Over the last several years a growing body of research in economic history and history has added to our understanding of changes in American society, economy, and politics, brought on by WWII. Together with research on the 1930s and Franklin Roosevelt's New Deal, this literature provides a vital historical window into the institutions that are increasingly in the public view as in need of reform. In order to learn the appropriate lessons for the future, we must recognize the complexity of the environment from which these institutions emerged.
Mark Wilson's Destructive Creation is an excellent and informative contribution to this literature. In part, Wilson challenges a stylized view of mobilization for WWII that focuses primarily on the efforts of America's business leaders. More importantly, he documents the origins of the mobilization program in the contentious debate over the role of public versus private ownership in American society during the interwar period. In this way, Destructive Creation follows in the tradition of Robert Higgs’ Crisis and Leviathan. Wilson is more sanguine on the importance of the interplay between public and private interests for the success of the mobilization effort than is Higgs, while also recognizing the long running political-economic dynamic that eventually produced the postwar military-industrial complex.
Chapter 1 provides the pre-history for WWII mobilization and is a superb narrative of the political economy of the interwar period. This account begins with the requisite mention of the country's lack of preparedness for WWI, which provided motivation to military and civilian planners. However, Wilson emphasizes that the transition was not smooth and does fit neatly with the standard characterization of mobilization during WWI. On the one hand, businesses recognized the potential for large and riskless profits from defense production as long as war continued or the political climate was neutral. On the other hand, the actual experience of the 1920s and 1930s showed the tendency toward government intervention into the management of private firms, progressive calls for more oversight, and greater interest in public ownership outright.
The build-up in military capacity that took place over the interwar period was the result of cautious cooperation on the part of business leaders in the context of a contentious political debate over the role of government in American society. In Chapter 2, Wilson documents how attention to preparedness and the back-and-forth of political process translated to early WWII mobilization efforts, starting with rearmament in the later 1930s. The important finding to emerge from this chapter is the underappreciated role of small firms and subcontractors relative to the large industrial corporations. The latter were certainly important, but the former played a role that was vital. Wilson convincingly argues that the view that the business community—specifically, large firms—was more important requires revision. For economic historians, quantitative evidence along this line as well as detailed analysis of the implications for postwar market structure remains an exciting area for future research.
In Chapters 3 and 4, Wilson moves to the 1940s to reexamine the initiative taken by private firms in carrying out mobilization. The backdrop for these chapters and the remainder of the book is the commonplace assumption that captains of industry and dollar-a-year men were the architects of the arsenal of democracy. Chapter 3 begins by showing that much of the popular understanding of WWII mobilization was shaped by a public relations effort on the part of firms and trade organizations that focused on the contributions of large firms. Public officials—including some New Dealers—reinforced this view. As a sign that this narrative was effective in convincing the electorate, the midterm elections of 1942 centered on pro-business and anti-statist rhetoric that favored private enterprise.
After documenting the political and social forces that shaped the public's understanding of wartime mobilization, Chapter 4 documents how facts on the ground undermine this rosy picture. First, many businesses complained of the administrative burden placed on them by the paperwork associated with government contracting. Second, the number of inspectors and auditors during the war increased. These people were civil servants placed on-site and tasked with checking the quality of goods before final delivery. By 1944 surveys of businesses reveal a private sector increasingly wary of the costs involved with government contracting. The chapter's title (“One Tough Customer”) encapsulates Wilson's view that mobilization did not represent a free-for-all for private firms, despite what firms wanted the public to believe about their contributions. The federal government provided a framework that was sometimes consistent and other times erratic; and during the war the business community harbored more acrimony to this oversight than they ever let on.
Chapter 5 examines the wartime policy toward organized labor. Wilson emphasizes the clash between the government, firms, and business groups over the strikes and subsequent plant seizures. The key in this storyline is the tension between the short-run—in which wartime policy contributed to greater unionization—and the long run—in which the backlash produced electoral victories and policy reversals that weakened unions. Here again, the government and businesses ran up against one another and the effect was larger than is typically recognized.
Finally, Chapter 6 addresses directly the issue of reconversion to a postwar economy and impact of mobilization on the political-economic dynamic in the long run. Ultimately, the war gave rise to two forces. On the one hand, the debates coming out of the 1920s and 1930s ensured that private firms were not given free rein in mobilization. On the other hand, lobbying and the delicacy of policymaking in wartime meant the business community emerged from the 1940s with a more contractual relationship with the federal government. These forces interacted to produce an arsenal of democracy, but also facilitated the development of military-industrial complex. Destructive Creation is essential reading for economic historians interested in WWII and for learning the lessons of history most relevant to ongoing debates over the military-industrial complex of the twenty-first century.
