World War I

All nations saw increases in government share of gross domestic product (GDP), surpassing 50 percent in both Germany and France and nearly reaching 50 percent in Britain. To pay for purchases in the U.S., Britain cashed in its massive investments in American railroads and then borrowed heavily on Wall Street. President Wilson was on the verge of cutting off the loans in late 1916, but with war imminent with Germany, he allowed a massive increase in U.S. government lending to the Allies. After 1919, the U.S. demanded repayment of these loans, which, in part, were funded by German reparations, which, in turn, were supported by American loans to Germany. This circular system collapsed in 1931 and the loans were never repaid.

One of the most dramatic effects of the end of the war was the expansion of governmental powers and responsibilities in the United Kingdom, France, the United States, and the Dominions of the British Empire. To harness all the power of their societies, new government ministries and powers were created. New taxes were levied and laws enacted, all designed to bolster the war effort. Many of these continue to this day.

The war strained the abilities of formerly large and bureaucratized governments such as those in Austria-Hungary and Germany. Here, however, the long term effects were clouded by the defeat of these governments.

Families were altered by the departure of many men. With the death or absence of the primary wage earner, women were forced into the workforce in unprecedented numbers. At the same time, industry needed to replace the lost laborers sent to war. This aided the struggle for voting rights for women.

As the war slowly turned into a war of attrition, conscription was implemented in some countries. This issue was particularly explosive in Canada and opened a political gap between the French-Canadians - who claimed their true loyalty was to Canada and not the British Empire - and the English-speaking majority who saw the war as a duty to both Britain and Canada, and a way of demonstrating leadership and high-contribution to the British Empire. Prime Minister Sir Robert Borden pushed through a Military Service Act that caused the Conscription Crisis of 1917.

In Britain, rationing was finally imposed in early 1918 and was limited to meat, sugar, and fats (butter and oleo), but not bread. The new system worked smoothly. From 1914 to 1918 trade union membership doubled, from a little over 4 million to a little over 8 million. Work stoppages and strikes became frequent in 1917–1918 as the unions expressed grievances regarding prices, liquor control, pay disputes, "dilution," fatigue from overtime and from Sunday work, and inadequate housing. Conscription put nearly every physically fit man into uniform, 6 million out of the 10 million eligible in Britain. About 750,000 lost their lives and 1,700,000 were wounded. Most fatalities were young unmarried men; however, 160,000 wives lost husbands and three hundred thousand children lost fathers.