The Upswing: How America Came Together a Century Ago and How We Can Do It Again

by Robert D. Putnam

Above all, he noted a fierce commitment to personal liberty among the descendants of rugged pioneers who had fought so hard for it. But he also observed the coming together of people for mutual purposes, in both the public and private spheres, and found that a multiplicity of associations formed a kind of check on unbridled individualism.

In each of the next four chapters of this book we will consider a single core trend: economics, politics, society, and culture, and reflect upon how its unfolding has contributed to our nation’s upswing toward a “we” ethos and subsequent downturn toward an “I” ethos.

four basic analytical lenses—economics, politics, society, and culture. Two additional analytical perspectives that we will apply to this time period, devoting a separate chapter to each, are race and gender.

will therefore argue that the rights revolutions of the 1960s and 1970s must be seen not as a bolt from the blue, but rather as the culmination of more than four decades of progress.

Furthermore, our examination of race in twentieth-century America will show that the decades after 1970—the period Americans often believe brought about the greatest gains in racial equality—actually represented a marked slowdown of progress for black Americans.

And yet, despite the real and often underemphasized progress African Americans and women were making early in the century, our analysis also reveals the undeniable ways in which the mid-century “we” was nonetheless highly racialized and gendered, and just how far short of the goal we were, even at a time when America’s comity and cohesion were at an unprecedented high. It is thus critical to avoid nostalgia about the 1950s as some sort of “golden age”

Indeed, we will see clear evidence of the fact that America’s failure to create a fully inclusive, fully egalitarian “we” over the first two thirds of the century played a critical role in the nation’s larger turn toward “I.”

The American Psychological Association reports that “the future of our nation” is a bigger source of stress among average Americans than even their own finances or work.8

Rebecca Edwards, a historian of the Gilded Age, observed that “the lessons one draws from a period of history depend to a large degree on one’s choice of beginning and ending points.”10

As represented in the subtitle of this book, our thesis is not that we should return nostalgically to some peak of American greatness, but that we should take inspiration and perhaps instruction from a period of despair much like our own, on the heels of which Americans successfully—and measurably—bent history in a more promising direction.

Rather than citing some recent event or offering a narrative of long-run decline, we will argue that the state of America today must be understood by first acknowledging that within living memory, each of the adverse trends we now see was going in the opposite direction.

The story of the American experiment in the twentieth century is one of a long upswing toward increasing solidarity, followed by a steep downturn into increasing individualism. From “I” to “we,” and back again to “I.”

As Tocqueville rightly noted, in order for the American experiment to succeed, personal liberty must be fiercely protected, but also carefully balanced with a commitment to the common good.

Perhaps the single most important lesson we can hope to gain from this analysis is that in the past America has experienced a storm of unbridled individualism in our culture, our communities, our politics, and our economics, and it produced then, as it has today, a national situation that few Americans found appealing. But we successfully weathered that storm once, and we can do it again.

and we must begin by acknowledging the long-run aggregate improvements. As measured by the luxuries—and even the length—of our lives,

But we shall shortly offer abundant evidence that long-term gains conceal sharp inequalities in the distribution of income, wealth, and well-being among Americans.

Since 1900, Americans have become, on average, healthier, wealthier, and if not wiser, then at least more educated, although as we shall see, the education story is somewhat more complicated.

accepted that almost no one disputes it. More recently, the growth rate seems to have slowed significantly after 1970, falling below the long-term rate of 2 percent a year, perhaps because technological innovation is no longer leading to steady growth in productivity.

short, decade by decade for more than a century American homes have become larger, more comfortable, and easier to maintain. Of course, not all Americans live in equally luxurious homes, and we shall turn our attention to inequality in the next section of this chapter,

The bottom line for long-run trends in the material conditions of the average American can be neatly summed up in a slightly edited mid-century advertising slogan from DuPont—“better things for better living—through technology.”

In the last few years, however, that line not only stopped ascending, but began to descend.10 This unfortunate change can be largely attributed to sharp rises in fatalities due to drugs, alcohol, or suicide—more commonly known as “deaths of despair.”

Nonetheless, the overall case for long-term American optimists seems strong. We might term this perspective on the twentieth and early twenty-first centuries “the view from Silicon Valley or MIT.”

