Corporate Influence and World War II: Resolving the New Deal Political Stalemate

Since many scholars focus on the New Deal as the foundation for modern U.S. governance, it is widely assumed that the United States is characterized by a weak state as compared to the welfare states of Western Europe. Yet, in the wake of World War II, the United States established a national security “warfare state” that rivaled the welfare states of Western Europe in scope of authority and operations and in its isolation from popular forces. The wartime redirection of U.S. state power also resolved the political stalemate stemming from the executive-congressional and business-government tensions roused during the New Deal. In fact, the course of wartime statebuilding was in many ways a response to the political tensions of the New Deal and to the expectation that the organization of wartime mobilization would indelibly define the postwar organization of U.S. state power. As this article argues, wartime mobilization resolved the New Deal political stalemate in large part by granting various segments of the corporate community the opportunity to influence the shape of U.S. national state power.

This article thus confronts two issues currently sparking debates among scholars of U.S. political development. First, it argues that World War II was significant in resolving the political modernization crisis in the United States by channeling national state power into military and national security institutions capable of extensive international interventionism and away from institutions capable of extensive domestic interventionism. Second, it more directly argues that class forces, especially monopoly-sector capitalists from industry and finance, participated in this redirection of U.S. political development. Both these points tend to run against the grain of current scholarship. For many of the scholars investigating wartime political developments, the questions raised by wartime statebuilding have been framed by a state-centered perspective that eschews considering the statebuilding influence of class forces. ¹ In turn, many scholars continue to avoid confronting the central role of national security in organizing postwar U.S. governance. In part, this myopia may be explained by the scholarly drive to comprehend the exceptionalist nature of U.S. welfare state development, or because scholars tend to segregate the study of national security and foreign policy from that of domestic policy. Yet, the narrow focus on domestic policymaking interferes with comprehending how wartime statebuilding shifted U.S. state capacities toward realizing internationally-interventionist goals versus domestically-interventionist ones. While scholars should be interested in the comparatively limited advances of redistributive state authority in the United States, accounting for this fact should not be so quickly disconnected from the larger process of consolidating national authority—a process that includes creation of the national security state.

To establish the analytical novelty of the argument, I review a recent debate in the literature of U.S. statebuilding to highlight the limits of the state-centered perspective and to suggest an alternative. Then after briefly reviewing the New Deal political stalemate, I divide the article into four parts that, because of space considerations, are meant to be primarily suggestive. Each part briefly analyzes a dimension of wartime corporate influence that helped define a new governing regime in the United States. The first part examines how the shift from depression to war enhanced the leverage of corporate executives from industry and finance, who, in turn, opposed New Dealer control of wartime economic mobilization and supported the domestic military ascendancy. The second part reviews how a military-corporate alliance defeated attempts to utilize wartime economic controls to stabilize the postwar economy. These first two parts review how wartime mobilization led to a significant shift in national authority as the military services displaced the domestic interventionist agencies of the New Deal. The third and fourth parts of the article refer to more deliberate efforts to build upon the political-institutional shifts of wartime. The third part examines the role of the Committee for Economic Development (CED), an organization that succeeded in organizing a business-centered agenda for a limited type of governmental interventionism. And the fourth part considers how corporate internationalists, as key advisers to Roosevelt and especially...