How War Amplified Federal Power in the Twentieth Century

Economic Bulletin, December, 2001

One of the ironies of history is that, contrary to Marxist notions, wars do not benefit capitalist economies, but rather tend to create socialist economies. An inescapable feature of wartime government has been the tendency toward nationalization of production and strict regulation of consumption. From the Civil War (which created a de facto socialist state in the Confederacy) to World War II (with its myriad “alphabet” war control boards) to the Vietnam War (Nixon’s wage and price controls), wars have been the occasion for incomes policies, consumer rationing, nationalization of key industries, and other features that characterize socialist command economies. Worse yet, as Robert Higgs points out below, the perceived success of wartime economic management became the model for peacetime economic and social goals. 

Issue: 
Vol. XLI, no. 12

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