Building on that sturdy foundation, during the twentieth century two major educational revolutions in America led first to nearly universal high school education and then to widespread college education.

The high school revolution was fostered by the “high school movement” in the early 1900s and was marked by the creation of free public high schools, beginning in small towns of the West and Midwest, then spreading to urban areas across the North, and finally throughout the entire country.

For all these reasons, several independent studies suggest that roughly one quarter of the post-1970s decline in income equality could be explained by the fall in unionization.93 Unions are another important example, like the high school movement, of a “we” social innovation from the early 1900s whose development over the ensuing six decades contributed to the Great Convergence and whose decline after mid-century contributed to the ensuing Great Divergence.

Prominent among these policy innovations were (1) progressive taxation of personal and corporate income and estates, (2) regulation of large financial institutions, and (3) minimum wage rules.

As the gap between the superrich and everyone else grew during the first Gilded Age, support for progressive tax reform spread across the political spectrum and across the country. Progressive tax innovations began at the state level. “In the 1890s fifteen states instituted taxes on large inheritances; more than 40 states had inheritance taxes in place in the 1910s.”96 The first federal income tax (apart from a temporary tax to support the Civil War), as well as the first inheritance tax, were approved with bipartisan support in 1894.

more than poor folks had been established. World War I, the New Deal, and World War II pushed both the level and the progressivity of the federal income tax ever upward to a high plateau from the 1940s to the mid-1960s.

both Republican and Democratic, have sought to halt the plummet and restore some progressiveness to the tax code; this list includes George H. W. Bush, Bill Clinton, and Barack Obama.)

Convergence and the Great Divergence. The federal corporate income tax was instituted in 1909 and is generally estimated to be borne by shareholders and thus basically progressive. As shown in Figure 2.14, the top corporate tax rate has risen and fallen in the familiar U-shape curve, rising steadily from 1 percent in 1909 to its peak of 53 percent in 1968–1969, then falling from 1970 to 2018, when President Trump’s tax cut sharply lowered it to 21 percent, the lowest rate in eighty years.

A third Progressive Era tax reform was directed at inequality in inherited wealth. Inherited advantage embodied in great family fortunes so violated the norm of equal opportunity—that all should begin life’s race at the same starting line—that even the wealthiest beneficiaries of the Gilded Age like John D. Rockefeller and Andrew Carnegie favored the taxation of large estates.

In summary, as Piketty and Saez argue, a significant reason for the Great Convergence is “the creation and the development of the progressive income tax (and of the progressive estate tax and corporate income tax).”103 Moreover, Emmanuel Saez and his colleagues have pointed out the interesting fact that there is a strong correlation between tax progressivity and pre-tax income equality. In other words, it is not simply that high taxes lop off top incomes, but that the determination of the pre-tax income distribution and the determination of tax progressivity are somehow intertwined, perhaps because both are responding in part to the same external factor or perhaps for some other reason.104 Be that as it may, our brief review of long-run changes in the progressivity of American taxes suggests that underneath the surface of party platforms and tax lobbyists and tax-writing committees and revenue officials in thousands of jurisdictions across the country a broad century-long ebb and flow of egalitarianism was at work.

Importantly, however, most of this expanded spending represents the growth of middle-class entitlement programs like Social Security and Medicare.105 The big beneficiaries of these growing transfer programs have been older Americans in the middle 40 percent of the income distribution, not the bottom 50 percent. That spending (in effect, transferring money from younger people to older people) has made the age distribution of income more egalitarian, mostly ending the scourge of elderly poverty

The only battle of the War on Poverty that was won was the War on Elder Poverty.

