Chapter 55 Chapter 9 The Golden Age 5

5 Any industry, once the transfer of its production operations becomes technically feasible and affirmed in terms of cost-effectiveness, will inevitably move from high-cost areas to areas with low labor costs.At the same time, the operators have also discovered (not surprisingly) that workers of other races are at least as good as white workers in terms of technical level and education level.This discovery, for high-tech industries, is naturally the icing on the cake, and it is also a wonderful benefit.But in addition to this, there is another factor worth considering why the prosperity of the golden age spread from the core countries of the old industrial belt to its belt, which is the unique combination of several "Keynesian" capitalist economic growth. cause.That is to say, the so-called capitalist-style economic growth is based on mass consumption. In such a society, the working population is not only fully employed, but wages are also increasing day by day, and they are more and more guaranteed.

The formation of this combination, as we have seen, is due to a purely political structure.Its foothold lies in the consensus of the left and right factions in most "Westernized" countries, thus forming an extremely effective policy.Today, the right wing of fascist extreme nationalism has been swept away from the political arena by World War II; the extreme left wing of communism has also been left far behind by the Cold War.This combination is also based on a certain tangible and intangible tacit understanding between labor and management. Both parties agree to keep labor requirements within a certain limit, so as to avoid loss of profits due to excessive costs.At the same time, everyone also believes that a certain degree of high profits will be sustainable in the future, because only in this way can the necessity of continuously betting huge funds be explained.Without the investment of these huge funds, the rapid growth of productivity in the golden age would not have been possible.Facts prove that in the 16 most advanced and industrialized countries in the market economy, their investment volume has increased at a rate of 4.5% per year, which is almost three times that of the period between 1870 and 1913.This rate would be even more alarming if it included the slower growing North American region (Maddison, 1982, Table 5.1, p. 96).In fact, this arrangement of labor-management relations is presented in a triangular relationship, where the government mediates a compromise, formally or informally helping both parties to carry out institutionalized and organized negotiation activities.And in this new era, the labor side has become customarily called the "social partner" of management, at least in Germany.But the golden age ended sadly, and such arrangements began to be attacked wantonly by the school of free market economic theology, labeling the old term "corporatism" - a nonsense name that was not only quickly forgotten by the world, but also It has absolutely nothing to do with interwar fascism (see Chapter 4, Section 1).Looking back at the labor negotiation arrangement in the golden age, it is basically the best situation that everyone is happy and accepted by all parties.For the employers at that time, the business was so prosperous, the profits were so rich, and under the long-term prosperity, they naturally welcomed the negotiation method, because it was more conducive to the company's forward-looking planning and arrangement.As far as labor is concerned, there are fixed wage increases and company benefits available, and the government continues to expand more generous social benefits, of course, why not do it.The government is also good. First of all, the political stability is greatly stabilized, and the vitality of the Communist Party is greatly weakened, and it loses its focus (Italy is an exception).Second, the predictability of economic environmental conditions has thus increased, which is conducive to the overall economic management that countries are now practicing.During the golden age, the economic performance of capitalist industrial countries was indeed good. One factor alone is enough, that is, with the realization of full employment, and the continuous increase of real income, coupled with the promotion of social security benefits (Payable from public sources when needed), the era of mass consumption by the masses has finally arrived for the first time (as for North America, it has already begun, and possibly Oceania as well).What's more, in the euphoric sixties, some governments were so reckless as to guarantee benefits to the unemployed (there were very few unemployed at the time) up to 80% of their original income.

The political climate of the Golden Age, until the late 1960s, still reflected the above policy orientation.After the war, the governments of various countries embarked on the road of reform one after another.There are Roosevelts in the United States; the former belligerent countries in Western Europe have a new atmosphere dominated by socialism or leaning towards social democratic lines.The exception was West Germany, which had no independent political organization and elections until 1949. Before 1947, even the Communist Party had a foot in the governments of various countries (see Chapter 8, Section 3).The long years of underground resistance made it even more difficult for the conservative parties that began to emerge at this time to escape the influence of reforms—such as the Christian Democrats in West Germany.As late as 1949, the party believed that the capitalist system was not conducive to the nascent Germany (Leanman, 1988)—the winds of reform were so strong that it would be extremely difficult for conservatives to sail against them.The British Conservative Party even took credit for the reforms of the Labor government in 1945.

