Beginning in 1938, The Oceanykan Federation saw itself embroiled in a continent-wide conflict the likes of which it had not seen since the Revolutionary Wars. From 1938 until 1946, the Oceanykan Civil War raged through the Federation. The situation became even more dire when the Japanese invaded northern Oceanyka during Operation Minamikaze, entangling the country into World War II. As a result, all parties involved adopted a war economy with which to fight.
- The Oceanykan Federation, led by the Constitutional Party, adopted a liberal war economy. Numerous state-owned defence companies were established in this period, such as the Commonwealth Aircraft Corporation or the Lithgow Small Arms Factory, which were wholly dedicated towards manufacturing weapons. However, most of the Federation's war materiel actually came from private corporations, which were successfully wrangled by the Cestlep government through war bonds, large contracts and ample central coordination. Additionally, it received ample war support from the United Nations (UN), better known at the time as the Allied Nations.
- On the other hand, the Oceanykan National Confederacy led by the Natalist Home Front, established a neo-feudal war economy from its seat of power in Edelia. Unlike its Cestlep counterpart, the Edelian government favoured decentralised measures, true to its national-anarchist ideals. Much like the feudal lords of old, every Sovereignty in this coalition was tasked with raising and maintaining their own army. In practice, this usually led to heavy-handed requisitioning and impressing labourers, perhaps owning to the fact that the Edelian government was economically outmatched by the Cestlep government many times over. Despite their only ally in the international stage being Adolf Hitler, who was in no position to provide any kind of aid, they did receive covert military aid from The State of Japan, especially after the beginning of Operation Minamikaze in an attempt to weaken Cestlep.
- From 1940 onwards, the Oceanykan People's Republic emerged in Melbourne, led by the Revolutionary Party. They established a communist war economy based around massed mobilisation of labour. While light industry was collectivised and power over it transferred to the workers, heavy industry was put under central planning. Thus, the Trotskyist dual system was made the backbone of the communists' engine of war. Despite being economically dwarfed by the Cestlep government, Melbourne was able to hold out for six long years partly because they received great quantities of military aid from the Fourth Eurasian Communist International (COMINTERN), colloquially known as the Eurasian Axis Powers.
By the war’s end in 1946, much of Oceanyka was economically devastated, and yet paradoxically, Cestlep and its surroundings were industrially strengthened. The vast private industries that led Cestlep to victory would not easily demobilise back to a civilian economy, setting the stage for post-war economic debates on reconstruction, privatisation, and the role of corporations in the State. The 1950s would see a continuation of Australian Anarcho-Capitalism, with the first corporate armies and war fleets emerging in this period, as private enterprise increasingly monopolised power in Oceanyka, leading to the Economy of the Oceanykan Federation in the 1960s.