Fordism and Embedded Liberalism: The Economic Order Between World War II and the 1970s

Chapter 13 explains how the Fordist mode of production in combination with the multilateral system of “embedded liberalism” led to a specific phase of industrial capitalist development between 1945 and 1973. This phase of capitalist “habitation” transformed both the mode of production and the mode of consumption. It established a capitalist global economy based on cooperating national welfare states under the hegemony of the USA. Internally, this economic model was based on the cooperation of capital, labor, and the state in various forms of corporatism. However, it remained spatially limited because returns remained unevenly distributed globally and countries of the Global South began to follow their own development paths. The end of this phase was marked by the collapse of the Bretton Woods system in 1973, the first oil price crisis, and the subsequent period of low economic growth and high inflation.