A Star is Born
By Shahid Yusuf
from "Development Economics through the decades. A Critical Look at 30 Years of the World Development Report" - 2009

The great industrial resurgence, which gathered momentum in the 1950s, was state directed, disciplined by targets, and frequently led by the public sector. It tended to be autarchic or quasi-mercantilist and was buttressed by a multitude of import restrictions. The retreat from the first globalization, which began in 1914, entered a new phase as capitalist and socialist economies and newly independent colonies embraced inward-looking growth policies...

Revising the Policy Framework for Sustained Growth, Employment Creation and Poverty Reduction
From UNCTAD, "Trade and Development Report 2010" - Chapter 5

Full employment in the “golden age of capitalism” In response to the experience of high unemployment during the Great Depression in the 1930s and the subsequent long period of instability and war, many major industrialized countries established full employment as a goal in law, and committed themselves to implementing proactive macroeconomic policies. In the post-war era up to the mid-1970s, a period often referred to as the “golden age of capitalism” (Marglin and Schor, 1990; Singh, 2009), unemployment in developed countries was at historically low levels. In Japan as well as several Western European countries that even absorbed a large number of migrant workers from Southern Europe, it was a period of what is considered full employment (table 5.1)...
...During the “golden age of capitalism” unemployment was historically low, even though labour markets were more regulated than they are today...

Research for action
Lessons of the Golden Age of Capitalism
Stephen A. Marglin - 1988
World Institute for Development Economics Research - United Nations University

We now have the ingredients at hand to essay a preliminary answer to one of the key questions that has motivated this study: are we to understand the demise of the golden age, and hence to conduct the search for new institutions, in terms of problems internal to each of the economies of Western Europe and the United States or in terms of the relations among the OECD countries and between these countries and the rest of the world? Evidently the historical account can be read two ways: first, that the essential problem was an internal one, the full employment profit squeeze that resulted from the failure of the system of production and the rules of coordination to accommodate the basic conflict between labour and capital; second, that the essential problem lay on the international side, in the erosion of profits that resulted from the energy shocks traceable to the erosion of American hegemony, and the demise of international arrangements that effectively suppressed the constraint of external balance for the United States as hegemonic power and allowed relatively expansionary demand management policies both in the United States and elsewhere. In the first reading, the end to the golden age comes about 1970, when productivity growth began to decline markedly throughout the OECD countries. In the second reading, the real end comes in 1979 when OPEC II triggered a new round of inflation that revealed - revealed but did not cause - the United States to be unable to continue to expand the world economy by stimulating the American economy and US imports. In this reading, the post-war regime foundered on the shoals of pluralism...

Macropolicy in the rise and fall of the golden age
Gerald A. Epstein - University Of Massachusetts at Amherst
Juliet B. Schor - Harvard University - June 1987

The Golden Age was the era of demand management. Originally with monetary, and then fiscal policy, the governments of the advanced capitalist economies attempted to enhance and guide the accumulation process. They allocated credit, manipulated interest rates, and presided over a dramatic expansion in state expenditure. As the Golden Age eroded, and stagnation replaced prosperity, governments tried to manage the decline.
Policy was actively used to reduce inflation and labor costs, enhance international competitiveness, or maintain employment.
This paper is a brief analysis of macropolicy in six countries during the Golden Age and its erosion. It begins with a general account of the structural determinants of policy. Next we turn to a discussion of policy during the Golden Age.
We argue that our six countries divide into two groups. Germany, Japan, France and Italy all pursued expansionary policies aimed at maximizing the rate of accumulation. The U.S. and the U.K. were less expansionary, on account of the international position of their currencies, the power of internationally-oriented finance capital, and the independence of the central bank...

