I will give you an actual example of Centrally Planned Economy that they don’t teach you in school: US War Economy 1942-1945
The US plunged into the Great Depression in 1929 as a result of financial speculation with nearly one quarter of the workforce unemployed. By 1933, FDR struck the New Deal and the economy began to recover but it happened at a slow pace. In fact, FDR began to reverse his policy towards austerity again in 1937 and threatened the economic recovery.
Then, the Japanese attacked Pearl Harbor on December 7, 1941. In less than three months, by February 1942, all automobile plants in the United States had been converted into war production factories.
The Federal Government had taken control of all industrial production in the country, literally telling private enterprises what they can or cannot produce.
The Federal Government seized all essential raw materials including gasoline, rubber and metal like aluminum and diverted them toward war production. In fact, if you had owned a car back then, it’d be very difficult for you to find gasoline for sale. Many essential daily items like food (sugar, coffee, meat etc.), clothing (shoes etc.) and paper were heavily rationed.
Unemployment dropped to zero - the Federal Government literally forcing everyone to go to work, and telling you what to do in your job.
In just a few years’ time, the US economy grew so much that not only did it pull the country out of the Great Depression, wages grew so much that (and with consumer goods still rationed) people were having too much money, which led to inflation. The Federal Government had to create the War Bonds to take the excess money out of circulation. (Contrary to popular narrative, War Bonds were not created to finance the war. It was created to take money away from the people whose income grew so rapidly without taxing them!)
By the end of the war, the US was the industrial giant of the world (also helped by the fact that Europe was completely ruined by the war), accounting for 50% of the world’s industrial output. In fact, the end of the war signaled peril as the drop in demands for war materiel would mean industry downsizing and a lot of people going unemployed again - a recession was on the horizon.
This was where the Marshall Plan came in. To the absolute horror of the French, the US decided to rebuild Germany by sending them all the dollars, for three main reasons:
To get Europe to become addicted to the dollar, thereby ensuring its status as a global reserve currency
To prevent a recession at home, as the Europeans will use the free money to import goods from American factories
To accelerate the reconstruction of Europe as a US ally to curb the influence of Soviet communism with huge sums of financial aid, without which the Western European countries would have had trouble keeping up with the rapidly growing socialist economies in the East
The war economy (read: centrally planned economy) was the reason for the American prosperity in the 1950s and 60s. No matter how much they try to revise the narrative after the fact, the war economy in the US from 1942 to 1945 was unequivocally a centrally planned economy (that saved capitalism).
Wages were growing and labor movements were expanding, civil rights were fought for, until the 1970s when neoliberalism took over and ended real wage growth, trade union expansion and the curbing of labor and civil rights - consequences that we are still enduring today.
In the meantime, there was also another centrally planned economy that started in the 1920s, and in a single generation, transformed a country full of illiterate peasants to a space-faring nation - the USSR. An unprecedented feat in the history of humanity, but that’s a story for another day.
The most important source is A Call to Arms: Mobilizing America for World War 2 by Maury Klein (2013). Let me warn you though that this is a 900+ pages academic text, not exactly the most digestible book for laymen (I certainly didn’t finish it), but it’s a good reference (including all primary and secondary sources) to everything that I have written above.
I will give you an actual example of Centrally Planned Economy that they don’t teach you in school: US War Economy 1942-1945
The US plunged into the Great Depression in 1929 as a result of financial speculation with nearly one quarter of the workforce unemployed. By 1933, FDR struck the New Deal and the economy began to recover but it happened at a slow pace. In fact, FDR began to reverse his policy towards austerity again in 1937 and threatened the economic recovery.
Then, the Japanese attacked Pearl Harbor on December 7, 1941. In less than three months, by February 1942, all automobile plants in the United States had been converted into war production factories.
The Federal Government had taken control of all industrial production in the country, literally telling private enterprises what they can or cannot produce.
The Federal Government seized all essential raw materials including gasoline, rubber and metal like aluminum and diverted them toward war production. In fact, if you had owned a car back then, it’d be very difficult for you to find gasoline for sale. Many essential daily items like food (sugar, coffee, meat etc.), clothing (shoes etc.) and paper were heavily rationed.
Unemployment dropped to zero - the Federal Government literally forcing everyone to go to work, and telling you what to do in your job.
In just a few years’ time, the US economy grew so much that not only did it pull the country out of the Great Depression, wages grew so much that (and with consumer goods still rationed) people were having too much money, which led to inflation. The Federal Government had to create the War Bonds to take the excess money out of circulation. (Contrary to popular narrative, War Bonds were not created to finance the war. It was created to take money away from the people whose income grew so rapidly without taxing them!)
By the end of the war, the US was the industrial giant of the world (also helped by the fact that Europe was completely ruined by the war), accounting for 50% of the world’s industrial output. In fact, the end of the war signaled peril as the drop in demands for war materiel would mean industry downsizing and a lot of people going unemployed again - a recession was on the horizon.
This was where the Marshall Plan came in. To the absolute horror of the French, the US decided to rebuild Germany by sending them all the dollars, for three main reasons:
The war economy (read: centrally planned economy) was the reason for the American prosperity in the 1950s and 60s. No matter how much they try to revise the narrative after the fact, the war economy in the US from 1942 to 1945 was unequivocally a centrally planned economy (that saved capitalism).
Wages were growing and labor movements were expanding, civil rights were fought for, until the 1970s when neoliberalism took over and ended real wage growth, trade union expansion and the curbing of labor and civil rights - consequences that we are still enduring today.
In the meantime, there was also another centrally planned economy that started in the 1920s, and in a single generation, transformed a country full of illiterate peasants to a space-faring nation - the USSR. An unprecedented feat in the history of humanity, but that’s a story for another day.
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The most important source is A Call to Arms: Mobilizing America for World War 2 by Maury Klein (2013). Let me warn you though that this is a 900+ pages academic text, not exactly the most digestible book for laymen (I certainly didn’t finish it), but it’s a good reference (including all primary and secondary sources) to everything that I have written above.
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