My claim is that this paradox is true because the successful waging of Total War is not really about gathering enough scarce physical resources but rather more about rallying all the possible psychic resources that your nation's citizenry possesses.
The demands of Total War are never ending and even the relatively simple task of commanding by fiat of 110% of all possible physical resources is never enough.
Fiat - the big stick with the bayonet at the end - will never makes your citizens do more than their dutiful duty (when the guards are watching).
Fiat command of psychic resources - such as Stalin employed during the Great Terror of the late 1930s, will be sufficient - in peacetime - to ensure everyone gets the minimum of food and comfort needed to keep working, while allowing a bit extra to pamper the elite and pay for a few Show Projects.
But under Total War, the bullet in the back of the head is never enough incentive to get people to give their 110%.
Stalin needed all the physical and manpower resources of peacetime USSR to , at a minimum, defends the USSR from being conquered by the forces of germany.
But he had, instead, lost a lot of those physical resources and manpower to German conquest and the most developed portions of his remaining territory was being bombed and burned.
Despite this, Stalin repulsed the Germans and then swept into Germany itself, because he made up for a loss of half of the most developed parts of USSR by drawing on three or four times the psychic energy of the Russian peoples compared to what he had drawn in 1937.
In WWII, even Stalin found that the threats of bullets in the back of the head were not enough
The Great Patriotic War, from mid 1941 to mid 1945 ,inspired virtually all Russians to work and fight with a fury and with a great imaginative drive.
Much the same thing happened in Britain from mid1940 to late 1942.
As did Germany from late 1942 to mid1945 and Japan during the same period.
When all of a nation's citizens are convinced that they face imminent torture and death, they will resist with all their will and energy : all their government's propaganda efforts are hardly needed to ensure that.
But these four major combatants only made up about 1/6th of the world's population during the war and even for them, their periods of intense psychic efforts only existed during the periods when they were under direct death threat.
For the rest of the world , governments could perhaps command a lot ( but by no means all) of their nation's scarce physical resources but only some of their scarce psychic resources by fiat alone.
As Henry Dawson personally knew from the First World War and foresaw would be needed again in the Second World War , such nations needs a "poor bleeding little Belgium" and an Edith Cavell to fight and die for --- they needed a high moral cause to draw out all the psychic energy from it citizens.
For Dawson, his personal little Belgium was diverting some scarce physical resources away from making bullets and towards making enough penicillin for all people needing it : all Allied soldiers, all Allied citizens, all Neutrals, all Axis POWS.
Divert resources away from bullets towards penicillin, not in spite of Total War, but because of Total War.
Dawson's promotion of this version of Social Medicine during Total War, was actually a sophisticated example of Indirect War Medicine, rather like rationing food equally for all or the decision to fortify all citizens' bread with vitamins during the war, without regard for their ability to pay for it.
All such measures indirectly helped the war economy and the military war, by ensuring the nation's psychic engine was firing in all six cylinders.....