Destructive Creation: A Review
Mining lessons for a Green New Deal from history is a thorny business. A new book on the institutional history of WWII economic mobilization shows us how.
Lineup of some women welders, 1943. National Archives, Spencer Beebe
Is preventing climate change anything like going to war? For some, the analogy has proven seductive. In 2016, Bill McKibben attempted to build an entire ideological frame around the idea that the fight against climate change seamlessly mirrors the challenges faced by the United States during World War II, even going so far to compare melting icecaps to Nazi advances and wildfires to the bombing of Dresden. The vision has been backed up by groups such as the Climate Mobilization, which use the WWII homefront analogy to endorse retro initiatives such as Victory Gardens and rationing as important elements of any deep decarbonization pathway. Whether literal or merely rhetorical, these embraces of WWII comparisons hope to recapture the sense of shared commitment and sacrifice towards a collective goal that supposedly united Americans after Pearl Harbor.
These embraces are not without critics. Many of us (myself included) are uneasy with any frame of the climate action premised upon national security. Yet, as most Green New Dealers concede, the industrial mobilization conducted by the United States from the late 1930s to 1945 remains our most salient historical reference point for successful state-led economic transformation at lightning speed. How was it accomplished? What lessons might this episode offer to us? As a history of the WWII mobilization and its political legacy, Destructive Creation by Mark Wilson takes on these questions. The good news is that in many ways we are better-positioned than the socialists of the late 1930s to shape the terms of an economic mobilization. Even so, doing this will require significant organizational discipline, patience, and persistence. Yet, as Destructive Creation shows, the benefits of this persistence are enormous—as they turned out to be for the conservative movement.
The thesis of Destructive Creation takes aim at a myth about World War II shared across the political spectrum. This myth portrays Americans as setting aside their New Deal era squabbles to make sacrifices and unite against a common enemy abroad. As others have punctured this myth in the domain of race relations, Wilson focuses on the extraordinarily contentious relations between business, labor, and the state which unfolded during the war. Far from congenial partners in producing the “arsenal of democracy,” American business leaders constantly trashed the state in private and public, comparing its interventions to those of Hitler. The state, in turn, repeatedly seized private enterprises and prosecuted their leaders for incompetence and intransigence. Labor locals bucked the directives of their national leaders, engaging in unauthorized strikes which often descended into violence. The picture that emerges from Wilson’s account challenges the idea that obstacles posed by polarized and contentious politics—obstacles many fear might derail a Green New Deal today—are anything new.
By documenting business’s incessant antagonization of the state before, throughout, and after the war, Wilson also disarms an argument commonly employed to discourage any parallels being drawn between WWII and the GND. Wartime production produces assets (namely, weapons) that are immediately destroyed, this argument goes, while a climate mobilization would produce assets—renewable energy infrastructure, public spaces, mass transit—that have significant value after the mobilization ends and therefore threaten private capital if placed under permanent public ownership. Such a contrast ignores the enormous amounts of industrial plant, land, and raw materials left in limbo by victory in 1945, assets that business aggressively pressured Congress into privatizing shortly thereafter. This privatization consolidated the political power of big business, leading to the rise of the military-industrial complex more narrowly and the eventual retrenchment of the New Deal more broadly. Given the current political constraints, it is easy to imagine a Green New Deal falling off the rails in a similar fashion: initial victories via state advances eventually giving way to a greener but ultimately crueler form of capitalism (privatized oxygen, anyone?).
In this sense, Wilson’s account illuminates one instance of a more general trajectory observed by left critics of social democracy over the course of the 20th Century. In country after country, militant working-class movements succeeded in pushing capitalists up against the wall; winning transformative concessions such as the welfare state, institutionalized labor power, and robust regulation of markets. Yet these victories stopped short of eliminating the “private dictatorships” of business, allowing them to regroup and eventually pull off a neoliberal coup of the global political economy in the 1970s and 80s. Similarly, the failure to exclude private interests from the defense industry over the 1930s and 40s allowed business to take advantage of wartime crisis, using their muscle to enact a series of path-dependent reforms that led to the privatization of the war economy, and the American economy more broadly.
The spectre of a repeat—private firms winning GND contracts and subsequently maneuvering to entrench green capitalism—points to a critical tradeoff the climate left faces in the United States, Europe, and elsewhere. Even in the best case, it is unlikely that we will build enough power in the little time we have left to strike a Deal that excludes the private sector entirely. As it stands, capital is far too powerful (and we are too weak) for us to vote (or strike) large parts of it out of existence, as a purely statist (or decentralized) Green New Deal would do through nationalization, Modern Monetary Theory-style public spending programs, or otherwise. The German Greens recent attempts to court big business, for example—while ideologically-driven in part—reflect a sober calculation to seek concessions rather than err after the jugular. This calculation may be naive, even catastrophically wrong. But the riddle remains: how do we accommodate business while denying it the possibility of reversing gains in the future?
