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How Economics Shaped The End of WWII · Trumponomics

• 0:03
  Speaker 1: World War Two has a powerful hold on the American narrative.
• 0:07
  Speaker 1: The nation of which I'm now a part was united
• 0:10
  Speaker 1: in a moral cause to roll back fascism and militarism.
• 0:15
  Speaker 1: But what if the United States was not so united?
• 0:19
  Speaker 1: And what if economics was at least partly to blame.
• 0:32
  Speaker 1: Welcome to Benchmark, a show about the global economy. I'm
• 0:36
  Speaker 1: Daniel Moss, columnist at Bloomberg Opinion in New York, and
• 0:40
  Speaker 1: I'm start Landman and economics editor with Bloomberg News in Washington.
• 0:45
  Speaker 1: Where approaching the seventy third anniversary of Japan's official surrender,
• 0:51
  Speaker 1: and most people are familiar with the role the atomic
• 0:53
  Speaker 1: bombs played in bringing an end to hostilities. Few are
• 0:58
  Speaker 1: familiar with the role that economic played in the end
• 1:01
  Speaker 1: of the Pacific War. In the months between the surrender
• 1:04
  Speaker 1: of Germany and Japan's capitulation, the home front was increasingly divided.
• 1:11
  Speaker 1: Unity was fraying, largely because of tensions in the economy
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  Speaker 1: and stretched supply chains. Joining us to discuss the final
• 1:20
  Speaker 1: months of the war and the role that economic and
• 1:23
  Speaker 1: commercial decisions played is Mark Gallichio, a professor of history
• 1:27
  Speaker 1: at Villanova University and co author with Waldo Heinrichs of
• 1:32
  Speaker 1: Implacable Foes War in the Pacific nineteen. It's the winner
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  Speaker 1: of the eighteen Bancroft Prize from Columbia University for outstanding
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  Speaker 1: book on US history and diplomacy. Mark, congratulations and thanks
• 1:47
  Speaker 1: for joining us. Oh, thank you very much. I'm happy
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  Speaker 1: to be here. Mark. Tell us why did you and
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  Speaker 1: your co author focus your efforts on the final years
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  Speaker 1: of the conflict and what surprised you the most. Well,
• 2:02
  Speaker 1: we decided to look at this period of the war
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  Speaker 1: because we thought that a lot of the writing about
• 2:09
  Speaker 1: the end of the war focused on the decision to
• 2:12
  Speaker 1: drop the atomic bomb, and it really didn't take into
• 2:15
  Speaker 1: account all the factors that led up to the use
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  Speaker 1: of the atomic bombs. And and we thought that there
• 2:23
  Speaker 1: had been a lot of emphasis on the you know,
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  Speaker 1: the final days of the war, the military campaigns, but
• 2:31
  Speaker 1: they hadn't incorporated the home front into their discussions or
• 2:37
  Speaker 1: analysis of conditions at the end of the war. So
• 2:40
  Speaker 1: we wanted to kind of broaden the scope of of
• 2:44
  Speaker 1: our analysis to take the home front political factors into consideration,
• 2:50
  Speaker 1: but also to try and understand the logistical challenges that
• 2:55
  Speaker 1: the United States faced in in waging war against Japan,
• 3:00
  Speaker 1: and we chose to begin in early nineteen four because
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  Speaker 1: that was when the Americans began to really go on
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  Speaker 1: the offensive and began to push ahead against Japan in
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  Speaker 1: taking the Marianas, but also with MacArthur moving along the
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  Speaker 1: coast of New Guinea and then into the Philippines. And
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  Speaker 1: it was then that the Americans had at their disposal
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  Speaker 1: the new fast carriers that allowed them to make these
• 3:34
  Speaker 1: long strides against the enemy. So it was really a
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  Speaker 1: combination of sort of what the economy was able to
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  Speaker 1: produce to give the forces in the Pacific the tools
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  Speaker 1: necessary to wage war over this, you know, vast expanse
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  Speaker 1: of the Pacific Ocean. Mark how was the wartime economy organized?