But it's a little strange, that is, although the wave of reforms flourished for a while, it stopped quickly, but the steps of various countries are not consistent.By the boom of the 1950s, almost all parts of the world were dominated by moderate and conservative governments.In the United States (since 1952), Great Britain (since 1951), France (except for a brief period of coalition government), West Germany, Italy, and Japan, the left completely died down.Only the Scandinavian countries are still in the hands of social democratic parties; as for other small countries, socialist parties continue to co-govern in coalition governments.The retreat of the left is evident, and their retreat is not due to the loss of support from socialists, nor is it due to the decline of the Communist Party in France and Italy, where the Communist Party is still the largest party of the working class.Their disappearance has nothing to do with the rise of the Cold War—the only exceptions may be in Germany and Italy, where the Social Democratic Party of the former has an "unreliable" view of German unity, and the Social Democratic Party of the latter still speaks out with the Communist Party— Everyone at that time, except the Communists, of course, was firmly anti-Russian.In a boom of ten years, people were unanimously anti-left, and this is really not a time to make any major changes.

But in the 1960s, the center of gravity of the consensus among countries began to shift to the left again.Part of the reason for this shift may have been the retreat of liberal economic thought under Keynesian management doctrines, even in hard-core countries such as Belgium and West Germany that adhered to the classical camp.Another reason may be that the old gentlemen of the previous generation began to withdraw from the stage-these predecessors who once took care of the stable revival of the capitalist generation: Eisenhower of the United States in 1960 (born in 1890), Adenauer of Germany in 1965 Konrad Adenauer (born 1876), Britain's Macmillan in 1964 (born 1894), and even the great French Marshal Charles de Gaulle (born 1890) all bid farewell to politics during this period .All of a sudden, there was a resurgence of youth and rejuvenation in the world political arena.In fact, for those on the moderate left, for whom the 1950s were so unfavorable, and the peak of the Golden Age was truly congenial, they are seen to be active again in the governments of Western Europe.This trend to the left has begun again, partly due to the shift in the direction of votes, such as voters in West Germany, Austria, Sweden and other countries.In the 1970s and into the early 1980s, it became even more powerful. The socialists in France, as well as the Italian Communist Party, reached their heyday at this time.In general, though, election results have remained largely stable everywhere—and the way elections have tended to overstate shifts that are actually small in magnitude.

However, at the same time that the political climate turned to the left, a great change occurred in public life in the past ten years, that is, a country that fully conforms to the word "welfare state" in a substantial sense began to formally emerge.In these veritable welfare states, the items of social welfare expenditure—including the maintenance of income levels, the provision of public health care and education—become the largest part of the country's total expenditure; the largest one.Taking Britain in the 1970s as an example, social welfare personnel accounted for 40% of the national civil servants, and Sweden was even higher at 47% (Therborn, 1983).Starting from this definition, the first real welfare states emerged around 1970.In the era of détente, the reduction in military spending, of course, automatically led to an increase in the ratio of other items, especially the example of the United States, which can best show the reality of this change. At the height of the Vietnam War in 1970, for the first time, American school staff began to outnumber "defense personnel" by a large margin (Statistical History 1976, II, pp. 1102, 1104, 1141).By the end of the 1970s, all advanced capitalist countries had become authentic "welfare states", and welfare expenditures in six of them accounted for more than 60% of the total national expenditure (Australia, Belgium, France, West Germany, Italy, and the Netherlands) .At the end of the golden age, such a large welfare burden naturally caused considerable problems.

At that time, the political life of the "advanced market economy" seemed peaceful, if not sleepily quiet.That is to say, apart from the crises and nuclear threats caused by communism and imperialism’s struggle for power overseas (Britain took risks in the Suez Canal in 1956, France started a war in Algeria from 1954 to 1961, and after 1965, it was the turn of the United States to take risks in the Suez Canal. years of fierce fighting on the Vietnam battlefield), what else is there to be excited about?It is precisely because of such a quiet background that the sudden emergence of radical student movements around the world in 1968 surprised politicians and old-school intellectuals, and they were caught off guard for a while.

The sudden emergence of the student movement showed signs that the balance and stability of the golden age had begun to shake.Economically, productivity and wages continue to grow, and the balance between them depends on the coordination between the two in order to maintain stable profits.But now that productivity is no longer increasing continuously, wages continue to rise disproportionately, which inevitably leads to unstable imbalances.The Golden Age came about thanks to a delicate balance of growth between productivity and the purchasing power of consumers—an oddity that, arguably, never existed between the two wars. Phenomenon.The rate of increase in wages must be fast enough to keep the market alive, but not fast enough to damage the profits of the business.However, in an era of labor shortage, how to control wages?More generally speaking, with such buoyant demand and such a prosperous market, how to control prices is also a science.In other words, how to harness the unruly wild horse of currency, or at least keep it within a certain range?In addition, the existence of the golden age also depends on the superior status of the United States in all aspects of politics and economy.The role of the U.S. master—though sometimes meaningless—becomes the stabilizer and guarantor of the world economy.

