American business in wartime

“WHAT is America but beauty queens, millionaires, stupid records and Hollywood?” asked Adolf Hitler in 1940. With hindsight, this ranks as just about the most foolish rhetorical question posed during the second world war. But it did not seem so at the time. As Arthur Herman shows in his wartime history, when Hitler mocked its prowess America had experienced not so much a double-dip as a double-dive depression. Yet somehow the country’s moribund military-industrial complex was able to respond with great force to President Franklin Roosevelt’s call to arms.

The production statistics cited by Mr Herman, a think-tank scholar at the American Enterprise Institute, still astound. Preparations for war got off to a stuttering start. But everything changed in 1941 when Germany invaded Russia and then Japan attacked the American naval base at Pearl Harbour. By the end of 1942 America’s output of war materiel already exceeded the combined production of the three Axis powers, Germany, Italy and Japan. By 1944 its factories built a plane every five minutes while its shipyards launched 50 merchant ships a day and eight aircraft carriers a month.

As a combative anti-Keynesian, Mr Herman scorns the notion that such triumphs resulted from the dictates of an interventionist Roosevelt administration. He often cites instead the free-market ideas of Adam Smith to support his claim that it was the profit motive that inspired America’s feats of mass production.

The business heroes in his history are mostly immigrants or high-school dropouts and often both. Two tower above the rest: William “Big Bill” Knudsen, a General Motors executive who was once a teenage clerk in a bicycle business in Copenhagen, and Henry Kaiser, who began work at 16 as a travelling salesman for a dry-goods store in Utica, New York. Knudsen headhunted corporate innovators and persuaded them to give up their pay and perks to join him as “dollar-a-year men” in Washington. Kaiser recruited a can-do team from such blue-chip American companies as Lockheed, Bechtel-McCone, Chrysler, Boeing and General Electric to produce everything from dams to tanks to ships to steel. Each executive received an annual fee of $1.

Big business did not succeed on its own. It needed the help of small business. The Boeing B-29 bomber, for instance, had 40,540 different parts, and 1,400 sub-contractors provided most of them. The Research Institute of America spurred them on. In a booklet entitled “Your Business Goes to War” it asked its readers to consider switching from making vacuum cleaners to gas-mask parts. Or from shoes to helmet linings. Or from razors to percussion primers for artillery shells.

Among those who gawped in wonderment was Joseph Stalin. When he met Roosevelt and Churchill in Tehran in 1943 he raised a glass to toast “American production, without which this war would have been lost.” His words were as wise as those of his rival tyrant, Hitler, were not.