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  Speaker 1: And by early ninety five was that starting to unravel.
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  Speaker 1: There's this famous quote from about Franklin Roosevelt. He said
• 4:07
  Speaker 1: doctor New Deal was going to become doctor win the
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  Speaker 1: war at that point. And what that really meant was
• 4:14
  Speaker 1: that Roosevelt placed an emphasis on a sort of maximizing
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  Speaker 1: production for the war effort, making the United States the
• 4:24
  Speaker 1: arsenal of democracy and really a victory in the war.
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  Speaker 1: I mean, he understood recently enough that Corporate America knew
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  Speaker 1: how to mass produce the tools that would be needed
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  Speaker 1: to win the war, and and he needed to defer
• 4:39
  Speaker 1: to them. And of course that decision was pretty disillusioning
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  Speaker 1: to a lot of people who, you know, hope that
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  Speaker 1: the beneficiaries of the new Deal, unions in particular, would
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  Speaker 1: be able to hold onto the games they made um.
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  Speaker 1: So there was quite a lot of contention by nineteen
• 5:02
  Speaker 1: forty five, how was that uneasy contract, how was that fairing?
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  Speaker 1: Was it going the distance? Sole was strains really beginning
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  Speaker 1: to emerge there? You could see um strains beginning to emerge.
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  Speaker 1: In fact, even in the autumn of nineteen when it
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  Speaker 1: looked like the war might be coming to an end
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  Speaker 1: for Christmas, with the Allies pushing across France very quickly,
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  Speaker 1: and there were people, the civilians in charge of the
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  Speaker 1: wartime economy were anxious to begin making the first cautious
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  Speaker 1: steps towards transitioning to a peacetime economy because they're great fear.
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  Speaker 1: And this is what I think bothered them for the
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  Speaker 1: remainder of the war was that if the war were
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  Speaker 1: to end suddenly and they weren't prepared for that transition,
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  Speaker 1: there would be millions of men coming home from the war,
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  Speaker 1: and there'd be no jobs for them, because the economy
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  Speaker 1: would not have been able to have shifted quickly enough
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  Speaker 1: from wartime production to peacetime pursuits. And UM and of
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  Speaker 1: course they were all haunted by the ghosts of the
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  Speaker 1: Great Depression and mass unemployment, and that affected workers in particular,
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  Speaker 1: who didn't want to get caught in um a munition
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  Speaker 1: factory or an airplane assembly line and then come to
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  Speaker 1: work one day and find that the plant had shut
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  Speaker 1: down because the contract they had been canceled because those
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  Speaker 1: materials were no longer needed. So in forty four you
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  Speaker 1: began to see signs of that. But then certainly in
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  Speaker 1: early after the Battle of Bulbs and when the Allies
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  Speaker 1: began to move again, people started getting restive. They were
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  Speaker 1: worried about, you know, what the future would pretend, and
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  Speaker 1: and um there were signs, isolated cases of factories closing
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  Speaker 1: and people being um, you know, thrown out of work.
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  Speaker 1: At the same time, the people who were responsible for
• 7:14
  Speaker 1: making sure that the economy continue to produce for the
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  Speaker 1: war effort, under Secretary of War Robert Patterson, General Bryan Somerville,
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  Speaker 1: who was ahead of the services of supply. They insisted
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  Speaker 1: that there be a maximum effort continuing to produce for
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  Speaker 1: the war. They didn't want to have any let up
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  Speaker 1: where the logistics and supply chains at the time, were
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  Speaker 1: they really focused on the war and were they not
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  Speaker 1: in great shape for the rest of the U. S economy?
