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The Politics of Economic Growth

in Postwar America

ROBERT M. COLLINS

1

2000

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Oxford New York

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Copyright © 2000

by Robert M.

Collins

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Library of Congress Cataloging–in–Publication Data

Collins, Robert M.

More : the politics of economic growth in postwar America / Robert M. Collins.

p. cm.

Includes bibliographical references and index.

ISBN 0–19–504646–3

1. Wealth—United States—History—20th century. 2. United States—Economic policy.

3. United States—Economic conditions—1945–. 4. Liberalism—United States—

History—20th Century. 5. National characteristics, American. I. Title.

HC110.W4C65 2000

338.973—dc21 99–022524

For My Parents

Contents

Preface ix

Acknowledgments xiii

Prologue: The Ambiguity of New Deal Economics 1

1 > The Emergence of Economic Growthmanship 17

2 > The Ascendancy of Growth Liberalism 40

3 > Growth Liberalism Comes a Cropper, 1968 68

4 > Richard Nixon’s Whig Growthmanship 98

5 > The Retreat from Growth in the 1970s 132

6 > The Reagan Revolution and Antistatist Growthmanship 166

7 > Slow Drilling in Hard Boards 214

Conclusion 233

Notes 241

Index 285

Abit of personal serendipity nearly three decades ago inspired this

book. In 1971 I visited Washington, D.C., and happened upon an arti￾fact of the American Century that has stayed in my mind ever since. It was

the so-called GNP clock, and the story behind it fascinated me.

The GNP clock was an appropriately outsized toteboard full of lights

and numbers that the Department of Commerce had constructed to keep

track of the nation’s economic growth. The aim was to record and publicize

the point at which the U.S. economy achieved a rate of growth that would,

if continued for one year, yield a $1 trillion gross national product.1 At the

appropriate moment, all the bells and whistles of the Nixon administra￾tion’s public relations machinery would announce to the world yet another

milestone in the progress of the world’s richest economy.

By prearrangement, the numbers on the board were to flash the $1 tril￾lion figure at noon on a winter’s day late in 1970, at which time President

Richard Nixon would usher in the economic millennium with a few cele￾bratory remarks. Alas, the president’s arrival was delayed. Mild panic set in

as technicians scrambled madly to turn the machine back. But the board

seemed to take on a life of its own, and despite their best efforts it flashed

the $1 trillion figure at 12:02. By the time Nixon finally arrived at 12:07, $2.3

million more had been added as the machine began calculating the GNP at

a wildly accelerating rate.2 Some Americans, less enamored of economic

growth than the Republican president, saw this victory of machine over

man and of matter over mind as ominously symbolic.

In outline, the story of the GNP clock seemed to feed all of my prejudices.

At the time, I felt a left liberal’s powerful antipathy toward Nixon, whom I

and my friends called the Trickster even before Watergate; and reflecting my

graduate student penury and the influence of counterculture values on

Preface

even an aspiring middle-class professional, I embraced a weak but excep￾tionally smug antimaterialism that held in contempt not my own quite

strong desire for acquisition but rather my culture’s somewhat more

abstract (but still indisputably real) and surely less refined materialism. All in

all, the GNP clock story struck me at the time as an apt metaphor for eco￾nomic growth, materialism, and technology all run amok.

It was only years later, when I read the full text of Richard Nixon’s

remarks on that occasion, that I came to suspect that perhaps the GNP clock

episode expressed something more complicated—and more interesting—

than the rather arch morality play I had first envisioned. In the land where,

John Kenneth Galbraith had sworn just a decade earlier, the cult of produc￾tion held absolute sway, Nixon’s remarks sounded a strangely defensive note:

“I think that rather than apologizing for our great, strong, private enterprise

economy, we should recognize that we are very fortunate to have it.” “Don’t

look at it,” he urged, “simply in terms of a great group of selfish people,

money grubbing.” The real significance of the trillion-dollar achievement, he

stressed, was not production for its own sake but rather what an economy of

that size and strength made possible. Plans for improving the income, health,

education, and housing of America’s poor and middle classes were fanciful

unless backed by such productive capacity: “Unless we produce the wealth, all

of those great dreams, those idealistic plans for doing things for people, aren’t

going to mean anything at all.” Nixon stood for growth, defiantly but not

mindlessly. Here, at what had appeared at first blush to be little more than a

civic celebration of Mammon, Nixon gave thanks that “as a result of our

moving forward on the economic side . . . we can now turn more to the qual￾ity of life and not just to its quantity.”3 Reading Nixon’s speech after the fact, it

occurred to me that perhaps America’s embrace of economic growth had

been more complex, more nuanced, more ambiguous, and perhaps even

more ambivalent, than either contemporaries or historians have generally

recognized. The chapters that follow explore that possibility.

