• Transformation of the US from a Colony to an Independent State to a Super power
o Transition to a super power to the economic transformations
o US stepped into ‘isolationism’
Due to conflicts within congress and within different sectors of the US economy
US adopted the policy of global hegemon without very much global disdain
US refused to become a member of the league of nations
• US became a leading member of the UN with little opposition
Transitions had a great deal to do with the dominant institution of modern capitalism (the
• Who controls these companies?
o The owners?
o The shareholders?
• US became a bureaucracy
o Division of labor
Determined by merit and skill not by family connection, etc.
Brains of the corporation, those than run the corporation
• CEO, etc.
• Needs to be permanently active, this requires company growth
o Under them, the workers
Government needs to play an important role in terms of education, necessities of skills
required for the corporations
• Therefore this requires a public school system through high school and
o These educational intuitions tend to be run by the state
• Immigration becomes crucial
Refers to the idea of the assemblyline
• Made jobs so simple and needed little training
• Therefore many immigrants became useful in such businesses
• Corporations can no longer take markets for granted
o Need to respond to changes in demand
o Need to make investment before they can produce products
o Aggregate supply vs. aggregate demand
• 1930’s US went through a great amount of deflation
o The government can change aggregate demand
o Through foreign markets, etc.
• States began to mimic the actions led by these corporations o The defense department, etc.
• All of these institutions need to defend their budgets
• Research and development requires growth within the government just like it does
within private industry
• Eisenhower, then Kennedy wanted the best and the brightest to run their defense
• Consolidation of the system of modern capitalism took place in the 1930s and through
• 1930’s saw the demand for increased infrastructure within the US as a means of
stimulating demand (the New Deal)
o 1933 Roosevelt passed Wagner act
Legalized labor unions
Labor unions push up aggregate employee wealth and therefore pushes up
the aggregate greater economic demands within the US
o Domestically the New Deal was important in establishing this relationship
between corporations and the greater economy and public wellbeing
o 1937/38 since the economy was improving the government should start dealing
with the deficit
led to another decline of the economy
the demand that was produced by WWII is what dragged the US out of the
o Military industrial complex
Relationship between federal government, congress and large corporations
that supply the government
This relationship between government, state and economy
• Resulted in a situation that at the end of WWII the US had become the
US exports declined after the war substantially
By 1976 world economy production (US only controlled 24%, instea