The Golden Age

by John Q on March 25, 2021

In most societies, there is a myth of a ‘golden age’, a time when men and women lived simply and happily, free from the cares and troubles that afflcit them today. This myth usually includes an account of how, through foolishness or malice, the golden age was lost. In Western versions, the blame has been placed upon women – Pandora opening the box and Eve taking the apple.

In the economic history of the developed world, there is one historical episode which might reasonably be regarded as a golden age. Between 1945 and 1973, developed countries in Western Europe, North America and Oceania experienced strong economic growth, combined with minimal levels of employment and a sharp decline in inequality. In policy terms. the dominant features of this period were the use of Keynesian macroeconomics to stabilize the economy and the development of a fairly comprehensive welfare state, protecting citizens from falling into poverty due to old age, incapacity or unemployment.

Those are the opening paragraphs for Chapter 2 of The Economic Consequences of the Pandemic. Comments and criticism much appreciated.



SJ 03.25.21 at 7:19 am

Typo “minimal levels of employment”.


Tm 03.25.21 at 8:01 am

“combined with minimal levels of employment” – Typo “unemployment”

“Comments and criticism much appreciated.”

There isn’t much to comment in these two paragraphs – it will be interesting how you continue that narrative. I’ll point out the obvious regressiveness in the “golden age” framing. The post war period appears only so “golden” because the preceding era was so horrible. High growth isn’t all that remarkable when you start from a low baseline. It doesn’t follow that we should wish for more destructive wars because of all the economic growth that they stimulate.

In terms of actual material standards of living, hardly anybody alive today would seriously prefer to live in the 1950s (and I’m not even getting into less material aspects, like the far more authoritarian, patriarchal structure of society). It has been claimed that rates of change are more important than absolute levels. There is some psychological justification for this view but it is also worth pointing out that the obsession with growth rates is a very recent phenomenon that has been relentlessly promoted by the dominant capitalist ideology. We need an economic paradigm that promotes a more equal distribution of material wealth and values social and natural capital, not a return to dirty, destructive growth.


Tim Worstall 03.25.21 at 11:36 am

“Between 1945 and 1973, developed countries in Western Europe, North America and Oceania experienced strong economic growth, combined with minimal levels of employment and a sharp decline in inequality. In policy terms. the dominant features of this period were the use of Keynesian macroeconomics to stabilize the economy and the development of a fairly comprehensive welfare state, protecting citizens from falling into poverty due to old age, incapacity or unemployment.”

Hmm, well. For it to be that development of the welfare state it would need to be consistent with the rolling out of the welfare state. Which did happen at different times in different places. UK unemployment pay (rather than Poor Law derivatives) started in 1934 for example.

It’s also possible to point out that the 1930s and 40s – building stuff to then blow it up isn’t normally thought of as useful economic growth – saw pretty much no economic growth. But both decades did see considerable technological advance. The growth that followed thereby being the application of that technological advance.

Sure, to say all of it was would be too much. But so also would it be too much to insist upon the opposite, that none of the 50s to 80s growth was a result of the absence of that in the 30s and 40s.

That that was, as described, the policy dominance of the era is true. But the growth is coincident with that. To prove causation requires a little more than just noting the correlation.


MisterMr 03.25.21 at 12:20 pm

Can we blame the end of the Golden Age on Tatcher, to mantain the sexist tradition?

From the point of view of the Chinese, the golden age has been the last 30 years.

Personally I think that the fast growth was due to lower inequality (in China the opposite is happening, but only because they can rely on demand from the much higer income USA).
The link between lower inequality and growth is simply because lower inequality was caused by lower unemployment (that also caused high inflation arguably).

Also, @tm 2, the reason we live in a less authoritarian, patriarchal and racist society now is because higer economic equality in the 50s made it possible to have a cultural change: the superstructure lags the base. So I think it is weird to contrast modern day less authoritarian culture with the period that created this culture as if they were opposites.
Why does the base lag the superstructure?
It’s simple: in 1950 the people in power were the ones born around 1890, and reflected the kind of education they had at the time; today the people in power are the ones born in 1960, and our society reflects the education they had at the time.


