Professor Alex Field on How Lessons from WWII Economic Mobilization Can Guide America's Response to Today's Crises
As the United States grapples with the ongoing economic aftershocks of the COVID-19 pandemic and faces new threats to its access to critical raw materials and defense supply chains, there is much to be learned from history.
Alex Field, a historical economist and the Michel and Mary Orradre Professor of Economics at the Leavey School of Business, has devoted much of his research to understanding the forces that shaped past economic systems and their enduring impact on the present. Since 2016, his focus has been on the economic consequences of U.S. mobilization during World War II, as explored in his book The Economic Consequences of U.S. Mobilization for the Second World War and his recent research paper The U.S. Rubber Famine during World War 2.
"World War II has not traditionally received much attention from economic historians," Field notes. "However, there are many parallels between what the U.S. faced then and the challenges we face today. Drawing historical comparisons can sharpen our understanding of current policy dilemmas, helping us navigate trade-offs and uncertainties during times of crisis."
During WWII, the U.S. was forced to pivot its economy dramatically. Factories that once produced automobiles and household appliances were retooled to produce tanks, airplanes, ammunition, and other military equipment. This shift required the country to transition from goods in which it had significant expertise to products it had little experience with. Similarly, when the COVID-19 pandemic hit in 2020, the U.S. faced a massive disruption, forcing the country to halt much of its usual economic activity in favor of saving lives and controlling the spread of the virus. In response, production lines were redirected to meet urgent needs such as personal protective equipment (PPE), ventilators, and, eventually, vaccines and diagnostic tests.
"While the economic shocks of the pandemic were not as large as those experienced during WWII, they posed similar challenges in terms of mitigating the risks of sudden, radical increases in the demand for specific goods," Field explains. "These challenges are difficult to address, often requiring quick and large-scale adjustments."
Defense supply chains present another ongoing challenge, particularly in light of recent geopolitical crises such as the wars in Ukraine and Gaza. The U.S. faces the risk of sudden surges in demand for conventional ammunition and armaments, highlighting the broader vulnerability of supply chains in times of international conflict.
Governments historically have employed two main strategies to protect against such disruptions: stockpiling essential products and maintaining standby production capabilities. "These strategies are costly—much like any form of insurance—but they can be less damaging than being unable to meet sudden spikes in demand," Field explains.
The economic shocks of WWII also exposed the U.S.'s heavy reliance on critical raw materials. When Japan overran Southeast Asia in 1942, it cut off nearly 95% of U.S. imports of rubber, a crucial resource. This disruption not only intensified the crisis and exposed the US’s vulnerability to supply chain disruptions, but it also spurred innovation, leading to the development of a synthetic rubber industry.
Today, similar vulnerabilities persist, particularly in our dependence on global suppliers for key components like semiconductors. "The U.S. remains highly dependent on exports from Southeast Asia, most notably the chips produced by Taiwan Semiconductor Manufacturing Company," says Field. "The chip shortage of 2020 is a case in point. It drove up the cost of new cars, which in turn pushed up used car prices and contributed to the broader inflationary surge that began in 2022."
Yet, just as the U.S. responded to WWII with adaptive strategies—such as stockpiling materials and developing new industries—so too has the country begun to take steps to secure its economic future. The CHIPS and Science Act is one such measure, aimed at strengthening domestic production of critical technologies. But while history never repeats itself exactly, the patterns of vulnerability and innovation remain remarkably similar. The lessons of the past, particularly the need for preparedness and diversification, are as relevant today as they were during the war.
"Understanding the difficulties associated with past mobilizations can inform our current policy choices," Field concludes. "By studying how the U.S. adapted to the economic challenges of World War II, we can better navigate today's uncertainties. The same principles of resilience, innovation, and foresight that guided the nation's response to global conflict can help us face the challenges of an increasingly complex world."