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  Speaker 1: What kind of state were they into, you know, to
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  Speaker 1: keep the economy going and to keep the wartime effort
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  Speaker 1: engaged in the army in particular dominated the economy and
• 8:05
  Speaker 1: consumed sort of most of the a durable goods and
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  Speaker 1: a lot of the agricultural goods. I mean that the
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  Speaker 1: rationing of meat we're all familiar with, and and you know,
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  Speaker 1: people were making money in these war related industries, but
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  Speaker 1: they didn't have a lot to spend it on because
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  Speaker 1: everything was focused on producing for the war. And so
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  Speaker 1: the concern was that peacetime industries would not be able
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  Speaker 1: to start up, they wouldn't be able to retool, in
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  Speaker 1: part because they didn't even have the materials necessary to
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  Speaker 1: begin producing. And then they were also worried about labor shortages.
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  Speaker 1: So everything really continued to be geared towards wartime production.
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  Speaker 1: So you've got these domestic economic, commercial and political concerns
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  Speaker 1: that are percolating a white just beneath the surface. Then
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  Speaker 1: only two key things happened on the battlefield. One is
• 9:06
  Speaker 1: Germany collapses. The other is the American campaign on Okinawa intensifies. Now,
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  Speaker 1: what is the interaction between those two things and how
• 9:16
  Speaker 1: does it shape Harry Truman's thinking. Well, there is absolute
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  Speaker 1: elation at the surrender of Germany, and then you turned
• 9:27
  Speaker 1: to Okinawa, which was occurring at the same time. The
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  Speaker 1: battle began on April one, and that was reminiscent of
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  Speaker 1: the worst days of World War One, the sort of
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  Speaker 1: plotting inch by inch battles causing heavy casualties. And Truman
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  Speaker 1: was was greatly disturbed by that because he could see
• 9:51
  Speaker 1: from the Battle of Okinawa what the invasion of Japan
• 9:55
  Speaker 1: itself would portend and and has troubled him tremendous lee. Now,
• 10:01
  Speaker 1: how does that interact with the strains that were beginning
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  Speaker 1: to show on domestic wartime economic management. Well, you had
• 10:10
  Speaker 1: asked us, you would ask me earlier what were some
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  Speaker 1: of the surprises we found? And this was for us
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  Speaker 1: a really big surprise. It really does seem that the
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  Speaker 1: American public, after Germany surrendered, sort of turned its attention
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  Speaker 1: towards thinking about peacetime, assuming that Japan was on diverge
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  Speaker 1: of defeat at that point. UM, and I think also
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  Speaker 1: sort of thinking about that war against Japan as really
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  Speaker 1: just that you know, sort of revolted by it because
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  Speaker 1: of the the level of casualties and the fact that
• 10:49
  Speaker 1: you know, it seemed to be to no purpose because
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  Speaker 1: it was clear that the Japanese could no longer win
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  Speaker 1: the war, yet they weren't surrendering, and and so America
• 11:00
  Speaker 1: and you know, kept their eyes you know, farther ahead
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  Speaker 1: towards the horizon, looking uh to the possibility of peace.
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  Speaker 1: And and um, the public was increasingly restive at this time.
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  Speaker 1: You know, they continued to sort of give their support
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  Speaker 1: to the war. And whenever they were asked in public
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  Speaker 1: opinion polls, they said they were they supported American policies
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  Speaker 1: and and that um, they were willing to support rationing.
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  Speaker 1: They they abhorred the idea of black markets and and
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  Speaker 1: and the like. But as individuals, you know, they were
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  Speaker 1: making these discrete decisions about what were their best job opportunities,
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  Speaker 1: and and uh, they wanted they also this was another
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  Speaker 1: big issue. They wanted, Um, the members of their families
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  Speaker 1: who were overseas in Europe to be brought home as
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  Speaker 1: quickly as possible. So how much in the and did
• 12:01
  Speaker 1: wartime considerations, you know, just winning the war, and how
• 12:04
  Speaker 1: much did domestic economic considerations play a role in the
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  Speaker 1: decision the ultimate decision to drop the atomic bombs in Japan.
