Pivotal Decade: How the United States Traded Factories for Finance in the Seventies [Hardcover]

Judith Stein (Author)

Book Description

Publication Date: May 25, 2010

In this fascinating new history, Judith Stein argues that in order to understand our current economic crisis we need to look back to the 1970s and the end of the age of the factory—the era of postwar liberalism, created by the New Deal, whose practices, high wages, and regulated capital produced both robust economic growth and greater income equality. When high oil prices and economic competition from Japan and Germany battered the American economy, new policies—both international and domestic—became necessary. But war was waged against inflation, rather than against unemployment, and the government promoted a balanced budget instead of growth. This, says Stein, marked the beginning of the age of finance and subsequent deregulation, free trade, low taxation, and weak unions that has fostered inequality and now the worst recession in sixty years.

Drawing on extensive archival research and covering the economic, intellectual, political, and labor history of the decade, Stein provides a wealth of information on the 1970s. She also shows that to restore prosperity today, America needs a new model: more factories and fewer financial houses. (20101021)

Editorial Reviews

Review

"A highly original illumination of how the American Century collapsed."—Rick Perlstein, The Nation  

(Rick Perlstein The Nation )

"[An] elegant, pinpoint dissection of the economic mistakes and far-reaching policy decisions of the seventies."—Oscar Villalon, Virginia Quarterly Review

(Oscar Villalon Virginia Quarterly Review )

"Here is one of those rare books in which a seasoned historian offers compelling analyses of urgent contemporary importance. Pivotal Decade will startle and provoke you.  It is on my not-miss list."—Sean Wilentz, Princeton University

(Sean Wilentz )

"In this probing, economically literate analysis, Judith Stein explains how and why the 1970s became the only 20th century decade other than that of the Great Depression during which Americans ended up poorer than they began. By explaining how we got to an economy that subordinates the manufacture of stuff to one that trades, finances, and consumes it, Stein provides the fullest story of the way economic stagnation prepared the way for a new era of social inequality. Citizens of Obama''s America should take note."—Nelson Lichtenstein, author of The Retail Revolution: How Wal-mart Created a Brave New World of Business

(Nelson Lichtenstein )

"Americans perplexed by the use of defective Chinese steel to rebuild the iconic San Francisco Bay Bridge will find an explanation for their puzzlement in Judith Stein''s Pivotal Decade: How the United States Traded  Factories for Finance in the Seventies. Bringing together political and economic history in the context of American foreign policy, Stein shows how Americans allowed the allure of paper profits to undermine our economic underpinnings."—Fred Siegel, The Cooper Union for Science and Art

(Fred Siegel )

"Judith Stein gets it. Pivotal Decade''s illustration and examination of the last forty years of failed economic policy will be a powerful text for our generation as well as for the future. We must learn these lessons once and for all—before it''s too late."—Leo W. Gerard, president, United Steelworkers

(Leo W. Gerard )

“An extraordinary achievement.”—The Journal of American History
(The Journal of American History )

“Pivotal Decade is an important explanation of how liberal became a dirty word and how conservative views came to dominate American political life for so long.”—Eric Foner, TheBrowser.com

(Eric Foner TheBrowser.com )

“Stein succeeds not only in making the 1970s much more interesting to read about, but in revealing the decade as the great historical pivot from postwar American boom to bust.”—David Chappell, Journal of the Historical Society

(David Chappell Journal of the Historical Society )

“Stein''s book is full of fine-grained arguments about economics, labor, and history.”—Josh Rothman, The Boston Globe

(Boston Globe )

“This book should be required reading for anyone seeking to understand how the economic restructuring of the 1970s led to our current age of inequality. It is a masterful study of the history of capitalism that is driven not by ideology but by a clearheaded interpretation of historical events and patterns.”—Shane Hamilton, Industrial and Labor Relations Review

(Shane Hamilton Industrial and Labor Relations Review )

About the Author

Judith Stein is professor of history at the City College and Graduate Center of the City University of New York. She is the author of The World of Marcus Garvey and Running Steel, Running America.

Product Details

• Hardcover: 384 pages
• Publisher: Yale University Press (May 25, 2010)
• Language: English
• ISBN-10: 030011818X
• ISBN-13: 978-0300118186
• Product Dimensions: 9.3 x 6.2 x 1.2 inches
• Shipping Weight: 1.5 pounds
• Average Customer Review: 4.1 out of 5 stars  See all reviews (7 customer reviews)
• Amazon Best Sellers Rank: #800,126 in Books (See Top 100 in Books)

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16 of 16 people found the following review helpful:

4.0 out of 5 stars If only the US had an industrial policy!, January 24, 2011

By 

Jonathan Zasloff - See all my reviews
(REAL NAME)   

This review is from: Pivotal Decade: How the United States Traded Factories for Finance in the Seventies (Hardcover)

Pivotal Decade is a well-written history of American political economy in the 1970's, with a policy agenda just below the surface. If you thought that the 1970's were about the end of Vietnam, Watergate, bell bottoms, disco, and Iran, then this book will try to disabuse you of those notions, and go a long way toward doing so. The problem is that it doesn't really make the sale. It leaves us with more questions than answers, which is fine -- even preferable -- for a work of history, but frustrating for a policy piece.