LFC 03.25.21 at 2:01 pm

Part Two of Hobsbawm’s The Age of Extremes: A History of the World, 1914-1991 (Vintage Books pb. ed., 1996; hardcover, 1994), is called “The Golden Age.” You don’t need to credit the phrase to him, though, since as a label for the period c.1945-c.1973 it’s probably not traceable to any single author, i.e., it’s in fairly wide circulation. Indeed, one of the sources that Hobsbawm uses is S. Marglin and J. Schor, eds., The Golden Age of Capitalism (Oxford UP, 1990).

In his brief discussion of the end of the Golden Age (pp. 284-286), Hobsbawm mentions, among several other factors, “the worldwide wage explosion at the end of the 1960s” that contributed to a “rapidly rising inflation”; perhaps oddly for a Marxist, he doesn’t mention, at least not in these pages, the conclusion that large employers presumably drew, namely that unions had gotten too big for their breeches and had to be brought to heel (to mix metaphors).


Brett 03.25.21 at 4:53 pm

I think the “Golden Age” framing in past societies ironically came about from efforts to do reforms. In deeply conservative societies, it made a lot of sense to claim that your reforms (including some outright radical ones) were actually “rediscoveries” of ancient wisdom. Sort of like Plato using the supposed “Ancient Athens”.


In the provinces 03.25.21 at 4:59 pm

It wasn’t just the developed world. Economic growth rates in the Eastern Bloc, Africa, Latin America and Asia (with a few exceptions, like China during the Great Leap Forward) were very rapid then as well. According to Angus Maddison’s calculations of the global product the world-wide economic growth rate, 1950 – 73, was the fastest in all of human history.


Jake Gibson 03.25.21 at 5:54 pm

Even in that circumstance, it is more nostalgic memory than actual existence.
The reaction of the wealthy elites to growing equality can be seen in the Powell Memo and Reagan-Thatcherism. Powell, Reagan and Movement Conservatism are really the symptoms.
Equality is anathematic to pure Capitalism. Capitalism can’t exist in any pure form without an underclass of desperate worker drones.


mary s 03.25.21 at 7:07 pm

Well, I know this isn’t news to anyone but . . . in the US of A, that “golden age” didn’t include everyone, thanks to Jim Crow/racial segregation and other forms of white supremacy/nationalism — e.g., my neighbors in Buffalo having to change their “foreign” names (Alba was called Amy and Ginetta was called Jenny) in order to do menial office work. Oh, and what we might call structural sexism, too.

I wouldn’t bring it up except that I think it was a feature, not a bug.


Alex SL 03.25.21 at 8:55 pm

“In policy terms. the dominant features of this period were the use of Keynesian macroeconomics to stabilize the economy and the development of a fairly comprehensive welfare state… Not only was economic growth consistently strong, and unemployment low, but income distribution was equalized to a degree not seen before or since”

I find this part interesting, because it treats state intervention and unemployment insurance as potential causes of prosperity, but equalised income distribution as an effect. IANAE, but to me it seems very logical that the strongly progressive tax system and the equalising effect it has on incomes is one of the key causes of prosperity.

It ensured that the rich didn’t pile up increasingly ridiculous amounts of non-circulating money, instead the state was collecting it and cycling it back into the economy. And it ensured that there was profit to be made producing and selling things or services to the working class (because it had a large share of the disposable money), which in turn created employment, in marked contrast to now, when it is clear that a lot of economic actors consider it more profitable to speculate, buy up others, inflate bubbles, or lock in monopolistic revenue streams.

P5: “tax revenue would”…?; double space in last line
P6: “they did not to worry” (need)

Tangential to the chapter content, but one of my greatest frustrations in discussions of the Golden Age is that whenever somebody suggests “hey, maybe we should try to understand what they did right and copy it”, a bunch of other people will jump in and argue that the time was actually terrible because of discrimination against minorities, they didn’t have shiny smartphones, and do you really want to go back to the primitive medical technology of that time?

