American Empire

by Joshua Freeman

  PART II

  The High Tide of Liberal Democracy (1954–1974)

  CHAPTER 5

  * * *

  Suburban Nation

  In March 1936, Dorothea Lange, while working for the federal Resettlement Administration, photographed a migrant worker and her daughters in a farmworkers’ camp in Nipomo, California. The image—usually called “Migrant Madonna” or “Migrant Mother”—of the destitute woman, thin-faced with worried brow, cradling a dirty-faced baby and flanked by two children turned away from the camera, received wide circulation at the time and ever since, seeming to capture the hopelessness of the “Okies” whom John Steinbeck and Woody Guthrie had brought to national attention. Yet in 1979, when another photographer named Bill Ganzel managed to locate the photo’s subject, Florence Thompson (whose name Lange had not bothered to learn), he discovered that the family, rather than starving to death, had achieved a measure of comfort. All ten of Thompson’s children had jobs and their own homes, and together they had bought their mother a house in Modesto (though when she later got sick they had difficultly paying for her medical care).

  The afterstory of the most iconic image of Depression-era America conveys the extraordinary economic upward mobility the country experienced during the decades after World War II. Sustained, robust economic growth made possible remarkable changes in the norms of living. After a short economic contraction during the reconversion from wartime to civilian production, the total output of goods and services began rising in 1947 and kept rising every year until 1969, except in 1954 and 1958 during brief recessions. Between 1950 and 1960, the gross national product, adjusted for inflation, increased by 37 percent.

  The United States was not unique in its economic performance. Western European growth rates during what has been called the golden age of capitalism were higher. But because the United States started the post–World War II era with so much greater wealth and productive capacity than any other nation, the gap between its standard of living and that elsewhere remained huge.

  The changes brought by economic growth were not subtle. From 1945 to 1960, life expectancy at birth rose from 66.8 to 70.6 years for whites and from 57.7 to 63.6 years for blacks, huge jumps. Annual per capita consumption of meat went from 161 pounds in 1942 to 208 pounds in 1965, not necessarily improving health but boosting a sense of well-being. By 1960, 75 percent of families owned a car, 87 percent a television, and 75 percent a washing machine. For Americans who came of age during the Depression or the war, postwar prosperity meant not only that they lived better than their parents had but that they lived better than they had ever anticipated they would.

  People in many circumstances benefited from the economic boom, but the greatest transformation took place in the new suburbs that sprang up across the nation. During the 1950s, a way of life blossomed that came to be seen as the embodiment of what it meant to be American: racially homogeneous, low-density neighborhoods of single-family homes; automobility; tight-knit nuclear families with stay-at-home mothers; and ever-rising levels of consumption. Idealized in the new medium of television in shows like The Adventures of Ozzie and Harriet, Leave It to Beaver, and Father Knows Best, suburbanization became the dominant model for development for decades to come. Government officials and business leaders presented backyard barbecues, washing machines, and Coca-Cola as proof of the superiority of mass production capitalism to Soviet-style communism. For better or worse, American suburban-style living and its cultural accoutrements came to be a measuring rod for social mores and economic achievement across the globe.

  Mass Production

  The economic boom of the postwar years rested in part on the extraordinary productivity of American industry, especially the mass production of consumer goods. The basic elements of Fordist production had been developed long before World War II, but the wartime and postwar years saw a significant renewal and expansion of the country’s industrial capability. Many of the facilities the government built or improved during World War II for military purposes were later converted to civilian use. Wartime research breakthroughs in chemical engineering, aviation, computing, and electronics became the basis for new civilian products and production methods. Between 1947 and 1968, a long wave of corporate capital investment more than doubled the real net value of the country’s manufacturing structures and equipment. Corporations extended Fordist production both geographically, to regions of the country that previously had few mass production facilities, and industrially, to sectors like home building and restaurants that until the war had almost exclusively used nonstandardized approaches to production that required much skilled labor.

  Automobiles, and the companies that made and serviced them, lay at the heart of the postwar economy and culture. Looking back, nothing more quickly suggests the ideal of life in the 1950s and 1960s than a picture of a long, low automobile with huge tail fins, parked in front of a drive-in restaurant or a roadside motel. Driving back and forth across the country, for the sake of the journey itself, became a form of existential expression and cultural Americanism, from Jack Kerouac’s On the Road, published in 1957, to John Steinbeck’s more sedate Travels with Charley, published five years later, to Robert Frank’s 1959 photo documentary, The Americans.

  In 1949, when automobile manufacturers completed their reconversion from war production, they sold five million cars, surpassing their best prewar year, and sales continued to rise thereafter. By 1960, over sixty-one million cars were registered, one for every three Americans. By contrast, in Great Britain there was one car for every nine people, in Germany one for every twelve, and in Italy one for every twenty-five. From the mid-1950s through the mid-1960s, at least half of the twenty largest companies in the United States—the big car manufacturers, the major oil companies, and the largest tire maker—depended heavily on automobiles for their profits.