The pace and distribution of health improvements during the last 40 years: some preliminary results
Giovanni Andrea Cornia and Leonardo Menchini - 2005

This paper juxtaposes changes over the last forty years in indicators of income growth and distribution with the mortality changes recorded at the aggregate level in about 170 countries and at the individual level in 21 countries with at least two Demographic and Health Surveys covering the last twenty years. Over the 1980s-and 1990s, the infant-mortality rate (IMR), under-5 mortality rate (U5MR) and Life Expectancy at Birth (LEB) mostly continued the favourable trends that characterized the 1960s and 1970s.
Yet, especially, the 1990s the pace of health improvement was slower than that recorded during the prior decades. In addition, the distribution between countries of aggregate health improvements became markedly more skewed. These trends are in part explained by the negative changes recorded in Sub- Saharan Africa and Eastern Europe, but are robust to the removal of the two regions from the sample. This tendency is observed also at the intra-regional level, with the exception of Western Europe. Thirdly, DHS data for 21 developing countries point to a frequent divergence over time in the within-country distribution of gains in IMR and U5MR among children living in urban vs. rural areas and belonging to families part of different quantiles of the asset distribution, while IMR differentials by level of education of the mother show mixed trends The paper concludes by underscoring the similarities and linkages between changes in income inequality and health inequality and suggests some tentative explanations of these trends without, however, formally testing them.

Inequality, Growth and Poverty in the Era of Liberalization and Globalization
Giovanni Andrea Cornia and Julius Court - 2001

This policy brief reports the main findings of the UNU/WIDER study on changes in within-country income inequality over the last two decades and on the links between poverty, inequality and growth. It focuses on inequality at the national level, i.e. the distribution of income among people within a country. As part of the project, UNU/WIDER compiled the World Income Inequality Database (WIID)—the most extensive database on inequality trends within countries. Analysis of the database and research papers highlights five main issues.
First, the recent trends in income inequality are sobering. Since the early-mid 1980s inequality has risen in most countries, and in many cases sharply.
Second, it is clear that there are some common factors causing the widespread surges in inequality around the world. ‘Traditional causes’ of inequality, such as land concentration, urban bias and inequality in education, do not appear to be responsible for the worsening situation. Rather it is ‘new causes’ that are crucial. These ‘new causes’ are linked to the excessively liberal economic policy regimes and the way in which economic reform policies have been carried out.
Third, the persistence of inequality at high levels or its further rise have made it much more difficult to reduce poverty. The higher the level of inequality, the less impact economic growth has in reducing poverty—for any rate of economic growth.
Fourth, high levels of inequality can depress the rate of growth. High levels of inequality can also have undesirable political and social impacts—on crime and political stability, for example.
Fifth, rising inequality is not inevitable in a world dominated by technological change and globalization. Countries can maintain low inequality and still grow fast—Canada and Taiwan provide two of the clearest examples.

Global Capitalism Theory and the Emergence of Transnational Elites
William I. Robinson - January 2010

The class and social structure of developing nations has undergone profound transformation in recent decades as each nation has incorporated into an increasingly integrated global production and financial system. National elites have experienced a new fractionation. Emergent transnationally-oriented elites grounded in globalized circuits of accumulation compete with older nationally-oriented elites grounded in more protected and often state-guided national and regional circuits. This essay focuses on structural analysis of the distinction between these two fractions of the elite and the implications for development.
I suggest that nationally-oriented elites are often dependent on the social reproduction of at least a portion of the popular and working classes for the reproduction of their own status, and therefore on local development processes however so defined whereas transnationally-oriented elites are less dependent on such local social reproduction. The shift in dominant power relations from nationally- to transnationally-oriented elites is reflected in a concomitant shift to a discourse from one that defines development as national industrialization and expanded consumption to one that defines it in terms of global market integration.

Structural Adjustment, Global Integration and Social Democracy
1. Structural Adjustment: Origins and Underlying Forces
Dharam Gai - 1992

The process of structural adjustment was first initiated in the industrialized countries and then "exported" to developing countries. It was the result in both groups of countries of a combination of conjunctural and secular forces. The former were represented by the economic crisis in the post-1973 period, first in the industrialized and then in the developing countries; the latter by the upsurge of world economic integration in the post-war period. This section looks first at the forces which propelled a reorientation of economic policies in the advanced countries before turning to an analysis of the dynamics of structural adjustment in the less developed regions of Africa, Latin America, South Asia and South-East and East Asia.
...The years immediately after the first petrol shock in 1973 were characterized in most OECD countries by falling growth rates, rising unemployment, increasing inflation and declining investment and profit rates (see Table 1). This constituted a sharp reversal of the experience over the preceding two decades. For instance, annual output growth fell from 4.9 per cent over the period 196O-1973 to 2.7 per cent in 1974-1979. Inflation more than doubled from 4.1 to 9.7 per cent per annum over the two periods. Productivity growth declined from 3.8 to 1.6 per cent and investment expansion tumbled from 7.6 to 2.3 per cent per annum. The rate of unemployment rose from 3.1 to 5.1 per cent and the expansion in trade fell from 9.1 to 4.3 per cent...