This book, then, is about how the pursuit of economic growth came to

become a central and defining feature of U.S. public policy in the half-cen￾tury after the end of World War II. Commentators in the 1950s coined the

term “growthmanship” to describe the seemingly single-minded pursuit of

exuberant economic growth that was then appearing to dominate the polit￾ical agenda and the public dialogue throughout the Western industrialized

world, nowhere more dramatically than in that bastion of materialistic

excess, the United States. I examine the origins of the postwar embrace of

growth and trace how that initial growthmanship evolved over time.

x > Preface

Over the last half of the twentieth century, American political leaders,

policymakers, and intellectuals created a succession of growth regimes, all

of which emphasized growth both as an end in itself and, more important,

as a vehicle for achieving a striking variety of other, ideological goals as

well. In one regard, I follow the lead of many observers in seeing the pursuit

of growth as a time-honored way of avoiding hard questions and evading

tough decisions about the distribution of wealth and power in America. At

the same time, however, I depart from the view that Americans in the post￾war era “substituted economic performance for political ideology.”4 Rather,

I contend that growth did not suspend or supersede ideological conflict so

much as embody and express it. The political economy of growth became

an important arena for ideological expression and conflict in the postwar

era; throughout, ideology shaped conceptions of growth, while, at the

same time, growth itself influenced ideology. As a result of this interpene￾tration, economic growth over time emerged as a much more complex and

heavily freighted phenomenon than the rhetoric of many of its champions

and most of its detractors allowed. It is my intention to make that complex￾ity both more discernible and more comprehensible.

Of course, I do not mean to suggest that it was only in the postwar era

that growth came to be recognized or valued. Economists since Adam

Smith have long recognized the importance of growth for a rising standard

of living; Smith himself wrote in 1776 that “it is not the actual greatness of

national wealth, but its continued increase, which occasions a rise in the

wages of labor.”5 From the time of Alexander Hamilton’s Report on Manu￾factures in 1791 and its gradual implementation in the early nineteenth cen￾tury, the federal government used land and trade policies to encourage

national development. Similarly, fears about the end of growth or about

limits to growth, usually expressed as anxiety regarding the disappearance

of the frontier, became a staple of American discourse as early as the 1880s.6

What made the postwar pursuit of growth distinctively modern was the

availability of new state powers and means of macroeconomic management

dedicated to achieving growth that was more exuberant, more continuous

and constant, more aggregately quantifiable, and also more precisely mea￾sured than ever before. Perhaps we can best appreciate what made postwar

growthmanship distinctive by looking at the context from which it emerged,

for it was the ambivalence of New Deal economic policy that made the sub￾sequent emergence of growthmanship seem like a striking departure.

Preface > xi

Writing is a solitary exercise, but completing a book is a collective

achievement. This book has been a long time in coming, and my

indebtedness to others has grown accordingly over the years. Many friends

and colleagues read portions of the work in progress, and Colin Gordon

and Michael Hogan read the penultimate draft in its entirety. I have bene￾fited from their helpful criticism, even if I did not always follow their sug￾gestions. The Hagley Center for the History of Business, Technology, and

Society, the National Endowment for the Humanities, the Lyndon B. John￾son Foundation, and the University of Missouri Research Council all pro￾vided welcome financial support. The staffs of the superb presidential

libraries and archival repositories mentioned in the notes, as well as that of

the University of Missouri libraries, helped with an unobtrusive profession￾alism we researchers sometimes take for granted. Oxford University Press

was patient in dealing with me and expeditious in dealing with my work, a

combination I have come to appreciate greatly. Finally, Betsy Rives Collins

contributed to the project in countless ways large and small. My heartfelt

thanks to all.

Acknowledgments