Look Back in Awe

Democrats and Republicans are alike in one respect, according to the libertarian writer Brink Lindsey: their shared nostalgia for the 1950s. Except, he says, "Republicans want to go home to the United States of the 1950s, while Democrats want to work there."

Indeed, from television (where Mad Men has faithfully recreated the furnishings, boozy smell, and chronic sexual dishonesty of the New York executive suite circa 1960), to the celebrated 50th anniversary of Jack Kerouac's On the Road, to the current political debate, we seem to be awash in 1950s nostalgia. While most of the Republican presidential candidates have life experiences more reminiscent of The Ice Storm than The Man in the Gray Flannel Suit, all invoke a vision of the patriarchal, orderly family of post–World War II suburban fantasy. And in their approaches to the world, all recreate that combination of belligerent, can-do triumphalism with mortal terror not seen since the decade of duck-and-cover drills, before Vietnam stripped away the triumphalism and the end of Communism alleviated the fear.

But even baby boom liberals who spent their youth in rebellion against the tranquilized 1950s have become homesick for its virtues. Ninety-one percent tax rates! Unions! Declining income inequality! Working people in nice big houses. What's to protest?

To be fair, and not just because the founding editors of this magazine are prominent among those calling attention to the virtues of the 1950s economic order, they are hardly calling for a return to Eisenhower's America, with its stifling conformist culture, cruel sexism, and tiny half steps toward racial justice.

Rather, Paul Krugman, Bob Kuttner, and Bob Reich (in their recent books) and the MIT economists Frank Levy and Peter Temin in a recent paper, "Inequality and Institutions in Twentieth-Century America," use the 1950s and 1960s to show what's possible. Their argument is a necessary reproach to the likes of Thomas Friedman, who view us as passive little boats swept along on waves of globalization, insisting that we accept all the inequality and disruption that goes along with that because the alternative is global stagnation. It's vital to understand that there was a time when great prosperity and greater equality not only co-existed but were taken for granted. And that it was political institutions and choices that made shared prosperity possible: Greater bargaining power in the hands of workers. A robust social safety net. A government that invested in infrastructure and in individuals, through the GI Bill and federal mortgage insurance programs. Manufacturing wages adequate for one worker to support a family. A corporate culture of stewardship rather than short-term profits.

All of this is true, but it begs the question: Could we really just work in the 1950s without having to live there, too? Or were the circumstances that created the great middle-class nation unique to that moment of postwar economic hegemony?

The answer is that this prosperous nation can surely recreate the broadly shared well-being of the postwar era, but not always in the same way. The institutions and political choices of the postwar era can be a little misleading as models because many of them were relatively painless, and almost invisible. For example, Levy and Temin attribute the decline of inequality in the 1950s largely to what they call "The Treaty of Detroit," referring to the generous pattern-bargaining agreements between Walter Reuther's United Auto Workers and the auto companies, which among other things launched our employer-based health insurance system. Better labor laws enabled that deal but did not create it. It was a bargain of economic abundance, in which labor's bargaining power was matched by GM's smug invincibility. As we've seen in more recent auto-industry negotiations, unions can no longer treat many employers as fixed pools of profit, from which to extract as much money as possible. Rather, they understand themselves as co-dependents in the company's effort to stay afloat and meet the demands of shareholders.

That's why every Democratic candidate for president understands that the only way to ensure health coverage now would be to shift some or all of the responsibility from employers to government, through subsidies or public programs. But that's part of a bigger trend, and the difference between our time and the 1950s is that reducing inequality and recreating economic security for families today will require a social contract that has a much bigger role for government, as a provider of subsidies, social insurance, job-creating public investment, and training. All that is possible, but it will call for a much more explicit and vigorous political fight than in the Eisenhower era, a fight over the line between public and private that is bigger than we can imagine.

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