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Economics in the Shadow of the First World War

Economics in the Shadow of the First World War

Christopher Godden

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12014 witnessed a plethora of publications, exhibitions, conferences and workshops exploring (or, at least, so it appeared) every aspect of the history of the First World War. These publications and events were set against the forthcoming centenary of the outbreak of the war, and offered the impression of providing an all-encompassing evaluation of this global conflict. At that time, however, a cursory examination of this coverage showed that much of its content was focused on comparative social and cultural histories. Any consideration of the economic aspects of the war (either in terms of economic histories or the history of economics ideas) were relegated to very lowly positions—if, indeed, they were considered at all.

2In terms of commentaries on the economic history of the war, one example that I noticed (in the spring of 2014) appeared in a review essay discussing the direction of historiography on the First World War over the past twenty years. Those works exploring the economic history of the war were covered in less than a page of this review, and where they were described by its author as the ‘poor relation’ of First World War studies (Jones, 2013, 877). Shortly after this, in May 2014, I attended a two-day conference at the University of Manchester, entitled ‘In the Shadow of the First World War: Social and Cultural Dimensions of Conflict in Global Perspective’. This brought together prominent scholars and postgraduate researchers to discuss the central dynamics of the war in relation to topics such as mass violence, race and ethnicity, and commemoration. From a personal perspective, it was curious to observe how, at the very peak of scholarly activity centred around the imminent centenary, economic considerations were deemed by some historians to be of little or no importance in discussions covering the history of the First World War. The economic dimension of the war had indeed become the ‘poor relation’ of debates that now expressed preference for social/cultural themes that drew on questions such as identity, consciousness, and public memory.

3Awareness of this ‘poor relation’ trend led me to re-read works that addressed the economic dynamics of the war. Examples of these included Balderston’s survey of the logistics of industrial mobilisation and war-time economic controls (Balderston, 2012), and chapters on economic mobilisation and war finance by Supple (2014) and Ullamn (2014) in the second volume of Winter’s The Cambridge History of the First World War. The most famous study of the macroeconomic history of the war—Broadberry and Harrison’s edited collection, The Economics of World War I—argued that economics was decisive in determining the outcome of the war (Broadberry and Harrison, 2005, 5). This work remains the starting point for research into the economic history of the First World War, although its focus on the centrality of economics in determining the outcome of the war is controversial: economic factors alone cannot explain why Germany collapsed when it did in 1918. Nonetheless, it became clear from this reading that economic perspectives have lost none of their importance, they still have their place in wider surveys of the conflict, and they should not—cannot—easily be dismissed.

4Beginning with these economic history works, the next logical step was to explore the development and presentation of economic ideas during the war itself. Efforts to seek out academic works discussing this topic proved to be somewhat frustrating. Works by Barber (1992a, 1992b) were useful in providing some analysis of late nineteenth- and early twentieth-century thought regarding the economics of war, while Carabelli and Cedrinin (2010) and Barnett (2001, 2009) examined various aspects of Keynes’s war-time early post-war ideas and activities. Yet it quickly became apparent that the economic literature produced during the First World War was a neglected area of historical investigation, and consequently systematic studies of war-time economic thought were difficult to come by.

5Given such limited secondary material, I investigated the war-time economic literature and undertook a brief (possibly unsystematic) survey covering works by Francis Edgeworth (1915), Charles Gide (1916, 1917), Arthur Pigou (1916, 1919, 1921) and Edwin Seligman (1916, 1918). This investigation developed further, leading me to explored various war related articles and reviews published in the pages of the Economic Journal between 1914 and 1918. All of this material highlighted a huge number of topics and debates, ranging from the inability of classical liberal-market economies to deliver the required volume of armaments thereby necessitating dramatic reorganisation of combatant economics, through to the ethical appropriateness of war-time financial policies in throwing huge economic burdens onto future generations.

6This brief study of the war-time economic literature demonstrated how economists had actively responded to the economic, social and policy problems thrown up by the anarchy of military conflict. This material had been underexplored by historians, yet it proved to be provocative and revealing and simply too rich to be allowed to remain in oblivion. Set against the centenary of the outbreak of the war, a clear opportunity presented itself to bring together a number of studies that explored different aspects of war-time economic thought. It was from this idea, coupled with the support of the editorial board of Œconomia, that this special issue–‘Economics in the Shadow of the First World War’–was born. All of the studies presented in this special issue are certainly welcome, and the reader has a variety of topics to contemplate.