Destructive Creation offers a few clues. The first clue concerns how institutional design choices made early on have enormous ramifications—not just for whether the mobilization is successful, but how its politics play out at every turn. American business leaders understood this fact much better than New Dealers in Roosevelt’s administration did. Many executives had the advantage of foresight that came from their experiences in World War I, when the Wilson administration repeatedly nationalized key industries such as railroads and telecommunications. While state ownership over these industries was surrendered in the postwar Republican Harding and Coolidge administrations, shaken businessmen convinced that wartime state intervention posed threats to their existence mobilized over the course of the late 1930s to ensure that any future wartime munitions production would be heavily dependent on private production.
This prewar political pressure applied by business had long-term effects. The prevailing production arrangement chosen for World War II—”GOCO”, standing for “government-owned, contractor-operated”—allowed business to take credit for hitting ambitious production goals while sticking the government with balance sheet liabilities. It also allowed for enormous growth in the market capitalization of a few large industrial corporations—now-familiar names such as Du Pont, GM, and Ford—while strengthening their relationships with smaller subcontracting firms. The result of burgeoning balance sheets and social ties between businessmen facilitated more robust political coordination between them, foreshadowing the rise of postwar conservatism on matters of economic policy. GOCO was not exactly what the private sector had wanted—as a matter of formality, it placed an enormous quantity of capital in the hands of the state—but it had the unanticipated effect of augmenting their power.
Crucially, the rationale for GOCO stemmed as much from political concessions than what is sometimes referred to as “the calculation problem”. In this telling, the transition economy is far too complex for a single entity (i.e. the state) to manage, and are best left to individual firms with specialized expertise. This argument, widely accepted for a time even by socialists, has come under scrutiny recently as advances in computation have significantly reduced the costs of logistics involved in mass production. Yet, as Wilson shows, this may not have been a prohibitive problem, even in the 1940s. It is clear that the American state did choose to depend heavily in many cases on the “managerial and manufacturing expertise of private firms” (90). One of the most striking claims in the book, however, is that wartime capitalists became hostile toward the state not for its blunders but for its sheer competence, its “growing economic knowledge and regulatory ability” (138). Scores of federal inspectors monitored all aspects of production, disciplining incompetent managers and trimming profits if unanticipated cost reductions were achieved. When it did seize GOCO plants and resume operations directly—an event which occurred more than five dozen times over the course of the war—the government often ran them more efficiently and effectively than the private sector had, especially as the war dragged on. Wilson provides an explicit upshot in his conclusion: rather than overreliance on contracting with private firms to meet clean energy goals, “there might be valuable payoffs to more direct World War II-style public investments and enterprises in energy policy” (288).
What made the state so unexpectedly nimble? Might we be able to replicate it? While he never quite comes out and says it, Wilson implies the American state’s wartime competencies owed themselves to institution-building done over the course of the 1920s and 30s. Of particular interest for our purposes was the Army Industrial College (AIC), set up by the War Department to train military officials in economic planning and industrial mobilization. Programs like the AIC and accumulated institutional knowledge from WWI and GOGO (government owned, government operated) plants maintained in the interwar period yielded experts such as Harold Bowen and George Westervelt who executed seizures of underperforming (or incompliant) plants and managed them adeptly. This terrified businessmen; it demonstrated not only the willingness of the government to replace them by force, but also how replaceable they ultimately were.
It is unclear whether an analogous set of bureaucrats exist in the state today. The federal government oversees a cadre of research institutions dedicated to the development of low-carbon technology: for example, the National Renewable Energy Laboratory (NREL) and the Department of Energy’s Building Technologies Office. These agencies are staffed with competent, semi-career bureaucrats who could commit to a state-led climate mobilization if faced with a mandate by a Sanders administration, an AOC-friendly Congress, or some combination of the two. Yet, two problems merit our attention here. The first is that while the federal government has developed core competencies in decarbonization tech and design, it knows far less about manufacturing and deployment. This makes it far more dependent on private sector partisans in any purely state-owned mobilization approach for expertise, an unsavory prospect. A partial alternative may be found in the work of scholars who document a global “green division of labor” in the development and deployment of renewable energy technology wherein middle-income countries (namely China) take the lead in commercialization, manufacturing, and installation. While cooperating with China to speed up a competent public renewables transition has its own political liabilities, it presents an intriguing and attractively internationalist option.
