In the flush years of the mid-20th century, an executive at a major American car company approached his board of directors with an unexpected proposal: to cap his own pay at $225,000, the equivalent of about $2 million today. This was already roughly 40 times what a typical American household made in the late 1950s. He argued that executives who were compensated too lavishly risked becoming distracted by “the temptations of success.”
The board agreed. As the company prospered in the early 1960s, he even refused the performance bonuses in his original contract, declining $268,000 over five years. The executive, George Romney, was the father of future presidential candidate and senator Mitt Romney.
Just a few decades later, Mitt also worked as an executive, at the consulting firm Bain & Co. and a spinoff private-equity firm. His earnings were significantly higher than his father’s: His net worth is now estimated at roughly $250 million. This striking father-son contrast reflects deep shifts in corporate culture and the American economy. In the 1950s, the top marginal tax rate was more than 90 percent. When Ronald Reagan left office in 1989, it was 28 percent. Unionization rates of American workers plunged from more than 30 percent in the 1960s to barely more than 10 percent today. For everyone not in the top 2 percent of the income distribution, the years from World War II until 1980 produced faster income growth than the decades since. Only for the very rich is the opposite true.
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What happened, and how might the best elements of that earlier culture be restored?
Journalist David Leonhardt’s ambitious first book, “Ours Was the Shining Future: The Story of the American Dream,” seeks to answer these vital questions. It’s a chronicle of almost a century of American economic life, rich with historical details and resonant narratives. It also makes a subtle but pointed argument about the present, offering a diagnosis of our current maladies and suggestions about the shape solutions could take.
His central contention is that the American left has largely abandoned fighting for basic economic improvement for the working class. Some of the defining progressive triumphs of the 20th century, from labor victories by unions under Franklin Roosevelt to the Great Society programs of Lyndon B. Johnson, required vast popular mobilizations to succeed. Leonhardt, a writer for the New York Times, champions a progressivism that is “more inclusive of people who are not white-collar professionals.” Borrowing a useful phrase from the economist Thomas Piketty, he argues that the “Brahmin left” must stop demonizing working-class people who do not share its views on cultural issues such as abortion, immigration, affirmative action and patriotism. A less self-righteous and more tolerant left could build what successfully increased access to the American Dream in the past: a broad grass-roots movement focused on core economic issues such as strengthening unions, improving wages and working conditions, raising corporate taxes, and decreasing corporate concentration.
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Some of the most fascinating material in the book endorses a more nuanced interpretation of America’s political realignment in the 1960s. The standard view is that the Democrats, by opposing segregation, lost millions of racist White voters to the Republican Party. Leonhardt argues that this captures only part of the truth. Another significant factor was the failure of Democrats to address issues such as crime. Rates of murder, assault and robbery all surged between 1960 and 1980, but some liberal publications and politicians refused to take the issue seriously. The Nation even used quotation marks to parade its skepticism, as if the crime wave were simply a fabrication of the political right.
This was part of a broader shift. While progressives in the 1930s and 1940s had concentrated more on material issues such as wages, retirement and unions, by the 1960s influential sections of the left began to focus “more on the psychic concerns of people fortunate enough to take material comfort for granted.” By 1970, political analysts Ben Wattenberg and Richard Scammon were arguing in “The Real Majority” that Democrats mistakenly believed that the typical voter was a 24-year-old political science instructor at Yale University. President Richard Nixon encouraged his aides to read their book.
Not all Democrats labored under this delusion. Robert Kennedy sought to create a working-class coalition across racial lines. A strong supporter of civil rights, he knew that some demagogues used the fear of crime to inflame racial tensions. He also understood that crime was a real issue, and for Democrats to ignore it would fatally undermine their credibility. Martin Luther King Jr. also recognized the value of broad, multiracial coalitions. Discussing the needs of Black Americans in 1961, he said, “Our needs are identical with labor’s needs: decent wages, fair working conditions, livable housing, old-age security, health and welfare measures, conditions in which families can grow, have education for their children and respect in the community.” Leonhardt’s delineation of this historical template for a genuinely inclusive progressive movement is a valuable contribution with striking contemporary relevance.
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His examination of the politics and economics of immigration is also fascinating. He traces the often forgotten history of progressives who opposed unrestricted immigration because it increases the supply of labor, thus lowering wages. From labor leader Samuel Gompers to civil rights leaders Booker T. Washington, Frederick Douglass, A. Philip Randolph and Rep. Barbara Jordan, an illustrious line of progressives has recognized that unlimited immigration can harm workers. Leonhardt makes a persuasive case that Democrats must move beyond an immigration policy that essentially maintains “more is better, and less is racist.”
Despite its overall strength, the book has some odd omissions and unexamined assumptions. Given Leonhardt’s support for what he calls “democratic capitalism,” it’s strange that he never explores the model of worker-owned cooperatives, which exist around the world and can be profoundly democratic, sharing both profits and decision-making power with workers at all levels in a business.
A deeper issue is the assumption that economic growth can somehow float free of ecological constraints. It sounds reasonable enough to identify the American Dream with the idea that each successive generation of Americans will earn more than their parents. But it’s quite unlikely that income and material consumption can rise indefinitely for future generations of Americans, and extending this same standard across the globe quickly collides with ecological reality. One recent study estimated that it would take five Earths to sustain the global human population if everyone had the consumption habits of Americans. Some people need and deserve to increase their material footprints; others should almost certainly do the opposite. Barring the discovery of truly miraculous sources of clean energy — and unlimited supplies of the minerals and materials used to manufacture the stuff we consume — an environmentally sustainable American Dream in this and future centuries may need to look quite different from the ways it has until now.
Nick Romeo teaches in the Graduate School of Journalism at the University of California at Berkeley. His new book, “The Alternative: How to Build a Just Economy,” will be published in January.
Ours Was the Shining Future
The Story of the American Dream
By David Leonhardt
Random House. 492 pp. $32
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