We businessmen seldom make political speeches â or any other kind for that matter. We have had little dealings in world diplomacy. However, under the lash of war we have developed more than new techniques and processes, new metals and synthetics that will make the world of the future a better place in which to live. We have created as well, under the stimulus of good industrial management, a far-seeing, statesman-like industrial leadership that intends to make peace its business too, and help to create a future world thatâs safe to live in. (Frederick Crawford, NAM President, June 1943)
The American experience of World War II was truly unique: a âpeculiar blendâ, as one historian wrote, âof profits and patriotism, of sacrifice amid unprecedented prosperityâ.1 Spared from the damages incurred by so many others, the United States emerged from humanityâs most destructive war infinitely stronger and richer than when it entered, transformed into the worldâs first âsuperpowerâ. Its political and military strength was underpinned by an economy of unparalleled size and diversity. In the five years since 1940, the US doubled the size of its economy to enable just 6 percent of the worldâs population to produce 50 percent of the worldâs goods, and American manufacturers dominated the worldâs markets for staple finished products. The foundation for that unprecedented post-war economic supremacy was laid during the war itself. The US enlisted minds, muscle and machines in a vast productive effort that would empower the Allies and overwhelm the Axis. That was achieved through a special arrangement between government and business that showered Americaâs largest corporations with huge federal contracts, guaranteed profits and an array of material incentives to produce for war. The US was quickly lifted from the doldrums of the 1930s in an extravaganza of government spending that dwarfed the miniscule ventures of the New Deal program then devised by President Franklin D. Roosevelt to rescue the economy from the Great Depression.2 What is more, that dazzling resurrection was achieved using a smaller proportion of the nationâs economic capacity than those it eventually out-produced in Germany, Japan, Britain and the Soviet Union.3 This meant that on the home front, Americans were not only spared direct physical attack but endured fewer privations than their foreign counterparts. The war economy eradicated unemployment, raised the standard of living, increased farm incomes and even narrowed the gap between rich and poor. The average American collected double the annual income of their British counterpart and twenty-eight times that of a worker in India. Mean household income in the US rose 25 percent between 1941 and 1944. The demand for labor strengthened trades unions which, with membership at new heights, secured better working conditions and benefits for its members. Social reformers, or New Deal liberals as they were commonly known, saw in the âcommand economyâ of the war an example of an idealized planned society which, with the help of government supervision and careful injections of federal spending, could wipe out forever the scourge of unemployment and poverty that accompanied the âboom and bustâ economics of the past. In the US, âthe wartime moodâ, as Winkler claimed, âwas buoyant and upbeatâ.4
The impact of the war on the American home front, however, was a complicated affair. In many ways, it was a true watershed moment in the history of the young nation. Despite the raised hopes of the New Dealers, the net result was a general shift toward political and social conservatism as the war progressed. While aspects of the war economy realized many of the objectives not met by the New Deal and seemed to loudly vindicate the indispensable role of government in running the economy; in other respects, the wartime experience of the US weakened the advocates of social and economic reform and strengthened their ideological rivals. In fact, the involvement of the nation in total war accentuated and exacerbated a multitude of tensions and unresolved issues born of the Great Depression about the political and economic direction of the country. Years of New Deal liberalism had failed to inspire large sections of American society and generated permanent resistance from significant sections of US business that refused to accept as the price for national recovery any federal tampering in their affairs or the expansion of labor rights, the extension of social security or what was, in their view, unwarranted regulation of the economy. The apparent failure of Roosevelt to improve the performance of the economy as the 1930s progressed, despite his belated employment of the âdeficit spendingâ method advanced by British economist John Maynard Keynes, inspired his critics who longed for a return to a romanticized past of passive government and market-based âfree enterpriseâ. Business and political conservatives who held these views re-doubled their efforts at mobilizing against the New Deal after the recession of 1937â1938, and by 1939, a âconservative coalitionâ of Congressional Republicans and southern Democrats was formed to stifle any further reformist tendencies of the Roosevelt administration.
