Commentary Magazine

Made in America

Freedom’s Forge:
How American Business Produced Victory in World War II
By Arthur Herman
Random House, 432 pages

Joseph Stalin was not exactly a man overflowing with compliments. So it was remarkable when, at the Tehran Conference in late 1943—by which time World War II had turned decisively in favor of the Allies—he rose during the official dinner and offered a toast to the American economy.

“Without American production,” he said, “the United Nations could never have won the war.”

For once, the dictator was telling the truth. During the war, the United States produced 86,000 tanks, 2.5 million trucks, 500,000 jeeps, 286,000 warplanes, 8,800 naval vessels (including landing craft), 5,600 merchant ships, 434 million tons of steel, 2.6 million machine guns, and 41 billion rounds of ammunition. 

As the Tehran conference ended, a plane was rolling off an American assembly line every five minutes, while 750 tons of steel were pouring out of foundries in the same interval. Eight aircraft carriers were launched each month, and 50 merchant ships made their maiden voyage each day. During the war, the United States produced 12,731 B-17 bombers (the famed “flying fortress”). Placed wing tip to wing tip, they would have stretched from New York City to Washington, D.C.

Even by the end of 1942, the United States was producing more instruments of war than were Germany, Italy, and Japan combined. The Ford Motor Company alone was out-producing Italy. And yet the American people suffered less from economic deprivation than the citizens of every other combatant nation. They endured severe shortages of such products as automobile tires and nylon stockings, while gasoline, butter, red meat, and sugar were rationed. But the rationing was nowhere near as severe as what the British endured during the war years. 

One reason for this was that the size of the American economy nearly doubled during those years. The greatest war machine in human history was built on top of, not in place of, the civilian economy.

The story of the American economy during World War II is one of the greatest epics in economic history. And Arthur Herman tells it very well in Freedom’s Forge. Indeed, it is one of the best war books I’ve ever read, despite the fact that hardly a shot is fired in it.

Herman, the author of such well-received histories as Gandhi and Churchill, To Rule the Waves, and the bestselling How the Scots Invented the Modern World, tells the story largely through the wartime careers of two remarkable men, Bill Knudsen and Henry J. Kaiser.

Knudsen was a Danish immigrant, 6’4”, a man of few words who never lost his thick accent. He arrived in this country in 1901, just as the automobile industry was beginning to come to life. A born engineer, he went to work for the Ford Motor Company in 1911 and helped mightily to develop the assembly-line concept that turned Ford into the first mass-production automobile company in the world. He was soon regarded, correctly, as a master of the mass-production process.

But Ford’s remarkable success with the Model T (by 1918, half of all the cars in America were Model Ts) caused Henry Ford to resist making any changes in its design or attributes. Ford wanted to use mass production to make the Model T ever cheaper, not better, to endlessly improve the process not the product. Knudsen knew that this was not a winning business model in the long term, but by 1917 Henry Ford was the sole owner of the Ford Motor Company and his ideas necessarily prevailed. In 1921, Knudsen quit Ford and soon went to work for General Motors’s then deeply troubled Chevrolet division, which competed with Ford’s Model T.

Knudsen turned it around almost immediately. Chevrolet sales went from 72,000 to 250,000 in a single year, and a loss of $8.6 million became a profit of $11.2 million. His introduction of flexible mass production, with constant updating of machine tools and techniques, allowed the introduction of annual model changes. This vital concept allowed General Motors to overtake Ford as the world’s leading automobile company—and would be the key to quickly converting the automobile industry to military purposes. In 1937, Bill Knudsen became president of General Motors.

In 1940, with Belgium falling to the Nazis and France not far behind, Franklin Roosevelt called Knudsen. He asked him to come to Washington to oversee the re-armament that Roosevelt knew was necessary despite ferocious opposition from both the left and right of American politics. Thus Knudsen became the first of the dollar-a-year men from American industry who would play a major part in creating the American war machine, often over the resistance of the New Deal political establishment.

Born in upstate New York to German immigrant parents, Henry J. Kaiser was the opposite of Knudsen in many ways. He was short and ebullient, with a flashing grin and a gift for gab. But he was an equally gifted business executive and, unlike Knudsen, a born entrepreneur. He also possessed an ample supply of chutzpah. At the beginning of his career, Kaiser landed a contract to pave Victoria Avenue in Vancouver by being the lowest bidder, but he had neither a company nor money to post the necessary performance bond. He went to a banker he had met and asked for a $25,000 loan, although he had neither assets nor track record. And he got it.

By the mid-1920s, he was one of the largest road builders in the West. He then moved into dam building, as part of the consortiums that built the Hoover, Grand Coulee, and Bonneville dams.

With the fall of France, Britain was in mortal peril, not least because German submarines were sinking her ships faster than they could be replaced. Unable to feed herself without imported food, Britain faced starvation and thus the loss of the war. Roosevelt wanted to help, but American shipyards at that point were choked with naval orders and had no capacity to build merchant ships. 

Kaiser had by this point some experience in shipbuilding. When British officials came to San Francisco to talk to him about building ships for them, he took them to a mudflat near Richmond, California. “But where are your shipyards?” one asked him.

“There are the shipyards,” he told them, pointing to the mudflats. “It’s true you see nothing now, but within months this vast space will have a shipyard on it with thousands of workers building the ships for you.” Once again he got the job. And, once again, he delivered, building the yard in record time and getting a standard, bare-bones, merchant ship designed—the soon-to-be-famous Liberty ship—that could be mass produced.

A typical merchant ship in the early 20th century required about eight months to build. Kaiser was told he would have to produce them in 105 days. Within a few months, they were coming off the ways in 70 days. By the end of 1942—as the Battle of the Atlantic was approaching its climax—a Kaiser yard built a Liberty ship, the Robert E. Peary, in under five days.

While concentrating on the stories of these two central figures, Herman does not ignore the myriad other stories about the American economy in World War II. 

There’s the B-29 bomber, crucial to defeating Japan, which pushed the envelope in designing large airframes. The difficult lessons learned in building the B-29 greatly accelerated the development of the postwar airline industry. The Higgins boat made amphibious invasions, crucial in both Europe and the Pacific, far easier to achieve.

The Manhattan Project both ended World War II and changed the nature of war, and thus geopolitics, forever.

The synthetic rubber, magnesium, and aluminum industries increased in size by orders of magnitude. And the war not only enlarged existing businesses. It also created more than 500,000 new ones, many of which helped lead the way into the postwar economy.

With 12 million men in uniform, women flooded the workforce and many never left it. Rosie the Riveter, while home-front propaganda, was also real. Six months after Pearl Harbor, 80,000 women worked in defense industries. Six months later still, three million did. (And, in a beautiful example of the long reach of history, Herman tells the story of Helen Dortch Longstreet, a riveter at the Marietta, Georgia, Lockheed plant at the age of 80. She never missed a day of work. But even more interesting, she was the widow of General James E. Longstreet of the Civil War, whom she had married as a young woman when he was 76.)

It is a commonplace that military and strategic victory in World War II made the United States the world’s dominant power. It is less noted that the war’s effect on the American economy, thanks to such genuine war heroes as Bill Knudsen and Henry J. Kaiser, ensured that the country would be able to maintain that position right up to the present day. Arthur Herman has done us a service by telling this extraordinary story so well.

About the Author

John Steele Gordon is the author of An Empire of Wealth: The Epic History of American Economic Power (HarperCollins).

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