Introduction
In "Ours Was the Shining Future," David Leonhardt takes us on a journey through the history of the American Dream, exploring its rise, fall, and potential rebirth. The book delves into the complex interplay of economic policies, political decisions, and social movements that have shaped the United States over the past century. Leonhardt examines how the nation went from a beacon of hope and prosperity to a land of stagnation and inequality, and offers insights into how it might reclaim its former promise.
The Birth of the American Dream
The Great Depression and a New Era
The phrase "American Dream" emerged during the tumultuous years of the Great Depression, a time when the United States was forced to reevaluate its economic and social structures. Before this period, two opposing forces dominated the economic landscape: the Progressive movement, which fought for workers' rights and better working conditions, and big business interests, which favored a laissez-faire approach with minimal government intervention.
The 1920s saw an economic boom, but it was accompanied by severe economic imbalance. This decade of prosperity ended abruptly with the stock market crash of 1929, plunging the nation into the Great Depression. This crisis set the stage for a dramatic shift in the balance of power between workers and corporations.
The Rise of Labor Unions
The dire economic situation of the 1930s created a unifying force among workers, who began demanding higher wages, better working conditions, and more rights. A pivotal moment came with the Minneapolis coal drivers strike of 1934, led by union branch Local 574. This strike resulted in significant concessions from employers and set a precedent for union victories across various industries.
The success of the labor movement depended heavily on political support. President Franklin D. Roosevelt, initially caught between the interests of big business and struggling workers, ultimately sided with the unions. His administration, bolstered by Secretary of Labor Frances Perkins, implemented policies that protected workers' rights and improved living standards.
The Wagner Act of 1935 was a crucial piece of legislation that protected the right to collective bargaining. This act, along with other New Deal policies, played a pivotal role in shaping a more equitable society. Public works programs, minimum wage laws, and workplace safety regulations all emerged from this era of pro-worker sentiment.
The Role of Unions in Shaping the Economy
Labor unions have faced criticism over the years, but historically, they have played a crucial role in securing workers' rights and improving living standards. Contrary to early concerns that unions would harm the economy, evidence suggests that when unions thrive, wealth is better redistributed. While CEOs may receive less money, the overall economy remains unharmed.
The success of the labor movement in the 1930s demonstrates how collective action and political backing can lead to significant social and economic change. This period laid the groundwork for a more just and equitable society, setting the stage for the golden age of the American Dream.
The Golden Age of Democratic Capitalism
A New Approach to Business and Government
As the United States emerged from the Great Depression and entered World War II, a new approach to business and government began to take shape. President Roosevelt's evolving policies and the strengthening of workers' unions across the country helped turn the tide and put the nation on the path to recovery.
Business leaders began to realize that corporate culture could prioritize national interests and good wages, leading to overall prosperity. This "what's-good-for-everyone-is-good-for-us" approach became the cornerstone of democratic capitalism.
The Committee for Economic Development
The Committee for Economic Development (CED) played a pivotal role in promoting the idea that cost control isn't the sole route to profitability. This ideological shift resulted in a more moderate form of capitalism, where wages rose, and the economy experienced a level of equality not seen since the mid-19th century.
Eisenhower's Presidency and Long-Term Investments
Dwight Eisenhower's presidency reflected this cultural shift, emphasizing economic moderation and compromise between businesses and workers. Despite being a Republican, Eisenhower's policies often defied expectations. He made wise investments in infrastructure, sacrificing short-term gains in favor of long-term economic growth and prosperity.
Eisenhower's time in office left an enduring impact, leading to transformative changes like the interstate highway system and technological advancements that made post-war America an innovative world power. These investments laid the foundation for decades of economic growth and improved quality of life for millions of Americans.
Addressing Racial Inequality
While the 1940s and 1950s were a time of severe racial inequality and government-sanctioned discrimination, there were some positive developments. The wage disparity between white and Black workers actually shrank during the postwar era. Unions became more inclusive, allowing more non-white workers to join their ranks.
The broad, common good-oriented policies of the postwar era enabled Black families to climb the economic ladder in the 1940s, 50s, and 60s. However, it's important to note that significant racial disparities persisted, and the civil rights movement of the 1960s would be necessary to address many of these inequalities.