In sum, during the Great Convergence, both taxation and spending moved in a progressive direction, so government redistribution was a major contributor to growing equality.

to reckless and often fraudulent and corrupt financial speculation, especially in banks and railways) led to long, deep depressions, with rising rural poverty and industrial joblessness, which in turn led to the rise of populist movements and parties and eventually the Progressive Era reforms. All of that has strong parallels in American life today, especially in the aftermath of the financial crisis of 2008 and the Great Recession.110

This growing regulation of financial services during the Great Convergence led to substantial reductions in the incomes of financiers. Since those who work at Wall Street firms and big banks are very prominent in the top strata of the income distribution, the reduction in their incomes was an important force for equalization.111

Economists are sharply divided on whether the direct effect of minimum wage laws on wage levels is offset, in whole or in part, by their indirect negative effects on low-wage employment opportunities. The raft of new state and local initiatives may soon help settle that argument, but in the meantime, a reasonable view is that there has probably been some effect on inequality at the lower end of the income distribution, though not at the top end, where the most massive inequalities have been concentrated in recent years.116

“In the United States,” argue Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, “the stagnation of bottom 50% incomes and the upsurge in the top 1% coincided with reduced progressive taxation, widespread deregulation (particularly in the financial sector), weakened unions, and an erosion of the federal minimum wage.”117

Why were policies that favored equality in force during the Great Convergence, and why did they all then change in the decade or so around 1965?

This normative change was temporarily disrupted by the Red Scare of the 1920s, but the utter devastation of the Great Depression gave renewed force to the ideals of social solidarity instead of naked individualism, even among Republicans like Herbert Hoover.120 The widely shared sacrifices of World War II strongly reinforced egalitarian norms among the Greatest Generation, who would then dominate American society and politics for a quarter century after the war. Executive compensation during that period was undoubtedly held in check by norms of fairness and decorum and what we might call the “outrage” factor.121

the early 1960s George Romney was a titan of business, the chairman and CEO of American Motors, and he was compensated handsomely. In 1960, his top-paid year, he made just over $661,000 (roughly $5.5 million today). Nevertheless, he also frequently turned down bonuses and pay raises that he viewed as excessive. In 1960, for example, he refused a $100,000 bonus, and in a five-year period he turned down a total of $268,000 (roughly 20 percent of his total earnings during the period). He feared the effects that overcompensation could have on executives: Overly generous pay could lead to “the temptations to success [that] could distract people from more important matters.”122 Moreover, he paid over a third of his income in taxes. Fifty years later, his son Mitt pulled in $21.7 million in 2010, roughly four times his father’s peak income. Of this, he paid an effective tax rate of 13.9 percent, roughly one third the rate his father had paid. We know of no evidence Mitt has ever voluntarily returned any of his compensation, though he and his wife gave away $3 million in charitable donations in 2010, including $1.5 million to the Mormon Church. During the presidential campaign of 2012 he said, “There are 47% of the people… who are dependent upon government, who believe that they are victims.… These are people who pay no income tax.… And so my job is not to worry about those people. I’ll never convince them that they should take personal responsibility and care for their lives.” Wh...

Partisan identification is more a tribal affiliation than an ideological commitment, and that is a crucial part of the story of party polarization.

Even in local affairs far from the pinnacles of national politics, mass polarization became increasingly common after the early 1970s, not because of who showed up, but because of who didn’t. Participation in public meetings, local civic organizations, political parties, and political rallies by self-described middle-of-the-roaders fell by more than half between 1973 and 1994.

Ironically, at the same time that more and more Americans described their political views as “middle of the road” or “moderate,” the extremes on the ideological spectrum accounted for a bigger and bigger share of those who actually attend meetings, write letters, serve on civic committees, and even go to church.

American voters increasingly see supporters of the other party as extreme ideologically and flawed personally. Both Democrats and Republicans increasingly dislike, even loathe, their opponents.

Indeed, as political scientists Shanto Iyengar and his colleagues have recently argued, “the most significant fault line in the second decade of the twenty-first century [in America] is not race, religion, or economic status but political party affiliation.”

Polarization appears to have begun at the elite level in the 1970s, but spread to the electorate as a whole in the 1980s, as voters, responding to the increasingly disparate options offered by leaders and encouraged by activists, sorted themselves into opposing camps.96

Democracy requires fair, vigorous competition between political parties who seek voter support in the political marketplace. Indeed, one influential theory of democracy argues that party competition is the very definition of democracy.104

that less-polarized era, politicians’ stock-in-trade was the ability to see both sides of an issue and thus to look for win-win solutions, but as that skill or inclination has waned, disputes have become increasingly difficult to resolve.105