In the 1960s, all aspects of the golden weather began to show signs of fatigue.The hegemony of the United States declined, and the world currency system based on the gold dollar also collapsed.In some countries, labor productivity is starting to slow, and the internal migration that previously fueled the industrial boom—the reservoir that provides the source of labor—is showing signs of drying up. Twenty years on, a new generation has grown up, and for these grown men and women, the tragic experience of the interwar years—mass unemployment, insecurity, stable or even plummeting prices—is just history books words, not their own experience.The expectations of this group of people for life and the future are completely based on the actual experience and feelings of their own age group, that is, full employment and continuous inflation (Friedman, 1968, p. 11). In the 1960s, there was a storm of wage inflation around the world, whatever the cause of the storm - labor shortages, employers' efforts to hold down real wage increases, as in the case of France and Italy: a wave of student revolt - —The key point is that this generation of workers who have been used to not worrying about not having a job suddenly discovered that for a long time, although there have been unions that have regularly negotiated fixed salary increases for them, the actual increase is far greater than what they themselves There are few bargains in the market.The disclosure of the truth of market supply and demand—here, we may detect a classical trend of returning to the struggle between labor and capital (the "New Left" after 1968 is plausible based on this).However, in any case, the mild and calm negotiation scene before 1968 no longer exists, and the hearts of the people at the end of the golden age have indeed changed a lot.

The psychological phenomena of the laboring population are closely and directly related to the actions of economic affairs.Therefore, once the labor psychology changes, the shocking effect is far greater than that of the student riots-although the news of the latter riots provides the media with more dramatic material, and also provides more topics for the critics who are full of words.The student resistance movement is essentially a phenomenon outside of political and economic life, and the target of mobilization is only a very small group of people; Most of them are still in school—outside the field of economic life at all, and the only role they can touch is as a buyer of rock records.All in all, this is a group of (middle-class) teens who are more cultural than political.The political significance displayed by the Western student movement is fleeting - it is not the same as that of the third world and totalitarian countries (see Section 3 of Chapter 11 and Section 3 of Chapter 15).But on the other hand, it also has a symbolic warning meaning, presenting a "symbol of mortal death" to those adults who think that the problems of Western society have been solved forever.Because of the book "The Future Socialism" (The Future Socialism) by Crossland, a reformer in the golden age, and "The Affluent Society" (The Affluent Society) by American social economist J.K. Galbraith, Sweden Economist Nobel laureate Milda's Beyond the Welfare State and Daniel Bell's The End of Ideology were both published between 1956 and 1960.Their arguments are all based on the same assumption, that is, in today's basically unsatisfactory society, relying on continuous improvement, the interior will become more harmonious.All in all, they all had great faith in an organized social consensus.However, the development of facts has proved that the lifespan of this coordinated consensus situation has not survived the 1960s.

Therefore, 1968 was not the end of an era, nor the beginning of an era, but only a signal.It is different from the soaring wages, the collapse of the international financial system established by Bretton Woods in 1971, the grain boom in 1972-1973, and the oil crisis triggered by oil-exporting countries in 1973.Nor does it play any significant role in the quest of economic historians to find a reason for the sudden end of the Golden Age.The end of the golden age was not entirely unexpected by scholars. In the early 1970s, under the influence of rapidly rising inflation, the global money supply continued to increase, and the US deficit increased substantially, and the pace of economic expansion accelerated crazily.Things are starting to get out of hand, and the world economic system is in danger of "overheating," to borrow an economist's term. In the 12 months from July 1972, the gross domestic product of the member countries of the Organization for Economic Co-operation and Development jumped by 7.5%, while real industrial productivity increased by 10%.For those historians who have not forgotten how the Victorian boom years came to an end, there may well have been fears at the time that the frenzied boom before us would soon enter a period of free fall.Their preoccupations may have been justified—though the author doubts very much that anyone at the time could have foreseen the 1974 crash.And even after it happened, I'm afraid no one treated it as a serious crisis.Because at that time the gross national product of the advanced industrial countries did experience a sharp decline—a phenomenon that had never happened since the Great War—but in people’s minds, it was only compared to the 1929 economic crisis.And there was no sign of any real unrest.As always, the people at the time were shocked and looked for answers in the reasons for the collapse of the old economy in the past, explaining it as "the result of an unfortunate chaos in a moment, which will be repeated on a much smaller scale in the future. The current shocks , mainly due to certain avoidable errors".The above is quoted from the report of the Organization for Economic Co-operation and Development (McCracken, 1977, p. 14).Simple-minded people even blame all the crimes on the greed of the chiefs of the Organization of Petroleum Exporting Countries.As a historian, it is necessary to re-examine the idea that major changes in the structure of the world economy have been attributed to bad luck or to mere avoidable accidents.But this time, the world's economic structure is indeed facing a big change. After the collapse, it will never be able to recover the attitude of striding forward in the past.An era came to an end, and in the 10 years since 1973, the world has once again entered an era of crisis. The glory of the golden age was lost.Yet in its shining days, the Golden Age brought about the most dramatic, rapid, and far-reaching revolutions in human history.Below, we will explore these revolutions further.