Introduction: The triumph of reformed capitalism

The twentieth century saw two main economic tendencies. First, capitalism triumphed globally, and the relations between capital and labor became the core economic power struggle everywhere. The main alternatives to capitalism – fascism and state socialism – which had both repressed class conflict, fell as a result of their own contradictions. Second, the outcome of struggle was that in the West, capitalism was reformed and given a human face through universal rights of civil, political, and social citizenship. I discussed the latter process in America in the last chapter. I continue here, but in a broad comparative analysis of nations. For entwining with capitalist growth was the tightening of nation-states, so that the principal terrain of class struggle was the individual nation-state and solutions to that struggle differed by country (although not only be country, as we shall see). That justifies the nationalist part of this chapter’s analysis.

As we saw in Chapter 2, divergence dominated globalizing tendencies in the first half of the twentieth century, as the West and Japan underwent rapid economic development and the rest of the world did not. Under colonialism, global inequality had surged. The few “middle-class” countries, mostly in Latin America, fell backward relative to the West and Japan. After World War II, the combination of pent-up innovation and consumer demand, the end of colonial empires, and the pax Americana was to pull the whole world upward, and countries around the fringes of Europe and in East Asia embarked on a catch-up development. In the period covered by this volume, the world continued to be diverse, a few living in comparative luxury, the masses remaining in dire poverty. It is the luxurious few whom I discuss here.