Asia’s Labour-Driven Economic Development, Flying-Geese Style
An Unprecedented Opportunity for the Poor to Rise?
Terutomo Ozawa - June 2006

The notion of ‘shared growth’ was introduced by the World Bank in recognition of East Asia’s rapid growth accompanied by poverty reduction. It emphasizes the criticality of pro-poor policies and institutional setups in the fast-developing East Asian economies. The efforts of these individual countries are, however, a necessary but not sufficient condition (explanation). There is a more essential, underlying region-wide mechanism that simultaneously promotes regionalized growth and specifically favours Asia’s working mass of unskilled labour. Such an efficacious mechanism is posited in the ‘flying-geese paradigm of comparative advantage recycling in labour-intensive goods’. The paper argues that a number of favourable factors have fortuitously coalesced to engender a considerably favourable condition for Asia’s rapid catch-up growth in which unskilled labour (the poor) can participate as their countries’ most vital input in labour-driven development.

Central Banks as Agents of Economic Development
Gerald Epstein - May 2006

In the last two decades, there has been a global sea change in the theory and practice of central banking. The currently dominant ‘best practice’ approach to central banking consists of the following: (1) central bank independence (2) a focus on inflation fighting (including adopting formal ‘inflation targeting’) and (3) the use of indirect methods of monetary policy (that is, short-term interest rates as opposed to direct methods such as credit ceilings). This paper argues that this neo-liberal approach to central banking is highly idiosyncratic in that, as a package, it is dramatically different from the historically dominant theory and practice of central banking, not only in the developing world, but, notably, in the now developed countries themselves. Throughout the early and recent history of central banking in the US, England, Europe, and elsewhere, financing governments, managing exchange rates, and supporting economic sectors by using ‘direct methods’ of intervention have been among the most important tasks of central banking and, indeed, in many cases, were among the reasons for their existence. The neo-liberal central bank policy package, then, is drastically out of step with the history and dominant practice of central banking throughout most of its history.

F.H. Cardoso and E. Faletto - 1979
Capitalist development and the state: bases and alternatives
(The subheadings were added by Dr. Róbinson Rojas. The text is part of the POST SCRIPTUM, in Cardoso and Faletto, "Dependency and Development in Latin America", University of California Press, 1979, translated from Cardoso y Faletto, "Dependencia y Desarrollo en América Latina", Siglo XXI Editores, México, primera edición, 1969)

The more developed countries of Latin America are attempting to define foreign policy objectives that take advantage of contradictions in the international order and allow these countries some independent policy- making. But these countries remain dependent and assure an internal social order favorable to capitalist interests and consequently fail to challenge one of the basic objectives of American foreign policy. Multinational enterprises continue to receive support from the foreign policies of their countries of origin, as well as from local states.

Globalization, social conflict and economic growth
by Dany Rodrik - October 1997

...But my difficulty with the conventional wisdom, as I just stated it, goes beyond the details. I believe the development community has internalized the wrong lessons from the experience of countries that adopted the ISI strategy in Latin America and elsewhere. The correct interpretation, I think, goes something like this.
First, ISI worked rather well for a period of about two decades. It brought unprecedented economic growth to scores of countries in Latin America, the Middle East, and North Africa, and even to some in sub-Saharan Africa.
Second, when the economies of these same countries began to fail apart in the second half of the 1970s, the reasons had very little to do with ISI policies per se or the extent of government interventions. Countries that weathered the storm were those in which governments undertook the appropriate macroeconomic adjustments (in the areas of fiscal, monetary and exchange-rate policy) rapidly and decisively.
Third, and more fundamentally, success in adopting these macroeconomic adjustments was linked to deeper social determinants. It was the ability to manage the domestic social conflicts triggered by the turbulance of the world economy during the 1970s that made the difference between continued growth and economic collapse. Countries with deeper social divisions and weaker institutions of conflict management experienced greater economic deterioration in response to the external shocks of the 1970s.

