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U.S. Economic Planning in the Second World War and the Planetary Crisis

Stars over Berlin and Tokyo will soon replace these factory lights reflected in the noses of planes at Douglas Aircraft's Long Beach, Calif., plant. Women workers groom lines of transparent noses for deadly A-20 attack bombers

"Stars over Berlin and Tokyo will soon replace these factory lights reflected in the noses of planes at Douglas Aircraft's Long Beach, Calif., plant. Women workers groom lines of transparent noses for deadly A-20 attack bombers." By Alfred T. Palmer - U.S. National Archives and Records Administration, Public Domain, Link.

Martin Hart-Landsberg is professor emeritus of economics at Lewis and Clark College, Portland, Oregon. He is also the author of the blog Reports from the Economic Front, where an earlier version of this article appeared on October 10, 2022. It has been revised for Monthly Review.

The planetary crisis has driven our planet into uncharted territory. We are close to breaching critical environmental thresholds, setting in motion destabilizing changes to our global climate system that could well make the earth unlivable for humans and countless other species. We must decrease carbon emissions as rapidly as possible, and there is no way to do that without significantly changing the operation and aims of our economy. But not just any change will do. It must be one that also promotes worker empowerment and solidarity, community security and well-being, and democracy.1

Activists have generated a wide-ranging list of demands to advance the desired transformation. Among them are ending the burning of fossil fuels for energy, to be replaced with a zero-carbon emissions energy infrastructure; developing systems of mass transit to dramatically reduce use of private cars and encourage new forms of living and working in healthy communities; retrofitting homes, offices, and factories to improve energy efficiency; expanding sustainable agriculture; providing high-quality and affordable health care; instituting a massive program of public works to upgrade our infrastructure; and re-skilling workers employed in environmentally damaging industries to ease their transition to alternative jobs in the expanding green sectors of the economy.

There are movements already doing the hard organizing to build support for many of these demands. At the same time, individual movement efforts—no matter how additive—do not automatically encourage an understanding of the challenges involved in the process of system change. Changes of the magnitude we want and need will involve many moving and interrelated parts. And, if it is to be successfully accomplished, the whole will have to be planned.

For example, the system change we need includes closing or significant downsizing many fossil fuel-dependent industries. We will need to develop a process for humanely and efficiently repurposing newly surplus facilities and ensuring alternative employment for released workers. Similarly, we will need agencies to decide the speed at which we grow the industries that will anchor our new economy, how their expansion will be financed, who will own and manage them, and how to best ensure that needed materials will be produced in sufficient quantities and made available at the appropriate time. We will also need planning to decide where to locate the new industries and how to provide social infrastructure to house and care for the workforce. Finally, we will need some way to ensure that our process of transformation is compatible with and supportive of efforts in other countries.

Clearly, we are not yet ready—organizationally or politically—to advance an actual transformation plan. However, it is not too soon for us to begin thinking about the challenges that lie ahead, both to keep the ultimate goal of system change in mind and to start developing the organizational relationships and networks required to create a shared sense of priorities. A number of people, including me, believe that there is a lot we can learn from studying the Second World War mobilization experience.2 Under the pressure of war, the U.S. government was forced to confront challenges similar to those highlighted above, as it rapidly converted the economy from civilian to military production. And, thanks to the work of a series of mobilization agencies and policies that enabled the government to fund the construction of new industries, support the expansion of existing ones, order the closure or conversion of yet others, and allocate scarce machines and resources according to established priorities, it succeeded.3

Not surprisingly, the consensus from those studying the wartime conversion experience is that a rapid and successful transformation requires aggressive state planning and direction of economic activity. This is indeed an important lesson for our movement to learn. But there is another lesson to be learned from that period, one that deserves more attention than it currently receives. It is that in a capitalist economy, capital’s ownership position greatly enhances its ability to mold state structures and their policies in ways favorable to its interests and to the detriment of workers. In other words, the planning process is a contested terrain, and one not usually favorable to working people.

