How did mobilizing for World War 1 change the economy and its relationship to government?Also, which of these changes, if any, spilled over to the postwar years?
Consider it an economic dress rehearsal for World War II. To mobilize an army on the scale needed for that conflict, and as quickly as it was needed, meant that industry had to fall in line quickly. It did so, partly out of government requirements and partly out of financial self interest. There was a lot of money to be made fulfilling army contracts, and these factories had already been making money selling weapons to Britain and France. Unlike past conflicts where wads of government cash were simply thrown at contractors, the Wilson Administration got directly involved in production targets and quality control, and even some degree of price controls.
Rationing was instituted, as nearly all sectors of the economy: industry, finance, agriculture, etc. were mobilized for the war effort. World War II meant we needed a much bigger more well equipped army, and we would use many of the same processes and ideas we perfected in the Great War.
As with wars that were to follow, the relationship between government and big business was directly impacted with America's entrance into war. Part of the need from the business side to enter into war production and participation was because foreign interests into other nations were drying out, and companies were facing a shortage in production. The windfall provided by wartime production and economic growth would prove beneficial to businesses, eager to enhance profit making. The mobilization for WWI proved to be a sort of "green light" to businesses to place production models in overtime and generate more wealth. Such a reality proved that business and government policy can converge where the former helps to guide the latter. Throughout the 20the century and beyond, this relationship has maintained its bond and hold.
I would say that mobilization changed the economy mostly by changing the look of the work force. As far as the relationship to government goes, mobilization greatly increased government involvement in the economy.
The government got very involved in the economy during mobilization. It set up boards to coordinate with business as to how things could be made more efficiently. This sort of teamwork between government and business lasted through the 1920s.
The main change in the workforce involved women and African Americans entering jobs that had been closed to them before. The main spillover was with blacks -- they moved to the North in great numbers during and after the war. Women really did not keep their jobs in industry after the war.