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The 50 Biggest Changes In The Last 50 Years
June/July 2004 | Volume 55, Issue 3
With American Heritage approaching its fiftieth birthday in December 2004, we’ve asked five prominent historians and cultural commentators to each pick 10 leading developments in American life during the last half-century. In this issue John Steele Gordon, American Heritage ’s “The Business of America” columnist and the author of An Empire of Wealth: The Epic History of American Economic Power, 1607-2001 , which will be published in October by HarperCollins, selects the 10 biggest changes in business. In other issues this year our authorities offer their choices of the half-century’s biggest transformations in politics; popular culture; innovation and technology; and the home and the family.
In 1954 the gross domestic product of the United States—the sum of all the goods and services produced in the country that year—was about $380 billion. In 2003 it was $10.9 trillion, more than 28 times as great in nominal terms. Even allowing for the very considerable inflation in the last 50 years, the economy is roughly 6 times as large as it was when American Heritage made its first appearance. So the biggest change in American business in the last 50 years has been, simply, the growth of the American economy as a whole.
But how all that wealth is created—who creates it, and by what means—has changed almost beyond imagining. The reason is plain enough: the computer. It is the most profound technological development since the steam engine ignited the Industrial Revolution two centuries ago, perhaps since the agricultural revolution ignited civilization itself 10 millennia ago. None of the biggest changes in business in the last 50 years would have been possible—or would have evolved as they did- had it not been for the computer. So while it easily ranks as the most important change, the computer, in truth, is behind nearly all the changes.
Look at a photograph of a typical office of the mid-fifties and one of 2004, and the difference is instantly obvious: Every desk in the office now has a computer on it. Today half of American workers use computers on a daily basis in their jobs; in 1954 perhaps one-tenth of one percent did. Moreover, not just office workers use computers. Farmers, garage mechanics, dentists, lumberjacks, and a thousand other job categories as well now utilize computers in the daily course of business for purposes unique to each occupation.
To be sure, in 1954 computers were already making inroads into American business, especially in areas where data processing was very intense, such as banking and insurance. But they were huge and hugely expensive, kept in special air-conditioned rooms and tended by men in white coats. Very few Americans had ever actually seen one. Today about the only way for an American not to see one every day would be to stay in bed with the lights off.
The difference is the development, beginning in 1969, of the microprocessor, essentially a dirt-cheap computer on a silicon chip. A little more than a decade later, the calculator had sent the slide rule into oblivion, word processing had made the typewriter a relic, and Apple Computer had introduced the personal computer.
In 1954 American exports totaled less than $14 billion, or 3.7 percent of GDP. In 2001 exports amounted to $729 billion, or 7.2 percent of GDP. Fifty years ago the American economy was effectively an island. The only great power whose industrial base had been strengthened, not diminished, by World War II, the United States was still self-sufficient in all but a few commodities (such as tin). Almost all the cars on the road in 1954 were, in their entirety, American-made by the Big Three auto companies, plus American Motors. What foreign automobiles there were, were mostly in niche markets, such as sports cars.
Today that is but a distant memory. American Motors is long gone, and the Big Three have only a little over half the American automobile market, about what GM had all by itself 50 years ago. The number one best-selling car in this country is not a Ford or Chevrolet; it’s the Japanese Toyota Camry. But many of the “foreign” cars on the roads today are in fact manufactured in the United States, and many of them are subsequently exported to other countries.
Automobile companies no longer have nationalities, except perhaps in terms of the locations of their corporate headquarters and greatest concentration of stockholders. Ford now owns Sweden’s Volvo and Britain’s Land Rover; GM owns Saab; Chrysler is part of the German Daimler. Every major automobile company manufactures parts or assembles vehicles in many countries. General Motors, with 15 percent of the global vehicle market, manufactures in 32 countries and sells in 192. The other great auto companies are equally dispersed.
That is increasingly true of companies in other lines of business, such as electronics and computers. It is also becoming true of retail companies. Wal-Mart, the world’s largest company in terms of gross revenues (if it were a sovereign nation, it would have the world’s thirtieth-largest economy), sells in 10 countries and buys products in many more. McDonald’s and KFC peddle their wares from Bangor to Bangalore, from Peoria to Paraguay, while American shopping malls are full of foreign products and foreign companies selling them.