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Comment by joshcrews | Hacker News Reader

My explanation of the 1947-1979 middle class bulge is the spoils of World War II for the United States. It gained brain power (smart immigrants), oversees market domination, and a premium on capital (other countries capital and people destroyed by war).

Those spoils paid high wages for the US middle class because it needed those workers for its factories and companies. After a few decades the advantages of the spoils of war evened out with other countries (catch ups in capital, education, strong legal systems) and technology for outsourcing and cheap shipping broke up the US middle classes prior monopoly on US factory/company jobs.

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I wish I could upvote this more. It constantly astounds me that people construct elaborate theories about the decay of morality amongst the elite of America when faced with such a powerful supply/demand argument. It's pretty simple really: the industrialized nations spent tremendous resources over a span of about 7 reducing each other to rubble. At the end of it, they wanted to rebuild, and the only country with industrial capacity remaining was the United States. Furthermore, the process of rebuilding was extremely labor-intensive, involving construction and manufacture of durable commercial and consumer goods in an environment with low automation. To top it all off, when the other nations were finally rebuilt and started to be competitive again, the size of the available labor pool simultaneously started to expand as women entered the workforce. The middle-class American dream was the result of a global labor market anomaly that lasted for several decades, which was long enough to convince everyone that it was the new normal, and the long decline since the late 70s was the result of that anomaly ending.

Indeed, it was U.S. policy to distribute the spoils of war. America created the Marshall Plan, the global trade, finance, and legal arrangements, and generally encouraged other countries to catch up.

It was a selfless policy, perhaps unique in world history.

The Marshall Plan was intended to counter Soviet influence in Europe so while it was a sensible policy to say that it was "selfless" is perhaps a bit inaccurate.

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