The Effects of Nuclear War
Chapter IV
CASE 2: A SOVIET ATTACK ON U.S. OIL REFINERIES
Recovery
Once people believed that the war was over, the Nation would face the task of restoring the economy. The human consequences would be severe, but most deaths would have occurred within 30 days of the attack. Economic disruption and the economic recovery process would last much longer.
Restoring an adequate supply of refined petroleum would take years. It is unlikely that any of the attacked refineries could be repaired, although enough infrastructure might survive to make it cost effective to clear and decontaminate the rubble and rebuild on the old sites, The attack would kill many people skilled in building or operating refineries. The attack would also destroy many ports with special facilities for handling large quantities of crude oil and refined petroleum, While intensive use of pIant and equipment can substantially increase output for many industries, it can increase a typical refinery’s output by only 4 percent. Thus, the attack would leave the United States with about a third of its prewar refining capacity and with little of its prewar oil importing capacity; this situation would persist until new refineries and ports could be built.
The survival of a third of the Nation’s refining capacity does not mean that everyone would get a third of the petroleum they did before the war. The Government would surely impose rationing. Critical industries and services would have top priority— military forces, agriculture, railroads, police, firefighting, and so on. Heating oil could be supplied, but at austere levels. Uses of petroleum for which there were substitutes would receive little or no petroleum. For example, railroads could substitute for airlines, trucks, and buses on intercity routes; mass transit would probably substitute for private automobiles and taxis in local transportation.
The demise of the petroleum industry would shatter the American economy, as the attack intended. A huge number of jobs depend on refined petroleum: manufacture, sales, repair, and insurance of cars, trucks, buses, aircraft, and ships; industries that make materials used in vehicle manufacture, such as steel, glass, rubber, aluminum, and plastics; highway construction; much of the vacation industry; petrochemicals; heating oil; some electric power generation; airlines and some railroads; agriculture; and so on. Thus, many workers would be thrown out of work, and many industries would be forced to close.
The limited direct economic damage, already multiplied by thousands of secondary effects just enumerated, would be multiplied again by tertiary effects. Economic patterns that rest on the petroleum economy would be disrupted. Much of the American way of life is dependent on automobiles, from fast-food restaurants and shopping malls to suburban housing construction and industries located on major highways whose workers commute by car. The many people thrown out of work would have less money to consume things made by others. Service industries of all kinds would be especially hard hit.
These economic changes would lead to social changes that would have further economic consequences. Gasoline rationing would at best severely curtail use of private cars; mass transit would be used to its capacity, which would appear inadequate. Demand for real estate would plummet in some areas, especially suburbs, and skyrocket in others, notably cities, as people moved nearer to work and stores. Such mass movement, even within cities but especially between them, would upset the demographics underlying taxes, schools, and city services. With many people out of work, demand for unemployment compensation would rise at the same time taxes were falling. Vacation patterns would shift; cuts in air and car travel would force people to travel by train, which would lead people to vacation closer to home. The situation following the attack could lead the dollar to tumble, but whether or not that occurred, the curtailment of commercial air travel would prevent most people from traveling abroad. The economic system on which production depends would be radically different. To be sure, most workers and equipment would survive unscathed, and economic recovery would eventually take place.
Production depends, however, not only on the use of physical resources, but also on a wide range of understandings between producers and consumers. These underpinnings would be destroyed by the attack just as surely as if they were targeted. Prices would be uncertain, and various kinds of barter (trading favors as well as goods) would supplement the use of money. Credit and finance could not function normally in the absence of information about the markets for continuing production. Contracts would have uncertain meaning. Many businesses would go bankrupt as patterns of supply and demand changed overnight. Courts would be seriously overburdened with the task of trying to arbitrate among all of these competing claims. Corporations and individuals would be reluctant to make commitments or investments.
Given this disruption, the effort to resume production would require grappling with some basic organizational questions. To which tasks would surviving resources be applied? How would people be put back to work? What mix of goods would they produce? Which industries should be expanded, and which curtailed? Which decisions would Government make, and which would be left to the market?
This organizational task is unprecedented, but in principle it could be performed, Presumably the United States would follow the precedent of the mobilization for World Wars I and 11, in which extensive Government planning supplemented private enterprise, and key assets and key people from the private sector were borrowed by the Government for the duration of the emergency. Certain tasks, such as caring for the injured, decontamination, high priority reconstruction, and serving as an employer of last resort (to say nothing of meeting military requirements), would obviously be handled by the Government. The difficulty would be in planning and facilitating the transformation of the private sector. The combination of unusable factories and service faciIities with unemployed workers could easily create a situation analogous to that experienced in the United States between 1929-33.