I will show that, during the war years, corporate leaders were able to rebuff Congress of Industrial Organization (CIO) planning proposals and successfully marginalize the participation of unions in the mobilization agencies that were formed, ensuring that labor would be forced into a defensive and ever weaker position relative to capital as the war progressed. Thus, if our aim is not simply a transformation to a somewhat less carbon consuming economy, but a complete and just transformation, we must prepare ourselves, and the movement that we hope to build, for an ongoing and complex struggle to overcome capital’s structural advantages. It is my hope that this article, which focuses on the class dynamics shaping the Second World War mobilization process, can help that preparation. The history it describes offers a useful primer on how the other side conducts its class war.

I will describe the U.S. military’s post-First World War efforts to develop an industrialization mobilization plan in preparation for the next war, highlighting the growing military-corporate alliance and the military’s determination to craft one that would promote maximum freedom of operation for the alliance partners at labor’s expense. I will then go on to discuss President Franklin D. Roosevelt’s opposition to the military’s plans, the nature of the mobilization agencies actually established, and how those agencies, despite Roosevelt’s concerns, were quickly dominated by big business. The subsequent section presents labor’s alternative plans for industrial mobilization. These plans—which were rejected by corporate America, mobilization authorities, and Roosevelt—would have transformed class relations by institutionalizing labor’s participation, with business and government, in planning and production decision-making. I then describe the cost of defeat for labor over the war years, highlighting the ways in which corporations and government agencies undermined past worker gains in both wages and working conditions by stripping unions of much of their capacity to defend workers’ interests. I conclude with a brief discussion of the relevance of the Second World War conversion experience to our present-day need to transform the U.S. economy.

The Military and Economic Mobilization

State planning, investment and ownership, and direction of economic activity were key to the U.S. transformation from a civilian to a military economy during the Second World War. Central to this state activity was the work of three successive planning agencies, each established by presidential executive order, with Roosevelt giving each new agency a more centralized leadership and greater authority over private economic activity.

The first was the National Defense Advisory Commission (NDAC), established in May 1940. It was replaced by the Office of Production Management (OPM) in December 1940, which was replaced in turn by the War Production Board (WPB) in January 1942. Despite their differences, the basic framework of the NDAC was maintained in both the OPM and WPB. Although it was Roosevelt who decided on that framework, his choice was not made in a vacuum. He had to contend with an increasingly powerful military-corporate alliance pushing its own mobilization plan.

The chaotic experience of the First World War economic mobilization encouraged the military to start thinking about an improved mobilization process soon after the war’s conclusion. The chaos was a result of poor organization and unclear lines of control on both the military and civilian sides of the mobilization. In a rush for armaments, the War and Navy departments began competing with each other to place contracts with firms. The uncoordinated purchases created havoc, leading to shortages and escalating prices.

The War Industries Board (WIB), established in 1917, was supposed to function as a coordinating agency to avoid such chaos. The WIB was organized around trade associations, with member companies participating on a voluntary basis. The trade associations were to make decisions about how best to ensure the desired military production and develop appropriate responses to shortages. However, it was not until Bernard Baruch was appointed head of the WIB in March 1918 that the industry side of the mobilization became effective. This was largely a result of his force of personality and, equally important, his newly granted presidential authority.

The military had its own house to get in order. In August 1918, the Assistant Secretary of War was authorized to establish a Planning Branch staffed by Army officers. In February 1922, the secretaries of War and Navy created the Army-Navy Munitions Board to help coordinate procurement and planning activities. Two years later, the Army established the Army Industrial College, with the mission of educating officers in the skills required for planning.

The Planning Branch soon began developing plans for a future wartime mobilization, with a new plan produced almost every three years. Baruch’s experience and vision had a big impact on the branch’s work. He believed that the military would do best by working with, rather than by having authority over, the business community, and, by 1924, Planning Branch members were openly consulting with trade association officials. In fact, some trade association leaders were made reserve officers for temporary duty in the Planning Branch to help with the work.

While the military’s planning focused on industry and its organization, labor was held in contempt. In contrast to the invitation extended to industry leaders to participate in the Army’s planning process, labor leaders were not only never invited, they were never even consulted. And, while there were different positions within the military on how to relate to labor during a wartime mobilization, all tended to be hostile. Some in the Army Industrial College even advocated drafting all males of specified age groups, then furloughing those needed to work for private industry at soldier’s pay.