  Employment in the automobile industry held steady at about three-quarters of a million during the quarter century after World War II, while output roughly doubled. This was typical of the mass production industries. In spite of a vast increase in the output of consumer goods, between 1947 and 1957 the number of factory operatives fell by 4 percent. Some of the increased productivity came from mechanization, some from new, more efficient management techniques, and some from simply forcing employees to work harder and faster.

  Given the enormous attention U.S. foreign policy paid to creating opportunities abroad for American business, international activities contributed only modestly to the postwar economy. Home markets were far more important for industry and agriculture. Between 1950 and 1970, U.S. exports fluctuated between 3.5 and 5 percent of GNP. Imports rose from just under 3 percent of GNP to about 4 percent. These levels exceeded the immediate prewar norms but were not especially high by historic standards, failing to match the figures for the early years of the twentieth century.

  Trade figures, however, do not tell the whole story. In some industries, imported raw materials were critical. During the 1950s, for example, most or all of the columbium, nickel, chromium, and cobalt used in the United States—necessary for making high-grade metals for aircraft engines and other advanced products—came from abroad. Also, in some sectors, American companies made more money from foreign investments and overseas facilities than from exporting products. U.S. investments abroad soared from less than $14 billion in 1946 to $120 billion in 1970.

  The auto industry provides a good example of how, even with moderate levels of trade, companies benefited from the dominant economic position of the United States. Between 1950 and 1960, American companies exported automobiles and auto parts worth twice the value of imports. They also earned substantial profits from overseas operations. American companies, for example, produced 40 percent of the automobiles manufactured in Great Britain. Meanwhile, foreign car companies, far weaker and less efficient than American firms, presented virtually no competition inside the United States, except in the form of the Volks
wagen Beetle at the low end of the market and some sports cars at the high end.

  Government Spending and the Free Market

  Many industries benefited from the militarization of the country, as federal spending on military goods and services pumped money into the economy on a massive scale. The arms industry was the most direct beneficiary, growing huge not only by supplying the American military but also by selling military goods abroad. The line between military and civilian production often blurred. Chrysler, in addition to being one of the country’s largest manufacturers of tanks, also worked on atomic weapons development and along with Ford was heavily involved in defense electronics. American Motors—the fourth-largest car manufacturer—sold Jeeps to the Army. The aircraft, electronics, and metalworking industries were even more dependent than auto manufacturers on military production for sales, profits, and technical innovations.

  Defense spending represented just one of the ways the federal government helped stimulate the postwar economy and lay the basis for profitable corporate activity. The government directly subsidized agriculture, shipping, and commercial mail rates and indirectly subsidized a host of industries by allowing accelerated amortization of buildings and equipment and depletion allowances (a form of tax deduction) for oil, gas, and mineral investors. Washington also made massive investments in infrastructure that aided business and reshaped the geography of production and distribution.

  The 1950s and 1960s were the heyday of federal dam building, in the number of projects if not their individual size. The new projects lacked the links to social planning and democratic reform of the prewar Tennessee Valley Authority. By the end of the 1940s, the changing political climate allayed business and conservative fears that government dams would be a first step toward broader control over the economy. Agricultural and industrial interests pushed for projects that would provide irrigation, cheap power, and improved transportation. It would be hard to imagine Woody Guthrie singing the praises of the postwar dams built along the Colorado River, very expensive investments to serve very particular interests, as he had once memorialized the Grand Coulee Dam as a people’s triumph while on the payroll of the Bonneville Power Administration.

  Stripped of the aura of social reform, postwar dam and canal building nonetheless remained deeply Promethean, immersed in a cult of giantism that blithely dismissed the dangers of reordering nature. In 1954, after decades of debate and negotiations with Canada, Congress authorized construction of the St. Lawrence Seaway. Just five years (and a billion dollars) later, oceangoing ships could travel to the Great Lakes and the heart of North America. On the other side of the country, the Army Corps of Engineers spent $100 million to shorten by forty miles the trip between New Orleans and the Gulf of Mexico by creating a new outlet from the Mississippi River. Half a century later, it acted as a funnel for water that Hurricane Katrina drove toward New Orleans, contributing to the disastrous flooding of the city.

  Federal highway building even more profoundly transformed the landscape and society. The federal government had been helping fund state road construction since the early twentieth century, but the extent of its involvement leaped upward with the 1956 Federal-Aid Highway Act, which called for the creation of a “National System of Interstate and Defense Highways.” During the Roosevelt and Truman administrations, there had been some discussion of linking road building to multimodal transportation planning and urban renewal. But the most powerful proponents of federal road building—the trucking industry, the farm lobby (seeking to make it easier to get crops to market), automobile clubs, state highway engineers, construction companies, vehicle and construction equipment manufacturers, and labor unions—wanted to maximize construction through a narrower program that would use public money solely to lay concrete. The 1956 act, justified in part as a civil defense measure to allow the evacuation of populated areas in the event of nuclear war, gave them what they wanted. The law authorized a $25 billion outlay with which the federal government would cover 90 percent of the cost of interstate highways, with the rest to be paid by the states. To finance this massive investment, the act created a Highway Trust Fund, into which went all federal taxes on fuel, tires, and vehicles. Money from the trust could be used only to build roads.

