Adrift

Adrift Plot Summary

Introduction

America's journey from a post-World War II economic powerhouse to today's complex global leader is a fascinating story of transformation. This journey has been marked by periods of remarkable prosperity and challenging decline, with one constant element at its core: the American middle class. When this group thrived, America seemed invincible; when it struggled, the nation's course became uncertain. The story begins in 1945, when America emerged from global conflict as the world's undisputed economic leader. What followed was an unprecedented period of shared prosperity that created the largest middle class in history. But starting in the 1980s, significant shifts in economic policy, technology, and global trade began to reshape the American landscape. These changes accelerated through the information age and now, in our current era of digital transformation, we face critical questions about national identity, economic fairness, and America's place in the world. By examining how different forces have affected the middle class over time, we gain valuable insights into not just America's past, but its possible futures.

Chapter 1: Post-War Prosperity: Building the American Middle Class (1945-1980)

In the summer of 1945, as World War II came to an end, America faced a remarkable challenge: how to transition from a wartime economy to a peacetime one without sliding back into the Depression. The nation had just mobilized 40% of its GDP for the war effort, and now needed to reabsorb millions of returning soldiers into civilian life. Economic planners feared widespread unemployment and recession would follow the ticker-tape parades. What happened instead was extraordinary. The American economy transformed from an arsenal of democracy into an engine of capitalism. The thirty years following World War II brought record-low unemployment, sustained economic growth, and unprecedented investment in infrastructure and research. Federal initiatives like the G.I. Bill funded college education for two million veterans, provided home loans, and supported small business creation. President Eisenhower launched a forty-year project to build the national highway system, while progressive income tax rates - with the top bracket at 91% - redistributed wealth through social programs and public investments. This economic transformation created something unprecedented: a broad, inclusive middle class that provided stability to American capitalism. Between 1950 and 1980, twenty-seven million American women entered the workforce, increasing their participation by 50%. The percentage of Black men earning middle-class incomes rose dramatically from 22% in 1940 to 68% by 1970. While inequities remained, more Americans were sharing in prosperity than ever before. America's greatest innovation during this period wasn't a technology but a social construct: the middle class itself. Like ballast in a ship - heavy material beneath the surface that provides stability in turbulent waters - the middle class provided economic and social stability. Middle-class households valued education, stability, and progress, creating a consumer market for manufactured goods while providing a talented workforce. The doctor, lawyer, and factory worker had different incomes but shared increasingly similar lifestyles and aspirations. This shared prosperity wasn't accidental. It resulted from deliberate policies that strengthened labor, expanded education, subsidized homeownership, and invested in scientific research. When prosperity is widely distributed, capitalism delivers on its promise of improving lives rather than simply concentrating wealth. The lessons of this era show that economic growth is most sustainable when its benefits are broadly shared.

Chapter 2: The Shareholder Revolution: Rise of Individualism (1980-2000)

By the late 1970s, America's economic dominance was faltering. Conglomerates had become inefficient, Japanese cars were outperforming American models, and stagflation gripped the economy. When Ronald Reagan took office in 1980, he articulated a clear vision in his inaugural address: "In this present crisis, government is not the solution to our problem; government is the problem." This philosophy launched what would become known as the Reagan Revolution, ushering in a new era of American individualism and shareholder capitalism. The signature policy tools of this period were tax cuts and deregulation. When Reagan took office, the highest marginal tax rate was 70% - already the lowest since 1935. By the time he passed the baton to George H.W. Bush, that rate had plummeted to 28%. The idea was that money not spent on taxes would be "reinvested" into the economy to spur growth. Simultaneously, regulations on businesses were systematically dismantled, with the financial sector experiencing particularly dramatic changes. The leveraged buyout (LBO) boom transformed corporate America as "corporate raiders" used debt to acquire companies, often dismantling them for parts. This period saw a fundamental shift in how Americans viewed government and community responsibility. Where Theodore Roosevelt once said, "The government is us. We are the government, you and I," and Franklin Roosevelt declared, "Let us never forget that government is ourselves and not an alien power over us," Reagan famously quipped, "The nine most terrifying words in the English language are 'I'm from the government and I'm here to help.'" This changing sentiment reflected a broader cultural transformation elevating individual achievement over collective welfare. A pivotal development was the decoupling of productivity and wages. From 1950 to the mid-1970s, worker compensation had risen in tandem with productivity gains. After 1975, however, these metrics diverged sharply. Between 1973 and 2014, net productivity grew 72%, but hourly worker compensation grew just 9%. The value created by American workers was increasingly flowing to shareholders and executives rather than being distributed through higher wages. Meanwhile, union membership declined precipitously, further weakening labor's bargaining position. The consequences of these shifts were profound and enduring. Government spending on infrastructure fell from 2.5% of GDP in 1966 to just 1.3% by 1983. Mental healthcare was drastically cut back through "deinstitutionalization," leaving hundreds of thousands of vulnerable people without support. The national debt tripled during Reagan's presidency despite his rhetoric about fiscal responsibility. These changes represented not just policy shifts but a fundamental reorientation of American values from community and institution-building toward individualism and shareholder returns.