The military’s Industrial Mobilization Plan of 1939 was its most complete. It called for the creation of a central mobilization agency, the War Resources Administration (WRA), which would be responsible for mobilizing and coordinating production in the event of war; all agencies created later were to be subordinate to it. The WRA was to be headed by a single appointed administrator whose staff would be provided by the Army-Navy Munitions Board. Other key agency positions were to be filled by “patriotic business leaders.” The WRA would operate through War Service Committees made up of self-organized trade associations, which would execute the policies decided upon by the WRA’s administrator.

As for labor policy, the military proposed that if war broke out, the labor section of the Army-Navy Munitions Board, composed entirely of military personnel, would have the authority to issue labor policies until a separate administration was created. Among the policies it advocated were a suspension of the Eight-Hour Act, a modification of the National Labor Relations Act to prioritize production, “work-or-fight” regulations, and the direct assignment of workers to defense plants.4

The military and its corporate allies clearly took planning seriously. They came to share a common aim: an industrial mobilization process in which they enjoyed maximum freedom of operation individually. The government was to remain on the sidelines and labor was to be repressed. They did not get everything they wanted, but as we will see next, they came close.

Wartime Planning

President Roosevelt had downplayed his desire to boost the country’s readiness for war because of strong isolationist sentiment, both in Congress and among the population in general. However, Germany’s rapid invasions of Belgium, the Netherlands, France, and Luxembourg in May 1940 changed public opinion. Seizing the moment, Roosevelt ordered an increase in military spending and established his first mobilization agency, charging it with increasing business’s capacity to support the defense buildup.

Roosevelt was critical of the military’s industrial mobilization plans. He was not willing to turn control of the economy over to a WRA administrator. He was also not willing to approve a mobilization plan dominated by a military-corporate alliance, in which business trade associations made and implemented government policy. Moreover, the military’s industrial mobilization plan was designed to become operational once war was declared, not to manage a defense buildup.

Thus, rather than seek congressional approval for a new mobilization agency that might give the military and its corporate allies an opportunity to push their own plan, Roosevelt reactivated an already-existing agency from the First World War, the NDAC. Against the military’s desires, the NDAC had no supreme leader, had only limited powers, and included divisions representing a range of economic interests and social concerns. In contrast to what the corporations wanted, trade associations were given no official standing to decide policy. At the same time, the underlying structure of the NDAC was only steps removed from that proposed by the military-corporate alliance in their evolving industrial mobilization plans. Moreover, with each successive change in mobilization agency, the distance became ever smaller.

The NDAC was a complex agency organized around seven divisions, each with its own appointed head: Industrial Production, Industrial Materials, Labor, Price Stabilization, Farm Products, Transportation, and Consumer Protection. Because the NDAC’s primary charge was to help business produce the goods and services needed by the military, two divisions quickly came to dominate its work: the Industrial Production Division (led by William S. Knudsen, then president of General Motors Corporation) and the Industrial Materials Division (led by Edward R. Stettinius Jr., board chairman of the United States Steel Corporation). The other divisions, including the Labor Division (led by Sidney Hillman, president of the Amalgamated Clothing Workers of America) were largely ignored by industry leaders and quickly sidelined.

The Industrial Production Division was tasked with “facilitating the manufacture of munitions not normally produced by the economy” and organized into eight sections, the most important of which being aircraft; ammunition and light ordnance; and transport, including tanks, trucks, and tractors. The Industrial Materials Division was tasked with ensuring the production of needed industrial materials. It was divided into three main subdivisions: mining and minerals products (which was further divided into sections representing products such as iron and steel, copper, aluminum, and tin), agricultural and forest products (further divided into sections for textiles, leather, paper, rubber, and the like), and chemical and allied products (subdivided into sections for goods such as petroleum and nitrogen).

Significantly, every section in these two divisions had its own appointed head, almost always a so-called dollar-a-year executive. These were business executives who, while serving on the NDAC, remained employed and salaried by their corporate employer. Often, they were put in charge of a section that was to oversee the activities of the firms that employed them. In many cases, these section heads relied on industry advisory committees, as well as trade association officials, to help them in their work.

The NDAC proved to be ineffective. With no central authority or powers to ensure compliance, it found it difficult to develop an overall production plan for the economy or to overcome military and corporate resistance to its initiatives. The fact that most section heads, in line with corporate desires, resisted NDAC efforts to promote industrial conversion, priority allocation of key materials, or new investment in plants and equipment only added to the agency’s poor performance.