Stein argues that the 1970's represented a time of US deindustrialization, and that federal policy failures were a principal cause of this trend. Instead of aggressively fighting for domestic manufacturing, both Republican and Democratic administrations chose to placate Japan and European allies on Cold War grounds: keeping them prosperous would strengthen the western alliance. And instead of intervening "microeconomically" to assist key sectors like autos and steel, economic policymakers, focusing on Keynesian fine-tuning, denied that there was a problem altogether and insisted that the federal government's only job was to stimulate and maintain aggregate demand.

Jimmy Carter comes in for particular abuse, although he is seen as part of a long-term trend within the Democratic party, namely, the dominance of "new politics" liberals uninterested in bread-and-butter economic issues like wages and living standards, and focused only on foreign policy, cultural issues, and the environment. These "new politics" forces developed when the critique of America's "affluent society" was at its apex; by the mid- to late 1970's, when these issues had been eclipsed by the flatlining of the US economy, they had no ideas to solve the problem. The picture of Carter is a continual ditherer, unable to decide on a coherent policy, and if anything too focused on inflation.

The book is particularly valuable for its discussion of economic policy debates in the 1970's, and its focus on the state of American workers and the labor movement. Stein is persuasive in contending that these issues, not the better-known ones of Vietnam, Watergate, and cultural transformation, were at the heart of American politics. Unlike many academic historians, Stein can write well, and by taking us into the policy debates in the Nixon, Ford, and Carter administrations, she shows us a side of US history that has unfairly been neglected for too long.

The biggest problem with Pivotal Decade is that, at least for me, it really doesn't prove its case that had US policy been different, outcomes would have been different. Stein never tires of decrying the refusal of US administrations to set "industrial policy" and intervene in the "microeconomy." She holds up Japan's Ministry of International Trade and Industry (MITI) as an example of the kind of approach the US should have taken. But it is anything but clear that MITI was a success, and the collapse of the Japanese economy in the 1990's -- elsewhere a boom decade -- casts doubts on the assertion that industrial policy would have been anything but the kind of corrupt dealing that Japan was revealed to have had. Similarly, she argues that American should have been tougher on trade and block European auto and steel imports. But would that really have made a difference? Her suggestions that the oil price shocks of the 1970's meant that Detroit needed time to adjust are plausible; but the fact remains that Detroit had three decades to put together stronger firms, and didn't do so. In any event, would government have been better able to direct private investment than the market? Perhaps, but she needs to make her case more directly.

And she had the space to do so. The last chapter -- the longest in the book -- is very fittingly called "The Age of Inequality." It runs us through the Reagan Administration to Obama's auto and finance policies. But it wasn't really necessary: this is a book about the 1970's, supposedly. Stein could have better used this space to make the case that had trade and industrial policies been different, America would have moved in a different direction. She marshals a lot of episodic and anecdotal evidence for this case, but really needs more, in my view. And she is a good enough writer to have taken us through these sometimes abstruse and needlessly technical economic debates without putting us to sleep.

An excellent book, but it could have been even better.

8 of 9 people found the following review helpful:

5.0 out of 5 stars Outstanding coverage of 70s political and economic history, October 24, 2010

By 

riviera123 (Chicago IL) - See all my reviews

This review is from: Pivotal Decade: How the United States Traded Factories for Finance in the Seventies (Hardcover)

Very detailed coverage of US economic policy-making in the 70's, with an emphasis on international trade and macroeconomics. A very well-researched, original work of history, not a polemic, although the author clearly has a few points to make. One is that since WWII, the US has been far too willing to allow our allies to flout the rules of fair trade in order to gain their support for our political ambitions. Another is that we've never developed effective strategies to target our corporate investments on the areas that will best improve overall productivity and help us to develop and retain high-value-added manufacturing jobs. At any rate, it's one of the best books on US political economy and trade that I've read. Also has good coverage of the presidential campaigns from an economic perspective.

4 of 5 people found the following review helpful:

3.0 out of 5 stars Well researched gem of information but poorly written, June 5, 2011

By 

Adam Holland - See all my reviews

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This review is from: Pivotal Decade: How the United States Traded Factories for Finance in the Seventies (Hardcover)

I love the concept behind this book and I love the wealth of research that went into this book but I just feel that it is poorly written. I could only recommend this book to people who have a strong desire to understand U.S. economic policy during the 1970's. I almost feel that the title is a bit misleading as I think the book severely lacks analysis of the actions of the financial industry in the 70's. This book is about U.S. political and economic policy which gave rise to the finance industry but doesn't go into much detail about the financial industry during the decade. Additionally, there is no cohesive theme that allows the author to tie each chapter together. The book is written in a 'here's some information, here's some more information, then this happened, okay now let's move on to some more information' style. I feel this book would have greatly benefitted by a couple paragraphs at the end of each chapter to tie together the information presented in the chapter to the title of the book. Once again, if you have a strong desire to learn about the topic, please read this book but understand that it's not an easy/fun/flowing read.