Robert Franklin Maddox, The War within World War II: The United States and International Cartels. Westport, CT: Praeger Publishers, 2001. xi + 232 pp. $ (hardback), ISBN: 0-275-96274-1

Review for EH.NET by Daniel Barbezat, Department of Economics, Amherst College,

This book will serve as a good reference for economic and business historians. It is written as a history of the strategic business practices of both Germany and Japan, their relationships to US firms, and the process of decartelization in the post war era. It is not an economic history of this process; rather, the book is really about how wartime investigations led to the post-war reform policies of the US conducted in both Germany and Japan. The first half is a systematic recounting of the US investigation of how German and Japanese firms aided axis war efforts and how US firms sometimes joined in restrictive, collusive arrangements. The second half follows with a description of the development and implementation of US decartelization.

The book opens with a brief overview of the traditional international cartel literature. However, the book is not about international cartels, per se, and so this material is rather perfunctory. The introduction spends most of its time setting up the US anti-trust position through an examination of the creation and findings of the Temporary National Economic Committee (TNEC). There follows a good chapter on the relationship of US firms to German firms and the business/industrial studies of Japanese production. Maddox does a nice job of documenting US firms' relationships with German firms. For example he describes an agreement for Standard Oil to provide IG Farben its patents and information on synthetic rubber in exchange for information from the German firm on synthetic oils and other information concerning oil and gasoline. Once discovered, the Justice Department forced Standard Oil to provide licenses on patents concerning synthetic rubber royalty-free to domestic producers interested in developing synthetic rubber plants and to provide the information on how to use the patents. Other agreements described are Alcoa's agreements with IG Farben, Dupont and IG Farben, and Seimens and Bendix Aviation Co. After these arrangements are described -- as well as US policy responses -- Maddox turns to the information gathering on Japanese production and industrial structure, viz. railroad bottlenecks, capacity estimates, etc.

The next two chapters are descriptions of German industry, one on IG Farben itself and the next on German cartels. These are a good reference source for the various firm liaisons within and exterior to the German market. There follows a chapter on Japanese business practices. This is an interesting chapter that goes beyond a mere description of the various kieratsu. Maddox investigates the various strategies of industrial espionage of the Japanese, designed both to find out US capabilities and to get technical information that could be copied back in Japan. Historians of business structure and of wartime strategy will find this information especially interesting. Maddox documents how the Japanese government appropriated US patents while firms such as the Universal Oil and Japan Gasoline Company secured information on high-test aviation gasoline from Standard Oil that was not even made available to the American oil industry.

The remainder of the book is an examination of how the US decided to conduct reforms within German and Japanese industries. Maddox rightly begins with the confusion in Roosevelt's cabinet over the question of whether Germany would be deindustrialized under the supervision of the British, Russian and American governments. Maddox outlines the formation of the Morganthau Plan, which was dedicated to the idea that (in Morganthau's own words) "a weak economy for Germany means that she will be weak politically, and she won't be able to make another war" (p.112). Maddox does a nice job of weaving the question of international business interests and, specifically, the post-war treatment of US involvement in international cartel arrangements. The only problem with this chapter is there is no mention of Jean Monnet who had been in Washington and was, of course, very interested in post-war German policy. In fact, Monnet's name does not appear in the index even though this chapter is followed by two chapters on Germany's decartelization. Monnet's influence in the international conduct of the German steel industry (culminating in the Schumann Plan) would seem essential for understanding the dynamics of what the United States undertook after the war.

The next two chapters outline the actual policy toward Germany, the first covering until 1947 and the second from 1948 through to 1950. The story emphasizes the many conflicts between British and US interests and, within the US, between the military committees and the State Department. There is no account, though, of the formation and implementation of the Marshall Plan, which, of course, had a major impact in the turning of US policy. Overall, Maddox's account stresses the internal negotiations of the decartelization policies rather than analyzing what actually occurred or the implications of their outcomes on international business practices over the rest of the twentieth century. These chapters can serve as a reference guide to the formation of policy, especially in regard to international collusive arrangements, rather than an analysis of it.

The final chapter, on the economic reform of Japan, begins with the story of Truman's decision to drop two atomic bombs on Japan in order to force Japanese acceptance of the Potsdam Declaration before the Soviets could enter the Pacific war. With the acceptance of the Potsdam Declaration and the unconditional surrender of Japan, it was seen by the Truman administration that the US would determine Japan's future under the control of General MacArthur as Supreme Allied Commander. Like the chapters that come before it, this one is concerned mainly with describing the control and regulation of collusive arrangements within the target country, this time Japan, and how US firms would be able to interact with Japanese firms on arrangements of markets.

This book will serve as a reference to those interested in the inter-war and post-war formation of US policy on international collusion. It documents how internal conceptions of US anti-trust policy interacted with military, strategic concerns to form the policies of the US towards both Japan and Germany.

Daniel Barbezat is the author of articles on inter-war international cartels and the European Union. He is currently researching federal policies toward children in the 1920s and Cuba after 1960.