92 ChaPter 2
see the newly militarized economy. Baruch and the WIB were given author-
ity to essentially control the economy; they could set prices, decide where
often-limited resources would be used, standardized industrial procedures,
determine production, or even force factories to make military goods instead
of their regular manufactures. All this, naturally, ensured huge corporate prof-
its as the military ordered goods in huge volume and the corporations charged
high prices. Wilson also created bureaucracies to administer the food supply,
control railroads, and oversee the coal industry. By war’s end, over 25 percent
of the country’s economy came from war production, and Congress eventu-
ally appropriated $32 billion [about a half billion dollars today] for the war,
which caused the Gross Domestic Product [GDP]—the value of all the fin-
ished goods and services produced in the U.S. in one year—to double, from
$39 billion in 1913 to $78 billion by 1918. Federal spending spiked too, from
$2.3 billion in 1917 to $13.1 billion in 1918 and then to $18.9 billion in 1919.
Military spending made vast economic expansion possible [a condition that
would characterize the U.S. especially after the Second World War and would
be known as the “Military-Industrial Complex” or “Military Keynesianism”].
Growth via militarism, not for human needs, would become the centerpiece
of the U.S. economy. Still, the U.S. role in the Great War was limited in most
ways compared to the Europeans. In the postwar era, the Americans would
try to take on a role much larger than they did in the war.“Democracy” in Progressivism and War
As Wilson sent American boys to Europe to make the world safe for “democ-
racy,” Americans had their own struggles for freedom and liberty. For Wilson,
democracy meant principally that the country should have a privately-held
and “free” capitalist economy; it did not mean that all people enjoyed funda-
mental rights. “Woe be,” Wilson warned anyone who might criticize the war
or advocate peace, “to the man or group of men that stands in our way.” So
as soon as the U.S. entered the war in April 1917, Wilson, who demanded full
loyalty from all Americans, established the Committee on Public Information
[CPI], basically a government propaganda unit that enforced support of the
war. The CPI had representatives travel the country to give talks about the
war, encourage people to support and donate goods for the troops [like today’s