an Explanation of Unemployment, 1934–1941,” Journal of Political Economy, 84 (02 1976), pp. 116.
Evans, Paul, “The Effects of General Price Controls in the United States during World War II,” Journal of Political Economy, 90 (10 1982), pp. 944–66.
Friedman, Milton, and Schwartz, Anna Jacobson, A Monetary History of the United States, 1867–1960 (Princeton, 1963).
Friedman, Milton, and Schwartz, Anna Jacobson, Monetary Trends in the United States and the United Kingdom (Chicago, 1982).
Fussell, Paul, Wartime: Understanding and Behavior in the Second World War (New York, 1989).
Gordon, Robert J., “$45 Billion of U.S. Private Investment Has Been Mislaid,” American Economic Review, 59 (06 1969), pp. 221–38.
Harris, Seymour E., Price and Related Controls in the United States (New York, 1945).
Higgs, Robert, Crisis and Leviathan: Critical Episodes in the Growth of American Government (New York, 1987).
Higgs, Robert, “Private Profit, Public Risk: Institutional Antecedents of the Modern Military Procurement System in the Rearmament Program of 1940–1941,” in Mills, Geofrey T. and Rockoff, Hugh, eds., The Sinews of War: Essays on the Economic History of World War II (Ames, forthcoming).
Hughes, J. R. T., “Stagnation without ‘Flation: The 1930s Again,” in Siegel, Barry N., ed., Money in Crisis: The Federal Reserve, the Economy, and Monetary Reform (Cambridge, MA, 1984), pp. 137–56.
Hughes, J. R. T., American Economic History (3rd edn., Glenview, IL, 1990).
Janeway, Eliot, The Struggle for Survival: A Chronicle of Economic Mobilization in World War II (New Haven, 1951).
Jensen, Richard J., “The Causes and Cures of Unemployment in the Great Depression,” Journal of Interdisciplinary History, 19 (Spring 1989), pp. 553–83.
Kendrick, John W., Productivity Trends in the United States (Princeton, 1961).
Krug, J. A., Production: Wartime Achievements and the Reconversion Outlook (Washington, DC, 1945), Special report prepared for the U.S. War Production Board.
Kuznets, Simon, National Product in Wartime (New York, 1945).
Kuznets, Simon, “Government Product and National Income,” in Lundberg, Erik, ed., Income and Wealth (Cambridge, 1951), pp. 178244.
Kuznets, Simon, “Long-Term Changes in the National Income of the United States of America since 1870,” in Kuznets, Simon, ed., Income & Wealth of the United States: Trends and Structure (Cambridge, 1952), pp. 29241.
Kuznets, Simon, Capital in the American Economy (Princeton, 1961).
Lebergott, Stanley, The Americans: An Economic Record (New York, 1984).
Manchester, William, Goodbye Darkness: A Memoir of the Pacific War (New York, 1980).
Mansfield, Harvey C., and Associates, A Short History of OPA (Washington, DC, 1947).
Melman, Seymour, The Permanent War Economy: American Capitalism in Decline (rev. edn., New York, 1985).
Miller, John Perry, Pricing of Military Procurements (New Haven, 1949).
Mills, Geofrey, and Rockoff, Hugh, “Compliance with Price Controls in the United States and the United Kingdom During World War II,” this Journal, 47 (03 1987), pp. 197213.
Mises, Ludwig von, Nation, State, and Economy: Contributions to the Politics and History of Our Time, translated by Yeager, Leland B. (1st edn., 1919; trans, edn., New York, 1983).
Mitchell, Wesley C., “Wartime ‘Prosperity’ and the Future,” National Bureau of Economic Research Occasional Paper 9 (New York, 1943).
National Bureau of Economic Research, Economic Growth, NBER General Series 96 (New York, 1972).
Nelson, Donald M., Arsenal of Democracy: The Story of American War Production (New York, 1946).
Niemi, Albert W. Jr., U.S. Economic History (2nd edn., Chicago, 1980).
Nordhaus, William, and Tobin, James, “Is Growth Obsolete?” in National Bureau of Economic Research, Economic Growth, NBER General Series 96 (New York, 1972), pp. 180.
Novick, David, Anshen, Melvin, and Truppner, W. C., Wartime Production Controls (New York, 1949).
Offer, Avner, “War Economy,” in Eatwell, John, Milgate, Murray, and Newman, Peter, eds., The New Palgrave: A Dictionary of Economics (London, 1987), vol. 4, pp. 875–77.
Polenberg, Richard, War and Society: The United States, 194–45 (New York, 1972).
Puth, Robert C., American Economic History (2nd edn., Chicago, 1988).
Rockoff, Hugh, “Indirect Price Increases and Real Wages during World War II,” Explorations in Economic History, 15 (10 1978), pp. 407–20.
Rockoff, Hugh, Drastic Measures: A History of Wage and Price Controls in the United States (Cambridge, 1984).
Schweitzer, Mary M., “World War II and Female Labor Force Participation Rates,” this Journal, 40 (03 1980), pp. 8995.
Smith, R. Elberton, The Army and Economic Mobilization (Washington, DC, 1959).
Stein, Herbert, Presidential Economics: The Making of Economic Policy from Roosevelt to Reagan and Beyond (New York, 1984).
U.S. Bureau of the Budget [War Records Section], The United States at War: Development and Administration of the War Program by the Federal Government (Washington, DC, 1946).
U.S. Bureau of the Census, Historical Statistics of the United States, Colonial Times to 1970 (Washington, DC, 1975).
U.S. Civilian Production Administration [formerly War Production Board], Industrial Mobilization for War: History of the War Production Board and Predecessor Agencies, 1940–1945 (Washington, DC, 1947).
U.S. Council of Economic Advisers, Annual Report, 1990 (Washington, DC, 1990).
U.S. Department of Commerce, National Income, 1954 edition: A Supplement to the Survey of Current Business (Washington, DC, 1954).
U.S. Department of Defense, Office of the Assistant Secretary of Defense (Comptroller), National Defense Budget Estimates for FY 1988/1989 (Washington, DC, 1987).
U.S. War Production Board, American Industry in War and Transition, 1940–1950. Part II: The Effect of the War on the Industrial Economy (Washington, DC, 1945).
Vatter, Harold G., The U.S. Economy in World War II (New York, 1985).
Vedder, Richard, and Gallaway, Lowell, “The Great Depression of 1946” (Unpublished manuscript, Ohio University, 1990).
Walton, Gary M., and Rockoff, Hugh, History of the American Economy (6th edn., San Diego, 1990).
Winkler, Allan M., Home Front U.S.A.: America during World War II (Arlington Heights, IL, 1986).
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

The Journal of Economic History
  • ISSN: 0022-0507
  • EISSN: 1471-6372
  • URL: /core/journals/journal-of-economic-history
Please enter your name
Please enter a valid email address
Who would you like to send this to? *


Altmetric attention score

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed