15. There was some significant movement toward economic and social democracy in many capitalist countries after World War II – most notably Great Britain, the Low Countries and Scandinavia, France, Germany, Austria, and Italy. The movement has been reversed in greater or lesser degree everywhere since the late 1970s. The pressure for the reversal came from an unsatisfactory rate of economic growth and of world trade.

That capitalism needs political democracy was shown well by Thorstein Veblen for Germany in his Imperial Germany and the Industrial Revolution (New York: Macmillan, 1915), and for Japan in his essay “The Opportunity for Japan,” (also 1915) in Leon Ardzrooni (ed.), Essays in Our Changing Order (New York: Viking, 1934). In both cases Veblen argued that even their versions of industrial capitalism were working to break down the lingering but still strong holdovers of a rigorous feudal past. He argued further that at some point democratic institutions (e.g., trade unions and socialist movements) would become so threatening to the national capitalism of both nations they would be led to retain “order” through a thoroughgoing militarization of their societies – that is, through fascism. Veblen was correct in his predictions. Within less than a generation, both in fact had become fascist: Japan by 1929, Germany by 1933.