Are they seriously arguing that 1950s tax policies were the cause of 1950s homophobia, or that prosperity can only be achieved by forgetting the results of the last few decades of medical research? But, astonishingly, to some people that seems to be an actual argument.


Tm 03.25.21 at 9:20 pm

MisterMr So you don’t dispute my point that almost no reasonable person would prefer to actually live in the 1950s rather than the present?

Btw if it is “weird” to contrast the present with the 1950s, can we perhaps then agree that the whole golden age narrative is weird?


john burke 03.25.21 at 11:11 pm

How much of Keynesian macroecon0mics in the US was driven by the military budget? How much in Western Europe and Japan was driven by increased demand from US consumers, which in turn was driven by military spending? And why did this happy mechanism stop working?


Raven Onthill 03.26.21 at 1:57 am

It is a strange thing to be a child of a golden age.


MFB 03.26.21 at 10:22 am

The original two paragraphs ought to be uncontroversial, and are controversial only because most post-1975 economics is largely devoted to trashing the policies which generated rapid economic growth for almost thirty years.

I was rereading Hobsbawm last week; it’s surprising, given his Party origins, how conventionally liberal his analysis is, but if Tony Benn’s diaries are to be trusted Hobsbawm was basically a New Labourite at that stage.

In any case, it seems obvious that there was a sharp rise in economic growth combined with a decline in inequality over that period, whereas there was a less sharp but still significant slowdown in economic growth combined with a massive surge in inequality over the subsequent period, in all the countries where neoliberal policies were pursued.

While Thatcher and Reagan are the persons most associated with these neoliberal policies and that economic slowdown, it seems obvious that they had a lot of help — and to all intents and purposes, Thatcher’s predecessor Callaghan and Reagan’s predecessor Carter were fundamentally neoliberals. I don’t know where sexism comes in, unless these days it’s been declared to be immoral to point out that a woman is in charge of implementing bad policies.


Gorgonzola Petrovna 03.26.21 at 10:29 am

The Soviets won WWII and acquired large territories, China turned communist, communism was popular in western Europe. The western establishment had to do something, and not only geopolitically, internally too. Carrot and stick. Some concessions, and of course some massive repressions. By the 1980s it was finished; no concessions were necessary anymore.


JimV 03.26.21 at 2:41 pm

Personal anecdote: in the 1960’s, a school teacher in the USA could put five children through college, usually two at a time (and considered it a duty). Don’t try that today.

Personal opinion: managers who served in the military in WWII tended to believe in training their employees, giving them responsibilities, and standing by them when necessary. Part of their identities was to believe the jobs they and their employees did was worthwhile to society.

There were a lot of issues such as pollution and racial prejudice whose importance they didn’t understand, but many of them were persuadable and would look at the facts when the facts were brought to their attention.

Then CEO’s like Jack Welch came into power, and the management they fostered were night-and-day different. When the “Dilbert” cartoons first came out, they seemed like a documentary.

What do I know, but it makes sense to me that going through WWII would give the survivors a different perspective, and that it wore off culturally.


SusanC 03.26.21 at 3:15 pm

Tolkien (esp. Lord of the Rings) is big on the Golden Age that never really existed., except possibly in Middle Earth,

Trying to relate LoTR to real chronology: possibly part way through the First World War is the turning point, the point beyond which it ceased to be even remotely credible to claim War is Fun. The decline of the (imaginary history) feudal aristocracy also seems to play a part, so the turning point is maybe a little bit earlier than 1911.

Adam Curtis’s latest documentary series has a bit where he suggests the British screwed up Iraq the first time (early twentieth century) by trying to refashion it into their idea of an (imaginary) feudal past, rather than a modern democracy,

I blame Sauron s

See also: China Mioeville’s Iron Council, etc.

P.S. If I seem to be confusing real history and Middle Earth, the basic point is that the actual real-history political movements were sort-of doing this, but without realising it.

