ABSTRACT

For business, this wartime collectivism meant a substantial curtailment of entrepreneurial freedom. Whether a firm was making large profits, as many did during the war, or had to close down its factories, was now dependent not so much on its competitiveness as on decisions made by state authorities (Kocka 1984: 73). In short, the war had profoundly changed the relationship between state and industry. Industry had lost the state as an ally in the defense of liberal capitalism (Feldman 1970: 315-17). At the same time, army and government both sought collaboration with organized labor to secure popular support for the war and prevent social unrest. For the first time, the unions obtained major administrative responsibilities. The government mandated unions and employers’ associations with the governance of institutions organizing the wartime economy. The inclusion of organized labor in this way was a concession to labor that a reversal of the state’s approach to the labor movement made possible. The extension of government controls and the state’s turn to organized labor had alienated capital from the state in a profound way and left capital without a political ally.