Dependency theory's reanimation in the era of financial capital
Kenneth Surin -1998

There is now virtual unanimity about the causes and character of the demise of capitalism's so-called 'Golden Age', i.e. the prolonged expansion associated with high employment, growing wages and welfare expenditures, high consumption, and benign business cycles that lasted in the advanced industrial countries from 1945 to 1973, and which effectively ended when the quadrupling of oil prices in that year threw most of the world's economies into recession. Of course the precise nature of the complex amalgam of economic, political, social, and cultural transformations involved in this epochal shift from the 'Golden Age' to its successor 'Leaden Age' (to use a term of Robert Pollin's) is a matter of considerable debate among students of political economy, and these include many who reflect on the character and import of marxian or marxisante accounts of capitalist development.
These reflections on the transition from the 'Golden' to the 'Leaden Age' are carried out under the now well-known titles 'late capitalism', 'advanced capitalism', 'disorganized capitalism', 'deregulatory capitalism', 'actually existing world capitalism', 'integrated world capitalism', 'postFordism', 'postindustrialization', 'overconsumptionist economic regimes', and so forth. The deliverances of such reflection have profound implications for any understanding of the forces and structures associated with uneven development, late industrialization and 'peripheralization'-- all these being notions vital to the explanations and theories of systemic international inequality sponsored by the various marxist traditions....

The International Context for National Development Strategies:
Constraints and Opportunities in a Changing World
Manfred Bienefel - 1982

The struggle for national development inevitably takes place in an international context, the changing circumstances of which define both constraints and opportunities for the various protagonists. This chapter provides one view of that context which emphasizes the importance of the changes it has undergone since 1945, and suggests that each individual country's experience can be analysed and understood only in relation to those changes.
Because of the inadequacy of any view which conceives of these international developments as exogenously given facts which impinge equally on all countries, so long as one allows for differential resource endowments, it is essential to analyse the links which transmit signals and pressures between the international and the various national spheres, thereby attaching relative significance to the nation state because it has the capacity, albeit a variable and limited one, to define those links.
The discussion which follows focuses on competitive economic relations as particularly powerful, though highly ambiguous, transmitters of pressure, inducing national adjustment to international change. It suggests that the benign circle of causation which free trade theory associates with such competitive relations was experienced in the 1950s and 1960s by the (OECD) industrialized countries, but argues that the 1970s, and the experience of most developing countries since 1945, indicate that this result depended on a number of conditions which have been eroded since the late 1960s.

In the Belly of the Beast
A perspective on the global justice movement in the United States: its roots and emergence
Sara Burke and Claudio Puty

PART I.- The Post-World War II Golden Age of Capitalism and Crisis of the 1970s
The massive expansion in production in the US during World War II lifted the US—and global—economies out of the crisis of the Great Depression and into a "Golden Age" of expansion that lasted until the great economic crisis of the 1970s. This era gave way to the neoliberal backlash of the 1980s.
PART II.- The Neoliberal Years: [The 1980s]
The collapse of the Mexican peso in 1982—near the beginning of the era—was to the global economic order what the elections of Ronald Reagan and Margaret Thatcher were to the global political order: the beginning of a new, conservative political hegemony that shaped the world's economic policy for the decade. Resistance to neoliberalism in Latin America.
PART III.- NAFTA and the Zapatista Uprising: [The early and mid 1990s]
The North American Free Trade Agreement [NAFTA] went into effect on January 1, 1994. The Zapatistas' autonomous revolt against NAFTA and neoliberalism that very day came to have a powerful effect on the nascent movement in the US.
PART IV.- The Anti-Capitalist Side of the Movement: [The turn of the century: 1999-2002]
Protest erupts in Seattle in 1999 as opponents of neoliberalism from around the world join American demonstrators against the World Trade Organization. The mainstream media focused on the surface: we look deeper.

Growth and Equity in Finland
Markus Jäntti,1 Juho Saari, and Juhana Vartiainen July 2006