The Economic and The Economic and Technological Impact of Technological Impact of

World War IWorld War I

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The Economic Impact of World The Economic Impact of World War IWar I

Ruined Europe’s 19Ruined Europe’s 19thth century economic century economic developmentdevelopment

““The war literally and metaphorically blew The war literally and metaphorically blew up the achievements of a century of up the achievements of a century of economic advance.” (Niall Ferguson)economic advance.” (Niall Ferguson)– Loss of tradeLoss of trade– Loss of foreign investmentsLoss of foreign investments– Subsequent losses due to economic Subsequent losses due to economic

instabilityinstability

Cost of World War ICost of World War I

CountryCountry Financial cost Financial cost (1918)(1918)

Great BritainGreat Britain 33,334,012,00033,334,012,000

FranceFrance 24,265,583,00024,265,583,000

GermanyGermany 33,775,000,00033,775,000,000

ItalyItaly 12,413,998,00012,413,998,000

RussiaRussia 22,293,950,00022,293,950,000

USAUSA 22,625,253,00022,625,253,000

GermanyGermany• Value of German trade with USA fell from 68 million to Value of German trade with USA fell from 68 million to

10 million in one year10 million in one year• Agricultural production fell about 50-70%Agricultural production fell about 50-70%• Industrial output fell 40% from 1914-1918Industrial output fell 40% from 1914-1918• Following the war, reparations repayments devalued Following the war, reparations repayments devalued

the German economythe German economy• Many people had saved marks during the war and Many people had saved marks during the war and

afterwards billions of dollars reentered the economyafterwards billions of dollars reentered the economy• This situation led to hyperinflationThis situation led to hyperinflation• January 1918January 1918 $1 US = 5.21 German $1 US = 5.21 German

MarksMarks• December 1923December 1923 $1 US = 4,200,000,000,000$1 US = 4,200,000,000,000• Value of German currency fellValue of German currency fell

Great Britain and the United Great Britain and the United StatesStates

Previous to World War I, Great Britain dominated as Previous to World War I, Great Britain dominated as the world’s creditorthe world’s creditor– During the war Britain became heavily indebted to the During the war Britain became heavily indebted to the

USUS– United States emerged from the war as a rival to Britain United States emerged from the war as a rival to Britain

as a financial superpower (Niall Ferguson)as a financial superpower (Niall Ferguson)– World’s financial center shifted from London to New World’s financial center shifted from London to New

YorkYork

US no longer was a debtor and became a creditor US no longer was a debtor and became a creditor nationnation– The war stimulated the US economyThe war stimulated the US economy

Increased employment and wagesIncreased employment and wagesBrought great profit to industryBrought great profit to industry

Technological advancements Technological advancements (civilian)(civilian)

The automobile was an important and The automobile was an important and prosperous change, especially with the prosperous change, especially with the American public. The impact of the car American public. The impact of the car was enormous as it increased efficiency in was enormous as it increased efficiency in the work force. the work force.

Radio and Washing MachineRadio and Washing Machine

The radio provided an additional luxurious The radio provided an additional luxurious item. It increased morale of the population. item. It increased morale of the population. Washing Machines increased the Washing Machines increased the efficiency output at the household which efficiency output at the household which would predominantly be the females. It would predominantly be the females. It also increased hygiene which increased also increased hygiene which increased life expectancy.life expectancy.