Table Of ContentTHE CLIMAX OF CAPITALISM
Also available from Longman by Tom Kemp:
Historical Patterns of Industrialization (1978)
Industrialization in Nineteenth-Century Europe (second edition 1985)
Industrialization in the Non-Western World (second edition 1989)
The Climax of
The U S Economy
in the
Twentieth Century
Tom Kemp
Q Routledge
Taylor & Francis Croup
LONDON AND NEW YORK
First published 1990 by Pearson Education Limited
Published 2013 by Routledge
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ISBN 13: 978-0-582-49423-7 (pbk)
British Library Cataloguing in Publication Data
Kemp, lom
The climax of capitalism: the U.S. economy in the twentieth century.
1. United States. Capitalism
I. Title
330.1220973
Library of Congress Cataloging-in-Publication Data
Kemp, Tom.
The climax of capitalism: the US economy in the twentieth century
/Tom Kemp.
p. cm.
Includes bibliographical references.
ISBN 0-582-06616-6. — ISBN 0-582-4923-0 (pbk.)
1. United States — Economic conditions — 1945- 2. United States-
—Economic conditions—1918-1945. 3. United States—Economic policy.
4. Capitalism— United States—History—20th century. I. Title.
HC106.5.K415 1990
330.973' 09—dc20 89-13783
CIP
Set in Linotron 202 10/12 Bembo Roman
Contents
List of Tables viii
Preface ix
Chapter One: Setting the stage 1
Colonization and growth 4
The Civil War and its aftermath 8
The rise of corporate business 12
American industry before the First World War 16
Chapter Two: Trends in the 1920s 20
The United States: a world power 20
The prosperity decade 23
The working class and the labour movement 30
The organization of business 35
The industrial power house 45
Agriculture: the simmering crisis 51
The banking system: a weak link 59
Chapter Three: A decade of crisis, 1929-1939 64
The greatest depression 64
Hoover’s response 73
Roosevelt and the New Deal 75
The Depression: a summing up 89
Chapter Four: The economic impact of the Second
World War 93
The war machine 95
The labour movement 1939-1945 103
v
The Climax of Capitalism
The cost of the war 106
Demobilization and reconstruction 108
The war economy and the development of
American capitalism 117
Chapter Five: The post-war economy: the 1950s boom 115
The role of the state after 1945 118
The Bretton Woods system 119
The Cold War 121
Prosperity returns 124
Anti-union backlash 125
The new American dream 127
Military spending 135
Chapter Six: Affluence and the Vietnam War: the 1960s 137
The Kennedy-Johnson boom 137
Inflation and its repercussions 141
Financing the war in Vietnam 143
The failure of the ‘new economics’ 146
Appendix: the US balance of payments 147
Chapter Seven: Structural changes in American capitalism
since 1945 149
Corporate strategy 151
‘The affluent society’ 154
The regulated market economy 158
Towards a welfare state? 160
The military-industrial complex 162
Agriculture: the regulation of market forces 166
Appendix: Federal Economic Regulatory Statutes,
1887-1976 173
Chapter Eight: The troubled economy: the 1970s
and beyond 177
Enter Richard Nixon 180
Oil and inflation 185
The role of the ‘Fed’ 188
A new phase of capitalism? 189
Foreign competition 199
‘Post-industrial’ society 200
VI
Contents
Chapter Nine: The Reagan Era: the 1980s 204
The paradoxes of Reaganism 205
The theoretical basis of Reaganomics 207
The new landscape of the 1980s economy 211
Domestic policy in the Reagan era 219
Epilogue: Into the 21st Century: an end to
American hegemony? 227
Select Bibliography 234
Index 240
List of Tables
1.1: US economic growth: the Civil War to the 1920s 9
1.2: Growth of American heavy industry, 1870-1920:
(a) output of bituminous coal and steel 10
(b) comparative output of the two leading European
economies in 1913 10
1.3: Manufacturing output per man hour 17
2.1: (a) Growth in the 1920s 24
(b) Index of industrial production 24
3.1: The economic impact of the Great Depression 72
3.2: Index of manufacturing production, 1929-1940 87
3.3: Unemployment, 1934—1940 88
3.4: Fall of corporate profits during the Depression
4.1: The labour market in wartime 94
6.1: US Balance of Payments, 1960-1983 148
7.1: Unemployment in the United States, 1950-1986 155
7.2: Income distribution in the United States 157
7.3: Cost of social welfare, 1950-1980 161
7.4: Federal Economic Regulatory Statutes, 1887-1976 173
9.1: Outlay on national defence, 1980-1987 222
9.2: The US Economy - The Reagan Record, 1980-1988 226
Fig 7.1 Federal Budget outlays for National Defence: 1970-1983 165
Preface
We are reminded every day of the way in which developments in
the United States and its role as a superpower in a troubled world
affect our lives. Day and night American bombers based in Britain are
ready to deliver a deadly nuclear cargo on Eastern Europe or the Soviet
Union. The military and strategic power of the American colossus is
a tangible thing to people throughout the world. But the influence of
America is not only visible in its military form. Throughout the world,
television viewers are served a daily diet of American programmes. In
the supermarkets of Frankfurt, Tokyo or South Africa it is difficult to
shop without buying American brands of cereals, soaps and canned
foods. What street or town in the ‘civilized’ world does not have
its McDonalds, Dunking Do’nuts or Kentucky Fried Chicken, or an
indigenous imitation? Lifestyles, consumer tastes and ways of thought
are moulded more than we realize by the American model. While there
is much talk of American ‘decline’, the Americanization of the world
continues its irresistible march even into the society of the Cold War
adversary.
The upsurge of American power in the twentieth century coincided
with the decline of Europe, speeded as it was by two internecine wars.
American military intervention in these wars tipped the scale, making
the United States first a world power and then, after 1945, a (or
perhaps the only) superpower, economic, political and military, with
an incredible nuclear weapon stockpile as well as massive conventional
naval and land weaponry. Economic strength was demonstrated in
the First, and even more in the Second, World War, especially in
the weight and variety of military equipment. ‘Quel materiel!’ was
the general comment as the liberating armies marched into Europe
in 1945.
IX
