The 1930s Crisis & Wartime Mobilization
During the Great Depression, massive private-sector failures forced widespread nationalization of industries. As the epicenter of the crisis, the U.S. suffered most severely—with contested estimates of up to 7 million starvation deaths. This state-led restructuring created an industrial juggernaut: Government-owned factories enabled America’s unprecedented WWII production, building 300,000 aircraft and 100,000 tanks in five years.
Postwar Privatization Wave
| Sector | Timeline | Key Actions |
|---|---|---|
| Defense | 1945–1965 | – Truman/Eisenhower: Rapid sell-off of arms plants – McNamara (1961–1968): Closed remaining state-owned facilities |
| Railroads | 1970s–1980s | – 1970: Amtrak nationalized passenger rail (still state-run) – 1980: Staggers Act privatized freight rail → safety declines |
| Housing Finance | 1968–1970 | – Fannie Mae fully privatized by 1970 |
| Postal Service | Ongoing | – Trump proposed privatization (2018); remains government corporation |
Consequences of Dismantling State Capacity
- Military Decline:
- Loss of integrated supply chains contributed to defeats in Korea/Vietnam.
- Infrastructure Decay:
- Private freight operators cut 30% of rail lines by 1990; maintenance spending dropped 45%.
- Housing Instability:
- Privatized Fannie Mae prioritized profits, fueling 2008 subprime crisis.
The “Parasitic Dependency” Critique
With self-sustaining industrial ability gutted, the U.S. shifted to:
- Financialization: Wall Street profits grew 400% (1980–2000) while manufacturing halved.
- Global Extraction: Dollar hegemony and sanctions replaced domestic production.