Ours Was the Shining Future

Ours Was the Shining Future Plot Summary

Introduction

In 1973, a crisis shook America to its core. Arab nations, angered by U.S. support for Israel in the Yom Kippur War, orchestrated an oil embargo that sent prices soaring and lines forming at gas stations across the country. This moment marked a turning point in American economic history – the beginning of the end of what many now call the "golden age" of American prosperity. For decades prior, from the end of World War II through the early 1970s, the United States had experienced unprecedented economic growth that benefited Americans across all income levels. Factory workers could afford homes, cars, and college educations for their children. The middle class expanded dramatically. But something fundamental changed in the 1970s, setting the nation on a different trajectory. This historical narrative explores how America built a broadly shared prosperity in the mid-20th century and then watched it gradually unravel. Through the lens of labor movements, corporate leadership, government investment, racial struggles, and ideological shifts, we witness the complex forces that shaped economic opportunity in America. The story reveals how specific policy choices, cultural changes, and power dynamics – not just inevitable economic forces – determined who prospered and who struggled. For anyone seeking to understand why economic inequality has grown so dramatically in recent decades, or why so many Americans feel the American Dream has slipped from their grasp, this exploration offers crucial insights into how we arrived at our current moment and what might be done to chart a different course.

Chapter 1: Labor's Uprising: The Minneapolis Strike and Worker Power (1934)

The Great Depression had devastated the American economy, leaving millions unemployed and desperate. By the early 1930s, the balance of power between workers and employers was dramatically uneven. In Minneapolis, truck drivers worked long hours in coal yards waiting for orders, but were only paid for deliveries. They had no job security, faced harsh working conditions, and lived on the edge of poverty. This imbalance was maintained by organizations like the Citizens Alliance of Minneapolis, which systematically prevented workers from forming unions that could counterbalance business influence. The political landscape began to shift when Floyd Olson, a progressive candidate, was elected governor of Minnesota in 1930. Meanwhile, in Washington, Franklin Roosevelt took office in 1933 with large Democratic majorities in Congress. Though Roosevelt's initial policies focused more on halting economic panic than altering economic structure, his administration would eventually embrace labor organizing as a key strategy. Frances Perkins, Roosevelt's Secretary of Labor, played a crucial role in this shift. Though initially skeptical of unions, she came to see their importance and advocated for including Section 7(a) in the National Industrial Recovery Act, giving workers the right to organize without employer interference. This legal protection sparked a wave of union organizing across America. In Minneapolis, Carl Skoglund, a Swedish immigrant and union activist, began secretly organizing coal yard drivers. When companies refused to recognize their union, the drivers went on strike in February 1934. They developed sophisticated tactics, including "flying squads" to stop deliveries and a Ladies' Auxiliary to involve workers' wives. The strike expanded beyond coal, with the rallying cry "Make Minneapolis a union town." Violence erupted when police attacked strikers, but Governor Olson eventually intervened, imposing a settlement that included pay increases and union recognition. The Minneapolis strike was part of a larger transformation. Across the country, workers staged thousands of strikes during the mid-1930s. The Wagner Act of 1935 codified workers' right to collective bargaining, and union membership grew dramatically. By the mid-1940s, more than 30 percent of American workers belonged to unions, up from just over 10 percent in the mid-1930s. This shift in power allowed workers to win higher wages and better working conditions, not just for union members but for many non-unionized workers as well. The labor movement's success depended on two forces working together: a mass movement of millions of workers willing to take risks, and the backing of political leaders like Roosevelt, Perkins, and Olson. Unlike earlier reform efforts that had produced only modest changes, this alliance between workers and political elites had an enduring impact. It reshaped the economy, reducing inequality as lower-income workers enjoyed larger percentage raises than the rich. Median family income more than doubled between the mid-1940s and mid-1970s, and the racial wage gap shrank. The world's largest middle class was being forged through this new balance of power.