See also: D. W. Griffith’s Birth of a Nation, from 1915.


SusanC 03.26.21 at 3:28 pm

Given that this is about imagined history that didn’t actually happen but people now think it did, “Old Labour” can possibly serve as the (UK) leftist Golden Age. This, of course, puts Tony Blair in the role of the Sauron figure.


Anthony Behan 03.26.21 at 6:06 pm

Hi there.

Two points I’d make on the Golden Age metaphor. First, there’s a quasi-theological element to the reactionary instinct, considering things like original sin, the idea that a past age of innocence is worth remembering, worth recovering. That comes most obviously with the Adam & Eve story, extended by Heidegger who writes a lot about the verfallen or fallen status of human being, and our desire to rise again, through some kind of salvation. I’ve written about it here. It’s further echoed in his treatment of authenticity, and both Nietzsche and Rousseau’s sense of education (first you unlearn everything and ultimately you become a child again etc.)

Second, I’m taken with the idea of the Gilded Age (1870-1900, roughly), a derivation of the Golden Age trope, recognising that all was not really as it seemed. Possibly worth considering; it was the age of the American Oligarch, the massive trusts that had to be broken up, but that had created significant value at the same time. There are other Golden Ages too – in philosophy (the 1920s), the Renaissance in Italy, the Dutch post-Spanish period in Art (Rembrandt and all that). It’s not just commerce and technology!

Final point – Golden Ages are not necessarily mythical. It’s invariably true that not everything was golden; but it’s usually the case that a lot of good came from those times. For example, would you want to go back to a time when science was respected and not openly questioned in government and mainstream media? Sure. Would you like to have to ride a horse to work again? Not really. Swings and roundabouts ;-)


SamChevre 03.26.21 at 9:12 pm

@Alex SL
Are they seriously arguing that 1950s tax policies were the cause of 1950s homophobia

I would not argue that–but I would argue that 1950’s tax rates, and 1950’s social structures including those in the labor market, strongly related to 1950’s gender roles. I don’t think “a large portion of married, middle-class women working” and “one income can support a middle-class lifestyle” are compatible.

In general, I think this analysis muddles correlation and causation badly. Major growth in capital-intensive industry in the West had stopped by 1965; much of the finance-friendly “neo-liberal” policy changes in the 1965-1985 period were an attempt to get it back–but the policy was driven by the reduction in industrial growth.


MisterMr 03.26.21 at 10:23 pm

@Tm 11

No reasonable person would like to live 70 years ago, because the world we live in now is better, because of big improvements both in technology and in culture, improvements that largely were created by the society of 70 years ago.

So many people would reasonably want to live in a society that both retains the improvements that were created in the 50s and has the ability to build over them to create more equality both economical and cultural, instead of sliding back to a situation where we have more inequality both economically and in terms of authoritarianism, racism etc.

I think what I said is quite uncontroversial, so I’m surprised when people who apparently have a similar political worldview to me strongly reject that the 50s were a good period.

Either we are talking past each other, or you believe that there was some connection between say racism and keynesianism, like if keynesian policies were possible only because of racism.
I’ve seen some people argue this but I think it is factually wrong.
I can’t tell if this is what you mean or if you mean something different, in which case I ask you to make your point more clearly.


Alex SL 03.27.21 at 1:24 am

Gorgonzola Petrovna,

I completely agree with your analysis. But the question remains: what were they key policies that made shared prosperity happen and that could be copied today if political will were there to achieve it again? At least that is how I understand the point of the post…


John Quiggin 03.27.21 at 2:26 am

I have put up a new post, responding to points about sexism and racism during the Golden Age (this was already covered in the draft chapter, but I’m repeating here) and making the same point as MisterMr @22 in relation to technological change.


Gorgonzola Petrovna 03.27.21 at 7:52 am

I’m skeptical of the idea of technocratic decision-making, ‘policies’.

