- Destructive Creation: American Business and the Winning of World War II by Mark R. Wilson
Mark Wilson’s study develops a more balanced view of the role played by American private enterprise in the success of World War II arms production than other scholars who have examined the “Arsenal of Democracy” story, myself included. He argues that war production success was more the result of public investment in the war economy, public management of the supply chains, and regulation of private industry and the national economy by the federal government than the result of unbridled hard work and patriotism from the private sector. In fact, American companies aggressively resisted government efforts to control prices and profits, to increase the power of organized labor within their enterprises, and otherwise interfere with their independence.
Economic mobilization for war production occurred under the shadow of the experiences of World War I, which neither business nor the federal government wanted to repeat. Many war contractors earned obscene excess profits during the Great War, while others suffered from sudden cancellations of war contracts. Government seizure of private enterprise, most notably the railroads, was a failure, as was the effort to build a massive nitrate plant and dam at Muscle Shoals, Alabama. Reflecting many of these concerns, a U.S. Senate Committee chaired by Gerald Nye (N. Dak.) issued a report in 1936 urging that strong price and profit controls be imposed on [End Page 446] defense contractors. The Nye Committee also proposed the use of government-owned and operated plants for arms production.
The federal government invested heavily in new facilities, which accounted for much of war production, spending nearly $20 billion, twice the investments made by private enterprise. Most of the new construction was financed by the military services or through the Defense Plant Corporation, part of the Reconstruction Finance Corporation, a New Deal agency created in 1932. Private enterprise managed production in the new facilities, commonly identified as Government-Owned, Company-Operated (GOCO) plants. Most of these were enormous factories that produced aircraft, tanks, aluminum, synthetic rubber, aviation fuel, and explosives. The private sector would not have built these vast, isolated, and specialized plants, which the government sold after the war. The importance of public investment in the war effort is largely unknown because the Franklin Roosevelt administration and private enterprise both downplayed it.
The military services and FDR’s administration tightly controlled defense production using inspections and other quality controls at the factories and through regulating prices and profits. Legislation mandated “renegotiation” of most supply contracts, which inevitably resulted in lowered prices and profits. Private enterprise was most frightened by the Roosevelt administration’s willingness to seize individual plants or firms to end labor unrest or to force compliance with government demands. There were only a few score of such seizures during the war and most were short-lived, but the threat of seizure was real. The private sector bitterly resisted these intrusions into their operations, mainly through political lobbying and propaganda.
Wilson effectively argues that the commonly held narrative explaining the remarkable production achievements of World War II is fundamentally flawed because American business aggressively took control of the narrative and the Roosevelt administration did little to counteract this. The National Association of Manufacturers and the Chamber of Commerce of the United States created mountains of propaganda crediting private enterprise for the “miracle” of war [End Page 447] production. Individual companies, especially in the automobile industry, produced thousands of national advertisements touting their contributions to the war effort.
The Army-Navy “E” awards given to individual factories recognized the contributions of labor to war production, but the Roosevelt administration otherwise heaped little praise on labor. FDR also largely ignored the vital role government played in the war effort. In many respects, Roosevelt threw organized labor and the New Dealers “under the bus” for most of the war in favor of the military services and the war contractors. Mark Wilson’s study offers a much-needed revision to...