Corporate Dreams: Big Business in American Democracy from the Great Depression to the Great Recession

Chapter 1 - The Corporate American Dream

Chapter 1 The Corporate American Dream Corporate capital and factory grit gave rise to the American Dream. At its 1950s zenith, the dream included suburban bungalows, stay-at-home moms, and a middle-class life for the common man. But the squeaky cleanness stopped at the workplace door. Grimy hands were the reality behind the reverie. Manufacturing jobs and heavy industry were the heart of America’s mid-twentieth-century prosperity. Giant corporations invested huge sums in plant and equipment, supporting mass production, economies of scale, and low unit costs. Despite the business corporation’s central role in the American Dream, the intellectual and social history of the corporation gets little attention. Now we seem to be waking into a dreary new day. It is time to clear our heads and recognize that corporations made the shimmer solid. Not of their own free will did corporations create the American Dream. Rather, they shared their wealth at the behest of labor unions and government. The mass manufacturers who dominated the mid-twentiethcentury economy needed tens and sometimes even hundreds of thousands of people to run their factories. Ponderously bureaucratic and slow to change, the mass producers made good targets for government regulation and for the labor unions those regulations often supported. By the 1950s some corporate managers saw labor unions as a positive force, others as a bad bargain. Either way, the American Dream rested on a symbiotic relation between mass producers and organized labor. Unions extracted the high wages that in turn enabled Americans to consume the factories’ output. With organized labor delivering middle-class incomes, workers gladly supported the labor movement. Thirty percent of the American workforce was unionized in the 1950s. The largest share worked in mass production. But tradesmen and journeymen—carpenters, plumbers, electricians, and others—also 9 benefited from union organization. The union umbrella shielded unorganized workers as well. Non-union employers had to pay good wages to compete with unionized shops for quality labor. Some anti-union companies paid well in order to fend off unionization. High pay for working people made the United States the world’s first middle-class society. America was a gigantic diamond, wider in the middle than at the top or bottom. All previous societies, at least all large ones, were pyramids with a small upper class at the apex and a vast lower class at the base. Between the apex and base of previous societies fell the traditional middle-class occupations of law, medicine, education, small business, corporate management, government administration, and religious ministry. But in 1950s America, factory workers could earn incomes equal to some of those traditional middle-class occupations. For the first time in history, there was a society where people earning middle-class incomes outnumbered those at the bottom. Not just middle-class wages for working people but a measure of control over high incomes was part of the 1950s recipe for prosperity. The financial sector, corporate management, lawyers, doctors, and other top-tier earners did not claim nearly as large a portion of the national income as they did half a century later. High earners also faced steeply progressive tax rates left over from World War II, further curbing moneyed pretense. With income distributed more evenly then than now, working Americans had the purchasing power to consume the country’s industrial output. Banks were well regulated, government deficits within reason, inflation and interest rates relatively low. Easy credit did not fuel inordinate speculation but kept the wheels of industry turning. Many corporate jobs carried good benefits. During World War II, the government had ordered wage freezes to fight inflation. Employers therefore competed for workers through non-wage benefits such as health insurance, a corporate perk that surged after the war. In the 1950s, as now, employers matched their employees’ taxes for Social Security, a system that had been established during the Great Depression of the 1930s. In 1961, Congress added Medicare to the Social Security program , providing health insurance for seniors. Less and less did Americans suffer nightmares of poverty from illness and old age. Midcentury Americans also slept well in the knowledge that their children’s futures were secure. After high school and then military C o r p o r a t e A m e r i c a n D r e a m a t I t s H e i g h t 10 service for...