Louis Hyman: How Did World War II End the Great Depression?

Louis Hyman is an assistant professor of history at Cornell University and the author of "Debtor Nation: A History of America in Red Ink."

It is commonly opined, in high school history classes and backyard barbeques, that government spending in the run-up to World War II "got us out of the Depression." This narrative conveys the sense that the end of the Great Depression was both accidental and necessarily belligerent.

But exactly how World War II got us out of the Depression is generally ignored -- even though it provides a lesson at odds with the accepted interpretation.

The war did provide a unique demand for entirely new industries. While airplanes had only been incidentally important in World War I, it was believed that they would be decisive in the 1940s. The problem, for the U.S. military, was that it had only a few planes, and fewer resources to construct them with. The government couldn't simply go to the market and buy some planes; it had to create the market. And it did.

In a genius marriage of finance and policy, the government founded the Defense Plant Corporation, or DPC, in 1940. The DPC was run by a committee of public-minded businessmen from all stripes of commerce: William Knudsen, who had helped organize Ford's production line and then became the president of General Motors Co.; Donald Nelson, a vice president at Sears, Roebuck & Co.; and Ralph Budd, president of the Chicago, Burlington and Quincy Railroad, to name a few....