Comparative World War Economic Growth in the US.

The fallowing discussion is a result of an argument I have had/ am having. The argument is about the historical record of democratic government control of capital. I had backed a libertarian into a corner about a suggested mechanism for which government intervention can produce positive results in an economy either through regulation or control and included historical examples justifying my position to which the libertarian quipped “the historical record of government control of capital is clear” or something to that effect. I, of course, challenge the assertion that government control of capital is an abject failure.

I claim that the only examples of a modern democratic government with a developed economy that had direct control of capital are the WWII governments of the United States and the United Kingdom. Other democratic governments have had influence over the control of capital to varying degrees and other non-democratic modern governments have had control over capital to be sure but I still think the WWII example is a valuable one for any claims about the historical performance of democratic government command economies as it is the only modern example of such an economy amongst developed economies.

I have no expertise in economics and I’m sure my approach is amateurish to the point of making even a second year economics major cringe and for that I apologize. I use methods and tools that I myself find highly objectionable in this discussion and it is by no means complete. I do justify my horrors by stating that this is merely an attempt to effectively participate in an informal and laid back discussion with a friend of mine. I may bring up objectionable stuff when it occurs and sometimes I may neglect to do so. It should be known that I do not fully agree with my methods or my results. I do include every calculation I have done on this topic.

WWII American society is unique and any terse comparison will be inaccurate and unjust but I won’t invest in a non-terse comparison. I will compare the economic performance of the United States during WWII which was a command economy with that of WWI which was a pre-new-deal market economy. The comparison will be rife with errors as the entirety of American society was not mobilized for the war effort and there was greater opposition to WWI in America then there was for WWII. Because of these and other factors such a comparison is highly inaccurate but I will talk about the economic performance of the United States during these wars in comparison with one another to comment on the effectiveness of a command economy under a democratic government.

I will also be doing a disservice to such a comparison by only looking at GDP as a measure of an economy. The GDP is not an accurate measure of an economy but it is the most convenient approximation of a measure. Even as an approximation it is very poor. I won’t go into the reasons for this assertion but I believe most economists don’t share them, so for the purposes of my argument with my friend I will use GDP as a measure of an economy.

In order to compare the two economies I will use 1915-1919 as the WWI economy and 1939-1944 as the WWII economy. There is good reason to use different dates but for my purposes I chose two dates of equal time to be easy to compare. The United States didn’t join the war at its onset but it did support Britain’s war effort to some degree.

According to Measuring Worth the following table lists the values for the real GDP and GDP per capita as measured in 2000 dollars:

	Total	Per Capita
	(bill$)	($)
1914	490.4	4,948
1919	614.8	5,852
1939	950.7	7,256
1944	1,806.5	13,053

The following table lists the total change and average annual change compounded continuously:

	Total		Per Capita
	Total Change	Average Change	Total Change	Average Change
		year^-1		year^-1
1914-1919	25.4%	4.52%	18.3%	3.36%
1919-1939	54.6%	2.18%	24.0%	1.08%
1939-1944	90.0%	12.8%	79.9%	11.7%

There are two things that stand out to me. The first is that total economic growth occurred at 2.8 times the rate during WWII then it did during WWI and the second is that total war time growth far outpaced peacetime growth in both cases with WWI growth occurring at 2.1 times the rate of peacetime growth. The naive conclusion is that war is more useful for economic growth then peace is and that a command economy produces more growth, at-least during war. It seems that when this nation really needed to ramp up production it used a command economy to do so with great effect.

This overlooks what production is occurring during war. War production actually destroys wealth instead of creating wealth but is counted in the GDP like useful production is. The growth in production during war is thus not beneficial to the economy. The drop in GDP after 1919 and 1945 (not shown) is evidence of this and there was a steeper drop after WWII then after WWI and the drop lasted longer. The growth in production during WII was not the reason for the American economic dominance of the 1950’s but rather the destruction of industry in most of the industrialized world was. I have no doubt that had WWI and WWII not occurred that Americans (and everybody else) would have been better off and would be better off today. I will not proceed with this argument any further here except to say that when this nation really wanted to accomplish a task with all of its might, it accomplished just that using a command economy.

There is also the question of evidence for the historical examples of democratic government involvement in capital control decisions that fall short of direct control. This same time period offers such an example and recently, with the current recession, people have made the claim that there would have been greater economic growth pre-1939 had the new deal not been implemented. My libertarian friend also made this argument and I will address it here.