Chapter 2: Corporate Conscience: Business Leadership's Postwar Transformation (1945-1960)

As World War II drew to a close, American business culture stood at a crossroads. Paul Hoffman, president of Studebaker and a typical Republican businessman of the era, had spent years criticizing Roosevelt's "collectivist" policies. Yet by the mid-1940s, Hoffman was leading a campaign to reform corporate America's culture, arguing for a more patriotic and less self-interested approach to business. This transformation wasn't unique to Hoffman—it reflected a broader shift among business leaders who had witnessed the Depression's devastation and the war's demands. The Committee for Economic Development (CED), which Hoffman helped found in 1942, became the vehicle for this cultural change. The CED adopted a hybrid structure combining a national umbrella group with local chapters, eventually establishing about two thousand chapters run by local businesspeople. Its mission was to prevent another depression after the war by creating a consumer economy built on abundant jobs paying high wages. Hoffman traveled the country with an "evangelistic fervor," persuading executives that cost-cutting wasn't their only route to profitability—they could also earn larger, more sustainable profits by creating an economy where American families had enough income to buy new products. This shift was driven partly by fear—fear of totalitarianism abroad and quasi-socialism at home. Business leaders understood that the wartime boom had created millions of jobs and high wages, and Americans "will not be content with less without a very great struggle." The CED's message was carefully crafted to use familiar business language while promoting new ideas. They edited their materials to remove words like "collective" that smacked of Soviet collectivism, while repurposing terms like "free enterprise" for new ends. The reformers described remaining corporate hard-liners as "intellectual Neanderthals" who were undermining the capitalist system they claimed to venerate. The business culture transformation became evident in executive compensation practices. George Romney, who ran American Motors Corporation in the early 1960s, capped his annual salary at $225,000 (about $2 million in today's terms) and refused bonuses that would have exceeded this limit. John Ekblom of Hupp Corporation similarly turned down a $110,000 bonus, saying it "far exceeds my needs and appetite." CEO pay rose only modestly from the 1940s through the 1970s, growing more slowly than stock prices, GDP, and median family income. Executives accepted this situation without complaint, along with a top marginal tax rate above 90 percent in the 1950s. When Dwight Eisenhower, a Republican, won the presidency in 1952, he validated rather than reversed the post-Depression changes to the economy. Though he moved policy somewhat to the right, the shift was modest. The top marginal tax rate fell by just one percentage point under Eisenhower, from 92 to 91 percent. Labor unions continued to grow, and wages kept rising. The more conservative elements of Eisenhower's coalition were bitterly disappointed, with the Chicago Tribune lamenting, "We cannot see what purpose was served by Republicans fighting the New Deal for 20 years if they were going to wind up by embracing the New Deal." This cultural transformation wasn't driven by the individual virtues of executives but by the prevailing ethos of their era. Business leaders had accommodated themselves to a new reality, accepting that a high-wage economy had advantages for everyone, including themselves. They came to see themselves as part of a shared project to overcome existential threats to the United States—first the Depression, then World War II, and finally the Cold War. This moderation of self-interest helped create an economy that reduced inequality and lifted living standards for virtually every group of Americans.

Chapter 3: Building Tomorrow: Eisenhower's Infrastructure and Research Legacy (1950-1965)

In the summer of 1919, a young lieutenant colonel named Dwight Eisenhower joined a military convoy traveling from Washington to San Francisco. The journey was grueling—once the caravan crossed into Illinois, dirt roads became the norm, and eighty-eight bridges collapsed during the trip. The convoy averaged only six miles per hour, covering just fifty-eight miles daily. This experience gave Eisenhower firsthand knowledge of America's infrastructure deficiencies, a lesson that would influence his later policies as president. Twenty-five years later, during World War II, Eisenhower witnessed the awesome power of American investment. The United States had poured tremendous resources into wartime mobilization, channeling the creativity of private companies toward a larger goal. American factories built warships in less than three weeks and produced 44 percent of all bullets made during the war. This industrial might helped the Allies defeat fascism on two continents, demonstrating what the country could accomplish through strategic investment. After World War II, the federal government made unprecedented investments in scientific research. The National Defense Research Committee, which had grown into a vast program during the war, funded research into radar, planes, ships, vehicles, guns, and protective gear. One crucial area was computing, where Grace Hopper, a mathematics professor who had joined the navy, worked on one of the world's first computers at Harvard's Computation Lab. Hopper helped develop early programming techniques and advocated for making computers accessible to more users. The government's investment in computing continued after the war, with the military financing about 85 percent of the country's electronics research through the 1950s. When Eisenhower became president in 1953, he expanded rather than contracted government investment in the future. Despite his instinct to keep government involvement minimal, he understood that some involvement was necessary. "The principal contradiction in the whole system comes about because of the inability of men to forego immediate gain for a longtime good," he once said. Under Eisenhower, federal spending on research and development more than doubled as a share of GDP. The annual budget for the National Institutes of Health increased almost tenfold, and the National Science Foundation budget rose even more sharply. In 1956, Congress passed Eisenhower's proposal for a forty-thousand-mile highway network. The Cold War, particularly the Soviet launch of Sputnik in 1957, created additional pressure to increase investment. In response, Eisenhower appointed the president of MIT as the first White House science adviser and worked with Congress to allocate new money for education, especially in science. The military created the Advanced Research Projects Agency (later DARPA), and NASA was established in 1958. These programs were surprisingly affordable relative to other federal spending, representing less than 1.7 percent of the federal budget when Eisenhower left office. The results of this investment boom were remarkable. Government-funded research led to the development of the semiconductor industry, computer networks, and eventually the internet. It produced medical breakthroughs including penicillin, cortisone, chemotherapy, vaccines, and cardiac treatments. Education expanded dramatically, with high schools becoming universal and college attendance growing well beyond its elite roots. By the end of the 1960s, the United States had become the most broadly prosperous country the world had known, with American companies dominating global industries from computers to pharmaceuticals, aviation to automobiles. Americans had faith that the future could be better than the past, and through strategic investment, they forged that future.