7Katia Caldari has produced several articles on the work of Alfred Marshall in recent years (Caldari, 2007; Caldari and Nishizawa, 2014), and these are followed here with a contribution focused on Marshall’s reflections on economic questions arising from both the Boer War and the First World War. Caldari demonstrates how Marshall’s views about these conflicts were framed in terms of questions surrounding Britain’s relative economic decline from the late nineteenth century onwards, with both wars allowing him opportunities to develop and (where necessary) adapt important aspects of his ideas. The experience of the First World War in particular led Marshall to appreciate the urgency for public control and management of crucial munitions production, as well as the need for more peacefully integrated economic, political and social relations.

8Following their recent success with the first biography of Arthur Pigou (Aslanbeigui and Oakes, 2015), Nahid Aslanbeigui and Guy Oakes offer a fascinating study of the role of the First World War in the genesis of Pigou's analysis of public finance. Their article provides the first systematic study of Pigou’s war-time writings on war finance and debt payment, and offers a detailed evaluation of the influence the war had in further developing his analysis of public finance established in his 1912 book, Wealth and Welfare.

9Klas Fregert’s study of Eli Heckscher’s forgotten 1915 book Världskrigets ekonomi (The Economics of the World War) provides original insights into Heckscher’s analysis of the costs and finance of the war. These include Heckscher’s use of the Marshallian distinction between the short-run and the long-run when dealing with the total cost estimates of the war, his investigation of consumption and investment as sources of war finance (Heckscher’s analysis of national income pre-dates Keynes’s 1940 essay How to Pay for the War), and comparisons between Heckscher’s 1915 work and Pigou’s 1916 book, The Economy and Finance of the War.

10Finally, Patrick Doyle’s article shifts our attention to Ireland’s agricultural co-operative movement and the British state during the war. Doyle’s previous work has focused on the role of the Irish co-operative movement in the nation-state building process in Ireland during the early twentieth century (Doyle 2014), and his contribution here explores the economic critique offered by Ireland’s leading co-operative theorist, George Russell, concerning the war-time state’s role in the organisation of agriculture, and its contribution to the breakdown in Anglo-Irish relations.

  • 1 The book was released in mid-November 2016, although the official publication date for the book is (...)

11It is pleasing to see how the centenary of the war has generated other academic investigations into the history of war-time economic thought. The publication of this special issue of Œconomia coincides with a new study edited by Fabrizio Bientinesi and Rosario Patalano entitled Economists and War: A Heterodox Perspective (Bientinesi and Patalano 2017).1 All of the chapters in Bientinesi and Patalano’s collection explore the relationship between war and economic power, and three in particular, focusing specifically on economic thought during the First World War, can profitably be read in conjunction with the four articles in this special issue—Fanny Colomb’s study of the relationship between the First World War and the development of heterodox economics (Colomb, 2017), and separate chapters by Luca Michelini (Michelini, 2017) and Rosario Patalano (Patalano, 2017) on Italian economic analysis and war finance during the war.

12Research into the history of economic thought during the First World War is by no means exhausted. Even the most cursory examination of material published during the conflict—in, for example, the Economic Journal, the American Economic Review, La Revue d’économie politique and Giornale degli Economisti—highlights a wide variety of contemporary policy issues and intellectual debates, ranging from the structure of economic mobilisation and the economics of war finance, through to the political and economic consequences of the war and the issues of reconstruction. The study of this war-time economic literature raises important questions associated with the impact of industrialised mass warfare on the development of economics in the early twentieth-century, and the role of the discipline as the faithful servant to both the war-maker and the peace-maker. This material is worthy of further investigation, and there remain many intriguing and invigorating possibilities for scholars to explore.

13Finally, I would like to take this opportunity to express my thanks to Œconomia’s panel of reviewers for their academic citizenship in giving of their time and expertise to undertake the reviewing task. I would also like to express my profound gratitude to the editor of the journal, Jean-Sébastien Lenfant, for his enthusiastic support at every stage of the project, and for his patience in dealing with me and the contributors (including those whose submissions did not make it to the final issue).

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Aslanbeigui, Nahid and Guy Oakes. 2015. Arthur Cecil Pigou. Basingstoke: Palgrave Macmillan.

Balderston, Theo. 2012. Industrial Mobilization and War Economies. In John Horne (ed.), A Companion to World War I, 217-233. Oxford: Wiley-Blackwell.

Barber, William J. 1992a. British and American Economists and Attempts to Comprehend the Nature of War, 1910–20. In C. D. Goodwin (ed.), Economics and National Security: A History of their Interaction, 61-86. North Carolina: Duke University Press.

