The capitalist economic system solidified its march toward success after World War II under U. S. leadership, the creation of international financial institutions, and the “glorious years.” Since 1945, the ripple effects of capitalism—now in the midst of a technological revolution—have continued to grow.
Eighty years have passed since one of the most tragic episodes in modern history ended on September 2, 1945: World War II. Although Germany surrendered on May 8 of that year, the war was not considered over until after the atomic bombings of Hiroshima and Nagasaki. Japan signed the surrender document, and the conflict finally ended.
Throughout this period, both before and after, the economy played a major role. Capitalism, which was born with the Industrial Revolution, evolved over time to transform the world forever with the beginning of the Golden Age of this economic system. But what has happened over these eight decades?
1945-1950: the reconstruction of Europe and the consolidation of the U.S.
At the end of the conflict, Europe was a devastated continent. Industrial production had fallen to half of its 1938 level, much of the infrastructure was completely destroyed, Germany had lost 20% of its male population, and France had lost 10% of its national wealth.
It was then that the U. S., fearing a possible expansion of the Soviet Union, decided to launch the famous Marshall Plan in 1948, with funding of $13 billion—equivalent to $140 billion today. This injection had a major impact on Europe, where industrial production grew by 35%.
For the United States, it was also a masterstroke, as it came to control 50% of the world’s GDP, became the leading exporter of manufactured goods, and the dollar was established as the international reserve currency under the Bretton Woods system.
During this time, not only did Europe begin to recover and the U.S. U.S. emerge as a global leader, but institutions such as the International Monetary Fund were also created to stabilize the international payment system, among other objectives, and the World Bank, which promoted the reconstruction of Europe and Japan.
1950-1973: the Golden Age of capitalism begins
The period between the end of World War II and the 1973 oil crisis became known as the Thirty Glorious Years. During this time, Europe recorded GDP growth rates of between 4% and 6%; Japan grew at a rate of 9%, and the United States at 3%. This economic growth had a major impact on living standards across societies. For example, per capita incomes doubled in most Western countries, and millions of families entered the so-called middle class. In fact, this was the era when mass consumption emerged as a driving force of the economy, shopping centers multiplied, and advertising expanded.
Not only that, but Europe also used this period of prosperity to shape welfare states, establishing pension systems, public healthcare, and public education.
Some striking figures reflecting the remarkable economic expansion of this period can be seen in annual automobile production, which rose from 10 million in 1950 to 40 million in 1970. As a result, oil became an economic engine, with production increasing from 10 million barrels per day to 50 million.
1973-1990: oil crisis and stagflation
After two decades of calm, the economy was hit by the oil crisis. This crisis began to take shape with Egypt and Syria’s attacks on Israel to reclaim the territories lost in 1967, namely the Sinai and Golan. The United States and European countries came to Israel’s defense in the famous Yom Kippur War, and OPEC responded with an oil embargo against the West and Israel’s allies.
Within months, the price of a barrel quadrupled, rising from $3 to $12, triggering inflation, recession, and industrial and energy crises in the West. To give some figures, inflation in the U.S. rose U.S. to 10% in 1974 and 1975, and unemployment nearly reached 10%. In Europe, inflation exceeded 12% in some countries, and the industrial crisis also led to a wave of layoffs.
But the worst was yet to come. In 1979, the second major oil crisis occurred following the Iranian Revolution and the fall of the Shah, the last monarch of the Persian nation. The price of a barrel rose from $14 to $40 in 1980, an increase that worsened the unresolved problems from the previous crisis. Once again, inflation and unemployment soared, causing deep recessions between 1980 and 1982.
Into this fertile ground came a new style of governance with Margaret Thatcher and Ronald Reagan. Taxes were cut, privatizations and deregulation were implemented, and the role of the state in the economy was reduced, giving rise to a new wave of economic freedom and capitalism.
In fact, inflation in the United Kingdom fell from 20% to less than 5%, and the economy grew at an annual rate of 2.6% during the decade. In the United States, Reagan’s policies resulted in annual GDP growth of 3.2%, and employment increased significantly, especially in the second half of the decade.
Overall, this period can be defined as the end of the postwar expansion cycle, a shift toward globalization, and an increase in economic freedom. It was also the era in which Asia began to awaken and establish itself as a key pillar of industrial growth.
The best of both worlds
1990-2008: the digital revolution and the financial crisis
With a growing and increasingly connected world, following the fall of the Berlin Wall and the end of the Cold War, the 1990s emerged as a period of unprecedented expansion and growth. These were the years that saw the birth of the internet and the rise of previously unknown companies like Microsoft, Apple, and Google, which became the big winners after the dot-com bubble.
It was a period during which the world grew at a rate of 3.5%. U.S. per capita GDP rose from $23,954 to $48,400, consumption accounted for almost 70% of U.S. GDP, and the global middle class grew from 23% of the population to 30%. Amid all this, China emerged as a major world power, with per capita GDP growth rates of 10% per year during this period.
Housing also played a key role during this time. With consumption rising and the economy expanding, construction boomed thanks to the global monetary environment. In general, house prices in the United States rose 90% between 2000 and 2006. However, banks continued to issue subprime mortgages, setting the stage for the 2008 financial crisis.
2008-2025: crisis, pandemic and the technological revolution
In less than twenty years, the 2008 financial crisis, the 2011–2012 euro crisis, the major tech boom, and the 2020 pandemic all occurred. The European Union experienced its worst economic contraction since World War II, unemployment surged across all countries, and the EU was pushed to the brink of disintegration following the bailouts of Greece, Ireland, and Portugal.
And what happened next? After the storm, calm returned. Annual growth averaged 3.6% from 2010 to 2019. U.S. per capita GDP rose from $48,000 to $65,000, China grew at an annual rate of 7.7%, and extreme poverty fell from 15.7% in 2010 to 8.4%.
In 2020, the pandemic brought the world to a standstill. The unthinkable happened. But the economy was not severely damaged, thanks to massive money printing by central banks, which did, however, trigger a major inflation crisis in 2022 that is still reverberating.
In short, looking back, we can see that since World War II, extreme poverty has fallen by more than 60% thanks to global economic growth; per capita GDP is six times higher than it was then; the middle class now represents 50% of the world’s population; and historic gains have been made in health, well-being, and education.