An Extraordinary Time: The End of the Postwar Book and the Return of the Ordinary Economy by Marc Levinson (review)

Marc Levinson has written an incredibly valuable, lively, and comprehensive economic history of how the global postwar boom stalled in the 1970s, never to return. While the book spans the 1940s to the 1980s, the bulk of it takes place in the 1970s, a crucial decade, in Levinson's view, that serves as the hinge upon which his entire argument turns. The title of the book encapsulates the overarching—yet in many ways ultimately frustrating—argument: Rather than try to really explain the end of the "Golden Age" of capitalism in the postwar years and the rise of a highly unequal and far less productive global economy that others (not Levinson) often refer to as "neoliberal," Levinson argues that the booming 1950s and 1960s were an extraordinary anomaly, while the era we live in today is simply a return to normalcy. "Scholars have spent the past fifty years struggling to understand what went wrong and how to set it right," Levinson summarizes in his Introduction, "but it may be that there is nothing to fix, that the long boom was a unique event that will never come again."

Such a fatalist approach makes for a somewhat contradictory book. On one hand, Levinson devotes a significant amount of time to various policy makers across the globe and their many attempts to the steer their respective economies back on track. Yet, on the other hand, Levinson's main point is that policy did not really matter, because, as he emphasizes time and again, nearly all the economies in the world witnessed a largely inexplicable downturn in productivity growth regardless of their political policies, ideological leanings, or social institutions.

While a growing literature in history, sociology, and even economics believes that the decline can mostly be explained by the political empowerment of a global pro-business financial elite that dismantled large swaths of the postwar welfare state while massively redistributing wealth upward to the "1 percent," Levinson sees this "right turn" as a consequence of dropping productivity rates and not the cause of economic decline. For example, in his opinion, the great tax cuts of the 1980s were less of a top-down power move by the well-to-do (the rich and powerful in general are mostly absent from this book) and more a result of the "productivity bust" that led voters to be less generous about their countries' welfare spending.

To make these points, Levinson leans heavily on the claim that "neither the tonic of free markets nor the strong hand of government seemed able to alter" the "new normal" of declining growth rates. I find this argument somewhat curious, because it can surely be said that nearly all the nations of the world after the early 1970s saw an abandonment of the very social-democratic policies that—Levinson agrees—had created the postwar boom to begin with. To be fair, Levinson does devote a fascinating chapter to François Mitterrand to show that there were some left-leaning attempts to jump-start the economy that also failed. But Mitterrand soon reversed course to liberalization, and even the book flap admits that "almost everywhere the pendulum swung to the right." Might this rightward swing, therefore, have caused the global postwar boom to end instead of vice versa?

Yet while the overall argument is a bit disappointing, I strongly recommend this book to anyone interested in our recent economic past—and present. With his sparkling prose, Levinson has a real knack for clarifying complicated economic policies and events—be it Third World import substitutions, bank capital reserves, American stagflation, energy deregulation, the OPEC oil shock, or Nixon's retreat from the gold standard and Bretton Woods. What is more, while many works claim to have a global scope, this book truly does. Not only does Levinson hop around the globe with ease...