Yesterday I reviewed The Economics of World War I.
Here, let me repeat 2 paragraphs on one of the ideas I got out of this:
There are GDP figures for all the countries involved. Russia and Germany were about the same size. France was a little over half that size, and adding her colonies brought that up to 2/3. Italy and Austria-Hungary were smaller still - each about 40% of the size of Russian and Germany. The U.K. was also about the same size as Russia and Germany, but including its colonies doubled that size. The sum was about the size of U.S. GDP.
An important distinction has to be made though about the size of the peasant class in each country. I did not know this before, but the continental countries had great difficulty raising resources from their peasantry with command-and-control techniques. If you were living a hardscrabble existence, and your sons were called off to war, you were very unlikely to yield up further produce or labor at artificially low rates. The book doesn't provide these estimates, but I constructed some on my own.
Here is my construction. To do this, I needed to make an identifying assumption (see below). I assumed that, at the time, China was almost completely at the subsistence level, and the U.S. was almost completely beyond the subsistence level. I assumed that the subsistence income was $500 per capita (a tad less than the $550 per capita income in China at this point), and that the per capita income in a developed area was $5,500 (somewhat more than the $5,300 per capita income in the U.S. at that time).
Putting this together paints the following picture of economic capacity. I excluded colonies (which were probably close to subsistence), but included the British dominions of Canada, Australia, New Zealand, and South Africa.
|Country||Real GDP (in billions of current dollars)||Population (in millions)||% Subsistence||Effective Real GDP|
I think my effective real GDP numbers give a much better picture of 1) why Germany thought they could probably beat France and Russia if England stayed out of the fray, 2) how weak Austria-Hungary and Russia really were, and 3) why contributions from Canada, Australia and New Zealand were so prominent.
Footnote: an identifying assumption is economics jargon for an assumption that has to be made to separate one thing that is inseparable into two or more things. In this case, all I know for sure is the real GDP and population. But from that you can construct per capita real GDP. Then you make an educated guess about what per capita real GDP would be at subsistence and non-subsistence. The identifying assumption is that the population of a country is either at the subsistence level, or the non-subsistence level. It isn't the most concrete bit of research, but I think it is a move in the right direction.