I think the main point is that yes it is 'set' in 1971 but when we are watching the show it feels that it is the 'here and now' rather than 'transporting us' to the 70s. I think qolbinau puts it better and more distinctly than I. (No surprise.)
It's true that the show has to take place circa 1971. The Ziegfeld Follies-type revues went by the wayside about the time of OKLAHOMA! during the war. (There were a few exceptions--an attempt to revive the Ziegfeld Follies without Ziegfeld in the late 40s--but basically.) If the central characters are roughly 50, then they had to be 20 during WWII.
The pastiche numbers wouldn't make any sense if Sally and Phyllis had played felines together in CATS.
But that being said, the essential themes of FOLLIES--regret over choices made in the past, self-delusion, losing one's self in one's ambition, etc.--these all remain current issues. We in the audience are better off thinking the characters are like us, rather than thinking they are curiosities of the past.
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ETA nasty_khakis does a great job of explaining the approach to costume design used in the show. It's not that the outfits couldn't be worn in 1971, it's that the more extreme fashions we associate with that period are omitted. Thankfully.
The spoken lines that deal with time are still there. So if one really cares, it is possible to calculate the year of the party at 1971. But it's also possible to conflate eras and think of the "present" in the play as something akin to now.
Updated On: 5/9/12 at 10:08 PM