Chapter 4: Racial Struggle: Civil Rights and Economic Opportunity (1940-1970)

In December 1945, O'Day and Helen Short, a Black couple who had migrated from the South, moved into a new home they had built in Fontana, California. They saw an opportunity to join the postwar boom and build a middle-class life near the Kaiser Steel plant. Days later, a deputy sheriff told them they needed to move because only White people were supposed to live in their neighborhood. When the Shorts refused to be intimidated, their house was set on fire while they were inside. The entire family—O'Day, Helen, and their two children—died from their injuries. Local officials quickly classified the explosion as an accident despite clear evidence of foul play, and no one was ever held accountable. This tragedy illustrated how the United States went to extraordinary lengths to exclude Black citizens from the growing middle class. Government policies systematically prevented Black Americans from accessing the same opportunities as White Americans. The minimum wages established by New Deal legislation didn't cover farmworkers or domestic workers, two categories that included about two-thirds of Black southern workers. Social Security also excluded them. Many federal programs gave local officials latitude to decide who received benefits, and those officials often rejected Black applicants. Housing discrimination was particularly severe. Federal and local governments built all-White public housing that was far superior to housing available to Black families. The Federal Housing Administration refused to fund integrated developments and created the practice of "redlining," automatically designating Black neighborhoods as poor credit risks. When Black families managed to move into White neighborhoods despite these barriers, they often faced violence that was ignored or even encouraged by law enforcement. Despite these obstacles, Black Americans made remarkable economic progress between the 1940s and 1970s. A. Philip Randolph, the elegant, dignified leader of the Brotherhood of Sleeping Car Porters, played a crucial role in this advancement. In 1941, Randolph threatened to lead 100,000 Black Americans in a march on Washington unless President Roosevelt integrated wartime factories. Roosevelt yielded, issuing Executive Order 8802, which prohibited discrimination in defense industries. Though imperfectly enforced, this order began to integrate America's industrial economy. The labor movement also contributed to racial progress. The Congress of Industrial Organizations (CIO) adopted a resolution called "Unity of Negro and White Workers" and actively recruited Black members. By the 1960s, about 33 percent of workers of color belonged to unions, compared to 28 percent of White workers. Union membership typically provided an even larger financial benefit for Black workers than for White workers, helping to shrink the racial wage gap. This narrowing of racial gaps reflected what economists call "distributional" forces rather than "positional" ones. While direct discrimination remained prevalent, economic policies that reduced overall inequality disproportionately benefited Black Americans. The minimum wage, rising unionization, and other policies that lifted lower-income workers had a greater impact on Black families because they were more likely to have low incomes. As Martin Luther King, Jr., recognized, "Negroes are almost entirely a working people. Our needs are identical with labor's needs: decent wages, fair working conditions, livable housing, old-age security, health and welfare measures."

