Ours Was the Shining Future
The Story of the American Dream
Book Edition Details
Summary
In the pages of "Ours Was the Shining Future," David Leonhardt unravels the intricate tapestry of America's economic journey—a narrative woven with dreams, despair, and determination. As the promise of the American Dream falters, Leonhardt shines a light on the systemic shifts that have widened the chasm of inequality. With a keen journalistic eye, he resurrects the voices of trailblazers like Frances Perkins and Cesar Chavez, who once championed a more equitable society. This gripping account traverses the tumultuous landscape from the Great Depression to our current age of stagnation, posing a poignant question: Can the dream be salvaged? With historical insight and a hopeful gaze toward the future, Leonhardt invites readers to ponder the power of collective action in reclaiming America's lost promise.
Introduction
In the summer of 1934, Minneapolis erupted in violence as truck drivers battled police in the streets, transforming a labor dispute into a defining moment for American capitalism. Carl Skoglund, a Swedish immigrant with a limp from a logging accident, had spent winter nights secretly organizing his fellow drivers who worked grueling hours in freezing weather for meager pay. When they finally struck, they faced not just their employers but the entire power structure of a city designed to keep wages low. Yet their victory would help establish a new model of capitalism that would lift millions into the middle class and create unprecedented prosperity for ordinary Americans. This historical journey reveals how America built, sustained, and then abandoned the most successful economic system in modern history. Through the stories of forgotten heroes like labor organizer Skoglund, visionary executives like Paul Hoffman, and civil rights leaders like A. Philip Randolph, we discover how three forces—political power, cultural values, and strategic investment—combined to create an economy that worked for everyone, not just the wealthy few. The transformation wasn't merely legislative but cultural, as business leaders began arguing that high wages weren't a burden but the foundation of prosperity itself. These lessons speak directly to anyone puzzled by today's economic inequality, frustrated by stagnant wages despite rising productivity, or wondering why the American Dream feels increasingly out of reach. By understanding how democratic capitalism once flourished through deliberate choices made by political leaders, business executives, and ordinary citizens who recognized their fates were intertwined, we can chart a path back to broadly shared prosperity.
Building Democratic Capitalism: The New Deal Revolution (1930s-1960s)
The Great Depression shattered Americans' faith in unfettered capitalism, creating space for a revolutionary experiment that would reshape the nation's economic foundation. As unemployment soared past 25 percent, a new generation of leaders recognized that democracy itself depended on ensuring economic security for ordinary citizens. Frances Perkins, the first woman to serve in a presidential cabinet, championed labor's right to organize with the simple but revolutionary principle enshrined in Section 7(a) of the National Industrial Recovery Act: "employees shall have the right to organize and bargain collectively." The transformation wasn't merely about new laws but represented a fundamental cultural shift in how America's leaders understood the economy. Business executives like Paul Hoffman of Studebaker Corporation broke ranks with their peers, arguing that high wages created the consumer demand necessary for sustained prosperity. This represented a dramatic departure from the 1920s mentality that viewed workers primarily as costs to be minimized. The new philosophy recognized workers as customers whose purchasing power drove economic growth, creating what economists would later call a virtuous cycle of prosperity. Labor unions emerged as democracy's great equalizing force during this period. The Minneapolis Teamsters' victory against the powerful Citizens Alliance demonstrated that organized workers could challenge corporate dominance when supported by federal policy. By 1945, union membership had tripled, and the share of national income flowing to the bottom 90 percent of Americans began rising for the first time in decades. The key insight was that wages existed in what economists called a "range of indeterminacy," where political power, not just market forces, determined whether workers received compensation at the high end or low end of what was economically possible. The postwar boom represented democratic capitalism at its zenith, as strategic government investment and strong labor unions created unprecedented middle-class prosperity. President Dwight Eisenhower, despite his Republican affiliation, presided over the largest infrastructure program in history while maintaining the highest tax rates on wealthy Americans ever recorded. His Interstate Highway System didn't just move cars—it moved an entire nation toward shared prosperity. The era's success stemmed from recognizing that private enterprise and public investment were partners, not adversaries, with government-funded research creating entire industries while federal programs enabled millions to achieve homeownership.