There are difficulties with measuring the economic growth of the “roaring twenties” and of the new deal that are far from trivial. A major reason for this was that one of the major reasons for the depression was the massive use of credit during the 1920s. When somebody or a society saves, one is buying prosperity tomorrow with poverty today and when one uses credit excessively, one is buying prosperity today with poverty tomorrow and this dynamic is certainty at play during the 1920s and 1930s. For this reason the GDP figure in 1929 and throughout the 1920s is sure to be artificially inflated.

Another difficulty is the presence of four years of the policies of President Hoover. There is ample evidence that President Hoover did not strictly fallow the laze-fair capitalist policies of his predecessors in dealing with the depression, but his policies were certainly not the new deal. I claim that Hoover’s policies were more in-line with his Republican predecessors then with the new deal but there are others that argue otherwise. Any accurate assessment on the performance of the new deal is contingent and an accurate assessment of this issue.

Attributing all the GDP growth from 1933 until 1939 to the new deal is not correct because part of that was realizing past growth that was not accounted for in 1933 but also attributing the GDP growth from 1919 to 1929 is also inaccurate because the GDP numbers are certainly inflated and a portion of the downturn in GDP must be attributed to policies leading to the downturn. I use two naïve compromises to correct for these inaccuracies. I compare the period from 1919-1929 with the period from 1933-1939 in order to have both inaccurate and give Hoover to nobody, I also compare 1919-1931 with 1931-1939 giving some of the downturn to the unrestrained market period and taking away from the new deal to take at-least some undue credit for any downward overshoot of the GDP.

From the same source these were the GDP figures for the various time frames: all figures are in 2000 dollars:

td>

	Total	Per Capita
	(bill$)	($)
1919	614.8	5,852
1929	865.2	7,099
1933	635.5	5,056
1939	950.7	7,256
1931	739.9	5,960

The following table lists the total change and average annual change compounded continuously:

	Total		Per Capita
	Total Change	Average Change	Total Change	Average Change
		year^-1		year^-1
1919-1929	40.7%	3.42%	21.3%	1.93%
1919-1933	3.4%	.24%	-13.6%	-1.04%
1919-1939	54.6%	2.18%	24.0%	1.08%
1929-1933	-26.6%	-7.71%	-28.8%	-8.48%
1929-1939	.9%	.94%	2.2%	.22%
1933-1939	9.6%	6.71%	43.5%	6.02%
1919-1931	20.3%	1.54%	1.8%	.15%
1931-1939	28.5%	3.13%	21.8%	2.46%

In both comparisons the new deal outperformed the “roaring twenties” by a factor of 2-3 times in GDP growth. GDP certainty does not complete an accurate picture of the strength of an economy but the evidence that GDP does give suggests that government intervention in capital control decisions does not spell disaster for an economy. There is ample evidence both in this example and others where democratic intervention in an economy produces positive results.

The Defeat of Hope

I try to watch an hour of news a day: half an hour of the BBC World News and half an hour of the ABC World News Tonight. I watch the episodes of The Daily Show and of the Colbert Report I read five left leaning blogs on a regular basis (links are over on the side -->). Everywhere I turn I am told that I’m a witness to history and how America has changed and how “our long national nightmare is over.” Never before have the opining minuets of Tchaikovsky’s “1812 Overture” sounded so bitter sweet.

The only thing historic about the election of Senator Obama to the office of the Presidency of the United States is the race factor. Just 18 years ago electing an African American to the Presidency was unheard of and now it isn’t. That isn’t much of a change. And in what shouldn’t be surprising the first Black President is worlds away from the pre 1980 black leaders. All of them. The geologic pace of turning back racism towards African Americans is there but for the vast majority of Black people (well for the vast majority of anyone not born relatively rich and white or just plain rich), the Presidency is well out of reach. Our two party Democracy still quite cleverly disenfranchises the majority of Americans not to mention the often insurmountable struggles that are still inherent in being born black.

This is very far from a defeat for racism. Senator McCain still received over 46% of the vote. I will not claim that everyone who voted for McCain is racist but any look at the political discourse in the month of October still shows that a large portion of the electorate (perhaps as high as a third but defiantly over a sixth) will not tolerate a black president. Electing Senator Obama president will unleash a great backlash of racism yet predicted. The KKK has been building strength from an “immigration crisis” and within a year in a half there will be video of large KKK demonstrations in cities broadcast on the evening news. Americans need to be reminded of the true threat of bigotry and this is something Senator Obama’s election will certainly do. Race riots may very well be part of the American cultural landscape within Senator Obama’s first term. After ignoring racism for decades, the underlying conditions of disparity between races, classes, and populations in this country will once again force itself onto the national stage. President Elect Obama is only the catalyst for this change and it will happen at-most only a decade then it otherwise would have.