The Decline of the American Dream
Waning Union Power and Political Shifts
As the 1960s dawned, the forces that had kept the American Dream alive in the postwar years began to weaken. Union power started to wane, and there was growing uncertainty about which political party truly represented the interests of the working class.
Sociologist C. Wright Mills observed that labor leaders were becoming complacent and too willing to play a passive role in the nation's corporate landscape. This complacency would have far-reaching consequences for the labor movement and the working class as a whole.
The Rise of the New Left
The 1960s saw the emergence of a new political movement known as the New Left. Composed primarily of young intellectuals and college students, the New Left was driven by concerns over nuclear war, the environment, and social justice. However, their upper-class intellectualism and unwillingness to compromise failed to connect with the working class of America.
This disconnect between the New Left and the traditional working-class base of the Democratic Party created an opening for the Republicans to rebrand themselves as the party of the people. Richard Nixon successfully appealed to the populist vote, setting the stage for a significant shift in American politics.
The Chicago School and New Economic Ideas
During the 1950s and 60s, new economic ideas were emerging from prominent figures like lawyer and Yale professor Robert Bork and a group of economists known as the Chicago School. They called for an end to anti-trust laws and financial regulations, arguing that a free, unencumbered market would allow the US to reach new heights and naturally become self-regulating.
These ideas remained on the back burner for more than a decade until economic crises in the 1970s created an opening for their implementation.
The Reagan Revolution
The 1967 Arab-Israeli war and the subsequent oil embargo of the 1970s resulted in a prolonged economic slump. This crisis opened the door for a new economic plan, which was embraced by Ronald Reagan in the 1980s. This marked a seismic shift in the nation's economic landscape, with democratic capitalism being replaced by a more aggressive form of capitalism that left many working-class Americans feeling marginalized.
During Reagan's two terms in office, property taxes and income taxes were cut, financial markets were deregulated, and labor policies were transformed. The kind of investments in infrastructure, education, and public works projects that were cornerstones in previous administrations were significantly reduced.
While the 1980s and 1990s saw economic booms, the benefits were unevenly distributed. Much like the decade before the Great Depression, a significant share of the economic gains flowed to the affluent. The rich got richer, and the poor got poorer, setting the stage for the growing inequality that would characterize the coming decades.
The Modern Era: Challenges and Opportunities
The Clinton Years: Missed Opportunities
The presidency of Bill Clinton in the 1990s continued the trend of economic upswing, but it also perpetuated the pattern of widening inequality. Clinton, a neoliberal at heart, promised benefits for ordinary workers through a mix of free trade, deregulation, and tax credits. However, these promises went largely unfulfilled, as incomes for the rich outpaced other groups during his tenure.
The neoliberal policies of recent decades, marked by increasing trade, growing corporate concentration, declining unions, reduced regulation, and lower tax rates, contributed to a decline in the share of American economic output going to workers' wages. Meanwhile, corporate profits surged, accounting for over seven percent of national income by the early 2020s, up from the postwar average of 5.5 percent. This shift has resulted in a substantial annual loss for the average family.
The Immigration Debate
One of the main issues in recent elections has been immigration, a topic that has become increasingly polarized. The current immigration debate largely stems from a 1965 immigration law that, despite initial intentions to create fairness in the admission process, contained unforeseen loopholes.
The law was originally intended to allow specialists who could fill specific job shortages into the country, with the belief that the overall number of immigrants wouldn't significantly increase. However, the reality has been quite different. Many immigrants tend to be blue-collar workers who've been allowed in due to having family members who already reside in the country, and the numbers have increased substantially.
When the bill was passed, legal immigration stood at around 290,000 annually. By 2001, that number exceeded one million for the first time. As a result, the number of foreign-born residents in the US has nearly tripled since the late 1960s and is likely to exceed the previous peak of 14.8 percent of the population, which was hit in 1890.
The pros and cons of this immigration wave have been hotly debated for decades. The US has benefited from immigration in many ways: it has enlarged the labor pool and the country's economic power, and been responsible for numerous innovations and successful businesses. However, it's also important to acknowledge that there have been consequences to the country's flawed immigration laws. A 2017 report by the National Academy of Sciences found that US immigration policy has had a significant impact on wages, employment options for the working class, and the declining power of labor unions.