The second deficiency of the present-day American entrepreneurial state Destructive Creation lays bare is its inattentiveness to politics. Low-carbon tech officials have proven fairly adept at protecting their funding (and staying quiet when necessary, as the BTO has shown during Trump’s tenure in office). Yet, there’s no indication they would avoid the mistakes of the WWII-planning New Dealers: neglecting the public relations battle (discussed below), making institutional design choices that give business too much power, and opting not to augment the power of allies (namely labor unions and the organized left). Just as important as a technical education is a political one: namely, that bureaucratic decisions are not just shaped by politics but can also reshape its distribution in path-dependent ways, ways that can augment the power of business if not carefully calibrated. The institutions that currently train lefty bureaucrats—public policy schools, government agencies, non-profits, and think tanks—cannot be relied upon to provide this education. Nor is it wise to rely on the Department of Defense as FDR did, for obvious reasons. As the right has done through efforts such as the Koch network and the Federalist Society, we need to build our own AIC-style pipeline of politically-shrewd public servants-in-waiting who can get shit done while ceding power to unions and backing capital into a position from which it cannot fight back.
This brings us to another clue: the perils of neglecting public narrative. Wilson leans heavily on this point in his analysis. He argues one of the main reasons business emerged from WWII in such a politically strong position was the fact that it embarked on a massive media campaign—including films, radio ads, news broadcasts—during the war that awarded complete credit for production “miracles” to company executives and the ingenuity of private enterprise. FDR and the New Deal statesmen, busy with the travails of conducting warfare, largely declined to advance a counternarrative, instead focusing state propaganda on the theatres of combat and shared sacrifice as consumers. Labor, meanwhile, was too divided amid grapples with no-strike clauses to counter either. The public, already weary from a decade of the New Deal, soaked up the pro-business narrative, delivering Republican gains in Congress and forcing New Dealers to adopt a more conciliatory position towards private enterprise then they had taken during the 30s. The PR campaign run by capital was remarkable both in its message discipline as well as its premeditation: “the business community had already decided what lessons Americans should learn from industrial mobilization, even before the arsenal was up and running” (91).
The most obvious (if not banal) lesson here is to fight the media war. This involves establishing our own outlets and platforms–Means TV and TikTok teens—but the posting wars merely scratch the surface. Rollouts ranging from the New Deal-era WPA to Obamacare website woes teach us to pay careful attention to the optics of implementation. It is not enough for programs to materially improve people’s lives. These improvements have to be visible and palpable, and connect to a broader narrative about the kind of social project the Green New Deal is. There’s a lot of buzz about what this could look like—see, for example, the WPA-style posters promulgated by AOC’s staff, and programs hosted at various universities.
On the other hand, too much of this conversation has been confined to academia and adjacent institutions. Furthermore, I think there’s a danger in focusing too much attention on things like “optics,” “framing,” and Lakoff-style language games. What matters more than anything is how deeply we can imbed the movement—its ideas and social ties—into every nook and cranny of American society. This is accomplished not by clever scripting but by mass organizations which stretch across social cleavages and help people to cope with extraordinary amounts of change. Crucially, these organizations must not only counter pro-business narratives but thwart attempts by businessmen to organize themselves: as Wilson documents, cohesion and cooperation among large and small firms alike allowed them to mount a much more effective policy and public relations campaign against the state.
One final clue from Destructive Creation concerns organizational discipline. This does not necessarily mean more centralized decision-making with punishment of defectors. More crucial (as in the no-strike clause deals struck by union international leaders which infuriated radical locals) seems to be the ability to coordinate around and commit to a shared strategy which checks both the state and the bosses. Core competencies around low-carbon tech deployment should be reserved for trade unions whenever possible, for example, to avoid the wrath of a capricious state (as labor leaders used to the friendly treatment of FDR discovered over the course of the Truman and Eisenhower administrations). The core lesson is perhaps this: the spectre of decarbonization divides both labor and capital from within. Only a disciplined movement will be able to unite the former and split the latter.
Destructive Creation has its limits. The heavy causal weight placed on PR in explaining political outcomes, for example, will sit uneasily with Marxists and merits further justification. Moreover, there is always a danger in believing historical parallels extend more than they do. But the disanalogies are mostly good news: today arguments for state intervention are more credible, and the business community more divided. A war is almost always bad for socialist popularity and morale, and so we should be grateful that our political project does not involve fighting one. Only a sober view of the WWII production mobilization—not the myth of blissful social cohesion around “shared sacrifice,” nor the fable of endless profiteering at the expense of a clueless state—can bear fruit for climatic resistance.
Johnathan Guy is a graduate student at UC Berkeley studying wealth inequality, social relations, and decarbonization. He is active in Sunrise Movement and the Democratic Socialists of America. He tweets @johnathanjguy.
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