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  Speaker 1: I think that the decision to use the bomb was
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  Speaker 1: made when they decided to build the bomb in that sense.
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  Speaker 1: But I think what we found was that given the
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  Speaker 1: situation on the home front, this frame of public support
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  Speaker 1: for the war, demand to bring the soldiers back home,
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  Speaker 1: get them out of uniform, that to say nothing of
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  Speaker 1: the increasingly stiff resistance offered by the Japanese, that all
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  Speaker 1: of those factors converged to make it a pretty easy
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  Speaker 1: decision for Truman to use the bomb. If he wanted
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  Speaker 1: to compel Japan's unconditioned and all surrender, then you know,
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  Speaker 1: the only way he could do that would be through
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  Speaker 1: an invasion, which was looking increasingly more difficult, or the
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  Speaker 1: use of the atomic bomb. Mark, You're right that Truman
• 13:15
  Speaker 1: had approved Operation Olympic, the invasion of Cayushu for late nine,
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  Speaker 1: but was balking at approving plans submitted to him for
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  Speaker 1: Operation Coronet, which was a landing on the main island
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  Speaker 1: of Honshu the following year. If the decision to drop
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  Speaker 1: the bombs was basically made when they developed the weapon,
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  Speaker 1: what role were the economic strains having on planning for
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  Speaker 1: Olympic and Coronet? And do you think in retrospect when
• 13:51
  Speaker 1: you review the records, how likely was it that they
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  Speaker 1: would go ahead if Japan had somehow held on well
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  Speaker 1: to sort of back up. I would say that um
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  Speaker 1: Truman was facing a really tough decision in summer forty five.
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  Speaker 1: I mean, the Olympic operation had been approved, this initial
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  Speaker 1: operation to invade the southernmost of the main islands of Kyushu, Um,
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  Speaker 1: but it wasn't to take place until November, and he
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  Speaker 1: Um was finding that the army was in particularly the
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  Speaker 1: army was insisting on keeping almost all the men in
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  Speaker 1: uniform that had actually been used to fight a two
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  Speaker 1: front war, that the army was planning on keeping almost
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  Speaker 1: the same number of men in uniform to fight Japan.
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  Speaker 1: And and his civilian advisors, particularly Fred Vincent, who was
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  Speaker 1: the head of this Office of War Mobilization and re Conversion,
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  Speaker 1: and and Vincent who was from Kentucky had been a congressman,
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  Speaker 1: was telling in him that the armies, just their monopoly
• 15:03
  Speaker 1: of the economy was really disruptive and was endangering the peace.
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  Speaker 1: And and so he was facing a show down on
• 15:12
  Speaker 1: this question of of the necessity of an invasion. We
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  Speaker 1: we don't go so far as to speculate as to
• 15:22
  Speaker 1: what would have happened, except to point out that this
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  Speaker 1: whole redeployment process was really bogging down. There were all
• 15:32
  Speaker 1: sorts of snags in the rail system in the United
• 15:36
  Speaker 1: States that made it unlikely they'd be able to move
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  Speaker 1: troops across the continent, shipping equipment from France all the
• 15:45
  Speaker 1: way out to the Pacific. Um what was behind schedule
• 15:51
  Speaker 1: the um the Port of Manila wasn't actually able to
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  Speaker 1: handle the capacity it needed to be able um to
• 16:00
  Speaker 1: move in order to prepare for the invasions. So, in
• 16:05
  Speaker 1: other words, this wasn't really a kind of a golden
• 16:07
  Speaker 1: era of unity leadership and decision making that some people
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  Speaker 1: make it out to be. Is that is that something
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  Speaker 1: of a myth or was there is there some truth
• 16:16
  Speaker 1: to looking at that way? Even with these problems that
• 16:19
  Speaker 1: you mentioned, it is certainly more fractius than we I
• 16:23
  Speaker 1: think generally remember it. The interesting thing is, as I said,
• 16:27
  Speaker 1: the public continue to sort of they were willing to
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  Speaker 1: support the leadership. What we found was that the leadership
• 16:36
  Speaker 1: was divided, and particularly in Congress, and people were calling
• 16:41
  Speaker 1: in Congress, we're calling for a more rapid movement towards
• 16:46
  Speaker 1: economic reconversion. And and so I'd say it really was
• 16:50
  Speaker 1: beginning at the top of government, Congress, the sort of
• 16:53
  Speaker 1: opinion makers, as I said, the civilian war mobilizers UM.
