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Not My Father's Economy
My first foray into national journalism came in 1976, when Life magazine invited me to write a brief essay for a special edition about youth in America. Then a junior at the University of North Carolina, and still very much an adolescent, I took the opportunity to complain about my father:
When I first came to the university, my father sent me packets of articles from The Wall Street Journal and Fortune magazine that praised the virtues of free enterprise. Someone had told him that all college professors had socialist tendencies, and that many were outright Marxists, Maoists, or both.
I thought of that article in October of 1998, while flying home to Chattanooga, Tennessee, to attend my father's funeral. His fear for me in those days had been that I was part of a lost generation. We had missed the character-building hardships of the Great Depression, and as a result, we would never fully appreciate the value of the dollar and never understand the power of the market economy -- or, as the title of one free-market tribute he sent me called it, The Incredible Bread -- Making Machine. The nation and the world, he worried, were headed toward some sort of inevitable socialist decline. And the way would be led by his son, who preferred poetry to physics.
How surprised he must have been at the way things turned out. During the last year of his life, confined to his bed with cancer, he took comfort in tuning the television to CNBC and seeing me, with stock market quotes streaming across my chest, the Dow Jones average planted firmly on my shoulder, and the words The Wall Street Journal nestled just below my chin.
But he must have been even more surprised to see how the world changed in that last quarter-century of his life. There was no socialist decline, no creeping expansion of the welfare state. Instead, just the opposite happened. The incredible bread-making machine proved more pervasive, more powerful, more incredible than he or anyone else could have imagined back in 1976.
The triumph of capitalism is, by now, a well-known story. British prime minister Margaret Thatcher and President Ronald Reagan heralded in a revitalization of the market economies of the West, while Soviet prime ministers Mikhail Gorbachev and Boris Yeltsin signaled the end of communism. The dramatic collapse of the Berlin Wall allowed the triumphant doctrine to spill over into every corner of the globe, with only a handful of people out of its powerful reach. The global financial crisis of the late 1990s underscored the darker side of markets and prompted some ponderous reevaluations of the free-market faith, but produced no substitutes. Today, the entire world agrees with my father: capitalism, whatever its faults, beats the alternatives.
Less widely appreciated, however, is just how profoundly the American economy has changed in those same two decades. No barbed-wire-laced concrete walls needed to fall here, and no arrogant tyrants needed toppling. No hidebound central-planning bureaucracies were dismantled. Yet the changes here, while less heralded, were no less revolutionary; perhaps even more so.
Consider what life was like just one generation ago. Sure, if you wanted to buy breakfast cereal, the market gave you options. But in other ways, markets were limited, and choices restrained. On Lookout Mountain, where I grew up, our electricity was provided by one company, the Electric Power Board, and our phone service, like every other American's, came courtesy of Ma Bell. When we were sick, we went to the family doctor and we bought medicine from the neighborhood druggist. And if we were very sick, we went to the local hospital -- no choices necessary. Television options were limited to UHF and VHF; banks were open from nine to three.
Airline fares were fixed at levels far higher than even affluent folks like us could easily afford. So when we traveled, we took the car -- a station wagon purchased at Andy Trotter's Pontiac. When the car broke down, which it often did, my father turned red in the face and let loose a string of curses that would end with a threat to "take this car and drive it right into Andy Trotter's swimming pool." It never occurred to me to ask why he kept buying cars from the cursed Mr. Trotter. The answer was obvious: Mr. Trotter was the only Pontiac dealer in town, and General Motors made the only affordable station wagon.
It was a simpler time. Fewer choices meant less complexity, less confusion. Businesses were more likely to treat their workers like family. Wages weren't allowed to diverge too much, for fear of creating rivalry in the company. Employment was often for life. Things were stable, comfortable, and predictable.
But that world was a far cry from the picture of a competitive economy portrayed in The Incredible Bread-Making Machine, or in any economic textbook. And it was a far, far, far cry from where we are today.
Today, the basic market principles of competition and choice have swept into every aspect of American life. Consumers face a bewildering array of choices not just for cereal, but for air travel, phone service, medical care, even postal service. In parts of the country, home owners have begun choosing from a menu of companies for their electricity. Health care has undergone a radical market-driven transformation, and education is following not too far behind. If you want to buy a car today, you start by going on the Internet and shopping for the best price available at any dealership within a thousand miles. The same goes for countless other consumer products.
Companies that seemed like unshakable behemoths a generation ago now fight like scrappy entrepreneurs against foreign firms and ever-emerging domestic competitors. Vast fortunes are made, literally overnight. Workers have become free agents, shifting jobs frequently and feeling little loyalty to their employers, who show little loyalty in return.
The world has gotten smaller; competition has gotten more intense; choices have become more plentiful.