Chapter 5: Cultural Fracture: The 1960s and Political Realignment

By the early 1960s, a new generation of young Americans was growing restless with the conformity of postwar life. C. Wright Mills, a sociology professor at Columbia University, captured this sentiment in his writings. Unlike most liberal intellectuals who celebrated the cooperation among labor, business, and government, Mills viewed this arrangement scornfully as "the great American celebration." He rejected the idea that the working class was the mechanism for progressive change, dismissing it as "the labor metaphysic," and instead argued that students and young intellectuals were the new agents of political transformation. Mills's ideas found a receptive audience among college students like Tom Hayden, who arrived at the University of Michigan in 1957 and found campus life rigid and stifling. Hayden and other students formed Students for a Democratic Society (SDS) and drafted the Port Huron Statement in 1962, a manifesto that described an emerging movement—the New Left. The document began: "We are people of this generation, bred in at least modest comfort, housed now in universities, looking uncomfortably to the world we inherit." It celebrated human independence and authenticity, focusing on what historian Kirkpatrick Sale called "poverty of vision rather than poverty of life." This approach differed markedly from the progressive movement of the 1930s and 1940s, which had organized around material concerns like jobs, wages, and retirement security. The New Left was more focused on the psychic concerns of people fortunate enough to take material comfort for granted. It rebelled against conformity by calling for a new individualism without acknowledging that individualism often benefited privileged members of society more than others. The movement also included an anti-American strain that set it apart from earlier progressive movements, which had consciously connected themselves to American ideals. A similar dynamic emerged in the feminist movement. Betty Friedan, whose 1963 book The Feminine Mystique launched second-wave feminism, had initially tried to enter progressive politics through labor unions but became disillusioned. Her book focused on the "problem that has no name"—the fact that American women were kept from growing to their full human capacities. While the book launched an important movement that helped open opportunities for women in education, business, government, and other realms, it also reflected a particular class perspective. Friedan described her subject as the "suburban wife" and emphasized individual empowerment and achievement. Many working-class women recoiled from this message. For one thing, it didn't describe their reality—many already had jobs outside the home out of economic necessity. Their main challenges were material, not attitudinal. While Friedan and her allies eventually paid more attention to issues important to working-class women, like childcare and job training, second-wave feminism never tried very hard to recruit working-class women or join forces with groups that represented them. The National Organization for Women (NOW) consciously chose to create a group of professional women rather than a mass organization that could find common ground across classes. The cultural fractures of the 1960s ultimately led to a profound political realignment. The Democratic Party, which had built its coalition around working-class voters of all races, increasingly became the party of educated professionals and minorities. The Republican Party, meanwhile, found new support among working-class white voters who felt alienated by the cultural left. This realignment would have profound implications for economic policy in the decades to come, as the political coalition that had supported the postwar economic order began to unravel.

Chapter 6: Economic Paradigm Shift: Reagan's Revolution and Its Aftermath (1980-1990)

The late 1970s marked a period of profound economic distress in America. The oil crisis that began in 1973 had triggered both inflation and recession—a combination called "stagflation" that conventional economic wisdom said couldn't happen. By 1979, inflation had reached 13.3 percent, unemployment stood at 7.2 percent, and interest rates approached 20 percent. This economic turmoil created fertile ground for a fundamental rethinking of America's economic approach. Ronald Reagan's election in 1980 represented the culmination of a long intellectual and political project that had been developing since the 1950s, particularly at the University of Chicago under economists like Milton Friedman. Reagan's economic program, quickly dubbed "Reaganomics," represented a dramatic break with the postwar consensus. The Economic Recovery Tax Act of 1981 slashed the top marginal tax rate from 70 percent to 50 percent (and later to 28 percent). The administration embarked on an aggressive campaign of deregulation across industries from airlines to banking. Most symbolically, when air traffic controllers went on strike in August 1981, Reagan fired them all—a signal that the federal government would no longer act as a neutral arbiter in labor disputes but would side with management against unions. The immediate economic results were mixed. A severe recession in 1981-82 pushed unemployment above 10 percent, but inflation fell dramatically. By the mid-1980s, the economy was growing again, and Reagan won reelection in a landslide. However, the benefits of this growth were distributed very differently than in the postwar boom. Income inequality, which had remained relatively stable from the 1940s through the 1970s, began rising sharply. The share of national income going to the top 1 percent nearly doubled between 1980 and 1990. This shift reflected a fundamental change in economic philosophy. The postwar consensus had emphasized shared prosperity, with government playing an active role in managing the economy and ensuring that growth benefited workers as well as investors. The new approach prioritized efficiency, innovation, and individual initiative, arguing that removing government constraints would unleash entrepreneurial energy and create prosperity that would eventually benefit everyone through "trickle-down" effects. The Reagan revolution transformed corporate behavior as well. With less fear of antitrust enforcement, companies embarked on a merger wave that increased concentration across industries. Corporate raiders used junk bonds to finance hostile takeovers, often followed by asset sales and layoffs. CEO compensation, which had grown modestly from the 1940s through the 1970s, began to soar, increasingly tied to short-term stock performance rather than long-term company health. Perhaps most significantly, the Reagan revolution changed the relationship between government and markets. The idea that government should actively shape markets to ensure broadly shared prosperity gave way to the belief that markets, left alone, would produce optimal outcomes. This shift would influence both political parties in the decades to come. Even when Democrats returned to power under Bill Clinton in the 1990s, they largely accepted the new paradigm, focusing on making markets work better rather than fundamentally challenging them. The economic paradigm shift of the 1980s represented a decisive break with the postwar model of democratic capitalism. It unleashed new dynamism in some sectors of the economy but also contributed to wage stagnation for many workers, declining union membership, and growing inequality. The long-term consequences of this shift would become increasingly apparent in the decades that followed, as the American dream of broadly shared prosperity became more elusive for millions of families.

