But since the mobilization effort mandated such measures as price controls, the draft, and rationing of scarce materials such as rubber and steel for war production purposes, the whole thing was the foulest of economic abominations. “So the carefully constructed measures of ‘inflation-adjusted gross domestic output’ during the 1940s are about as meaningful as the economic statistics reported by the Soviet Union,” Murphy notes in disgust. “The government effectively made it illegal for market prices to signal how much inflation the Fed was pumping into the system.”

And so it is with all the economic measures of the grotesquely defiled Forties. Sure, the poor saps drafted into the Army or the female workers who thronged into war production factories might have thought things were turning around. But they were blind to how the pure model of laissez-faire was being molested! After all, Murphy explains, “there are other goods and services that those scarce resources could have produced, but which humans will now never enjoy because they were devoted to government projects.” Think of all the miniature golf facilities, nylon stockings and radios senselessly sacrificed just for the liberal vanity project of defeating fascism!

Likewise with the erstwhile layabouts now caught up by the draft—how could anyone count this as a legitimate form of employment? Suppose, for example, “that FDR announced in 1940 that in an effort to fight the Depression, all able-bodied unemployed men would be shipped to African jungles (where they faced lions and disease). That policy would have brought down the official unemployment rate,” Murphy sniffs, “yet it obviously would not have promoted actual economic recovery. Had FDR suggested something this monstrous as a ‘cure’ for mass unemployment, citizens would have rightfully recoiled in horror.”

Indeed, one can almost picture Murphy himself, after typing up such infamies, smiting his breast, slumping alongside his laptop, lifting his head heavenward only to convulsively shout, “Unclean! Unclean!” After all, had the market approved of the war, it could by itself have instructed wartime production facilities where to allocate resources, by the magic of the price mechanism. “Precisely because World War II was an unprecedented event, there were no ‘experts’ on transforming civilian production to military production on this scale. When it comes to motivating millions of people to brainstorm and quickly come up with better ways to make a mousetrap (or tank), nothing beats the profit-driven market economy.”

Back in consensual reality, however, the Second World War doesn’t actually reduce to a perverse safari outing. There was a Japanese attack on a U.S. naval base, and a massive German effort to conquer the West and spread racial genocide. Oh, and the “pecuniary” stakes were far from negligible, as well, with a war-driven Nazi command economy curiously indifferent to the domestic production needs of Poland, France, Belgium, the Balkan states, and so on. A laissez-faire outlook among the Allied powers, in other words, would almost certainly have resulted in a fascist triumph. (Even more inconveniently, the killing blow to Nazi imperialism was delivered by the most hatefully statist command economy of them all, Stalinist Russia.)

# posted by Bob Murphy @ 12:36 PM