Lessons of victory: Occupying Germany and Japan, discovering the 'People's Capitalism'

"Lessons of Victory" reveals the emergence of an influential and distinct political economy in the middle of the twentieth century, a political economy neither liberal nor conservative (in the typical meaning of those terms). It was born in the post-World War II occupation governments in Germany and Japan and belonged to a group of men C. Wright Mills later identified as the "Power Elite," essentially a cadre of military, business and government leaders within Dwight D. Eisenhower's inner circle. Their political economy issued from the marriage of New Deal state-building and the realities of German and Japanese political culture and history. They then brought this political economy back to the United States in its mature form in Eisenhower's presidency which they ultimately called "The People's Capitalism." It supported a muscular central government with broad capacities while nevertheless defining limits to its reach and remaining deeply suspicious of its totalitarian potential. The People's Capitalism differed from New Deal liberalism and the nascent conservatism of the 1940s and 1950s in its intense focus on the way government and business funded their expansion. Eisenhower and his circle felt that finance proved the key policy arena for (1) protecting individual liberty and (2) developing popular support for the large and permanent military apparatus necessary for waging the Cold War. That is, finance played more than an economic role narrowly defined: first and foremost it supported (or undermined) democratic freedom and state legitimacy and only secondarily provided the means for state and capitalist expansion (although these two aims remained closely connected). When Eisenhower won the election of 1952 he campaigned on this political economy; his victory signaled its ascendance as an organizing discourse within American politics.