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Destructive Creation: American Business and the Winning of World War II

Author(s):Wilson, Mark R.
Reviewer(s):Duncan, Thomas K.

Published by EH.Net (May 2017)

Mark R. Wilson, Destructive Creation: American Business and the Winning of World War II. Philadelphia: University of Pennsylvania Press, 2016. v + 379 pp. $45 (cloth), ISBN: 978-0-8122-4833-3.

Reviewed for EH.Net by Thomas K. Duncan, Department of Economics, Radford University.

In Destructive Creation: American Business and the Winning of World War II, Mark R. Wilson (UNC-Charlotte) provides a very detailed account of the U.S. industrial war machine. The information contained within makes this book well worth the read for anyone who is seriously studying the war economy of World War II. Wilson’s stated purpose is to redefine the narrative of the war, positing that “business and government were reluctant, contentious, and even bitter partners” (p. 286) rather than the stated alternative narrative where the war is won by unbridled capitalism. Wilson also attempts to dismiss the argument that the war led only to the confluence of interests that became the military-industrial complex. The evidence provided does not definitively resolve the issue. Interestingly, the case falls short not due to lack of research but perhaps due to an overabundance. The research that went into Destructive Creation is detailed enough to allow for a far more nuanced view of the war and its economic effects.

Chapter 1 establishes the anti-war view that U.S. enterprises held after World War I. During the Great War, the U.S. had seen an increase in regulation, government seizures, the rise of state capitalism, and the excess profits tax. After the war, industrial leaders were labeled “merchants of death,” investigated by the Nye Committee, and saw the New Deal expand the role of government through the TVA and other public ventures. The interwar period was a time of industrial mistrust of war policies and a hesitancy to engage in the pre-war buildup.

While most chapters of the book have a wealth of information, Chapter 2 is the strongest in this regard. The U.S. began its armaments buildup of 1938-1940 despite industry misgivings. Though Wilson states that the war economy should not be interpreted as creating a “military-corporate alliance,” he notes the rise of government organizations headed by business leaders, increasing industrial dependence on government investment, and the growing importance of the government-owned, contractor-operated plants, where government financed construction and leased the plants to private contractors. The buildup was also the period where cost-plus fixed-fee contracts and subsidized construction allowed for massive industrial expansion. Wilson attempts to downplay the role of large corporations by highlighting the increases in subcontractors, but this argument is weakened with the discussion of the high costs of conversion for mid-sized firms and the prominence of prime contracting where large firms dominated.

Shifting focus, the “War Stories” chapter describes how U.S. industrial leaders attempted to win the war at home – as well as abroad. To highlight the narrative of free enterprise, Wilson offers detailed accounts of the public relations efforts of the National Association of Manufacturers with its 1942 “Production for Victory” tour and corporate radio ads. Yet he far too quickly dismisses the influence of the counter narratives of labor’s “soldiers of production” and the reemergence of the “merchants of death” label. While the Republicans’ Congressional gains in 1942 may suggest the dominance of the pro-business narrative, Wilson’s next two chapters provide evidence of concern over excess profits and of seizures to enforce union contracts. Such evidence suggests that the alternative narratives found traction in some corners of government and public opinion.

In fact, the next two chapters clearly illustrate the nuance needed in reading this book and the tension in the simple narratives. In Chapter 4, Wilson argues that business did not enjoy working with government, particularly when faced with regulations, contract cancellations, changing specifications, and the excessive paperwork associated with bureaucratic red tape. Variability in contracts, such as the Army’s tank and small arms reductions, caused painful reallocations for industrial manufacturers. The new excess profits tax, established to prevent war profiteering, created additional uncertainty in the profitability of the war effort. Yet even as contracts were cancelled and profits reduced in some areas, other projects, such as Boeing’s B-29, saw expansions in orders to offset losses. Larger industrial leaders like General Motors and Du Pont were also able to access significant tax loopholes to lower their burden. The fifth chapter exhibits many of these same tensions, with government willing to seize companies to break union wage strikes in a pro-business manner, but also to seize companies for underperformance and for failing to adhere to the union’s maintenance of membership rules in decidedly not pro-business actions.

Chapter 6 is perhaps the weakest of the chapters. Though it provides the history of the reconversion era after the war’s end, there is far less detail given than in previous chapters. This lack of depth is likely due to the span of history Wilson is attempting to cover, as the reconversion period discussed covers the years up to and partially during the Vietnam era. The chapter argues that the shift to privatization, ramped up by Robert McNamara, has led to a less regulated and more expansive military industry. Wilson again offers mixed evidence for business favoritism across the economy, yet very clearly lays out the foundations of the military-industrial complex in the specific areas of aviation and missile programs.

In summation, there are a few times the author presses an argument that does not appear to be supported by the evidence surrounding it, yet overall Wilson offers a well-researched and largely well-written historical account that, despite the title, spans from the end of World War I to the beginning of the Vietnam War. Wilson ultimately concludes that the lessons of World War II may provide guidance for resolving current issues such as climate change and healthcare. However, this conclusion misses the singular focus that all-out war mobilization brings, namely producing military ordnance in great abundance. This singular focus may not be true of the disparate and conflicting wants and needs of a peacetime economy.

Thomas K. Duncan is an Assistant Professor of Economics in the College of Business and Economics at Radford University. He has published research on the U.S. war economy in journals such as The Independent Review, the Review of Austrian Economics, and Peace Economics, Peace Science and Public Policy, and has been a contributor to the Oxford Handbook of Austrian Economics in the area of U.S. foreign intervention. Email: tduncan13@radford.edu

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Subject(s):Military and War
Geographic Area(s):North America
Time Period(s):20th Century: Pre WWII
20th Century: WWII and post-WWII