Chapter 3: Digital Transformation and Wealth Concentration (2000-2010)

The dawn of the 21st century marked the beginning of the digital revolution, fundamentally transforming how Americans worked, communicated, and consumed. When Steve Jobs unveiled the iPhone in 2007, calling it a "revolutionary product that changes everything," few could have predicted how profoundly this pocket-sized computer would reshape society. Within just a few years, Americans would be spending hours each day staring at these screens, creating vast new economic opportunities – and challenges. Digital technology created unprecedented wealth, much of it concentrated in a handful of tech companies based in Silicon Valley. The business model that emerged was unlike anything seen before: platforms offering "free" services in exchange for users' attention and data. By 2010, Americans were spending 3% of their waking hours on mobile devices. By 2021, that figure would skyrocket to 33%. Companies like Google and Facebook became advertising powerhouses, capturing over two-thirds of digital advertising dollars by monetizing user attention. This era saw the emergence of what can be called "the idolatry of innovators" – a cultural phenomenon elevating tech founders to almost mythical status. Where Americans once idolized astronauts and civil rights leaders, they now worshipped tech entrepreneurs who generated billions and moved financial markets. Silicon Valley culture perpetuated the myth that success was purely the result of individual genius and grit, despite the fact that technologies like computer chips, the internet, and GPS were all developed with substantial government funding. The financial crisis of 2008 revealed deeper structural problems in the American economy. As home values collapsed and unemployment soared, the government bailed out major financial institutions deemed "too big to fail." Meanwhile, millions of ordinary Americans lost their homes and retirement savings. The crisis accelerated the trend of wealth concentration, with the top 1% of Americans controlling an ever-larger share of national wealth. Between 1990 and 2021, this group increased their share from 24% to 32%. Corporate profits, which had once tracked alongside employee compensation, continued to diverge dramatically. By the end of this decade, CEO compensation had reached 351 times that of the average worker – up from just 21 times in 1965. The promise of technology creating broadly shared prosperity was increasingly at odds with the reality of growing inequality. The digital revolution was producing enormous value, but the distribution of that value was more uneven than at any point since the Gilded Age.

Chapter 4: Social Fragmentation in the Information Age (2010-2020)

By 2010, social media had become firmly embedded in American life, with Facebook reaching 500 million users worldwide and Twitter emerging as a powerful force in public discourse. These platforms promised to connect people across geographic and social boundaries, creating a more interconnected global community. The reality, however, proved far more complex and troubling than the utopian vision initially presented by tech leaders. The algorithms powering social media platforms made a disturbing discovery: content that triggered negative emotions, particularly anger, generated the most engagement. Research showed that falsehoods spread on Twitter six times faster than truth, and Facebook's recommendation system steered users toward increasingly extreme content. Media organizations, struggling with declining advertising revenue, adapted to this new environment by producing more provocative headlines. Between 2016 and 2021, Americans' trust in national news organizations suffered a sharp decline, with the drop particularly pronounced among Republicans. The social consequences of these technological changes were profound. Young people increasingly formed relationships online rather than through traditional social networks. Online dating apps, which barely existed in 2000, became the dominant way couples met by 2020. Meanwhile, participation in community organizations plummeted. Church attendance, Rotary Club membership, and participation in scouting programs all declined significantly. Americans were increasingly living in digital bubbles, interacting primarily with those who shared their views and interests. Political polarization reached unprecedented levels. By 2020, 42% of Americans believed the political system needed a complete overhaul, and another 43% said it required major changes. Political affiliation became a marker of identity, with Americans increasingly viewing members of the opposing party not just as political adversaries but as enemies. A poll by the University of Virginia found that 2 out of 5 Biden voters and more than half of Trump voters favored splitting the country along party lines. Perhaps most concerning was the impact on young men. By 2021, men accounted for just 40% of college enrollments, down from nearly 60% in 1970. Young people of both genders were struggling economically, with more 18-to-29-year-olds living with their parents than at any point since the Great Depression. But young men faced particular challenges, being more susceptible to deaths of despair (suicide, drug overdose), more likely to be incarcerated, and increasingly unable to form meaningful relationships. A society with a large cohort of unattached, economically insecure young men historically faces significant social instability.