Accordingly, in December 1940, Roosevelt replaced the NDAC with the Office of Production Management. This agency had a designated leader and a policy council that included military representatives. It also had fewer divisions; those seen as tangential to the military buildup were dropped. While this was an improvement over the NDAC, the OPM also floundered, in large part because the president continued to withhold the authority to direct and regulate production. Thus, although progress was made in building a planning infrastructure, shortages of key products and materials continued to destabilize the economy and set back the military buildup.

Finally, with the U.S. entry into the war, Roosevelt replaced the OPM in January 1942 with a new mobilization agency, the WPB. In contrast to the previous two agencies, the WPB was given the economic and regulatory power needed to finally unleash the country’s productive capacities in the service of military production. In particular, the WPB was able to shut down or order the conversion to military production of civilian industries, prioritize and allocate the distribution of scarce goods and materials, promote new investment in plants and equipment in critical industrial sectors, and secure agreement from the military’s procurement agencies to take the economy’s production capacity into account when making demands.

Although each new mobilization agency had a more centralized decision-making structure, broader responsibilities, and greater authority over private business decisions than its predecessor, one thing remained the same: key decisions were still made by divisions, and most of their sections were headed by dollar-a-year executives. As the labor historian Nelson Lichtenstein noted: “Key decision-making lay within the industrial divisions of the OPM and the WPB. There, almost 800 posts were held by dollar-a-year executives on loan from their corporations. Along with like-minded procurement officers in the military, the men who staffed the industrial divisions soon presided over a virtual command economy. They decided distribution of contracts, allocation of scarce resources, general coordination of industrial capacity and military requirements.”5

Not surprisingly, big business was the main beneficiary of this private planning system. Of the $175 billion in prime contracts awarded between June 1940 and September 1944, over one half went to the top thirty-three corporations.6 Roosevelt’s acceptance of this behind-the-scenes takeover of the mobilization process by corporate executives—despite his critical views—reflects the powerful leverage corporations enjoy in a capitalist economy, especially during wartime. As Roosevelt’s Secretary of War, Henry Stimson, explained: “If you are going to try and go to war, or to prepare for war, in a capitalist country, you have to let business make money out of the process or business won’t work.”7

Of course, capital’s leverage is always contested. As we see next, organized labor put forward its own workable mobilization plans. Unfortunately, these plans were quickly rejected by corporate leaders, including those who occupied positions of authority in the OPM and WPB, and, eventually, by Roosevelt himself. The war would be won and capital would claim the lion’s share of the credit, citing its “production miracle.”

Labor’s Exclusion

The defense mobilization came at a challenging time for unions, especially those affiliated with the CIO. Labor’s gains between 1935 and 1937 were significant, but many key industries remained unorganized when the economy fell back into recession in late 1937. CIO leaders were hopeful that the defense buildup would re-energize the labor movement. At the same time, aware of the antiworker sentiments of both the military and corporate community and hoping to sideline the most recent Industrial Mobilization Plan, Philip Murray, head of the CIO, developed his own plan. He presented it to Roosevelt, with unanimous support from the CIO executive board, in December 1940.

The Murray Plan was quite general. In brief, it called for the creation of Industry Councils composed of an equal number of representatives from management, labor, and government in all major industries. These councils would have, as the military historian Paul A. C. Koistinen explained:

the authority to make all major decisions for the industry during the period of emergency.… [They] would plan for converting an industry to defense and war production, allocate contracts, materials, and labor within the industry, provide for the maximum utilization of all facilities, including pooling arrangements, and insure proper training, housing, and other facilities for the work force. A National Defense Board, composed of equal representatives from labor and industry, but chaired by the President or his representative, would serve to coordinate the various councils and to establish rules and procedure for the operation of the councils.8

Under the Murray Plan, the government would consider “each industry, not as a series of corporations, but as a series of plants.” Beginning in January 1941, a number of CIO unions offered variants of the Murray Plan for their own industries, including the steel industry, aluminum industry, copper industry, and agricultural equipment industry.

