War Controls of Materials, Equipment, and Manpower: An Experiment in Economic Planning

Abstract

In a capitalistic economy during times of peace, industrial control is diffused and is exercised either by impersonal economic forces in the market or by managers who decide the policies of their firms regarding such matters as prices, production, inventories, capital investment, sales, hiring, and training. In times of war, however, there can be less reliance on market forces and individual self-interest in the industrial sphere. Actions must be taken by government to direct, even to force, production out of certain channels and into others in short order. The use of economic resources for many peace-time pursuits must be curtailed in order to make certain that the nation's resources are used in the most effective manner judged by the one objective in total war: the maximum injury to the enemy within the shortest possible time. In order to accomplish the rapid conversion of industry in line with the war program and in order to prevent waste or dissipation of materials, machines, and manpower on non-essentials, it is necessary for the central government to assume control over materials, facilities, and manpower to the extent that shortages develop. In times of war, government control supplants, to a considerable degree, the controls normally exercised in modern capitalistic societies by industrial management over such matters as kinds and specifications of products, purchasing policies, prices, inventories, employment practices, labor relations, hours of work, and even employee morale. The longer the war lasts and the more severe the struggle, the more detailed and comprehensive the planning by the central agency must be and the less reliance there will be upon price, markets, and private spending to determine the distribution and use of the nation's economic resources. To carry out the central plans, government controls become more stringent and more widespread. For example, central control over the various factors of production has been more complete in Great Britain, Australia, and Canada than in this country.