Joshua B. Freeman's American Empire: 1945-2000: The Rise of a Global Power, the Democratic Revolution at Home covers the highs and lows of America's glory years, which, even when things were at their best, were never completely fulfilled. Freeman distilled his epic survey into three critical events that shaped America's last half-century.
Between the celebrations at the end of World War II and the mourning five and a half decades later after 9/11, no single occurrence accounted for America’s path of development. But some events, like the postwar strike wave, the Korean War, and the stagflation of the 1970s, proved exceptionally important in shaping what followed.
On January 21, 1946, three-quarters of a million steelworkers went on strike, threatening to bring the economy to a halt. Altogether, during the year after the war, five million workers walked off their jobs, the largest strike wave in United States history. Though today almost entirely unknown, that epic industrial clash helped shape the economy, politics, and everyday life for decades to come.
World War II brought an enormous expansion of the union movement – one out of three employees carried a union card – as the economy revived and new federal laws and regulations promoted worker organization. The postwar strikes centered on union efforts to win wage gains to compensate for the end of long, wartime working hours and anticipated inflation. But both management and labor understood that the battle would set the parameters of postwar union power.
When the dust settled, unions had won substantial wage increases, in many cases nearly twenty percent. More important, unlike after World War I, they came out of the conflict with their organizational strength intact, having proved they could take on the most powerful corporations in the world. Not that they got everything; companies won restrictions on union action and pressured the Truman administration to ease price controls – still in place from the war – to allow them to pass on higher labor costs to consumers.
Still, the strikes made it clear that organized labor -- and the New Deal coalition it was a part of -- would endure. That meant that the huge economic gains that the United States made during the quarter-century after the war would be broadly shared. As families saw their income rise year after year and their sense of security bolstered by government unemployment and old-age payments and private benefits patterned after union-won provisions, their consumer spending gave the economy an ongoing boost. The optimism that came with shared economic growth laid the basis for struggles for greater equality, first the African American freedom movement and then movements of students, Latinos, women, Indians, gays and lesbians, and other groups. America seemed a land of almost infinite possibility.
Four and a half years after the steelworkers struck, and halfway around the world, on June 25, 1950, North and South Korean troops began exchanging artillery fire. Soon North Korean infantry, led by Soviet-built tanks, poured across the border. Within days, they captured the South Korean capital, Seoul, while steadily advancing down the Korean peninsula. Less than two weeks later, the first American units, sent in by President Truman to defend South Korea, were shocked when a North Korean unit marched right through their position.
The Korean War ushered in a new phase of American history. Until then, the United States only mobilized militarily during periods of war. Even during the half-decade after World War II, as tensions with the Soviet Union escalated, the United States shrunk its Army and President Truman resisted calls for increased military spending. But with Korea came what turned out to be a permanent state of military mobilization, as the distinction between peace and war blurred. A vast national security state grew up, encompassing the armed services (permanently deployed in both Europe and Asia), sprawling intelligence agencies, secret research and weapons programs, and a massive taxpayers’ bill. America became – though it rarely used the word – an empire, not seeking territorial conquest but rather global power and control through economic, political and cultural means and military might. A large standing military, instead of just preventing war, generated it. The United States went to war because it could, including in situations like Vietnam where no direct American interests were at stake. Even the end of the Cold War failed to restore the limited role the military had played in the pre-World War II nation.
Through the end of the 1960s, the United States could finance both a vast military establishment and a rising standard of living for most Americans. But the deep recession of the mid-1970s brought that to an end. A combination of high inflation and high unemployment – “stagflation” as it came to be called – caused widespread misery and undermined faith in the liberal, Keynesian approach to economic policy that had become hegemonic after the war, since using fiscal policy to stimulate employment would worsen inflation, while using it to damp inflation would throw more people out of work. The inability of President Carter and Congressional liberals to craft an effective economic policy created an opening for monetarism, free market ideology, and a conservative ascendency. Ronald Reagan asked voters in 1980 if they were “better off than you were four years ago,” and for most the answer was no.
Reagan helped change the basic calculus of American politics. Whereas during the New Deal and its postwar aftermath government had been widely accepted as a force for social betterment, Reagan portrayed it as a dead weight on the public, retarding economic growth and individual freedom. Reducing taxes and deregulation assumed a new centrality in the growing conservative movement.
When the economy eventually did revive, finance rather than production played the leading role. The growth of national income was no longer widely shared; the wealthy got an ever-larger slice of the pie, while most workers saw their incomes stagnate or decline. With tax- cutting and heavy military spending leading to massive federal deficits, pressure grew to cut welfare and social programs.
Today, we live with the heritage of the postwar decades, for better and for worse. The United States is as close to an empire as is left in the twenty-first century, though no longer a very successful one, as wars grind on and the cost of battle helps sink the economy. At home, the era of widely-shared, continual economic improvement seems a distant memory, while the financialized, globalized post-Reagan economic system has become increasingly inequitable and fragile. Looking back at how we got to our current circumstances can help us think how to best move forward.