The most detailed mobilization plan—and the one that came closest to adoption—was developed in late 1940 by Walter Reuther of the United Auto Workers union (UAW), with the help of I. F. Stone, for the automobile industry. His plan was designed to begin the conversion process at existing auto plants while still maintaining civilian production at a reduced level. In brief, it called for the industry to delay work on new car models for six months, thereby freeing up thousands of skilled mechanics and machines. The resulting excess capacity would then be pooled and used to build planes for the military at the rate of five hundred per day. Although Reuther’s plan was proposed to cover a transition period, there was little doubt he envisioned it as a framework for organizing the industry’s eventual total conversion to war production.

More specifically, Reuther’s plan called for the creation of a tripartite Aviation Production Board headed by a government official with an equal number of business and union representatives. Bruce Catton, who served as director of information for the WPB, summarized the basic elements of the plan as follows:

[The Aviation Production Board] was not to be an advisory body, making suggestions to government or to management; it was to be the authority, empowered to make plans and commitments for the entire industry and to distribute production among the various corporations and plants within the industry according to the technical needs of conversion. It would operate mostly through three subcommittees.

One of these was to be a technical committee, composed of the best engineering personnel of the auto companies, plus representatives of the parts producers, plus representatives of labor. This committee was to plan the conversion of basic facilities and the distribution of production among them; to organize the engineering activities of the companies, in other words, eliminating duplication and wasted effort.

A second committee was to deal with the labor supply. Again, it was to be balanced as to management and labor representatives in its make-up; and it was to have authority to transfer workers to the most vital production points, to up-grade workers where necessary, and to supervise the retraining of workers who might be displaced during the transition period.

The third committee was to handle subcontracting. It was supposed to include the best purchasing agents of the auto companies, the best technical personnel of the parts producers, and—once more—representatives of the unions. Its job would be to ensure that the facilities of the parts companies and of the other auto industry supplies were used to the maximum, and that “the tens of thousands of small plants for which no provision has yet been made in the work effort” were effectively put to work.9

Not surprisingly, industry leaders strongly opposed Reuther’s plan. They were well aware that if it were to be imposed on the auto industry, other industries would soon be forced to implement it as well. And if workers gained the power to help plan and organize production during the war, it was all too likely they would be able to maintain it after the war ended. But industry leaders did not have to publicly say anything; rather, they could rely on the OPM to reject the idea for them.10

Roosevelt had the Reuther proposal sent to the OPM, headed by William Knudsen, the former president of General Motors, for consideration. Finally, after a long period of silence, Knudsen announced that the OPM had rejected it on grounds that it was technically unfeasible. The industry’s machine tools were not appropriate for aircraft production and pooling arrangements were not practical.11

The stall was effective, not only in sidelining serious consideration of the Reuther plan, but also in postponing the conversion of the auto industry. The auto industry did not embrace conversion until after Pearl Harbor and the establishment of the WPB, when it knew it had no choice and the military was ready to offer billions in production contracts. When the conversion took place, it was under the direction of the WPB’s Auto Industry Advisory Committee headed by Ernest Kanzler, a Ford executive, who publicly rejected the establishment of joint labor-management committees to help with the process.

Strikingly, the actual conversion of the auto industry demonstrated that, despite what was said by Knudsen, Reuther’s plan was, in fact, technically feasible. At the start of the war, all the various associations of firms involved in the production of automobiles came together to form the Automotive Council for War Production (ACWP). As Alvan Macauley, Packard’s board chairman and president of the ACWP, noted, the ACWP “established a pattern of industrial teamwork for victory. Its purpose was the fostering of complete interchange of mass-production information, time-saving techniques, product improvements, tooling shortcuts and developments.”12

In other words, the auto industry became one major entity, pooling its research, machine tools, parts, processes, and employees, resulting in the development of new production methods, new products, and ever faster and more cost-effective production. The auto industry was not unique. For example, plane manufacturers also formed new associations that spurred the sharing of production processes, methods, tools, materials, and even machine time at each other’s factories.