The Conservative Counterrevolution: Markets Unleashed (1970s-1990s)
The economic crisis of the 1970s, marked by stagflation and energy shortages, discredited the postwar consensus and opened the door for a radical experiment that would fundamentally transform American capitalism. Conservative intellectuals like Milton Friedman and Robert Bork had spent decades developing free-market theories at the University of Chicago, waiting for their moment. When oil shocks and economic malaise made Americans desperate for change, these ideas moved from academic journals to presidential policy with the elegant promise that trusting market forces would solve the nation's problems. Ronald Reagan became the perfect messenger for this ideology, combining sunny optimism with a fundamental hostility to the government programs that had built the middle class. His revolution wasn't merely about cutting taxes—it represented a complete philosophical shift in how America understood the relationship between government, business, and workers. The new doctrine held that markets were inherently efficient and government intervention inherently harmful, recasting labor unions as obstacles to progress rather than engines of prosperity that had created shared wealth for decades. The transformation was both swift and comprehensive, dismantling the institutions that had created middle-class prosperity with remarkable efficiency. Tax rates on the wealthy plummeted from 70 percent to 28 percent while payroll taxes on working families increased. When air traffic controllers went on strike, Reagan fired them all, sending a clear signal that the government would no longer protect workers' right to organize. Corporate executives embraced this shift enthusiastically, abandoning the postwar ethic of shared prosperity for a winner-take-all mentality that celebrated unlimited accumulation over collective welfare. The cultural shift proved just as important as the policy changes, as business leaders who had once viewed workers as partners now saw them as costs to be minimized. CEO compensation, which had grown modestly for decades at roughly 20 times the average worker's salary, suddenly exploded to over 300 times that amount. The idea that businesses had obligations to their communities and country gave way to the doctrine that their only responsibility was maximizing shareholder value. By 2000, America had completed its transformation from democratic capitalism to what might be called rough-and-tumble capitalism—a system that prioritized efficiency over equity and individual success over collective prosperity, setting the stage for the inequality crisis that would follow.
Immigration and Political Realignment: Identity Politics Emerge (1965-Present)
The Immigration and Nationality Act of 1965 seemed like a modest reform when President Lyndon Johnson signed it into law at the Statue of Liberty, with sponsors assuring Congress it would not significantly change American immigration patterns or increase overall numbers. Senator Edward Kennedy testified that the bill would add only "a small percentage" to existing immigration levels. Yet this legislation would prove to be one of the most transformative policy changes of the 20th century, fundamentally altering American society and politics in ways its architects never anticipated through a seemingly technical provision prioritizing family reunification over national origin quotas. The law's unintended consequences created a chain migration effect where each new immigrant could eventually sponsor multiple family members, leading to exponential growth in immigration from Asia, Latin America, and other regions previously restricted. Between 1965 and 2000, the foreign-born share of the American population tripled, reaching levels not seen since the early 1900s. This demographic transformation intersected with the rise of the educated professional class and the civil rights framework, creating a constituency that viewed diversity as both morally imperative and economically beneficial, with cities like Houston becoming showcases for successful immigrant integration. However, immigration also became a source of profound political tension, particularly among working-class Americans who felt their economic interests and cultural values were being overlooked by political elites. The effects weren't merely economic, though those were real enough in certain industries and regions where wage competition intensified. Immigration also challenged traditional notions of American identity and belonging, creating what scholars identified as a conflict between "universalist" values emphasizing individual rights and global citizenship, and "communalist" values prioritizing shared traditions and national solidarity. This cultural divide fundamentally reshaped American politics as the Democratic Party evolved toward representing college-educated professionals—what economists call the "Brahmin left"—while working-class voters of all backgrounds increasingly felt politically homeless. The party that had once championed labor unions and broad-based prosperity now focused on issues like diversity and environmental protection that resonated more with affluent suburbanites than factory workers. This political realignment left a vacuum that demagogues would eventually fill, contributing to a politics of resentment rather than aspiration, division rather than the shared purpose that had once enabled democratic capitalism to flourish.