Large country’s economy is an extremely complicated formation. I see it as a life-form. The management has to mostly go with the flow, adapt to the ever-changing conditions. Yes, steering gently to one direction or the other, but within a narrow range; or the whole thing will collapse. Think of Roosevelt’s “You’ve convinced me. Now go out and make me do it.” …Well, okay, I suppose there are examples of successful — if extremely dangerous! — technocratic sharp turns (Deng Xiaoping). Still, I think if those are ‘policies’, it’s only in the most generic sense.


Tm 03.27.21 at 10:20 am

Nobody here is arguing against „trying to understand what they did right“ ( in the 1950s or any other period) (re Alex 10). But there are good reasons to resist the nostalgia and glorification that invariably come with the Golden Age discourse.

And MisterMr, that nostalgia (which I insist is politically regressive) is very real in the US (to a much lesser extent in Europe), it has been a persistent feature of the Trump-age political discourse. On the right, that nostalgia quite explicitly endorses the unapologetically racist and patriarchal culture. In parts of the left, I see a naive nostalgia for the working class culture of the period, blind to its problematic aspects (see 9).

I think we can agree that post war economic policies did something right that we should want to understand and learn from, but with the caveat that some of the conditions of the postwar successes cannot simply be recreated. These conditions include a devastating world war in which US liberal democracy and Soviet Communism defeated fascism, thereby discrediting right wing politics and economics to the core. Also, the structure of capitalism as well as of the working class where very different from today.

Finally, my point stands that growth will always look more impressive when you start from a low base line. We shouldn’t be nostalgic for those growth rates and for the economic paradigm that undergirded them. Our period’s problems can only be exacerbated, not solved, by dirty growth (and clean growth is a chimera).


J-D 03.28.21 at 4:08 am

But the question remains: what were they key policies that made shared prosperity happen and that could be copied today if political will were there to achieve it again? At least that is how I understand the point of the post…

I don’t think the most important point of the (draft) chapter is that we now should copy key policies from the past. I think the most important point is that Benjamin the donkey was wrong.

Only old Benjamin professed to remember every detail of his long life and to know that things never had been, nor ever could be much better or much worse – hunger, hardship and disappointment being, so he said, the unalterable law of life.

Windmill or no windmill, he said, life would go on as it had always gone on – that is, badly.

(George Orwell, Animal Farm)

If inequality (meaning, at least, some important forms of inequality) has increased since the earlier period described, that means, among other things, that there was a time when there was much less inequality of that kind, and therefore that this kind of inequality is not inevitable and can be reduced. That it is possible to reduce it is a more fundamental point than conclusions about how best to reduce it (obviously those conclusions are important too; but even if we make errors in drawing those conclusions, the more fundamental point remains).


Hidari 03.28.21 at 6:41 pm

Pretty exciting to see how many people arguing against objective and non-debatable facts, such as, for example, that growth was higher worldwide between 1945 and 1975, that unemployment was lower, that inequality was lower, that, whereas in 1945 most of the countries of the Global South still sweated under the jackboot of the Western imperialist powers, by 1975 most of them were liberated, and so on. (the idea that to view things in this way is ‘sexist’ or ‘racist’ is ludicrous: the anti-sexist and anti-racist movements which we now all (rightly) support actually began in these times, and all that has happened is that the rest of us are playing ‘catch up’ to these movements).

And the reason why this was the the case is simple and, again, not debatable: because there was, worldwide, a large, multinational, working class, anti-capitalist movement which took different forms in different countries, but which fought against capitalism, against inequality, against imperialism, and in favour of the working class. And the reason that a lot of things are so much worse now (again, in a number of objective and non-debatable ways) are that this movement no longer exists in any meaningful sense. Because it was crushed in the neoliberal onslaught 1975 to 1995 (roughly).

One cannot help but wonder why so many people are so determined to deny these facts, and smear those who proclaim them as being victims of ‘nostalgia’.


notGoodenough 03.30.21 at 6:48 am

John Quiggin @ OP

“The War on Poverty launched by President Lyndon B Johnson in … was an expression of this faith”

Some ellipses there :-) US commentators no doubt know better than I, but 1964ish?

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