Our friend Bob Higgs has done amazing work on the history of the Great Depression. I'm sure most of our readers are familiar with his paper on "Regime Uncertainty" that is a huge contribution to understanding the length of the Great Depression. Sometimes less well-known, but equally important, is his paper on why World War II did not get us out of the Depression. In that paper, Bob argues that the traditional macroeconomic aggregates don't tell us the real story because the variety of wartime controls (from conscription's effect on the unemployment rate to how wage and price controls distort measures of GDP) cause those aggregates to diverge even more than they might usually from the underlying economic reality. Bob also tries to look at some different aggregate data to show that, for example, household consumption during the war was flat to slightly falling. He argues that the wartime controls and rationing make it hard to believe that the war was a time of economic growth and recovery in any meaningful way.
What Bob doesn't do in that paper is to look in more depth at the lived lives of Americans during the war to see if it supports his argument. One of my current students has decided to take that project on. Mike McPhillips is a history major and an econ minor (though he's actually minoring in "Horwitz") who took my "Great Depression" seminar last fall and worked on this idea for his term paper and is now extending it as an indepedent study this semester. He recently spent some time looking at microfilm of local newspapers during WW II and found an absolutely fascinating series of ads by the Canton Electric Light and Power Company that shows the deterioration of consumption and living standards between 1942 and 1943. These ads ran in the very same spot in the local paper pretty much weekly during the war. Below is a selection of these ads with brief commentary below each one from me that narrates the story I think they're telling.
This is from March 17, 1942. Note the language of "still" and a "fairly good supply" and "while they're still available." Already it's clear, four months into the war, that buying consumer appliances is a perhaps tenuous proposition.
Two months later, May 12, 1942, "now is the time to buy" because "production has stopped" and only the supply in stock is available. Again, if recovery from the Depression means the war made the lived lives of Americans better off, it's hard to see how that idea gets any support here. And we can already see how Bob's consumption measures might actually overstate the real situation for families.
An ad in July of that year reveals that electric ranges could not even be sold for a period of time and that they were then available for sale again. They were still no longer being produced but ones in stock could be sold. Presumably during the "no sale" period, the existing stock was being refitted or turned to scrap metal for war purposes. This is an interesting application of Austrian capital theory.
On November 3, 1942, the company has given up altogether on trying to sell consumer appliances and is warning its customers to take good care of the equipment they currently own because the repair or replacement of the motors in those heating devices is pretty much impossible. An ad two months later simply encouraged people to keep all of their electrical applicances in good repair.
This is a point Bob makes in his original article: the wartime controls forced people to try to extend the lives of their capital and consumer goods longer than they normally would because replacements were hard to find. This presumably led to excess investment in maintenance and I would imagine there was a large and expensive black market in these parts. All of this reduces the real well-being of households. Again, how this period constitutes a meaningful recovery from the Depression is something of a mystery.
Ads in the months to follow then shifted to encouraging people to buy war bonds, as the company became part of the war propaganda effort. The last ad below illustrates the point where the restrictions on consumption and their effects on well-being meet up with the war propaganda effort.
This November 16, 1943 ad brings a nice spin to the "Freedom Fries" of the post 9/11 period as well as our more recent debates about violent metaphors (food as a weapon? really?). However, its relevance to the story here is that the electric appliance company has totally stopped even worrying about its major product and is instead encouraging people to cut back and scrimp on their food usage as part of the war effort. It's hard to see the table of contents, but it indcates four things people should do:
1. Produce as much of your own food as you can (the losses from giving up on comparative advantage and the division of labor are clear here).
2. Conserve as much food as you can.
3. Share your food.
4. And Play Square with your food (perhaps a reference to following rationing laws and guidelines).
What is clear is that food items were relatively more scarce for consumers and that this was imposing significant costs on families. In other work Mike has done, he has found plenty of other similar evidence of how the wartime controls and rationing negatively affected the well-being of American families as resources were diverted to the war. If recovery from the Depression means an improvement in the economic well-being of the average American, the wartime economy does not fit that description.
As I pointed out in a recent Freeman piece, there are still plenty of folks today making the argument that World War II got us out of the Depression and that we should be using that as a model for our current doldrums. Higgs' work gives us the case that WW II didn't help and probably hurt. If Mike continues to find stuff like he's found, we'll have additional "on the ground" evidence for the ways in which WW II significantly worsened the economic situation of most Americans. Calling war a recipe for recovery is itself a recipe for disaster.
I'm hopeful that what Mike eventually produces out of this will be something that he and I can co-author and get published somewhere.