Chapter 7: Divided Dreams: Inequality and the Bifurcation of Opportunity (1990-2020)

By the 1990s, the American economy had entered a new phase characterized by growing divergence between different segments of society. For Americans with college degrees, particularly those in technology, finance, and other knowledge industries, the economy offered unprecedented opportunities. Cities like San Francisco, Seattle, and Boston became hubs of innovation and wealth creation. The stock market reached record highs, benefiting those with retirement accounts and investment portfolios. Yet for Americans without college degrees, particularly in former manufacturing regions, economic prospects remained bleak. This bifurcation of opportunity reflected decades of policy choices and economic trends. Educational attainment, which had risen dramatically from the 1940s through the 1970s, had largely stagnated since then. While other developed nations continued expanding their educational systems and investing in workforce training, American public investment in these areas lagged. The decline of labor unions removed an institution that had once ensured that economic gains were shared broadly. Corporate concentration increased across industries, from airlines to telecommunications to healthcare, often resulting in higher prices for consumers and downward pressure on wages. The geography of opportunity also shifted dramatically. Economists documented what they called "the great divergence" – the growing gap between thriving metropolitan areas and struggling regions. Cities with high concentrations of college graduates and knowledge industries pulled further ahead of places dependent on traditional manufacturing. This geographic sorting reinforced political divisions, as Democrats became the party of urban, educated America while Republicans increasingly represented rural and working-class communities. These political divisions made addressing economic inequality more difficult, as neither party fully represented the interests of those most disadvantaged by economic changes. Technology accelerated these divides. Digital platforms created enormous wealth for their founders and investors while often disrupting traditional employment relationships. The rise of the gig economy offered flexibility for some workers but precarity for others. Automation eliminated many middle-skill jobs while creating new opportunities primarily for those with advanced education. The five largest American companies by market capitalization in 2020 were all technology firms – Apple, Microsoft, Amazon, Alphabet (Google), and Facebook – representing a dramatic shift from earlier eras when manufacturing and energy companies dominated. The global financial crisis of 2008-2009 exposed the fragility of the new economic order. The collapse of the housing bubble and subsequent recession wiped out trillions in household wealth, with the heaviest impacts falling on working-class and minority communities. The government response – bailing out banks while providing limited relief to homeowners – reinforced perceptions that the system was rigged in favor of the wealthy and well-connected. The recovery that followed was the slowest in modern American history, with wage growth remaining sluggish for years. By 2020, the American dream of upward mobility appeared increasingly out of reach for many citizens. Studies showed that children born in the 1980s and later were significantly less likely to earn more than their parents than children born in earlier decades. Life expectancy for working-class Americans actually declined – an extraordinary development in a wealthy nation during peacetime. These trends reflected not just economic forces but the erosion of the social contract that had once ensured that prosperity was widely shared. The COVID-19 pandemic further exposed and exacerbated these divides, with essential workers facing health risks while knowledge workers could retreat to the safety of remote work. The bifurcation of opportunity that had been developing for decades became impossible to ignore.

Summary

The story of American prosperity over the past century reveals a clear pattern: broadly shared economic growth depends not on market forces alone but on the balance of power between different groups in society. The mid-20th century saw the creation of the world's largest middle class through a combination of strong labor unions, corporate leadership that accepted responsibility for worker welfare, substantial government investment in infrastructure and education, and expanding civil rights. This system wasn't perfect – it excluded too many Americans, particularly racial minorities – but it created unprecedented economic security for millions of families. Beginning in the 1970s, this system gradually unraveled through a combination of global economic pressures, ideological shifts, declining union power, and policy choices that favored corporate interests over workers. The result has been growing inequality and diminished economic mobility. The lessons of this history suggest potential paths forward: rebuilding institutions that give workers a voice in economic decisions, renewing public investment in education and infrastructure, and recognizing that markets function best within a framework of rules that ensure their benefits are widely shared. The American dream of broadly shared prosperity isn't an inevitable outcome of market forces; it requires deliberate choices and collective action to create an economy that works not just for the few but for everyone.

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David Leonhardt

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