This book review originally appeared in Democracy: A Journal of Ideas, and is reprinted with permission.
As the twenty-first-century American middle class gets squeezed, with little relief in sight, liberals are wistfully remembering something about the postwar era that they had energetically forgotten. That age of suburban conformity and institutionalized sexism and racism was also a time when big business believed in government and worried about the common good, and was willing to pay for both.
Reminding us of that era, and documenting the engagement between the corporate class and the state during the 1940s, ’50s, and ’60s, is the most valuable contribution of The Fracturing of the American Corporate Elite by Mark Mizruchi. The University of Michigan business school professor, who has written three previous books about the practices and culture of the American corporation, offers a compelling history of how the American corporate elite reconciled itself to the New Deal, and then, in the aftermath of World War II, signed on to a vision of America in which government played a muscular and essential role in steering the economy and underwriting the well-being of the middle class.
The business heroes in this narrative are the leaders of the “moderate, pragmatic corporate elite [that] had emerged, based primarily in the largest American corporations” by the end of World War II. This elite and its views were “epitomized” by the organization whose history forms the backbone of Mizruchi’s narrative, the Committee for Economic Development (CED). Formally incorporated in 1942, the CED brought together engaged, moderate businessmen from across the country and advanced their views in the major national debates of the subsequent decades. They were an illustrious group: As of July 1945, the CED’s trustees included a senior partner at Goldman Sachs, the chairman of Coca-Cola, the president of General Electric, and the presidents of the Federal Reserve Banks of Boston and St. Louis.
The CED, in Mizruchi’s telling, thought the days of untrammeled free-market capitalism were gone, and that both private and government-led economic management would be necessary for a market economy to survive. In order to maintain the system from which their privileges derived, they believed it would be necessary to attend to the welfare of the broader population. This meant supporting a high level of employment, the alleviation of poverty, the amelioration of racial disadvantage, and the provision of sufficient purchasing power in the population to consume the goods that American business was so proficient at producing.