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How Capitalism helped to win the war

Posted by GP

The Bethlehem-Fairfield Shipyard, Baltimore, MD – cargo vessels in 24/7 production

“We won because we smothered the enemy in an avalanche of production, the like of which he had never seen, nor dreamed possible.” ___ William Knudsen, Pres. of G.M.

William ‘Bill’ Knudsen’s story is detailed in the video Capitalism in World War II: The Arsenal of Democracy.

Capitalism in WWII: Andrew Higgins “The Man Who Won WWII” covers Andrew Higgins, whose landing craft designs, based on his own experiences building shallow-water boats in New Orleans, dramatically shaped the way the U.S. military fought World War II. With its enemies oceans away, the U.S. military relied on these small, purpose-built crafts to put boots on the ground.

Rob Citino

Rob Citino:

Well first of all, what America was able to do as a result of individuals like Bill Knudsen and Andrew Higgins, and also as a result of our social economic system and as a result of our fantastic material wealth (much of which was lying fallow during the depression) was to mass produce and employ an economy of scale on a way that was just unheard of to the other countries, with the possible exception of the Soviet Union. If you look at others, another name that has to be mentioned up top is Henry Kaiser. He was the master builder of the war. Kaiser was an energetic and hard driving guy, he was always going in all directions at once. Kaiser would help build the Hoover Dam and the Grand Coulee Dam.

One of many Rosie the Riveters

Kaiser went from construction to shipbuilding, having never built a ship before in his life, during World War II in Richmond, California and Portland, Oregon. They were Liberty Ships, a kind of a floating train car, the most ungainly think you could ever imagine, and he banged them out with abandon.

It used to take months to build a ship. Kaiser’s company could bang them out in 10 days. A ship is a funny thing to build because for most construction projects you speed up at the end. You’ve done all of the heavy lifting in the beginning and at the end it really goes quickly. Shipbuilding goes slowly at the end because you have to put the deckhouses on, but you can clamp together the hull fairly quickly. Kaiser was the one who hit on the notion that you can prefab these things, preassemble the deckhouses and then use a crane to put them on top of an already full constructed ship. I think that was a real breakthrough in shipbuilding.

tank mass production

If we were going to come to grips with our enemy in the Pacific, Japan, an island nation all the way across the Pacific, or in Europe, Germany, we had to get across the Atlantic to get there. We had to form and deploy gigantic forces in a short amount of time, and the only way to get them there is by sea. You can air transport light forces into a theater, like paratroopers and light vehicles perhaps, but in order to bring the heavy metal (the way the United States fights wars is with a lot of materiel, a lot of ammunition, and a lot of heavy artillery) if you’re going to get these things to theater, the only way you can do it is by sea.

The real peak of that achievement is June 1944: spearheading an alliance, the United States landed a massive force in Europe, tens of thousands on the first day and millions of follow-on forces, and literally within weeks launched a gigantic landing on the island of Saipan in the Marianas. There has never been a military power before, and maybe there never will be again, with that kind of global reach. And it’s things like being able to build a Liberty Ship faster than the Germans could torpedo them in 1942 that enabled this. It’s nothing romantic, it’s a battle of attrition.

Higgins boats at Saipan

You have to produce more than you’re losing. And, by and large, that is the margin of victory across all fronts for the Americans in World War II. So it is someone like Knudsen, an expert on production and the assembly line, someone like Higgins, building a little shallow draft boat for river traffic down here in the New Orleans swamps and bayous, someone like Kaiser, figuring out a way to build a big transport ship in an ungodly short amount of time, that allows America to fight the war of the rich man.

There’s a famous book, Arthur Herman’s Freedom’s Forge, which attributes the entire success of the World War II economy onto a handful of these Knudsens and Higgins’ and Kaisers that you and I have been talking about. They brought their patriotism forward, the innovation, the entrepreneurial skills that U.S. workers on all levels enabled.

aircraft mass production

I don’t deny any of that, but the portrait has been overdrawn. Cost-plus contract gave every World War II contractor a guaranteed 8 percent profit, more or less. A guaranteed 8 percent profit is a lot of money for a $10 billion industry. Things like Cost-plus contract, a five-year amortization rather than 16, and letters of intent that could be used for borrowing [also impacted the success of the World War II economy]. Henry Stimson who was Secretary of War at the time said “you have to let business make money, otherwise business won’t work.”

Robert M. Citino (born June 19, 1958) is an American military historian and the Samuel Zemurray Stone Senior Historian at the National WWII Museum. He is a leading authority on modern German military history, with an emphasis upon World War II and the German influence upon modern operational doctrine.

Click on images to enlarge.

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