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From The New International, Vol. IX No. 2, February 1943, pp. 46–47.
Transcribed & marked up by Einde O’Callaghan.
At the end of World War I, when an economic assessment was completed on its costs, the world was shocked by what it then considered astronomical expenditures made by all the warring nations in a futile imperialist conflict. The direct financial expenditures for that war were almost equalled by indirect costs, i.e., capitalized value of life and property losses. A summary of the costs of the First World War revealed that the Allied Entente made a net direct expenditure of $125,690,476,497, while the Triple Alliance spent directly $60,643,160,600. The total direct costs of the four years’ war were over $186,000,000,000. Indirect costs of the war, capitalized in life and property losses, totalled over $151,000,000,000, thus making a grand total of almost $338,000,000,000, representing the total cost of the First World War. [1] Since the outbreak of the present conflict, various attempts have been made to estimate the costs of prosecuting a global war. From time to time reports of war expenditures for one country or another have been published, but no over-all picture was drawn. It is much too early to determine total costs, and information which is the property of government bodies is rarely made public in a coordinated way or for mass consumption.
In the February 6 issue of Foreign Commerce Weekly, however, Leon S. Wellstone, of the Division of Commercial and Economic Information of the Bureau of Foreign and Domestic Commerce, has written a preliminary observation on this subject entitled, The Cost of Hitler. Extremely interesting tables of war budgets and expenditures by all the warring countries make up the main content of the study, but the opening theme is that the war budgets and war expenditures are the result of the existence of Hitler and the Nazi regime.
Naturally, from an historical point of view, this has no fundamental significance; it is only a partial truth, or half-truth. The real truth is that war is the decisive way in which capitalist society endeavors to solve its inherent contradictions. Thus, Mr. Wellstone stretches a point when he includes in his estimates the war budgets of many countries dating from 1932. For the most part, the big powers (the United States, Great Britain and France) did not materially increase such budgetary expenditures in the early years of Hitler’s reign. It was only in 1938 that Great Britain and France announced a huge increase in the military budget. Up until that time, the bourgeois regimes in these two countries at least were quite prepared to aid or appease a “revitalized” German imperialism. Prior to that time, expenditures were not unusual for normal peacetime military budgets. The smaller countries, Poland, Belgium, Holland, etc., whether content or not, followed the lead of their masters.
The military budgets of all the countries rose sharply only when war appeared imminent, when all hope for an understanding with Germany had paled. The degree of preparedness by the powers is graphically revealed by the following figures.
It is common knowledge today that Hitler began preparations for war almost from the day he became Chancellor. As a matter of historical truth, the German industrial and financial ruling class prepared for a new war from the day Germany signed the Versailles Treaty, in order to seek again what it failed to achieve in the last war, namely, a redivision of the world in its favor.
The estimate of German expenditures for war since Hitler’s assumption of power is over $100,000,000,000. A much poorer country, Italy, under Mussolini, has had an enormous military budget for many years. Since her entry into the war in June of 1940, Italy has spent about $8,000,000,000. This comparatively small amount has, however, resulted in a complete dislocation of the weak Italian economic structure.
No figures are supplied for Japanese war expenditures since they are almost too difficult to obtain. Japan has been at war with China for many years. Even though this war was not fought on so nearly as large a scale as the present, it has been very costly. Despite an extremely low national standard of living, the Japanese war budget and direct expenditures, considering the experiences of all other countries, must run into billions of dollars.
What is the cost of the war to the United Nations? It is vastly greater than that of the Axis. In first place comes the United States. The actual expenditures have risen from $6,700,000,000 in 1940-41 (fiscal year) to an estimated $77,000,000,000 by the end of July, 194$. The presidential budget plan calls for an actual expenditure of $97,000,000,000 for the fiscal year 1942–43, while Congress has already agreed to a national debt expansion of $209,000,000,000. Wellstone writes: “Taking only the expenditures already used or now appropriated we arrive at the total of $112,300,000,000 for the last three years.”
