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Lewis, Beech and Rudkin all took advantage of government opportunities and actively resisted its intrusions, and this was essential to their success. Close examination of the World War II and Korean War eras—key episodes in the expansion of the federal government as regulator and customer—shows that for these businesswomen building a relationship with government was both necessary and important. Military contracts and Reconstruction Finance Corporation loans kept Lewis and Beech in business while Excess Profits Tax posed a real threat that both women fought and wartime rationing as well as regulations by the Office of Price Administration fundamentally shaped Rudkin’s business strategy and success. Prevailing scholarly interpretations have argued that women’s businesses were too small to attract federal attention but the experience of these entrepreneurs reveals that for women who operated businesses big enough to cater to a national market, government programs were fundamental to their success and federal regulation threatened significant losses in profit. By the mid-twentieth century, in fact, developing a relationship with the federal government was hardly a choice; a strategic one could determine a business’ future.

This chapter focuses on the financing of the Korean War and its within-case variation. Korean War finance can be divided into two periods, from June 1950 to mid-1951 and from mid-1951 to the end of the war. During the first period, both the fear of inflation and support for the war effort were high. As a result, the Revenue Act of 1950, eliminating an excise tax reduction and increasing both corporate and individual income taxes, and the Excess Profit Tax Law of 1950 were swiftly signed into law. During the second period of Korean War finance, however, the political-economic landscape changed, and President Truman was only able to get half of what he requested in terms of revenue, as reflected in the Revenue Act of 1951.

The 1947 budget presented by Liaquat Ali Khan was a path-breaking step towards social engineering. It came with the establishment of the Commodity Prices Board which was responsible for formulating a coherent price policy. The inherent conflicts between the Congress and the Muslim League in attitudes to industrial and agricultural producers prevented the board from playing the role originally assigned. More crucially the budget provisions, of an excess profits tax, a wealth tax and the proposal for an Income Tax Investigation Commission signalled that corporate financial irregularities were to be professionally scrutinized. However, G.D. Birla and the industry organization FICCI led a virulent campaign against the budget provisions and moulded the Congress into a lobby for business interests. While Jawaharlal Nehru had been privy to the budget proposals, which economists of the time found incisively framed, the Congress ensured that the budget proposals were seriously diluted.

Once natural assets have been discovered comes the second link in the decision chain: how their value should be captured by society. “Captured by society” means that the value of natural assets should accrue as revenue to government, the representative of society. In the bottom billion there is often a gulf between what should happen and what actually does happen. The value of natural assets is captured, but not always by government. Sometimes we find plunder in its crudest form, as for example when a corrupt minister strikes a deal with a shady resource-extraction company. The minister gets handsomely rewarded and deposits his share of the profits in a foreign bank account. The company makes a fortune, which benefits its shareholders, none of whom are citizens of the country from which the natural assets have been removed. Underlying stories such as this are two distinct problems. The most obvious is corruption, just as at the prospecting stage. The interests of the country and its citizens are necessarily represented by its government, and indeed, not by its entire government but by a handful of people: perhaps the president, the minister of mines, and a couple of high officials. The resource-extraction company bribes these representatives, inducing them to ignore their professional responsibilities in favor of their personal interests. Bribes are, of course, never termed “bribes”; they are “facilitation payments,” often made by the resource-extraction company to local companies for unspecified services and whose beneficial ownership is opaque. There are two defenses against corruption: transparency and an effective legal system. Because governments are one of the parties to corruption, they are often reluctant to permit transparency and generate criminal investigations. Fortunately, however, each of them can be reinforced internationally. The Publish What You Pay campaign pressures resource-extraction companies into releasing information on the payments that they are making to governments. The idea is that once these payments become public knowledge it is much more difficult for corrupt officials and politicians to siphon off the money. Citizens match the money paid by companies to income entered on the official rolls.

Smiths’ products are needed in aircraft, ships, and fighting vehicles. It has two shadow factories under way in 1939 and diverts resources into materiel and other war-related production from the outset of war, as its precision clock- and instrument-making capacity are easily adapted to war purposes. Smiths manufactures for the Ministry of Aircraft Production, to which the newly ennobled Sir Allan Gordon-Smith is conveniently seconded. Highly personal memories provide wry and amusing insights into wartime life. Inadequate planning for sourcing specialist raw materials is illustrated in Smiths’ role in a wider diplomatic smuggling effort involving the British embassy in Berne. The creation of enhanced and precision engineering capacity leads, as early as 1942, to detailed planning for the post-war period, highlighting themes of both future security as well as job creation/preservation. Important post-war relationships, for example, between Allan Gordon-Smith and Stafford Cripps, are forged