Phases of Capitalist Developments

Abstract

Until the eighteenth century, most of the world was caught in a Malthusian trap. Population rose about 0.04 per cent a year over the two millenia preceding 1700, and world income no faster. Since then, population has grown by 0.7 per cent a year and per capita income is a multiple of previous levels. Understandably, this transition has had a hypnotic fascination for economic historians. However, within the period of modern economic growth, there have also been distinct and important phases of development, less dramatic than the great transition, but equally worthy of study, definition and causal interpretation. These phases have characteristics which put constraints on the performance of individual countries, whether they be fast- or slow-growing. This paper deals with developments since 1870 in 16 of the more advanced capitalist countries, and divides the past century’s experience into four phases.

I am grateful to Rita Varley for help with the statistical work in this paper. An earlier version was published in the Banca Nazionale del Lavoro Quarterly Review, June 1977.