• 17:00
  Speaker 1: One of the other surprises we found was that the
• 17:06
  Speaker 1: sort of level of criticism and that was aimed at
• 17:10
  Speaker 1: the army at this time. Truman himself, when he had
• 17:14
  Speaker 1: served on this what was known as the Truman Committee
• 17:17
  Speaker 1: to investigate UM military expenditures, he had privately said he
• 17:24
  Speaker 1: was convinced that Brand's Somerville would would give the United
• 17:28
  Speaker 1: States a fascist economy if he could. And there was
• 17:31
  Speaker 1: so there was this suspicion all along about the sense
• 17:34
  Speaker 1: that the army was not at all flexible and its
• 17:38
  Speaker 1: demands they were just consuming too much and not willing,
• 17:43
  Speaker 1: you know, to trim the fat anywhere. Mark. This is fascinating.
• 17:47
  Speaker 1: When we think of wartime divisions, we tend to think
• 17:51
  Speaker 1: of Vietnam Iraq. If we're interpreting you correctly, these divisions
• 17:59
  Speaker 1: were present during World War Two, but as long as
• 18:04
  Speaker 1: there was battlefield victory, a lid could be kept on that.
• 18:10
  Speaker 1: Once the momentum there on the battlefield stops, as it
• 18:15
  Speaker 1: appeared to be starting to do, then suddenly these things
• 18:20
  Speaker 1: open up. Yeah. I think that's a that's a good
• 18:23
  Speaker 1: way of putting it, because it's towards the end of
• 18:25
  Speaker 1: the battle for Okinawa when you begin to see people
• 18:29
  Speaker 1: And at first it was legislators in the Republican Party
• 18:33
  Speaker 1: and and former President Herbert Hoover who began to suggest
• 18:38
  Speaker 1: that Japan was ready to surrender and that they might
• 18:43
  Speaker 1: be induced to surrender if the United States was willing
• 18:46
  Speaker 1: to modify the terms of surrender, if the United States
• 18:50
  Speaker 1: was willing to accept something less than unconditional surrender. And
• 18:54
  Speaker 1: if that were the case, then you wouldn't need to
• 18:59
  Speaker 1: continue these wartime restrictions on the economy. You could begin
• 19:03
  Speaker 1: a more um, sort of gradual transition to peace time
• 19:09
  Speaker 1: and uh, and of course you would save thousands, tens
• 19:13
  Speaker 1: of thousands of lives in the bargain. And so I
• 19:17
  Speaker 1: think it's at that moment when everyone knows that the
• 19:21
  Speaker 1: next big campaign is gonna being an invasion somewhere in Japan,
• 19:26
  Speaker 1: that they begin to raise the possibility maybe there's another
• 19:29
  Speaker 1: way to end the war. And and that was that
• 19:32
  Speaker 1: was I think a further sort of pressure on Truman
• 19:36
  Speaker 1: Um he really resisted modifying unconditional surrender. Mark, thank you
• 19:43
  Speaker 1: for sharing your perspective with us as we remember the jade. Oh,
• 19:48
  Speaker 1: you're welcome. I'm really happy to have had chance to
• 19:54
  Speaker 1: talk to you about this and Schmark will be back
• 20:00
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• 20:03
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• 20:08
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