President Elect Obama faces a country in poor condition. What he does as President will only make the situation worse further raising the stakes in this country. He will expand the military and extend the global war on terrorism while ending the war in Iraq “responsibly” in an echo of “victory with honor.” He will continue to wiretap citizens. His solution to an economic crisis that is caused by an economic system that relies on companies making more money than they spend causing people to need to spend more money than they earn worse by supporting policies to further advance such a system. As far as I know he has never addressed poverty, or real wages, or homophobia, or the conditions for the majority of African Americans, while praising welfare reform, tax cuts for all but quarter millionaires, Warren Buffet, Larry Summers, and Bill Clinton. The real change that will happen is that the abuses of the past thirty years will be less in your face then they have been the past eight years.

What I find most disgusting is how people are responding to hallow (and bad) rhetoric, to false hope, to an undefined vision, not to mention to the promise of more war and a continuation of our bad economy. People, even the bloggers I link to (all of them, which is heartbreaking) are treating the Election of President Obama as the defeat of racism while a lot of people are regarding President Elect Obama as if he will lead us to a Promised Land. Senator Obama has skillfully built up this fallowing and the fervor to which he has whipped up a large portion of the population with a lack of substance is frightening. President Elect Obama will not cause societal change because he isn’t doing so and if he tries he will be marginalized worse then President Carter. Time and time again the leaders of social movements in this country aren’t elected President. Doctor Martian Luther King Junior had no chance of becoming President and would have no chance if he were an activist today. Senator Obama has inspired many people to look to their government and their governmental leaders for change. Governments have a great historical record of never being able to change anything. The only people that can bring change to American society are the American people, not its President and not its government. Senator Obama has inspired over 57 million people to vote for him as “voting for change.” He has inspired millions to work diligently to see him elected President. The tragedy of this is immense.

Senator Obama could have used his Presidential Campaign to do something far greater. Instead of inspiring people with false hope to look towards their government of change, Senator Obama could have inspired people with real hope to look towards themselves for change. Change will happen in this country when 57 million people decide to work together to change their lives directly. When 57 million people work to improve their communities, to look after the disadvantaged, to insure freedom, equality, and justice, to support their neighbors, and to bring out the best in humanity, change will happen. When 57 million people look to a savior to improve their individual lives… the results won’t be good. Senator Obama developed the celebrity and the credibility to inspire people to really change the world for the better and instead inspired people to vote him into the Presidency where he will (along with President Bush) usher in a tumultuous era of American history rivaling the 1960’s. The hope that President Elect Obama will bring will be that a leader who can do what Dr. King did will emerge from such a situation but it may not have been necessary for the inevitable pain to occur for this hope to possibly be realized.

I am not going to claim that there isn’t anything positive from the way Senator Obama ran his campaign or from a President Elect Obama but the desperation amongst the American people that is now self evident is great reason to worry. Today I was talking with a worker at Taco Bell and the effect happiness brought by Senator Obama’s election was great. In having a several minute conversation with her it was revealed that the happiness is within in herself. This is one small positive and there are countless others both large and small but these are overshadowed by both the wasted opportunity and the grave state the country now faces itself in.

I Had A Dream

…well… a nightmare really. It was while ago and when I did I thought about starting a blog so I could get it down right away. It was a very powerful dream and, unusual for a nightmare, was much scarier after I woke up then it was during the dream. I couldn’t get back to sleep for hours after the dream and I can’t remember the last time before then that this was the case. It was a truly frightening experience that I’m now going to share with my zero readers but you need some background first.

When reading Red State Son, I came across rather effective endorsement for Nicholson Baker’s book: Human Smoke. Mr. Perin posted a quote from a review by someone else that was along the lines of: it made me angry at pacifists. Being a pacifist, before I read Mr. Baker’s book, I found World War Two hard to argue against without resorting to the pacifist basics and I couldn’t think of a better endorsement to read Human Smoke then it makes warmongers angry at pacifists. Mr. Baker’s book taught me a lot of history I didn’t previously know and it is no longer the case that I don’t have specific arguments against World War Two. The book pertains to my situation as I was reading the book around the time I had the nightmare. I will relate it as best as I can remember.

I was at a boarding school (high school level I think). The setting was a mixture of contemporary America and 19th century France by my best guess. I was an individualist and got into a fair amount of trouble at my school but nothing too serious, which is not surprising. I also starting fancying a female student who had a similar rebellious attitude except she got into more serious trouble then I did.