The Liberal Dilemma
Today's liberals, continuing a trend that began with the New Left in the 1960s, tend to be unyielding in their policy positions and more focused on social issues than economic issues. As a result, the working class can justifiably feel that their concerns are being largely ignored by the Democratic Party.
Liberals could do a better job of reaching the working class by understanding that it's possible to be pro-immigrant without being pro-immigration. This nuanced position could help bring back many working-class voters who have since strayed over to the Republican Party. It's worth noting that many immigrant voters are also concerned about the nation's weak immigration laws, highlighting the complexity of this issue.
The Decline in Government Investment
Since the 1970s, there has been a steady decline in government spending, especially on programs that benefit the young and working class. This lack of investment has had far-reaching consequences:
- The United States is one of the few developed nations without a national paid parental leave program.
- Child poverty rates are higher than in many other developed countries.
- Transportation infrastructure has faced significant challenges and underinvestment.
- Women's participation in the labor force has declined, partly due to a lack of supportive policies.
This reduction in government investment stands in stark contrast to the approach taken during the golden age of the American Dream, when significant public works projects and social programs helped drive economic growth and improve quality of life for millions of Americans.
The Path Forward: Reclaiming the American Dream
Balancing Efficiency, Justice, and Liberty
The economist John Maynard Keynes once said that the challenge of a thriving economy is to find a balance between economic efficiency, social justice, and individual liberty. This balance is what the United States came closest to achieving in the postwar years, during the height of the American Dream.
To reclaim this balance and revitalize the American Dream, several key steps are necessary:
Reinvigorate Labor Unions: Strengthening labor unions can help ensure that workers have a voice in shaping economic policies and can negotiate for better wages and working conditions.
Invest in Infrastructure and Education: Returning to a model of significant government investment in infrastructure, education, and research can drive innovation, create jobs, and improve quality of life for all Americans.
Address Income Inequality: Implementing policies that ensure a more equitable distribution of economic gains can help rebuild the middle class and reduce social tensions.
Reform Immigration Policies: Developing a more nuanced approach to immigration that addresses both the benefits and challenges can help bridge political divides and address legitimate concerns of the working class.
Prioritize Long-Term Growth: Encouraging businesses and policymakers to focus on long-term economic growth rather than short-term profits can lead to more sustainable prosperity.
Embrace Bipartisanship: Finding common ground between political parties on economic issues can help create more stable and effective policies.
Reconnect with Working-Class Voters: Both major political parties need to make a concerted effort to understand and address the concerns of working-class Americans.
The Role of Grassroots Movements
Grassroots movements that take heed of public opinion can play a crucial role in pushing for these changes. By organizing at the local and national levels, citizens can make their voices heard and pressure policymakers to implement reforms that benefit the broader population rather than just the wealthy elite.
Learning from History
As we look to the future, it's crucial to learn from both the successes and failures of the past. The postwar era demonstrated that it's possible to have a thriving economy that benefits a broad swath of the population. At the same time, the challenges faced by marginalized groups during this period remind us of the importance of ensuring that prosperity is truly inclusive.
By studying the policies and cultural shifts that led to the rise of the American Dream, as well as those that contributed to its decline, we can develop more effective strategies for creating a more equitable and prosperous society in the 21st century.
Conclusion
"Ours Was the Shining Future" provides a comprehensive look at the evolution of the American Dream, from its origins in the aftermath of the Great Depression to its current state of uncertainty. David Leonhardt's analysis highlights the complex interplay of economic policies, political decisions, and social movements that have shaped the United States over the past century.
The book serves as both a cautionary tale and a source of hope. It reminds us that the prosperity and equality of the postwar years were not accidents of history, but the result of deliberate policies and cultural shifts. At the same time, it shows how quickly these gains can be eroded when the balance between workers, businesses, and government is disrupted.
As we face the challenges of the 21st century – from rising inequality to climate change to technological disruption – the lessons of "Ours Was the Shining Future" become increasingly relevant. By understanding our past and learning from both our successes and failures, we can work towards reclaiming the promise of the American Dream and creating a more prosperous, equitable, and sustainable future for all Americans.
The path forward will not be easy, and it will require cooperation, compromise, and a willingness to challenge entrenched interests. But as the history recounted in this book shows, the United States has overcome seemingly insurmountable challenges before. With determination, vision, and a commitment to the common good, we can do so again, and ensure that the shining future once promised by the American Dream becomes a reality for generations to come.