Restoring Shared Prosperity: Historical Lessons for Renewal
The story of America's economic transformation reveals that prosperity is not automatic, and the institutions that create shared economic growth require constant renewal and adaptation through deliberate political choices. The golden age of the mid-20th century emerged from leaders, business executives, and ordinary citizens who recognized that their fates were intertwined, just as the growing inequality and economic stagnation of recent decades reflect a shift toward policies prioritizing market efficiency over collective welfare. The neoliberal experiment has produced exactly what economic theory predicted: greater efficiency but also greater inequality, more innovation but less security, higher profits but stagnant wages for most workers. History suggests that restoring broad-based economic growth will require rebuilding the institutions of democratic capitalism through three essential steps that mirror the original New Deal transformation. First, restore the balance of power between workers and employers through stronger labor unions and antitrust enforcement that recognizes organized workers as democracy's great equalizing force. Second, resume public investment in education, infrastructure, and research that creates shared prosperity rather than winner-take-all outcomes, following the model of leaders like Eisenhower who understood that government investment and private enterprise were partners, not adversaries. Third, cultivate a culture among business and political leaders that values long-term thinking and collective welfare over short-term profits and individual accumulation, returning to the wisdom of executives like Paul Hoffman who recognized that high wages created the consumer demand necessary for sustained prosperity. The examples of successful politicians like Robert Kennedy, who managed to appeal to both working-class voters and civil rights advocates, demonstrate that building bridges across cultural and economic divides remains possible even in polarized times. Perhaps most importantly, this historical analysis reveals that change requires both intellectual preparation and grassroots organizing, as the conservative revolution succeeded by combining rigorous policy development with effective political mobilization. As civil rights leader A. Philip Randolph observed, "Nothing counts but pressure, pressure, more pressure, and still more pressure through broad organized aggressive mass action." The tools for renewal exist—stronger unions, progressive taxation, public investment, and cultural change—but deploying them requires the political will that can only come from citizens who understand that their economic futures depend on collective action rather than individual striving alone.
Summary
The central tension running through this historical analysis is the ongoing struggle between two competing visions of American capitalism: one that prioritizes shared prosperity and democratic participation, and another that emphasizes market efficiency and individual success. The golden age of the mid-20th century demonstrated that these goals need not be mutually exclusive, as strong unions, progressive taxation, and public investment created both rapid economic growth and broad-based prosperity where a single breadwinner could support a family, buy a home, and send children to college. However, the conservative revolution that began in the 1970s gradually dismantled these institutions in favor of policies that, while generating impressive aggregate wealth, failed to ensure that ordinary Americans shared in the benefits. This history offers crucial lessons for contemporary efforts to address rising inequality and economic stagnation through understanding how political power, cultural values, and strategic investment interact to shape economic outcomes. First, lasting change requires building coalitions that bridge cultural and class divides, as successful movements from the New Deal to the civil rights era understood. Second, policy reforms must be accompanied by institutional changes that shift political power toward those who benefit from shared prosperity, recognizing that individual workers have little power against large corporations but organized workers can shift the balance. Finally, intellectual preparation and grassroots organizing must work in tandem, as abstract policy proposals mean nothing without the political strength to implement them. The path forward lies not in returning to the exact policies of the past, but in adapting their underlying principles to contemporary challenges, creating new institutions of democratic capitalism that can ensure broadly shared prosperity remains achievable. The current crisis of American democracy stems largely from economic transformation that has left citizens losing faith in institutions that no longer serve their interests. Yet the same forces that once created the world's largest middle class—organized worker power, strategic public investment, and cultural values emphasizing collective welfare—remain available to those with the vision and determination to deploy them for a new generation.
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By David Leonhardt
