Liberal Compromise And The Golden Age - 2581 Words

The golden age of capitalism was the period after WWII which saw a post-war economic expansion. During this period, there was a rise in real wages, and high levels of employment. In this essay we will discuss the embedded liberal compromise that took place, and attempt to identify significant features that allowed for the golden age to take place. In the later parts of this essay, the reasons as to why the embedded liberal compromise and the golden age ended will be discussed. One of the main reasons that led to the embedded liberal compromise was the global balance of power after WWII. The USA was by far the strongest country in terms of military ability and economic capacity following WWII. The theory of hegemonic stability argues†¦show more content†¦This relates to embedded liberalism as the Marshall plan could be seen as feature of as it relates to states accepting preconditions from the USA that represent the key principals of embedded liberalism. More of this will be discussed on this the the later parts of this essay. The neoliberal theory on hegemonic stability takes on a different factor as to neorealism, public goods. waltzIn a global market, the provision of public goods will be the responsibility of the hegemon. This is because when power is evenly distributed between states, the incentive to produce public goods is diminished. Free-riding diminishes this incentive as states are unlikely to bear the costs of these public goods. Public goods in this context could be seen as a well organised international system of free trade or possibly the provision of financial aid in the time of crisis. Both of these being features of embedded liberalism. These goods will be provided by the hegemon because the size of the hegemon ensures that benefits provided by the free goods outweighs the costs. Although Waltz theory is the more popular of the two theories of hegemonic stability, Ruggie believes this does not explain enough. He believes that the structure of the internationalisation of political authority is not just dependant on power, but also on social