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To what extent was the Second World War in Europe decided by economic factors?


Historians have demonstrated the role economic resources and their organization played in the Second World War (WWII). According to Harrison (1998), there is no doubt that the United States (US) economic capabilities overwhelmed those of Japan and therefore determined the eventuality of the war. According to Calleo (1978), the Nazi economy did not have the economic power and organization that would have enabled them to oppose the combined power of the US, the United Kingdom (UK), and the Union of Soviet Socialists Republics (USSR). Some authors according to Alexander (2000) have disputed the primary role economics played in the turn of events during the WWII and have in turn attributed the defeat of the Germans to the strategic and tactical mistakes that Hitler made among them, the invasion into USSR. Despite these minor disputes, arguments by such authors like Tooze (2006) have established the primacy of economic resources and organization in the unfolding and eventuality of the Second World War.

According to Tooze (2006), Hitler was paranoid about the issue of limited agricultural land in German compared to the land resources and raw material available for the Americans and the British and as Tooze puts it “land hunger was one, if not the most important impulse” (166). Agriculture is one of the economic activities that Hitler and German relied upon for economic income. Hitler land-hunger is best described through the so-called General Plan Ost which is in the Third Reich. According to Tooze (2006), the General Plan Ost would have ultimately caused the death of 40 million eastern Europeans and provided land for the Germans. This essay therefore seeks to explore the effect of economic factors in the Second World War and the extent to which these factors influenced to outcome of the war. This will be done through literature review and argumentative deductions based on available information.


The pre-war years and economic balance

The years before the Second World War and in particular those between 1933 and 1939 played critical roles in fueling and modeling the war that came to be. There is considerable evidence towards this argument (Tsouras, 2006; Tooze, 2006). One of the aspects of the pre-war years was the alliance system that was struck before the war broke. These alliances can be explained from territory, GDP, and population aspects. GDP and population signify the military-economic significance as they determine the upper limit of production and personnel available for war. Territory and its diversity had an important contribution as it determined the quantity of natural resources available for example metal ore, fuel, minerals, and the degree to which each coalition could expect as potential or as disruption to economic bloc under the war time conditions.

The Anglo-French alliance, with their colonies taken into account comprised almost 700 million people which were about a third of the world population at the time, and about 47.6 million square kilometers of territory. On the other hand, the Axis-German alliance comprised of about 260 million persons and a little more than six million square kilometers of territory (Barkai, 1990). Statistically, the Allies had overwhelmed the Axis by 2.7:1 in population and by 7.5:1 in territory. In addition, some countries in the Axis alliance were also involved in other conflicts other than the Allies for example; Japan was in a conflict with China, which too overweighed Japan in both population and territory.

Immediately before the Second World War, that is 1938, the Allies disposed of more than $1,000 billion of real product which was way higher than the $750 billion disposed by the Axis Gross Domestic Product (GDP) which was an advantage of 1.4:1 to the Allies (Barkai, 1990). In each of the three major aspects – population, territory, and GDP – that are related to economics, the Allied were strongly advantaged to the Axis even before the war began in 1939. The primary cause of this was the adherence by the Axis on low income regions in Asia and Africa. Despite the expanse advantage for the Allied over the Axis, the Allied level of income per head was less than $1500 a half of the Axis level of income per head at $2900.


Economic causes of the WWII

According to Burleigh (2000), modern war is basically as a result of international rivalries that can’t be separated from the capitalistic way of owning world resources and the Second World War was no exception. Specifically, the root cause of the war was the scramble for colonies. Germany and Italy entered into the scramble well before 1914 but they were slow and the Allies acquired all the best territories, trade routes, and strategic positions. These colonial territories meant the allies had gold and raw materials, which the Axis lacked, and in a bid to solve this problem, the Axis governments formed aggressive totalitarian oriented policy that was meant to challenge the Allied. The policy involved among others, a different way of trading that avoided transacting with gold, and tied their markets to themselves hence taking them out of the world market. The result of this was declined gold in London and New York and to exacerbate the matter, the Axis members began to take markets through military force for example Manchuria by Japan in 1931 and Abyssinia by Italy in 1935 (Brenner, 2006).

In response to the Axis’ market strategy, the Allied powers engaged in a high powered campaign to regain the markets with boycott to Italy, Japan, and German goods being one of the strategies (Brenner, 2006). As the success of this strategy increased, so did German become more desperate hence turning to use of force hence the annexation of Austria in 1938. At the time, Britain and France continued to use credits to undermine German market influence. With no side backing down, war broke in 1939 when the British and the French decided to repulse force by using force. As stated by Calleo (1978) war was delayed as much as possible mainly because of the desire to solve the problem through negotiations and also because of the anti-war feeling among British and French workers, but in September when Germany invaded Poland, the Second World War began (Harrison, 1988).


Economic balance in wartime

Under the impact of the war, the factors determining the economic balance between the two opposing sides changed (Mills and Rockoff, 1993). One of the factors that was at work was the accession of new allies as much as possible because the conflict grew to global scale. Finland, Romania, and Hungary joined the Axis powers and the US and the USSR joined the Allied powers as well as China which was already at war with Japan, a member of Axis. Under the metrics of population, the Allied were more advantaged mainly because of the addition of the USSR and the USA which added more than 300 million persons in comparison to the 28.5 million additions to the Axis powers (Tooze, 2006). However, as a result of the war and the reluctance of the Allied to participate fully in the war, by 1942, the Allies had lost territory with a population of about 260 million which they had residence in 1938 before the war. As a result of this, the Axis had brought into their account Asian and European territories with a population of about 350 million persons.