After beating back labor’s challenge, corporate leaders were well placed to exercise considerable control over the mobilization process. This allowed them to take advantage of the country’s single-minded focus on war production in order to roll back aggressively both union and worker power. Their wartime dominance in both the planning process and on the shop floor also meant that they were well placed to craft a postwar reconversion process that was responsive to their interests.13

The High Cost of Exclusion

Labor’s exclusion from defense planning left it vulnerable to a military and corporate anti-union offensive. As a harbinger of what was to come, as early as 1940, military periodicals like the Army and Navy Journal were printing stories falsely charging labor unions with engaging in workplace actions that threatened military construction projects.14

The military openly opposed the administration’s labor policies. Hillman and Roosevelt would periodically voice their support for the maintenance of existing labor standards, especially the forty-hour work week and time-and-a-half for overtime. The NDAC even approved a policy statement that declared that work related to the national defense should be carried out in compliance with federal, state, and local labor statutes.

But the military went its own way. Perhaps most striking was the Army and Navy’s determination to ignore labor law violations when awarding contracts. The services made clear that the cost of the contract and delivery speed were the only things of concern to them. Hillman and Roosevelt never challenged this policy, and the government never publicly considered using its wartime powers to require contractors to obey existing labor laws.

By 1941, spurred by the military-fueled growth in production and employment, CIO unions were again actively organizing. That year, there were approximately 4,300 strikes involving some 2.4 million workers (the great majority in the first half of the year), with most aimed at winning union contracts and wage increases at major defense contractors in the steel, shipbuilding, and aircraft industries. Alarmed, military and corporate leaders began publicly accusing strike leaders of being communists who were out to undermine the country’s military preparedness. Conservatives in Congress and many newspaper editorialists called for new laws to suspend the recently won forty-hour workweek, to outlaw strikes at firms producing for the military, and to ban the union shop.

In March 1941, Roosevelt, in an attempt to end the strike wave, established the National Defense Mediation Board (NDMB), which was to settle all labor disputes certified by the Secretary of Labor as threatening defense production. The CIO, for its part, was not willing to abandon its strike weapon. That April, it published a widely circulated pamphlet, titled “The Right to Strike—Keystone of Liberty.”

A test of wills between the CIO and the Army over the right to strike was quick in coming. The UAW was pursuing a number of organizing campaigns at several aircraft plants in Southern California. In late 1940, it won a major strike against Vultee Aircraft, a key producer of Army trainer planes. It then targeted the North American Aviation plant in Inglewood, one of the main producers of fighter aircraft. It won an NLRB election in February 1941—but with no progress in negotiations, and the NDMB unable to schedule a panel quickly to hear the case, a wildcat strike broke out on June 4. The next day the entire local was out.

On May 27, 1941, Roosevelt issued a Declaration of Unlimited National Emergency, which included a warning against strikes at defense plants. Fearing that Roosevelt might view the North American Aviation strike as a challenge to his recent declaration, CIO and national UAW leaders pressed the local shop to end its strike. When the local refused, the national leadership revoked its charter, suspended its negotiation committee, and fired five UAW international representatives who continued to support the strike.

But the strike continued, and the Army finally got its wish: presidential approval for direct action. On June 9, Roosevelt signed an executive order authorizing the Army to seize the plant. Over 2,500 troops were sent to the plant to end the picketing. Local union leaders were banned from the plant, and striking workers threatened with a loss of their draft deferments. The strike was broken.

The president’s strong criticism of strikes, the growing possibility of Congress passing new laws limiting labor rights, and the ongoing threat of military intervention all took their toll. The CIO leadership was now resigned to allowing the NDMB to settle disputes with management. The NDMB, for its part, demanded that unions end their strikes and, if they wanted a speedy panel hearing, to return to work as soon as their disputes were forwarded to the board. The result was a dramatic decline in the number of strikes over the second half of 1941.

Once the United States entered the war, unions found themselves with even less room to maneuver and fewer ways to represent their membership. On December 17, Roosevelt called a top-level conference of labor and industry leaders to set ground rules for a new organization, the National War Labor Board (NWLB), to replace the NDMB. Both sides agreed that there would be no strikes or lockouts for the duration of the war, but they could not agree on union security issues, with the unions wanting, and management rejecting, a closed shop. Roosevelt ended the conference, calling for trust in the NWLB, which began operations in January 1942.

As war spending intensified, inflation became one of the government’s biggest concerns. The WPB, with Roosevelt’s encouragement, began a campaign to pressure unions to eliminate premium pay for holiday and weekend work. Conservatives in Congress began pushing legislation that would not only end premium pay but other labor standards such as normal overtime pay, as well. On the defensive, CIO leadership capitulated. On March 24, a conference of five hundred CIO leaders agreed to eliminate premium pay in existing contracts. This decision was not well received by the rank-and-file.

