You’ve heard about the “Greatest Generation” and how Americans all pulled together in the 1940s to win the war against fascism, right? Doris Kearns Goodwin, in her book No Ordinary Time (1994) tells a different story.
As Hitler occupied most of France and began attacking England, FDR appealed to business leaders to shift their production to defense materials. They refused unless they would be given preferential status in bidding for defense contracts. In the end, FDR gave in.
When the revenue bill [giving favorable terms to corporations taking on defense contracts] finally passed later that fall, the capital strike [by big business] came to an end and war contracts began to clear with speed.. . . In the months ahead . . . new legislation would be enacted to try to increase the relative share of small business in total army procurement. But by then, the basic pattern—the link between big business and the military establishment, a link that would last long into the postwar era and lead a future president to warn against the “military-industrial complex”—was already set.[pp. 158-59]
In 1940, . . . approximately 175,000 companies provided 70 percent of the manufacturing output of the U.S., while one hundred companies produced the remaining 30 percent. By the beginning of 1943, the ratio had been reversed. The hundred large companies formerly holding only 30 percent now held 70 percent of all government contracts.[p. 399]
To this day, Franklin Roosevelt remains the symbol of big government and the controlled economy. Yet, under Roosevelt’s wartime leadership, the government entered into a close partnership with private enterprise . . . . Business was exempted from antitrust laws, allowed to write off the full cost of investments, given the financial and material resources to fulfill contracts, and guaranteed a substantial profit. The leader who had once proclaimed his intention to master the forces of organized money had become their greatest benefactor.[pp. 607-08]
So angry was the outpouring of public sentiment that a resolution was introduced in the Senate requiring members to renounce their claim of special privilege. When the defiant Senators defeated the resolution by a vote of sixty-six to two, the public mood darkened.[p. 357]