The New Deal agenda was subsequently narrowed and the coalition continued to hamper Roosevelt throughout the war period. The conservative coalition failed to win the White House but managed to secure effective control over the legislative agenda in successive victories in the Congressional mid-term elections. This remarkable feat of political consistency was achieved thanks to a wider national trend of public antipathy toward government intrusion that was perceived, rightly or wrongly, as detrimental to the wartime improvement of living standards and generalized prosperity of most Americans. After years of Depression, there were jobs with decent wages and money to spend on conveniences, recreation, amenities and for some even luxuries. As Blum wrote: âBy stimulating the economy, the war did wonderful things for the American peopleâ.5 One of those things was to foster a taste for mounting prosperity which blinded the public to the true contribution of federal spending in delivering that upturn. In fact, vast public funds on a scale unknown in American history were engaged to fuel the production âmiracleâ that lifted the economy out of the doldrums and carried the Allies to victory.6 However, the facts of the recovery were obscured by a generalized mood of disquiet over âbig governmentâ and of the apparent redundancy of New Deal reformism now the âgood timesâ were back. That presented a fertile setting for conservatives who enjoyed newfound success in labeling federal difficulties in managing the economy in war as proof of its inability to manage it in peace. A repeat during the war period of the same difficulties of bureaucratic overlap, duplication and confusion which had plagued the Roosevelt administration in the 1930s further undermined public confidence in government. What is more, the decision by Roosevelt to tread carefully with business and entice, rather than compel, the captains of industry to mobilize for war only sped the consolidation of the largest US corporations and greatly improved the standing of American business generally in the eyes of the public. Praise for winning the war attached almost as strongly to business as it did to Roosevelt.7 The failure of the administration to construct a clear sense of purpose for which Americans were fighting created what Leff described as âa vacuum that would be filled by private desires and conservative trendsâ.8 America stood as the most conservative nation among the Western democracies as it prepared to assume leadership of a new world order in 1945.
Yet the result was that Americans, faced with an uncertain post-war future, did not entirely abandon the social reforms and economic regulation born of the New Deal and wartime eras. Ultimately, despite a relentless campaign to persuade them otherwise, conservatives failed to convince Americans that unfettered âprivate enterpriseâ could deliver the economic security for which they longed and many had recently savored, a desire which overrode public objections to a degree of post-war government regulation of the economy and federal welfare protections. After more than a decade of âbig governmentâ, Americans had grown slowly accustomed to the presence of federal regulation in their lives, and, it seemed, expected it to continue in some form or another when the war emergency was over. Organized labor, too, after years of growth and the right to collectively bargain, had become an established part of the industrial marketplace. The mild incorporation of the trades unions into the machinery of mobilization during the war sped the bureaucratization of a labor leadership which learned to favor accommodation over militancy.9 The war experience also produced what Sherry described as a âreconciliationâ between liberals and conservatives over their conflicting visions of how the post-war economy should work. Wartime prosperity, corporate influence in the mobilization and negative foreign examples of state-controlled planning (most prominently Germany and the Soviet Union) led to the abandonment by many New Deal liberals of their calls for greater federal control of the economy and closer regulation of business than what had been achieved in the pre-war years. Corporations, for their part, accepted that government, and not only the market, had a key role in the fiscal management of the economy to avoid slumps which, coupled with a modicum of social welfare and labor rights, was the middle-ground in political economy that business, government and labor were content to accept in their post-war world.10 The onset of a Cold War settled the case for a âstrong stateâ.
Although conservatives had failed to vanquish completely all traces of the New Deal and were saddled with the consolidation of organized labor within a hybrid version of liberal political economy for some time to come, their wartime exploits brought huge dividends. The combined strength of corporate and Congressional conservatives had stalled the New Deal experiment, minimized the expansion of executive authority during the war and help set the limits of regulatory participation in American life for some years thereafter. As Winkler concluded, after 1945 âthe basic patterns forged during the war enduredâ.11 Thanks to its exceptional wartime record, there was no denying that the reputation of business had been greatly restored after the inglorious retreat of the Great Depression, and as a class would continue to build on that success for decades to follow. American corporations basked in the glow of their wartime exploits for years with few correctives about the equally significant role of federal action in delivering the production miracle, in academia or elsewhere. That distortion in the historical account, as Wilson has recently stressed, left corporate conservatives âwell positioned, after 1945, to continue to reverse the setbacks that they had experienced in the 1930sâ.12 And it is to this factor, the rise in stature of American businessâwhat Workman called the âpostwar business ascendancyââthat this book is dedicated to exploring through the wartime exploits of the National Association of Manufacturers.13
Business in America
The mobilization of industry for war made the 1940s a decade of unprecedented growth not just in the size of American business but also its importance in shaping society and politics. The close association of the business community with the national âbody politicâ has a long and storied tradition in the US. The academic study of the relationship between business, society and the state in the US dates back to the early twentieth century.14 The so-called Progressive School characterized business as uniformly and constantly antipathetic to political or social reform, a theory reinforced by the experience of the Great Depression. Indeed, employersâ associations in the US are of a unique character, being larger and more influential than those of any other country. Their strength has been attributed to the peculiar conditions of American capitalism, which from the very founding of the Republic has fostered the rapid advance of an excessively wealthy, powerful and relatively homogenous business class that was more ableâunlike the European business class for exampleâto minimize the encroachments of government on its freedom and withstand the myriad challenges of organized labor. American capitalists were unhindered by a strong military caste or landed aristocracy, and the US Constitution itself was actually âtailoredâ to meet the needs of...