The First World War: The First Modern Industrial War
The First World War (1914–18) was fought mainly in Europe but felt around the world, plunging the first half of the twentieth century into a crisis that took over three decades to overcome. It was fought between the Allies — Britain, France and Russia (later joined by the US) — and the Central Powers — Germany, Austria-Hungary and Ottoman Turkey.
It was the first modern industrial war, using machine guns, tanks, aircraft and chemical weapons on a massive scale. The scale of death — 9 million dead and 20 million injured — reduced the able-bodied workforce in Europe, and as men went to battle, women stepped into jobs once done only by men. The war also snapped economic links, so Britain borrowed heavily from the US, transforming the US from an international debtor to an international creditor.
The Difficult Post-war Recovery
Post-war recovery was difficult. Britain, the pre-war leading economy, faced a prolonged crisis: while it was busy with the war, industries had grown in India and Japan, so Britain could not recapture its markets, and it was burdened with huge external debts to the US. The war boom ended, production contracted, and unemployment rose — in 1921, one in every five British workers was out of work.
Agriculture was also in crisis. During the war, when eastern European wheat supply was disrupted, production expanded in Canada, America and Australia; when eastern Europe revived, a wheat glut followed, grain prices fell, and farmers fell into debt.
Mass Production and Consumption in the US
In the US, recovery was quicker. A key feature of the 1920s US economy was mass production. The pioneer was the car manufacturer Henry Ford, who adapted the assembly line of a Chicago slaughterhouse to his car plant in Detroit. The assembly line forced workers to repeat a single task at a pace set by the conveyor belt, greatly increasing output per worker — the T-Model Ford became the world's first mass-produced car.
Workers initially quit under the stress, so Ford doubled the daily wage to $5 in January 1914 (while banning trade unions). Mass production lowered costs and prices, and with higher wages more workers could buy cars, refrigerators, washing machines and radios, often through 'hire purchase' (on credit). Car production in the US rose from 2 million in 1919 to over 5 million in 1929. This housing and consumer boom created the basis of US prosperity.
Questions and Answers
Q1. Why is the First World War called the first modern industrial war? Ans. Because it used the products of modern large-scale industry — machine guns, tanks, aircraft and chemical weapons — on a massive scale, and involved the world's leading industrial nations harnessing industry to cause the greatest possible destruction.
Q2. How did the First World War transform the US from a debtor to a creditor? Ans. During the war, Britain borrowed large sums from US banks and the US public. By the war's end, the US and its citizens owned more overseas assets than foreigners owned in the US, so the US changed from an international debtor to an international creditor.
Questions and Answers (continued)
Q3. What is mass production, and who pioneered it? Ans. Mass production is the production of goods in large quantities using the assembly line, pioneered by the car manufacturer Henry Ford in Detroit. Workers repeated a single task at a pace set by the conveyor belt, so the T-Model Ford became the world's first mass-produced car.
Q4. Why did Henry Ford double his workers' wages to @@GYANGHAR_MATH@@05 to keep workers (while banning trade unions), later calling it the 'best cost-cutting decision' he had made.
Questions and Answers (continued)
Q5. How did mass production lead to a consumer boom in the US in the 1920s? Ans. Mass production lowered the costs and prices of goods, and with higher wages more workers could afford cars, refrigerators, washing machines and radios, often bought on 'hire purchase' (credit). This, with a boom in house construction, created a cycle of higher employment, incomes and consumption.