Special Providence_ American Foreign Policy and How It Changed World - Walter Russell Mead

TheRiseandRetreatoftheNewWorldOrder 273

noted,andthestorybehinditis relativelystraightforward.Fromthe
NewDealthroughthe1960s,themanufacturingeconomyhadprovided
stableemploymentandrisinglivingstandardsformillionsofAmeri-
canblue-collarworkers. Whenrealweeklywagespeakedin1973, 20
millionAmericans,or 26 percent^5 ofthecivilianlaborforce,heldmanu-
facturingjobs.Withlittlemeaningfuleconomiccompetitionfromover-
seas, oligopolisticAmericanfirms enjoyed stable incomeand shared
rentsandproductivitygainswiththeirworkers,whooftenorganized
intopowerfulunions.
TomanyAmericansthiswasthebesteconomicsystemseeninthe
historyoftheworld.Itcombinedsecurity,affluence,andopportunityto
an unprecedented degree. Blue-collarworkers enjoyedsteadilyrising
standardsofliving,couldbuytheirownhousesandcars,andhadlittle
fear ofunemployment.Theirchildren,shouldtheyshowthetalentor
inclination,hadeveryopportunityforcollegeanduniversityeducation
andfindinga placeintheprofessionalworld.
This system could not endure. The.Pax Americana gave other
countries-initiallyGermanyandJapan,laterthedevelopingworld-
thepeaceandordertheyneededtorecoverand/ortodevelop.Detroit's
automobilecompaniesanditsunionizedworkforcefacedcompetition
fromefficientinternationalrivals.Atthelowendoftheskillsmarket,
the textilecompanies that hadearlier migratedfrom NewEngland
toDixiecontinuedtheirmigration-toTaiwan,Korea,andultimately
Vietnam,Bangladesh,andtherestofthePacificRim.Inattemptingto
respondtothisnewcompetition,Americancompaniescouldeithertrans-
ferproductionabroadorautomateathome;neithercoursedidmuchfor
thewagesorjobsecurityoflowandsemi-skilledworkers.
Asthemarketsforgoodsbecamemoretumultuousandcompetitive,
financial markets also lost their postwarcalm. Internationalcapital
movements, almostfrozenfromthedepressionuntiltheEuropeanrecov-
eryofthe1950S,pickeduponceagain.TheEurodollarmarketcreated
anoffshorepooloffundsexemptfromthecarefulregulatorystructures
thathadtamednationalcapitalmarketsfollowingtheupheavalsofthe
depressionandWorldWarII.Crisisproneanddestabilizingasthese
marketswere, corporationsstrugglingtoadapttonewlycompetitive
goodsmarkets(andtothedestabilizinginflationaryandcurrencyshocks
ofthepost-BrettonWoodsperiod)neededalltheflexibilitytheycould
get.
Duringthisperiodtheapparentinterestsofmajorcorporationsand