Author: b.salas1

In reading Judith Stein’s Pivotal Decade How the United States Traded Factories for Finance in the Seventies one of the very first aspects of her articulation that I noticed early on was her use of numbers. Stein bombards the reader with fascinating facts and statistics. While some historians occasionally utilize statistics to back up their argument to a fault, Stein does a great job in making sure that each fact she’s using correlates with what she is trying to argue. For example when Stein was prefacing her introduction of what the Great Compression was, in the very first paragraph of chapter 1 she says “By 1970, 63 percent of families owned their own homes, there was as many private cars as families, and only 10 percent were poor” (Stein, 1). Despite, in this case, Stein not arguing about a particular point, this quote is evidently exposing the tactic Stein will attempt to use to convince the reader from here on out.

Like mentioned before, Stein uses statistics that are very fascinating. The Great Compression was a period after World War II stretching all the way to the 1970s when the US economy was flourishing and when poor and middle class America were experiencing more economic growth than that of the rich. On page 1 Stein states “The income of the lower fifth increased 116 percent, while the top fifth grew 85 percent; the middle also gained more than the top” (Stein, 1). This is an amazing fact and one I believe will probably not be replicated any time soon. Usually when the economic state of a struggling nation begins to see exponential progress, the beneficiaries are always usually the upper class. This has been happening all around Latin America especially in recent history. In the late 20th century entering the 21st century, Latin American nations like Brazil, Mexico, and Caribbean Islands have been successful is becoming very rich nations after a period of owing massive foreign debt. While this is proven in the countries’ numbers as a whole, it does not tell the whole story. Despite these Latin American nations being well-off financially, the unemployment rates in those countries are rising, the poor people are becoming more poor and worse-off, and the upper-class are becoming filthy rich as they are the ones reaping all the rewards. I bring that up to say how amazing this time of the Great Compression must have been for the majority of the population of Americans. Its not common for such a “compression” of the wage gap between the rich and poor to occur and the statistic mentioned above perfectly embodies what this period in time was all about.

In additional thought that came to mind when reading Stein’s work was how the Great Compression laid the foundation to the benefits a lot of society today take advantage of. Those being, health insurance, paid vacations and holidays, and pensions. Like Stein says, these benefits became cemented as the “norms of working-class life,” (Stein, 2) and today are expected by most of us when joining the workforce. I believe it’s not an overstatement to say that the Great Compression was a critical reason for why workers today are enjoying these benefits. Why wouldn’t the government try to replicate what it did during the Great Compression if they saw how successful they were.

Richard White’s excerpt “Creative Destruction” brings up the various pros and cons of transcontinental railroads. To say the creation and rise of railroads in the United States brought with it many negatives is an extreme thing to utter, in hindsight. However, White does attempt to make the argument by mentioning how unnecessary a large agricultural expansion was needed. While the railroads did create extremely productive farmlands, it created as many, if not more, extremely unproductive and costly farmlands. These railroads also made farmers overproduce goods like cattle, wheat, and silver. The level of supply of these goods easily surpassed the world demand for the goods meaning a great loss of money, time, effort, and product for eager farmers and their farmland communities.

White also touches on how certain people with money, influence, and/or power were able to take advantage of these transcontinental railroads while the majority of the population had to wait a while to enjoy this movement. Entrepreneur Joseph Schumpeter famously said “creative destruction was its essence” when referring to capitalism. He believed that the harm and the damage capitalism was able to create was the reason why capitalism was so powerful. For someone like him to claim this makes complete sense. He reaped way more than he sowed because he had the goal of getting wealthy quick, now, and in a hurry. Schumpeter, however, did not keep that same energy when it came to the rest of society who weren’t apart of the elite. He often spoke about how it’ll take generations for communities to finally enjoy the fruits of their parent’s labor and Schumpeter was completely okay with that. In fact, he encouraged it.  The entrepreneur believed that society should let capitalistic damage, in this case the creation of railroads, run its course. Eventually with time the problems brought about from these creations would sort themselves out. This reminds me of the idea of Adam Smith’s Laissez Faire. This idea promoted minimal government intervention because of the belief that markets, if left alone, would solve their issues on their own over time. It is not surprising that Joseph Schumpeter openly agreed to all this. He had to actually. Reason being is because if his goal was to get rich quick, he needed a lot of people to suffer and not prosper so that he had the opportunity to thrive.

One surprising fact that I read in this excerpt was how underwhelming growth was in the West initially but then boomed almost immediately due to the railroads. One would think that with the implementation of a society-changing innovation like the railroad  would instantly produce prosperity. However, very quickly did the United States realize that the lands between the 98th and 100th meridian were very infertile, very dry, and overall not good enough land to cultivate goods. This being the case in the midwest and west, California was upset about how small their growth was occurring in the 1870s and 1880s. In fact, between the years 1880 and 1890, the Sacramento Valley “had lost 20 thousand of its natural increase in population”. However, very quickly would all this change. So in the 1870s there were only 2 million non-Indians settled west of the Missouri River. By 1900, that 2 million had multiplied 5-fold to a whopping 10.4 million. This fact fascinates. It’s crazy to think how quickly things could change seemingly just out of the blue.