Freedom’s Forge: How American Business Produced Victory in World War II, by Arthur Herman (Random House, 346 pp., $28)
‘The size of the internal American market and its wealth of buying power and also raw materials . . . guarantee the American automobile industry internal sales figures that alone permit production methods that would simply be impossible in Europe. The result of that is the enormous export capacity of the American automobile industry.”
So wrote a young Adolf Hitler in the unpublished “Second Book” of Mein Kampf. And he was right. Which raises the question of why he would declare war on such an awesomely productive power on December 8, 1941, when his alliance with imperial Japan (whose leaders hadn’t even bothered to give the Führer advance notice of Pearl Harbor) required no such thing. For it was the greatest exports of the American automobile industry — the nearly 300,000 aircraft, 90,000 tanks, and 400 million tons of bombs it retooled itself to produce during the war — that would prove to be the doom of the Third Reich.
As Americans, we’re likely to focus on American-led campaigns and battles — names such as Midway, Iwo Jima, Normandy, and Bastogne — and the brave men who fought and died in them. But the indelicate fact is that four of every five Germans who died in ground combat were killed by Russians, and that it was the Soviet Union under the bloody-minded Josef Stalin that provided the sheer mass of bodies required to stop Germany in its tracks. As British historian Andrew Roberts puts the matter in his brilliant recent book The Storm of War, America’s most important contributions were made thousands of miles from the front lines. “Grossly to oversimplify the contributions made by the three leading members of the Grand Alliance in the Second World War,” he writes, “if Britain had provided the time and Russia the blood necessary to defeat the Axis, it was America that produced the weapons.”
Just how the United States managed this is Arthur Herman’s subject in his engaging new book, Freedom’s Forge. His narrative is impressive in both its breadth and its detail, and fills out the gauzy images of war bonds and Rosie the Riveter that constitute the casual American’s understanding of the war economy. But though his scope is plenary, Herman wisely tells much of the story through two paradigmatic captains of industry: Bill Knudsen, who as one of Roosevelt’s “dollar-a-year” men did as much as anyone to ensure that free enterprise survived and thrived on a war footing; and Henry Kaiser, an industrial dynamo who built just about everything short of fully formed infantrymen for the war effort.
Kaiser was of that truly American type whose business is business. He started out as an ambitious camera-shop owner and in the course of the first two decades of the 20th century became one of the most important road-graders and -pavers west of the Mississippi, connecting the burgeoning West Coast to the heart of America. He then turned his sights to dam building, and was instrumental in forming the conglomerate known as the Six Companies that put up the Hoover and Boulder Dams. By 1940, Kaiser and his company were building shipyards in Seattle, and the experience convinced him that — why not? — he could build merchant freighters for the desperate British, whose own fleet was being decimated by German U-boats. And so he did — 747 of the famed Liberty ships for Britain, and later America, before the war was over.
He installed massive new yards in Richmond, Calif., and Portland, Ore., and from there turned shipbuilding, which had been an idiosyncratic, artisanal process, into just another example of assembly-line mass production. The first Liberty freighter out of the Richmond docks in May 1941 took 253 days to build and launch. When Admiral Howard Vickery of the Maritime Commission told him that that would need to come down to 105 days, Kaiser and his team gulped but signed on. A year and a half later, the Richmond yards assembled Hull No. 440, later christened the Robert E. Peary, in four and a half days.
Eventually Kaiser would turn to making the steel for the ships himself rather than having it brought in from the major foundries in the Midwest, building the first large-scale steel-production facility west of the Rockies in Fontana, Calif. His Six Companies would also help rebuild Pearl Harbor after the Japanese attack, and their engineers and workers would die alongside Marines in the heroic but ill-fated defense of Wake Island against the Japanese. By the end of the war, Kaiser was even building aircraft carriers, and had become a living legend.
On the surface, Kaiser looks like a character from an Ayn Rand novel, but Herman demonstrates that he was also a shrewd political operator with a team of slick lobbyists and an instrumental affection for the New Deal and its influence-peddling architects. He believed in and succeeded through the free-enterprise system, to be sure, but he was also well aware of the benefits of having friends in Washington.
William Knudsen, whom Herman affectionately refers to as “the Big Dane” throughout the book, was in many ways Kaiser’s complement. An immigrant who earned a reputation as a bare-knuckle boxer in turn-of-the-century New York City, Knudsen was a maker of bicycles who caught the attention of Henry Ford. He worked for — and clashed with — Ford during the Model T era, inventing vast swaths of the science of industrial management in the process. In the 1920s, he left Ford for Chevrolet and engineered — both literally and figuratively — its dethroning of the Model T as the bestselling car in America. By 1940, when President Roosevelt called Knudsen to Washington to lead the country into war production, Knudsen sat atop General Motors and the automotive world, his reputation second not even to that of Ford himself. But Knudsen nevertheless resigned his position unceremoniously (to the chagrin of his America First–supporting chairman at GM, Alfred P. Sloan) and left for Washington. America had been good to him, Knudsen reasoned, and he owed her.