Barber, William J. 1992b. From the Economics of Welfare to the Economics of Warfare (and back) in the Thought of A.C. Pigou. In C. D. Goodwin (ed.), Economics and National Security: A History of their Interaction, 131-142. North Carolina: Duke University Press.

Barnett, Vincent. 2001. Calling up the Reserves: Keynes, Tugan-Baranovsky and Russian War Finance. Europe-Asia Studies, 53(1): 151-169.

Barnett, Vincent. 2009. Keynes and the Non-Neutrality of Russian War Finance during World War One. Europe-Asia Studies, 61(5): 797-812.

Bientinesi, Fabrizio and Rosario Patalano (eds). 2017. Economists and War: A Heterodox Perspective. London: Routledge.

Broadberry, Stephen and Mark Harrison (eds). 2005. The Economics of World War I. Cambridge: Cambridge University Press.

Caldari, Katia. 2007. Alfred Marshall’s Critical Analysis of Scientific Management. European Journal of the History of Economic Thought, 14(1): 55-78.

Caldari, Katia and Tamotsu Nishizawa. 2014. Marshall's ‘Welfare Economics’ and ‘Welfare’: A Reappraisal Based on his Unpublished Manuscript on Progress. History of Economic Ideas, 22(1): 51-68.

Carabelli, Anna M. and Mario A. Cedrini. 2010. Keynes and the Complexity of International Economic Relations in the Aftermath of World War I. Journal of Economic Issues, 44(4): 1009-1027.

Coulomb, Fanny. 2017. The Evolution of the Economic Thought Confronted with World War I and the Reparations’ Issue. In Fabrizio Bientinesi and Rosario Patalano (eds), Economists and War: A Heterodox Perspective, 27-41. London: Routledge.

Doyle, Patrick. 2014. Reframing the ‘Irish Question’: The Role of the Irish Co-operative Movement in the Formation of Irish Nationalism, 1900–22. Irish Studies Review, 22(3): 267-284.

Edgeworth, Francis Y. 1915. On the Relations of Political Economy to War. Oxford: Oxford University Press.

Gide, Charles. 1916. The Commercial Policy of France after the War. Economic Journal, 26(104): 441-447.

Gide, Charles. 1917. Commercial Policy after the War. London: Cassell & Company.

Jones, Heather. 2013. As the Centenary Approaches: The Regeneration of First World War Historiography. Historical Journal, 56(3): 857-878.

Michelini, Luca. 2017. Italian Economic Analysis of the First World War: ‘Historical Materialism’ Verses ‘Pure Economics’. In Fabrizio Bientinesi and Rosario Patalano (eds), Economists and War: A Heterodox Perspective, 98-116. London: Routledge.

Patalano, Rosario. 2017. How to Pay for the War: Military Spending and War Funding in Italian Economic Thought (1890–1918). In Fabrizio Bientinesi and Rosario Patalano (eds), Economists and War: A Heterodox Perspective, 150-172. London: Routledge.

Pigou, Arthur Cecil. 1916. The Economy and Finance of the War. London: J.M. Dent & Sons Ltd.

Pigou, Arthur Cecil. 1919. The Burden of War and Future Generations. Quarterly Journal of Economics, 33(2): 242-255.

Pigou, Arthur Cecil. 1921. The Political Economy of War. London: Macmillan & Co Ltd.

Seligman, Edwin. 1916. The Economic Influence of the War on the United States. Economic Journal, 26(102): 145-160.

Seligman, Edwin. 1918. Loans versus Taxes in War Finance. Annals of the American Academy of Political and Social Science, 75: 52-82.

Supple, Barry. 2014. War Economies. In Jay Winter (ed.), The Cambridge History of the First World War – Volume II: The State, 295-324. Cambridge: Cambridge University Press.

Ullman, Hans-Peter. 2014. Finance. In Jay Winter (ed.), The Cambridge History of the First World War – Volume II: The State, 408-433. Cambridge: Cambridge University Press.

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1 The book was released in mid-November 2016, although the official publication date for the book is given as 2017.

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Electronic reference

Christopher Godden, « Economics in the Shadow of the First World War », Œconomia [Online], 6-4 | 2016, Online since 01 December 2016, connection on 24 February 2018. URL :

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Les contenus d’Œconomia sont mis à disposition selon les termes de la Licence Creative Commons Attribution - Pas d'Utilisation Commerciale - Pas de Modification 4.0 International.

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