The fact that the United States is the arsenal for the United Nations has created some confusion to the effect that her Allies have no means to finance the war and rely entirely upon the efforts and resources of Washington. A cursory examination of the war budgets of the Allied countries will easily dispel this notion.
Right behind the United States stands the United Kingdom (note that this does not include the Commonwealth). The British budget rose from 102,990,000 pounds sterling in 1932–33 to an estimated 4,500,000,000 pounds in 1942–43. The total expenditures of the United Kingdom have been 14,239,000,000 pounds, or $58,200,000,000. As will readily be seen, the expenditures of the United States and the United Kingdom alone exceed those of the Axis. Canada, with a relatively small population, has already spent almost $5,000,000,000 for war. The three additional British dominions, Australia, New Zealand and the Union of South Africa, have spent almost two and a half billion dollars.
Although knocked out of the war in its early stages (June 1940), France had expended over ten billion dollars in a relatively short period of time. Over a billion dollars was spent by Holland, Belgium, Norway, Jugoslavia and Greece. More than two and a half billion dollars was the cost of the devastating war to Poland.
Outside the orbit of the capitalist countries stands the Soviet Union. The figures presented by Mr. Wellstone, which cannot be verified by independent or Soviet sources, are extremely interesting. They show that the military expenditures of Russia jumped sharply from a billion and a half rubles in 1932 to almost fifteen billion rubles in 1935; that great yearly increases followed up through the year 1941 (there are no figures for 1942). On the uncertain estimate of forty cents to a ruble, the report shows that the Soviet Union has spent about $96,000,000,000, a sum greater than that of the United Kingdom and its dominions! A partial answer to those seeking the source of military strength of the Red Army is to be found in the military expenditures of the Stalin régime and the unquestioned preparedness by Russia for war.
Adding the costs to Czechoslovakia, Mr. Wellstone’s preliminary survey shows that the United Nations have already expended $293,000,000,000 for this war. If we include the expenditures of the Axis, the figure will rise to over $400,000,000,000.
The economic editor in the Department of Commerce has not considered the increased budgets and expenditures of Latin American countries. Nor does he supply any figures on what the war has cost the Chinese.
The above figures concern only budgetary and direct expenditures. They do not take into consideration the capitalized value in loss of life and property which has already greatly exceeded such losses during the four years of the First World War. The figures cited in the opening paragraph of this article showed that the latter losses equalled direct costs. Mr. Wellstone takes note of this fact when he says: “... it would be difficult, if not impossible, to make estimates in human life and property losses at this writing. It may be noted, however, that during the Fust World War they were considered equal to moneys expended in military operations.”
For this reason alone his estimate that the war will cost $500,000,000,000 before it is ended, is far too low. The economic editor “assumes” that the war with Hitler will end in another year, an assumption that is pure speculation. If we accept the estimate of other costs to be equal to direct costs, the war cost now is swiftly reaching toward one thousand billion dollars!
It is impossible to leave this subject without recalling the congressional struggles over the New Deal budget for unemployment relief and insurance, WPA projects and social security taxes. The struggle of the reactionary bourgeoisie against a six billion dollar budget sought by the reformist Roosevelt Administration to “alleviate the suffering of more than fifteen million unemployed” is contrasted to the swift passage of a military budget more than thirty times as great! The same situation prevails in Great Britain in the early skirmishes over the Beveridge Plan, which is a more diluted form of social insurance without even the social significance of the American New Deal.
Behind these astronomical figures on the costs of the war one can observe the disintegrating tendencies of capitalism busily at work. If the capitalist order continues for many years, the costs of this global war will be placed, as it is now, entirely on the shoulders of the workers, peasants and colonial peoples of the world. The increasing disproportion between the living standards of the capitalist classes in all the warring countries and those of the masses, the workers, the peasants, the middle classes and the colonial peoples becomes greater day by day. The destruction of the existing low living standards, not only nationally, but throughout the world, is sharply contrasted to the enrichment of the international capitalist class in the midst of the present conflict.
1. These figures are from Kirby Page’s National Defense, and are based on tables in Bogart’s Direct and Indirect Costs of the Great World War.
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