
The extraordinary story of Britain’s efforts to finance the First World War - hunglee2
https://bankunderground.co.uk/2017/08/08/your-country-needs-funds-the-extraordinary-story-of-britains-early-efforts-to-finance-the-first-world-war/
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RobertoG
I don't understand how you can write an article like this without any mention
to the gold standard.

With a floating Pound the problem of financing disappear as happened later in
the Second World War. Note that they would be forced to tax heavily and emit
bonds in order to retire money from the economy and avoid inflation, but it
would not be a problem of 'where to get the money'.

In times of war, the veil disappear and it becomes clear that the important
thing is how much the economy can really produce, not how much money the
country has.

~~~
neilwilson
A good comment.

You don't necessarily have to tax. Saving acts like taxation, and a £10 note
is just a permanent zero interest bearer bond.

Ultimately if you can't buy anything (rationing) or do anything (planning)
then all you can do is pile up the money as savings.

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MichaelBurge
> As the war unfolded, ministers were pilloried for rewarding investors far
> too generously for surrendering capital which should have been sacrificed
> gladly as a matter of patriotic principle

Interesting how much harder it was for the government to get money back then.

Wikipedia seems to say that WW2 cost the equivalent of $4.5 trillion, while
the Iraq war is about $2.4 trillion.

The Gold Standard seemed to have caused trouble with wars: WW2 had to
temporarily suspend gold trading, and it was canceled entirely around Vietnam.
Now we can spend trillions with it causing hardly any day-to-day trouble: A
blessing when needed, and a curse when not.

~~~
danieltillett
The economy is much larger today than back in the 1940s. My memory is
something like 40% of the US economy was devoted to the war effort in WWII,
while it would have been a couple of percent at most for the Iraq war.

~~~
cat199
[https://en.wikipedia.org/wiki/List_of_countries_by_military_...](https://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures)

Per this 2.2% of GDP in 2016 - after iraq with no 'hot' conflict. Google says
5.66% in iraq peak.

Percentages of estimated net world defense spending in 2016:

* US: ~36.2% of total world defense spending

* China: ~12.7%

* EU Countries listed: ~12.2%

* Russia: ~4.5%

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brudgers
Niall Ferguson's _Pity of War: Explaining World War I_ describes the finances
of the participants in great detail. It's a fascinating read.

~~~
justinv
Similarly, Liaquat Ahamed's Lords of Finance is a great read about finances
from World War I to the Great Depression.

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byron_fast
You have to wonder what is currently unknown today.

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gwern
Truth and freedom tend to be the first casualties of war.

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an_account
It makes sense to hide the truth. Deceiving the enemy is a very important
tactic of war.

~~~
D-Coder
Deceiving the citizens is also a very important tactic of war.

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arca_vorago
All sides of it too!

