May 15 – Rationing, Central Planning

Gay Lynn HillBell Ringers, Economics(BR)

On May 15, 1942, seventeen states introduced gasoline rationing to support the war effort.

A prominent economist, Professor Peter Boettke, from George Mason University, attributes his decision to become an economist to his experience digging swimming pools one summer, while still in school. His employer required a lot of fuel, and due to gasoline shortages caused by the oil embargo of 1973, the crews were filling up tanks and then transferring the fuel to the machines by hand. Doing so required siphoning, and it was his task to suck the fuel into the hose, to get the siphon started. He developed a strong distaste for shortages and any form of rationing, and became an economist to figure out how all that worked!

War consumes a lot of resources. During World War II, fulfilling the armament requires necessary to win the war meant shifting lots of production away from ordinary, civilian uses, to military uses. Car factories became Jeep and tank factories.

And all those jeeps and tanks needed a lot of fuel, creating shortages. As a way of fairly addressing those shortages, the government took over the allocation of fuel (and many other things). Each family received an allotment of coupons each month, which they could use to legally purchase things the military also needed.

Rationing is an example of central planning. A Rationing Board would met and decide the proper allotment of goods each person could have that month. If their calculations were off, it took time for that information to get back to them, and often, by the time it did, the conditions had changed.



During war, there may be no alternative, but countries without functioning markets also often have one form of rationing or another even in peacetime. Communist countries, for instance, limited supplies of consumer goods, and rationing occurred through a culture of long lines. People would often “queue up,” not knowing what goods awaited them at the counter, figuring that they would have plenty of time to figure it out before they got to the front of the line.


Questions:
  1. Do you think that the video would have been persuasive to the British public to accept rationing?
  2. How important do you think it is for the public to feel like they are making sacrifices during wartime? Contrast President George W. Bush’s plea for people to “go out to the mall” following 9/11?
  3. Whenever there is rationing, black markets emerge. Why do you think that is?

Image Citation:

10, May 2018, War Propaganda Poster (Office of Price Administration, 1943) [Digital image].  Retrieved from <google.com>.