We, France, was at war with our enemy, Germany, and the war was getting worse and the school administration was getting more uptight and the trouble I caused was becoming less tolerated. But during the middle of the school day we had a pep rally assembly to inspire patriotic fervor about the war. Everybody had to line up in their class but it was done in a racist way: the black students were standing to the right of the white students, the poor were standing to the right of the rich, and the women were standing to the right of the men (all directions from the perspective of the students). I think I was third or forth from the end towards the left side. We went down the line of each class and each student had to say how the war was benefiting him or her and/or how/why he or she was supporting the war: I can’t quite remember. The line got to me and here is what I said, “I cannot support this war in which we are deliberately killing children. I cannot support that murder.” I was referring to French bombers deliberately targeting all types of civilians, including children. I don’t have to say that this was unacceptable and I got into some serious trouble. I wasn’t expelled but it was clear from that point on that my teenage rebellious actions were no longer all fun and games, that my rebellion had profound meaning attached with it. I decided I had to leave the boarding school because I couldn’t support the schools support for war and it was clear to me that speaking out against it would not be tolerated. As I was collecting my things I talked with my crush about things. She revealed that she was interested in me but because she had to do everything she could against the war, she couldn’t become involved with me, which was disappointing.

That’s when the dream stopped. There is a lot in it and a lot of it pertains to my life personally but there is something in it that pertains to all Americans today. During World War Two we deliberately targeted children with our bombers. Today, in Iraq, in Afghanistan, elsewhere, and soon to be in Pakistan, we aren’t deliberately targeting children but when we expand our ordinance we are certain that it will result in the deaths of children. Our intentions aren’t as horrible as they were in World War Two but the effect is just as horrible. This is why the dream was scarier after I woke up. It is because my country is responsible for the deliberate murder children around the world… and I support it.

Spinning in His Grave

I’ve been sad since about 6:00 PM yesterday. That sorda sucks as I have claimed I’ve been doing good since Monday which was the first time in about 4-6 months I’ve made that claim. It is my mistake for being sad but I’m getting ahead of myself, you all need some background first.

The first thing I remember about politics with any real clarity was the campaign between President Clinton and Senator Dole in 1996. I have vague memories of seeing President Bush on the news during the Gulf War and of Mr. Perot debating with President Bush and Governor Clinton in 1992 but those are only vague memories and I remember literally seconds of content from each of them. Now, I’ve been raised liberal by my mother’s family and raised to be a partisan Democrat by my father and for a while these went hand in hand for me.

This would work for the 1996 Presidential election as well despite not knowing what I was talking about but I would scour the Washington Post for the latest talking points and think I was being very smart adopting them as my own. I especially liked using talking points to demonize Senator Dole despite not understanding what I was saying. I defended the Clinton administration in its second term. I argued that the Clinton administration policy on Iraq was perfect (anything away from the official policy in the slightest was doomed to dismal failure) both when he was allowing the inspectors to work saying that bombs won’t solve anything and when President Clinton removed inspectors and boomed Iraq stating that the action was just and reasonable. I read the Washington Post a lot in middle school and high school and during the 1990’s I would always find those talking points to defend the President.

I continued associating liberalism with the Democratic Party after Clinton. In one moment I am ashamed of to this day, I convinced my mother to vote for Vice President Gore instead of Mr. Nader with an impassioned defense of the two party system. It was a year before I would first start learning about the historical impact of minor parties in AP US History. Mom, if you read this, I apologize for my actions. This was the same year where, in the spring, I declared myself a socialist. In gifted and talented (later changed to honors) world history in my sophomore year in high school, my teacher divided the students into two groups for a debate. One group would argue that Karl Marx was a genius and the other group would argue that Karl Marx was an idiot. At the time I thought it was obvious that he was an idiot and that there could be no defense of anything other than that.

I can’t remember the side I was assigned but at the time I had the habit of preparing both sides of a debate before participating in one. It was a great way to learn the skill of understanding things you don’t agree with which is essential if one ever wants to understand anything remotely approaching truth. Before that day I was passionately outspoken against communism and anything resembling it (and I knew two people in middle school who called themselves communist). When I was preparing for the debate, which never happened by the way, I realized that I had never before learned anything about communism. Seeing how I was woefully ignorant about something I was outspoken about, I need to do the responsible thing and educate myself about communism so I read the communist manifesto. I remember not agreeing with everything in it but thinking that allot of what is said in it is worthwhile, so I wasn’t going to convert to communism and I wasn’t going to stay a capitalist so I became a socialist. I’ve remained one ever since despite my understanding of that term completely changing at-least twice over the past eight in a half years.