While Kaiser’s is an impressive story of American ambition, what Knudsen managed to accomplish in a number of largely thankless government roles — unpaid, unchartered, unloved, and with little more than the (fleeting) good wishes of the president of the United States — was nothing short of astonishing. Leveraging his personal stature and his relationships in Detroit and elsewhere, along with his innate production genius and intimate knowledge of America’s manufacturing base, he personally distributed billions in government contracts to those companies best suited to deliver — even if it meant focusing on the large auto corporations (thus drawing ire from the likes of Senator Harry Truman) he well knew had the dedicated engineering staffs required to make massive plants turn on a dime for war production. Herman does the sums:
In the end, American automakers would produce 50 percent of all aircraft engines, 35 percent of aircraft propellers, 47 percent of all machine guns, 87 percent of all aerial bombs, 80 percent of tanks and tank parts, one-half [of] the diesel engines for ships, submarines, and other naval craft; not to mention 100 percent of U.S. Army trucks, half-tracks, and other vehicles.
Knudsen was more than just a glorified appropriator. Herman details the myriad ways in which he helped improve everything from airplane-assembly orders to military-contracting procedures during a seemingly never-ending cross-country inspection tour of America’s “arsenal of democracy” (a phrase Knudsen coined and FDR borrowed). A representative tidbit recounted by Herman is Knudsen’s realization that the country’s tax laws, which included a 15-year amortization schedule for deducting physical capital as a business expense, would make the private-sector investment required for a speedy military buildup impossible. (Hitler’s Germany had a seven-year schedule.) Knudsen finally prevailed upon Roosevelt to change the law — but first he had to get FDR’s friend, glass tycoon John Biggers, to explain to the president and his cabinet what “amortization” meant.
Indeed, the proximate villains in Herman’s story are not the Nazis or the Japanese, but the ideology and often, as above, the ignorance of the progressive New Dealers and labor unions. Union strikes, especially those spearheaded by the Communist-tainted CIO, stymied Knudsen’s efforts and crippled production in the critical months before Pearl Harbor. Nor did the date of infamy change much: Workers at a Consolidated B-24 plant in San Diego struck a week after Pearl Harbor. In all, 1941 would have 3,500 strikes, costing 23 million man-days of labor. Roosevelt’s refusal to check the unions meant the strike menace would persist through the war, although it would reach a turning point in 1943, when public outrage over a coal-miners’ strike allowed Republicans in Congress to pass (over FDR’s veto) the War Labor Disputes Act, which curtailed unions’ ability to walk out.
Nor was it just Roosevelt’s allies in Big Labor who worked to undermine Knudsen. Roosevelt’s chief ideologue and fixer, Harold Ickes, mistrusted the Big Dane and thought of him as a creature of Big Business. Others in the administration — including the first lady — shared Ickes’s opinion, and, owing to their whispers, so did a compliant press. And they’d eventually have his scalp. After Knudsen had overseen no less than the repurposing of the entire manufacturing capacity of a continent, Roosevelt unceremoniously cut him loose from his civilian position, bowing to pressure from the Left. Knudsen learned of his termination over ticker tape. He’d get a consolation prize, of sorts, in the form of a three-star commission in the U.S. Army (he was the only civilian ever to be made a lieutenant general), and go on as an indispensable troubleshooter for the War Department until 1945.
Besides Kaiser and Knudsen, there are hundreds of heroes in Herman’s book: American businessmen of every make and model, from burly immigrants and bayou dropouts to teetotaling prep-school dandies and the scions of Gilded Age dynasties, alongside countless upstarts who, with a few thousand dollars and a spare garage or tool shed, created new ways to weld studs onto naval vessels or mass-produce pre-fab huts for troops stationed in the Arctic. From the titans to the little-guy entrepreneurs who would form the 500,000 new businesses that emerged from the war, all of them were motivated to help America by helping themselves.
Their stories make Herman’s narrative revisionist in an important respect: Most casual histories of American armament write as if the wartime economy were purely central-planned and state-driven. Herman shows that it was not, that individual businesses motivated by both patriotism and profit were the motor of the war effort.
To be sure, progressive ideologues saw the military buildup as the New Deal by other means: As one put it, it was “a version of the WPA that Republicans [would] have to support.” But the parts of the war effort the government planned most heavily — production-priority charts, rations for raw materials, and the like — were messes. For instance, when one of FDR’s alphabet-soup agencies unilaterally ordered a halt to new civilian-automobile manufacturing on January 15, 1942, so that Detroit could focus exclusively on armament, the administration faced a swift kick in the pants from the God of Unintended Consequences, as 400,000 autoworkers were laid off and car dealerships across the country shuttered. The result of centralized control was to slow, not hasten, wartime production.
This isn’t to say that the American war economy was an ideal example of laissez-faire. Among other things, the effort involved massive, wholesale collusion of a type that would be illegal under even the most basic of antitrust laws. Nearly all of Detroit, for example, agreed in 1940 to stop making yearly model changes, to save retooling time and focus on the war production effort. And competitive bidding for war contracts was thrown out the window — there simply wasn’t enough time to do things that way. But Herman’s excellent book reminds us again and again that the most successful warmaking machine in history — by the middle of the war, the U.S. was out-producing all the other belligerents combined — was also the freest. We did not defeat Nazi syndicalism, or Soviet Communism for that matter, because we were lucky. We defeated them because we were right.