  It took nearly forty years to complete the 41,000-mile interstate highway system, at a far greater cost than originally expected, but its impact was, if anything, greater than anticipated. The new roads made car and truck travel economical for long distances as well as short ones, in the process undermining competing modes of transportation, especially the railroads. Interstates opened up large regions of the country for economic development, as transportation time and costs became less of a factor in decisions about where to locate factories and warehouses and where to live. But the new roads also doomed countless towns that they bypassed, and destroyed urban neighborhoods (often low income) that were sliced up by highways.

  Dwight Eisenhower pushed through the interstate highway system in part because, like so many Americans, he associated cars with progress; more automobiles, he said, would bring “greater convenience . . . , greater happiness, and greater standards of living.” But he also viewed construction of the system as a means of creating jobs and speeding recovery from the recession that began in mid-1953. Eisenhower and most of his political contemporaries had little interest in directly employing large numbers of workers on government projects, the way the New Deal had, or in having the federal government engage in economic activities in competition with the private sector. But they did not forswear the lesson of World War II that massive government spending could boost the economy and overcome tendencies toward stagnation. Appropriations for defense spending and infrastructure development could be used to hire contractors to undertake work that the private sector would not otherwise do, stimulating the economy without threatening corporate interests. A conservative, militarized Keynesianism emerged as the new fiscal orthodoxy; the government would spend freely on arming itself and building infrastructure, which kept up aggregate demand without threatening the power or profits of private enterprise. Bigness and growth were seen as self-evident goods.

  Population, Unions, and Consumer Demand

  Efficient production and government spending alone could not have sustained postwar economic expansion. Ballooning consumer demand provided a central economic engine. Between World War I and World War II, a fundamental economic challenge for American capitalism had been an inability to sell all the goods that could be produced. The New Deal tried, with only limited success, to use direct government spending and social welfare benefits to create sufficient demand to lift the country out of the Depression. Wartime military spending did the trick but at a government expenditure level beyond what even the most enthusiastic New Dealers imagined for peacetime. Immediately after the war, a shopping spree financed by the massive pool of wartime savings helped prevent a widely feared return to depression. When that one-time stimulus ended, a variety of developments combined to keep up consumer demand, including demographic and cultural changes, dense unionization, and suburbanization.

  Rapidly growing population accounted for some of the increase in consumer spending. Between 1950 and 1960, the population leaped from 151 million to 178 million. This 18 percent increase was the largest since the first decade of the century. With immigration low, as a result of restrictions put in place after World War I, a sharp rise in the birth rate, the “baby boom,” accounted for most of the increase.

  Unexpectedly, major demographic trends of the twentieth century reversed as World War II drew to a close. People began marrying younger, in greater numbers, and with fewer divorces than in the preceding decades. The median age of first marriage for men fell to under twenty-three, while for women it barely topped twenty. And they had children at a younger age, and more of them. In 1950, 3.6 million children were born, a million more than a decade earlier. In 1960, the number reached 4.3 million.

&nbs
p; Population growth and the flood of new households formed—over ten million between 1947 and 1957—combined with rising income and a relatively equitable distribution of wealth to create a huge market for mass production goods. Starting in the Depression and accelerating during the 1940s, income inequality fell substantially. The introduction of the minimum wage, the wartime demand for unskilled labor, rising productivity, higher levels of worker education, and widespread unionization all contributed to a compression of the wage structure. Well into the 1960s, an income distribution markedly more equitable than before the New Deal remained in place.

  Unions helped push up working-class spending power. Though labor made few major organizational breakthroughs, union membership grew from fourteen million when World War II ended to seventeen million in 1960, so that roughly a third of nonagricultural wage earners carried a union card throughout the period. Almost every round of contract negotiations became an occasion for raising wages.

  Unions also won a growing array of what were called “social” or “fringe” benefits. The United Mine Workers paved the way. In 1945 the union proposed that employers finance health and retirement benefits for its members. It took a fierce, five-year struggle, which involved four large strikes, a temporary government takeover of the industry, and massive fines against the union for defying court orders, for the mine workers to achieve their goal. But when Horace Alinscough, a retired miner from a small town in Wyoming, received the first Mine Workers pension check, a revolution in social provision began. Through trust funds financed by royalty payments on every ton of mined coal, the Mine Workers’ plan provided generous retirement payments to supplement Social Security, aid to miners’ widows and orphaned children, and medical care. The union even built its own chain of hospitals in medically underserved coal mining regions of Virginia, West Virginia, and Kentucky.