But Vice President Gore failed to win the 2000 Presidential election despite my efforts to change one vote in Virginia but early into 2001 the Democrats took over the Senate. That year taught me something valuable: The Democrats aren’t liberal. At this point I was still in support of the Democratic Party because they are further left then the Republican Party but I was angry at the Democrats. In the first election that I voted in, that I could vote in, the 2002 mid-term elections, my choices were simple. For Virginia Senator, Senator Warner was running for the Republicans and there was no Democrat running, but there was a liberal running for a third party or as an independent and all the other races I could vote in only featured a Republican and a Democrat. My choices were simple though I did do terse independent (i.e. not just looked at the one page candidate comparison in the local newspaper the day of the election) research about all of my options. I was still angry at the Democrats.

Then came the 2004 Presidential campaign. I was still upset at the Democrats and was so disenchanted that they had to do something special to keep me supporting them. The Democrats had to demonstrate that they will stand up and fight for liberalism. I set aside the 2004 Democratic National Committee Convention in Boston as their chance to do this. Through all 4 days, the speakers were convincing and succeeding in bringing my back into the fold however wary about it I was then Senator Kerry spoke and I knew that the Democrats would be as spineless as ever. I stopped supporting the Democratic Party that day and the fallowing day I joined the Socialist Party USA and have been becoming slowly more radical ever since.

This sets up the scene for the 2008 Presidential campaign. I am further away from supporting the Democratic Party then I was in 2004 and the Democrats now had to win me back instead of merely avoiding loosing me. On principle, and a good principle, I decided to allow Senator Obama (and yes, Senator McCain) a fair chance to appeal to my vote. I have decided to once again leave it up to the conventions for the parties to argue for my support. So I’ve watched all 72 hours of the Democratic National Committee Convention though, in fairness, I should point out some of it more intensely then others. I suspended my disbelief about Senator Obama and the Democratic Party to, as objectively as I could, judge the Democrats and whether or not I should vote for Senator Obama. This opened me up to get hurt and get hurt I did.

Yesterday, on Thursday, the last day, the day in the football stadium, The Democratic National Committee held a tribute to Reverend Martian Luther King Junior at their convention. During the tribute two of his offspring spoke. The video and the speakers pointed out that an African American receiving a major party nomination to be the President of the United States is a realization of Dr. King’s dream. This was a correct assertion as such a thing would be completely ridiculous sixteen years ago, much less forty-four. It was also claimed, though not directly, that Dr. King would support Senator Obama in his bid to become the President of the United States.

Such a thing could not be further then the truth. Dr. King is someone who called the United States “the greatest purveyor of violence in the world today,” and also spoke out against capitalism in public and for democratic socialism in private. These beliefs are certainly still pertinent to today. I can see no possibility of Dr. King supporting Obama who is advocating more war and violence and who is not talking about tackling poverty like Senator Edwards might have or Kucinich would. Claims that Dr. King would support Senator Obama insults both the man himself and the people who try and hold him as a role model.

This is why I am sad. I shouldn’t be. It’s not surprising or noteworthy when politicians misrepresent history for their own gain. It is my fault for diving the Democratic National Committee the power to effect my like they have. I need to figure out a way to suspend my disbelief to listen to their arguments without making myself vulnerable as I apparently have. The tribute did do one important thing for me, however. It reminded me that I cannot overlook the foreign policy of Senator Obama on the off chance his domestic policy may sufficiently appeal to me for if I truly hold Dr. King as a role model in the way I try to, I cannot support war and Senator Obama supports war in Afghanistan, in Pakistan, and elsewhere. If President Johnson was not good enough in 1968 then Senator Obama is defiantly not good enough in 2008.

Senator Kerry’s speech at the 2004 Democratic National Committee Convention lost my vote. The Martian Luther King tribute at the 2008 Democratic National Committee lost my vote. I am not looking forward to how the Democrats will lose my vote in 2012 especially if Senator Obama becomes President Obama.

Meaningless Introductory Post

Good evening. I’ve been thinking about starting a new blog for a few months now ever since I had a dream, which I’ll get to later, especially since I think I can get literally two, maybe three readers. I’ve been putting it off not wanting to throw effort into something that is quite likely not to have any positive effects but after last night, I need an outlet if only for myself. The event which lead to the sadness will be part of my next post but I didn’t want my first post to be about something so trivial so this is really a place holder. If you’re this far back, I’ll have you know that the third post would have made a great first post but this is the real world and things don’t always work out as if somebody is writing a novel about your life and you’re only the protagonist in a work of literature and have no “real” existence ... or does it?