As unions back-peddled, workers began to question the value of union membership. The government, fearing that weak unions meant a growing likelihood of wildcat strikes, decided it had to do something to strengthen them. Thus in June 1942, the NWLB agreed to use a standardized maintenance of membership formula that would automatically apply to any union that agreed to enforce a no-strike pledge and otherwise cooperated to boost production. The formula required every worker to join their workplace union, but gave the new hire as well as existing union members under a new contract a fifteen-day escape period when they could leave. This decision substantially boosted union membership and finances, but did little for workers, given the growing web of restrictions on union activity.

Those restrictions increased again in July 1942, when the NWLB devised a wage policy to use as a guide in considering union demands for wage increases. The policy set a limit on general wage increases for groups of workers to no more than 15 percent of their hourly earnings in January 1941. Unions bitterly complained about the choice of starting date, the board’s price index, and the imposition of a real wage limit, to no avail.

Limited in their efforts to win general wage increases, unions turned to correcting in-plant wage inequalities. Soon, the NWLB was overwhelmed with referred cases. Roosevelt’s response, in April 1943, was to issue an executive order ending the NWLB’s authority to correct them. Some 10,000 pending cases were thrown out.15

With union power essentially gutted, management pressed its advantage, ignoring workers’ objections to decisions that violated union contracts, created unsafe working conditions, or produced new wage inequities. In some cases, managers went out of their way to embarrass union activists by enforcing arbitrary dress codes and no-smoking regulations. Local unions could file grievances with the NWLB, but with little hope of a timely and positive decision.16

As important as their victory over workers was, it was only one part of corporate America’s broader effort to secure capitalism’s future and their own profitability. From the very outset of the wartime mobilization, they aggressively worked to win the popular identification of democracy with corporate freedom of action, and totalitarianism with government planning and direction of economic activity.17

Nothing was taken for granted. Throughout the war, business leaders and associations spent heavily in order to win the ideological battle. The National Association of Manufacturers (NAM) was one of the most active promoters of the idea that it was business, not government, and certainly not labor, that was winning the war. It did so by funding a steady stream of films, books, tours, and speeches celebrating American businesses’ “production miracle.”18 Perhaps not surprisingly, government and union efforts to challenge the corporate story were never as well-funded, sustained, or shaped by such a clear class perspective. As a consequence, they were far less effective.

Final Thoughts

There are many lessons from the Second World War conversion experience that are helpful for our own organizing efforts today. One is that a rapid economic transformation is possible; this is certainly encouraging. Another is that state planning, public financing and ownership, and state direction of economic activity are essential for achieving such a transformation. But a third, and the focus of this paper, is that planning is more than a technical challenge, best left to government officials assisted by corporate leaders disguised as neutral production experts. Rather, all relevant decisions, including the structure, membership, and authority of key planning institutions, are first and foremost political ones, where the choices made determine whose interests will be best served by the process of change.

Of course, we are organizing in a time far different from the Second World War era. Some of those differences make our task more challenging. One of the most important distinctions is that the war itself forced the government to act decisively to convert the economy. In contrast, despite the worsening of our current planetary crisis, there is little urgency on the part of government or the corporate community to take major action. Perhaps more troubling, significant numbers of people still deny the reality of the crisis.

At the same time, the focus on rapid production of armaments during wartime meant that the union movement was quickly put on the defensive, with demands for participation in decision-making and defense of workplace rights all too easily painted as obstacles to the war effort. Since the aim of our transformation is far broader, and includes new ways of working and living, it will be much harder for corporate leaders to dismiss our demands for the working class to assume a central role in the planning and direction of the transformation we seek.

Another challenge for us is that, in contrast to the Second World War era, when there was a critical view of corporate motives because of the Depression and a general belief in the capacity of the government to manage economic activity, thanks to the popularity of the New Deal, we face the opposite situation. So-called corporate ingenuity is celebrated while there are widespread doubts about the effectiveness of government policy.