As a result of the expansion of the Axis territory, which was a principal objective of Axis expansionism with each power in the Axis alliance seeking to achieve self-sufficiency in the colonial sphere at the expense of the Allied and neutral powers, the resources available to the Axis side reached a peak in 1942 (Tooze, 2006). Among these was the amount of GDP available to the Axis powers however, and as argued by Mills (1993), many regions during the wartime period did not have GDP indicators available. By 1942, the ex ante advantage of the Allied had fallen to just 1.9:1 in population but still maintained the 7:1 for territory, and GDP fallen to 1.3:1.

Given china was not clearly understood on which side it participated in the war because, despite china being in war with china, their internal basis for the civil war were not understood whether communism or capitalism, it (China) could not be entirely considered as a member of the Allied forces (Tooze, 2006). Deducting the Chinese resource, then by 1942, the resulting figures are 1.2:1 for population and 1.1:1 for GDP therefore, the Allied powers didn’t have economic superiority over the Axis powers. With the absence of GDP indicators, the 1942 GDP is based on 1938 income which according to Tooze (2006) corresponds with the Axis military-economic policy expectations. Prior to the war, German and Japan had anticipated taking over the materials and labor-rich colonial spheres of their adversaries and exploit them to the fullest (Barkai, 1990). This was exacerbated by the thinking that the adversaries didn’t have vigorous economic mobilization at home level to counter their expansion.

Even though the Axis powers were successful in conquering more colonies by 1942, incomes fell and there were difficulties in exploiting the resources in the conquered territories (Harrison, 1988). At the same time, the Allied powers conceived the real threat posed by the Axis powers and engaged heightened military power to counter the threat of the Axis to their homelands as well as their international interests. The Allied powers mobilized their resources and they became richer and economically more powerful compared to how they were before the war. However, due to the shifting position of France, being knocked out of the Allied and their resources being available for Germany, in 1941 the Allied were at their lowest economically. From 1942 and onwards up to the termination of the war (Harrison, 1998), the economic standing of the Allied powers moved steadily upwards and presented the Allied powers with an advantage over the Axis.

The US, which had by far the largest economy in terms of GDP undertook to enormous quantitative mobilization drive and by 1944, their GDP was at about twice the level it was in 1938. The USSR economy which had been hit greatly by the 1941 invasion and still harder again in 1942 had also stabilized and mobilized to a higher output level. In 1943, Italy was knocked out of the Axis alliance and after France had joined the Axis powers; its economy began falling year after year. By the end of 1943 and in 1944, the economies of the great Axis powers, German and Japan began to collapse and could not sustain an aggressive war strategy any more. By 1944, the economic balance had shifted greatly in favor of the Allied forces to reach a ratio of 3.3:1 (Tooze, 2006).

By 1944, the five great powers still in the war fielded about 43 million soldiers and two thirds of these were in Allied uniform. In the eastern front, the Allied advantage stood at almost 2:1 just as in the west and the pacific fronts (Overy, 1995). Economic power determined the quantitative metric of the war and for the Axis; quantitative disadvantage was even greater in munitions than in personnel. In the most intense period of the global conflict – 1942-44 – the number of weapons produced was astonishing with about 50 million machineguns, automatic weapons, rifles, and more than 2 million mortars and guns, slightly above 200,000 tanks, 400,000 combat aircrafts, and 9000 naval major vessels. According to Overy (1995), in category of the war the Allies outweighed the Axis with a ratio of 5:2 for rifles, and combat aircrafts, 3:1 for machine guns and guns, 5:1 for tanks, war naval ships, and motors, and 15:1 for machine pistols. The allied powers therefore had the upper hand in every aspect of the war from soldiers to weapons in the east, west, and pacific fronts, an aspect that has due to the higher economic advantage.



Economy played a crucial role in the ongoing of the Second World War and in determining the outcome of the same. The Allied and Axis powers both tried to amass higher economic capabilities by acquiring colonies which presented them with population hence personnel for the war, territory which presented markets and resources for the war, and income through GDP. By the start of the war, the Allied forces had the upper hand economically with higher population, bigger territory, and higher GDP. When the war broke out in 1939 and as a result of the shifting position of the French as well as Italy being knocked out of the Axis alliance, as well as the effects of invasion to the USSR, the Allied were at their lowest economically in 1942. However, after quantitative mobilization of their economy, the Allied were again at an advantage economically and mobilized resources to win the war. It is therefore concluded that, economy determined the start of the Second World War, its ongoings, and how it turned out with the defect of the Axis.



  • Alexander, Bevin. How Hitler Could Have Won World War II: The Fatal Errors that Led to Nazi Defeat. New York: Three Rivers Press, 2000.
  • Barkai, Avraham. Nazi Economics: Ideology, Theory, and Policy. New Haven: Yale University Press, 1990.
  • Brenner, Robert. ‘What Is, and What Is Not, Imperialism?’ Historical Materialism, 14, 4 (2006): 79–105.
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  • Calleo, David P. The German Problem Reconsidered: Germany and the World Order, 1870 to the Present, Cambridge: Cambridge University Press, 1978.
  • Harrison, Mark. ‘Resource Mobilization for World War II: The USA, UK, USSR and Germany, 1938–1945.’ Economic History Review 41, no. 2 (1988): 171–92.
  • Harrison, Mark. The Economics of World War II. Cambridge and New York: Cambridge University Press, 1998.
  • Mills, Geofrey T. and Rockoff, Hugh, Ed. The Sinews of War: Essays on the Economic History of World War II. Ames: Iowa State University Press, 1993.
  • Overy, Richard.  Why the Allies Won.  New York:  Norton, 1995.
  • Tooze, Adam. The Wages of Destruction: The Making and Breaking of the Nazi Economy. London: Penguin Books, 2006.
  • Tsouras, Peter G., ed. Hitler Triumphant: Alternate Decisions of World War II. London: Greenhill Books, 2006.

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