During a war, it is commonly assumed that the citizenry must sacrifice so the troops can have the equipment they need. “We can’t have both guns and butter,” as the saying goes. However, in the case of the biggest and most expensive war mobilization in history — the Second World War — Americans actually did have both.
A new paper from J.W. Mason and Andrew Bossie at the Roosevelt Institute shows that military production shot up from 1941-44, but almost none of this came at the expense of civilian consumption. Moreover, the massive surge of war spending gave jobs to virtually every single person who wanted one, and this ultra-tight labor market dramatically reduced income inequality — which particularly benefited people at the bottom of the social ladder, like poorer African-Americans.