World War and the Growth of Global Power 261oil taken from occupied countries—and 150 million tons of steel, mostly
German. By the end of the war, 70 percent of everything used to defeat the
Axis came from an American factory. Among those recognizing the feat was
Stalin, who raised a toast during a 1943 meeting with FDR and Churchill to
“American production, without which this war would have been lost.”
American factory workers and Red Army soldiers, above all, had made Allied
victory possible.
The Military Keynesian approach that came with the onset of the war in
Europe had helped rescue the U.S. economy even before American participa-
tion after Pearl Harbor. Escalating production for the war then created
greater economic power as the conflict was fought. Preparing for war, the
process of mobilization, led to major changes in the economy, a continuation
of the type of ideas put forth in Hoover’s trade association concepts and
FDR’s First New Deal. That meant the government and businessmen had to
work as one, planning out schedules, quotas, deadlines, finance, and distribu-
tion for the immense amount of war material to be manufactured. Henry
Stimson, now Secretary of War, explained, “If you are going to try to go to
war, or to prepare for war, in a capitalist country, you have got to let business
make money out of the process or business won’t work.” The greater unifica-
tion of the state and corporations led to huge economic growth, especially for
the bigger industrial firms that got most of the government contracts.
Antitrust violations were suspended so the largest companies especially could
do as they wish—merge, collude, fix prices and production—and not fear
problems from the Attorney General or courts. Consequently, many of the
largest firms providing materials for the war doubled their profits, or more,
while smaller producers often went out of business, a situation similar to the
reforms of the Progressive Era, the Hoover years, and the early New Deal. In
the first year after U.S. entry into the war, America’s industrial output, as seen
above, had soared and already surpassed than the Axis, and by 1944 reached
production numbers more than double those of the enemy. American indus-
trial output itself more than doubled between 1942-1945, giving more evi-
dence for Stalin’s observation above.
To manage this economy and create such growth, Roosevelt re-shaped the
economy with new programs and bureaucracies. Businessmen, many of whom
had been upset with Second New Deal programs, now rushed to Washington
D.C. to run the agencies created to oversee production, working as “dollar a