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The Response of the Giant Corporations to Wage and Price Controls in World War II

Published online by Cambridge University Press:  03 March 2009

Hugh Rockoff
Hugh Rockoff
Affiliation:
Associate Professor, Department of Economics, Rutgers College, Rutgers the State University, New Brunswick, NJ
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Abstract

This paper reexamines the extent to which the giant corporations cooperated with wage and price controls during World War II, an issue to which Galbraith first drew attention. Two forms of evidence are explored: a sample of court cases involving the Office of Price Administration and large corporations, and the monographs in which former administrators reflected on their wartime experiences. The conclusion is that the compliance record could be characterized as a good one, but that this achievement depended on the constraints on allocation and collective bargaining that existed during the war.

Type
Papers Presented at the Fortieth Annual Meeting of the Economic History Association
Information
The Journal of Economic History , Volume 41 , Issue 1 , March 1981 , pp. 123 - 128
Copyright
Copyright © The Economic History Association 1981

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References

1 Galbraith, John Kenneth, A Theory of Price Control (Cambridge, MA, 1952), pp. 10–27.Google Scholar

2 Galbraith, John Kenneth, The New Industrial State (Boston, 1967), pp. 253–54.Google Scholar

3 The before tax rate of return for the 14 was 13.59 in 1945, while for 81 of the remaining firms for which data were available the rate was 12.96. The “t” for the difference was.26. Details concerning the matched samples and other tests are available on request.

4 The black market in automobiles received considerable attention in the press. Typical examples are “Autos: The Blacker Market,” Newsweek, 27 (May 6, 1946), 68+,Google Scholar and Coflin, Tris, “So You Want a New Car,” Nation, 163 (09. 7, 1946), 258–60.Google Scholar

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7 Clinard, Marshall B., The Black Market: A Study in White Collar Crime (New York, 1952), p. 203. Clinard served with the enforcement department of OPA from 1943 to 1945.Google Scholar

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14 This point was also made in a review of A Theory of Price Control by Bronfenbrenner, Martin. Bronfenbrenner drew attention to the then current labor disputes associated with the Korean War, rather than to those which followed VJ day. “Review of A Theory of Price Control,” Journal of Political Economy, 62 (February. 1954), 68–70.Google Scholar

15 The extent of seizure is seldom appreciated. At least a third of the top 100 corporations experienced seizure, either the whole firm or at least a plant or subsidiary. Blackman, John L. Jr, Presidential Seizure in Labor Disputes (Cambridge, MA, 1967), pp. 259–78, 299–304, and 306–09.CrossRefGoogle Scholar

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