Economic Consequences Of World War I

A. Introduction

World War I, commonly known as the Great War, is easily the most notable war in history. Taking place around Europe, the Great War left behind an astounding loss of 9 million soldiers and an additional 21 million injured rendering it, undeniably, the largest war in terms of casualties. Such immense war brought about vast changes economically, politically, and socially still lasting to this day. The consequences of World War I comprise economic decline of participating nations, wide political changes regarding new governments, and damage to society. Economic decline was prompted by the financial cost of the war, and political consequences consisted of the formation of new nations due to the collapse of old empires. Moreover,

In actuality, "unlike in some European countries, the United States was not laid to waste by war. America's factories and countrysides were unharmed, and performing better than ever. World War I sped up American industrial production, leading to an economic boom throughout the 'Roaring Twenties.' While the war was a devastating experience for France and the United Kingdom, these countries were able to recover economically without too much difficulty" (Sullivan). While France and the United Kingdom avoided large economic decline, the United States, in fact, benefited from the war economically. So, was the war actually damaging to the economies of participating nations? Although the Great War caused minor harm to France and the United Kingdom and in fact benefitted the United States, concluding that it had little damaging economic consequences on the world would be overlooking the damages it caused to many other nations. Germany especially faced economic damage from the war as "Germany was required to make monetary payments to the Allies, called reparations. The heavy reparations, combined with the devastated economic infrastructure throughout Germany and political tension under the Weimar Republic, led to an economic depression. Hyperinflation and unemployment in Weimar Germany were staggering. Reichsmarks, the German currency, became so devalued, that it took wheelbarrows full of money to buy basic items, such as a loaf of bread" (Sullivan). It was not only Germany that suffered economically but also many other nation as "most governments printed extra money to meet their needs. The increased money supply caused severe inflation (price increases) and contributed to the Great Depression of the 1930’s" (Neiberg). Despite the United States facing economic boost following the war, the Great War left behind immense economic