Chapter 5: China's Rise and America's Response (2000-Present)

As America focused inward on its cultural and political divisions, a profound shift was occurring in the global balance of power. China, which had embarked on market reforms in the late 1970s under Deng Xiaoping, was transforming from a poor, primarily agricultural society into an economic and technological powerhouse. Between 1990 and 2020, China lifted more than 700 million people out of extreme poverty in what has been called the greatest poverty reduction program in history. The economic relationship between the United States and China evolved dramatically during this period. In 2000, the U.S. was the largest trading partner for most nations around the world. By 2020, China had surpassed America in this regard, with three times as many countries counting China as their primary trading partner. China's Belt and Road Initiative further expanded its economic influence, covering 71 countries that account for half the world's population and a third of global GDP. While the U.S. remained the world's largest economy, China was rapidly closing the gap. In military terms, the picture was similarly complex. The United States maintained the world's largest defense budget by far, spending more than the next ten countries combined. However, when adjusted for purchasing power parity, China's military spending was much closer to America's than raw numbers suggested. China invested strategically in areas like military drones, artificial intelligence, and cyber capabilities, often focusing on asymmetric advantages rather than trying to match U.S. conventional forces. Perhaps most concerning for America's long-term position was China's growing technological prowess. The U.S. share of global research and development spending fell from 69% in 1960 to just 30% by 2020, even as China significantly increased its investments. In critical areas like artificial intelligence, 5G networks, and clean energy, China began challenging or even surpassing American leadership. China now dominates the extraction and processing of rare earth metals and other minerals essential to renewable energy technologies. America's response to China's rise has been inconsistent and often ineffective. While the U.S. defense establishment increasingly identified China as America's primary strategic competitor, economic ties between the two countries deepened through the early 2000s. Trade disputes intensified under the Trump administration, with tariffs imposed on hundreds of billions of dollars in Chinese goods. However, these measures did little to address fundamental issues like intellectual property theft or China's state-directed industrial policy. Meanwhile, America's international standing declined, with fewer people in allied countries viewing the U.S. favorably or considering it a model democracy.

Chapter 6: Crisis as Opportunity: Paths to Renewal

Throughout American history, periods of crisis have often preceded times of renewal and innovation. The Great Depression led to the New Deal and the creation of the modern social safety net. The challenges of the Cold War spurred investments in education and technology that powered decades of economic growth. Today's overlapping crises of inequality, political dysfunction, climate change, and international competition may similarly contain the seeds of America's renewal. The COVID-19 pandemic, despite its terrible human toll, accelerated positive trends that were already underway. Remote work became normalized, giving millions of Americans greater flexibility and reducing the environmental impact of daily commuting. New business formation surged, with 5.4 million applications filed in 2021 alone – 23% higher than 2020's record and 35% higher than 2019. Many of these new ventures are addressing pressing social and environmental challenges. The rapid development of mRNA vaccines demonstrated America's continuing capacity for scientific innovation when properly resourced and focused on clear goals. Several paths to national renewal deserve consideration. First, America could simplify its tax code, which has grown from 409,000 words in 1955 to roughly 4 million today. This complexity benefits the wealthy, who can afford sophisticated tax avoidance strategies, while imposing huge compliance costs on ordinary Americans. Second, the regulatory system needs rebuilding to prevent monopolies from suppressing innovation while providing security for individuals and small businesses. Third, investing in children and families through universal preschool, expanded child tax credits, and paid family leave would reduce child poverty while supporting family formation. Education reform represents another crucial opportunity. Higher education needs incentives to expand enrollment rather than functioning as "hedge funds masquerading as educators." Public universities could adopt hybrid models of instruction to dramatically increase access, while new pathways for vocational training could provide alternatives to traditional four-year degrees. National service programs like AmeriCorps, Peace Corps, and YouthBuild could be expanded to offer young people meaningful work experience while rebuilding community connections. Perhaps most importantly, America needs to reinvest in its democratic institutions and social cohesion. The severe polarization that characterizes current politics is neither inevitable nor irreversible. Creating spaces for constructive disagreement, rebuilding local news ecosystems, and reforming social media platforms could help Americans rediscover their common ground. The January 2021 invasion of Ukraine showed how external threats can unify even deeply divided societies around shared values of freedom and democracy.

Summary

The story of America since World War II is largely the story of its middle class – its creation, expansion, and subsequent challenges. When this broad middle class was strong, providing economic ballast to the ship of state, America prospered not just economically but socially and culturally. The postwar period demonstrated that capitalism works best when its benefits are widely shared, creating a virtuous cycle of consumption, investment, and growth. Conversely, when wealth and opportunity become concentrated, as they have in recent decades, the entire system becomes less stable and productive. Today's challenges call for renewed investment in the foundations of middle-class prosperity: education, infrastructure, innovation, and community. Rather than reverting to the exact policies of the past, America needs forward-looking approaches that address contemporary realities of technology, globalization, and climate change. This means rebuilding regulatory systems for the digital age, creating new pathways to economic security beyond traditional college degrees, and making strategic investments in clean energy and advanced manufacturing. It also requires strengthening the social fabric through expanded national service, support for family formation, and reforms to social media that promote connection rather than division. By recommitting to broadly shared prosperity and renewing its democratic institutions, America can navigate the turbulent waters ahead and chart a course toward a more secure and equitable future.

About Author

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Scott Galloway

Scott Galloway is a clinical professor of marketing at the New York University Stern School of Business, and a public speaker, author, and entrepreneur. He was named one of the world's 50 best business school professors by Poets and Quants.

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