However, as opposed to a wartime emergency requiring immediate action, we do have some—although not unlimited—breathing room in which to deepen our organizing work and build the movement needed to put system-wide changes on the political agenda. A core part of our efforts should be directed at overcoming the challenges noted above. In particular, we must find ways to encourage meaningful worker-community conversations that help people better understand the connections between issues, expand their capacities for action, and generate new visions of a path towards a sustainable and equitable future.

To offer one relevant example from the war years: in 1944, in an effort to help working people envision possibilities for a worker-community planned reconversion process, District 8 of the United Electrical, Radio, and Machine Workers of America hosted “Community Leadership for Reconversion and Postwar Employment” conferences on the need for postwar planning in five different midwestern cities where the union had significant membership. As reported by labor historian Rosemary Feurer: “Representation was based on two men and two women elected from each factory department. In seeking to build a community coalition around postwar planning, district leaders invited government, church, and civic organizations and women’s and Black organizations. In addition, District 8 tried to garner business support for, or at least diffuse their opposition to, postwar planning.”19

If we are successful enough to create the political conditions that lead to support for decisive public action in order to transform our economy, capital can be expected to step forward with its own preferred plans for change, including proposals for the structure, power, and aims of potential new government agencies. Hopefully, our movement will be ready and able to respond, fully aware that system change is class war.


  1. Vaios Triantafyllou, “John Bellamy Foster on the ‘Green New Deal,’Climate and Capitalism, February 12, 2019.
  2. See Martin Hart-Landsberg, “The Planning and Politics of Transformation: World War II Lessons for a Green New Deal,” New Politics XVIII, no. 4 (Winter 2022), and “The Green New Deal and the State: Lessons from World War II,” Against the Current, no. 207 (July–August 2020).
  3. For a discussion of the evolution and operation of U.S. mobilization agencies and policies, see Martin Hart-Landsberg, “Realizing A Green New Deal: Lessons From World War II,” Class, Race and Corporate Power 9, no. 2 (2021) and Paul A. C. Koistinen, Arsenal of World War II, The Political Economy of American Warfare 1940–1945 (Lawrence, KS: University of Kansas Press, 2004).
  4. Paul A. C. Koistinen, The Hammer and the Sword (New York: Arno Press, 1979), 57.
  5. Nelson Lichtenstein, Labor’s War at Home: The CIO in World War II (Cambridge: Cambridge University Press, 1982), 83.
  6. Harold G. Vatter, The U.S. Economy in World War II (New York: Columbia University Press, 1985), 60.
  7. As quoted in Lichtenstein, Labor’s War at Home, 39.
  8. Koistinen, The Hammer and the Sword, 601–2.
  9. Bruce Catton, The War Lords of Washington: The Inside Story of Big Business Versus the People in World War II (New York: Harcourt, Brace and Company, 1948), 92–93.
  10. Tragically, CIO officials did little to mobilize workers in support of either the Murray Plan or the Reuther Plan, and their appeals to government officials were generally ignored. Even Sidney Hillman, supposedly labor’s representative on both the NCDA and OPM, decided not to speak for either plan. See Rosemary Feurer, Radical Unionism in the Midwest, 1900–1950 (Urbana: University of Illinois Press, 2006), 139.
  11. Lichtenstein, Labor’s War at Home, 88.
  12. As quoted in Donald Nelson, Arsenal of Democracy: The Story of American War Production (New York: Harcourt, 1946), 228.
  13. See Koistinen, Arsenal of World War II, chapter 14, for a discussion of how big business maneuvered to get the reconversion process it wanted. The CIO continued to refine the Murray Plan, now as a framework for organizing the postwar economy. It approved new versions at its annual conventions in 1944, 1946, 1947, 1948, 1949, and 1951, although it did little to promote them.
  14. Koistinen, The Hammer and the Sword, 125.
  15. Lichtenstein, Labor’s War at Home, 116.
  16. Lichtenstein, Labor’s War at Home, 120.
  17. W. Mason, “The Economy During Wartime,” Dissent Magazine (Fall 2017).
  18. For discussion of some of these initiatives, see Mark R. Wilson, Destructive Creation: American Business and the Winning of World War II (Philadelphia: University of Pennsylvania Press, 2016), 102.
  19. Feurer, Radical Unionism in the Midwest, 161.
2023, Volume 74, Issue 09 (February)
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