It was a critical time for civilian government, with revolving Cabinets, assassinations, and attempted coups. But the army and navy chiefs had seats in Cabinet and blocked budgets that did not meet their growing demands for military spending. While the army prepared for a wider invasion of China, civilian ministers led by Minister of Finance Korekiyo Takahashi tried to limit their demands for a larger share of the national budget. But in 1931, the Japanese Army invaded Manchuria and laid out plans for further expansion to secure the key materials necessary for wartime production that Japan was lacking. Japan was cushioned from the worst of the Great Depression by a unique combination of fiscal policy and quantitative easing. These pressures brought down successive governments in the interwar years. This was followed by intense pressure to fund the Japanese Imperial Army’s expansionist plans. In 1905, Japan had defeated Russia, financed partly by Japan’s first international capital borrowings in Europe. In the Far East, preparations for war had started much earlier. He also thought about how to activate the stabilisation tools of fiscal and monetary policy after wartime disruption. It was unclear whether there would be a labour shortage or a shortage of demand after the war. He accepted that post-war stabilisation would become a major problem. To this end he helped organise the first major UK National Accounts. One of the problems Keynes identified was that wartime spending would overwhelm the normal business cycle and cause over-heating. Keynes turned this on its head, proposing to ration demand by using taxes and compulsory savings. The impulse of the UK government at the start of the WWII had been to control markets and ration supply. The efficiency of war mobilisation and the distribution of burdens on workers, lenders, and future generations would depend on the funding method chosen. He recognised that even in wartime there were choices. In 1939, John Maynard Keynes published How to Pay for the War (reprinted in Moggridge 1972: 367-439). In principle, war might be funded in different ways-out of past savings, current taxes, borrowing (abroad or domestically), or through inflation. Bollard (2019) compares and contrasts the contributions of key economists in various belligerent countries. Biographies can illuminate individual lives, for example Skidelsky (1983, 1992, 2000) on Keynes, Smethurst (2007) on Takahashi, and Weitz (1997) on Schacht. How did economics and economists of the 1930s and 1940s contribute to war preparations and the waging of war? Surveys such as Harrison (1998) provide context. Prices and costs may be overlooked, while markets are disrupted as civilian law gives way to commands from the military, and sometimes from warlords. This column is a lead commentary in the Vo圎U Debate ' The Economics of the Second World War: Eighty Years On'

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