The interwar decades brought a host of economic problems: high unemployment, huge inflation, and, of course, the Great Depression. The “Hayekian” or economically orthodox solution to these problems – laisser-faire and austerity – was, as DeLong claims, “completely insane” and “made things worse”. The suffering caused by capitalism, combined with the failure of establishment figures and parties to manage it effectively, contributed to growing support for extremists on the left (communists) and right (fascists and national socialists), who promised " solve" the problems of capitalism and create a "better" world. Capitalism tempered, then unleashed Disciplined by the lessons of the interwar years, the West entered a new period after 1945, characterized by DeLong as a " Keynesian-blessed forced marriage between Polanyi and Hayek .
Capitalism did re-emerge, contrary to the south africa phone number list wishes of its staunchest critics, but it did so tempered by state interference to prevent its downsides, which also disappointed "free market" advocates. If between 1870 and 1914 humanity had slowly moved towards utopia, during the postwar Social Democratic era it ran towards it. In the decades after 1945, Western economies grew faster than ever, while inequality, class conflict, and extremism declined. Despite its successes, this social democratic era also came to an end. Economic difficulties beginning in the 1970s provided an opening for "Hayekian" attacks on the system, and the demise of communism after 1989 emboldened the right.
Thus began a new neoliberal period in which the pendulum swung back towards Hayek and a more relevant role for markets, and away from the Polanyian or even Keynesian emphasis on the importance of state intervention to protect citizens from the negative consequences of capitalism. The results in the West were tepid growth, rising inequality, stagnant productivity and entrepreneurship, and a financial crisis that brought this period to an end . (The developing world had a different experience during these decades: capitalism generated huge profits and progress similar to that experienced by the West between 1870 and 1914.) This leads us to DeLong's fifth period, the contemporary one, characterized by a Polanyian reaction to the negative consequences of the neoliberal era. Over the past decade or so, the West has experienced the growth of social discontent and political extremism , as well as widespread questioning as to whether capitalism can still help humanity creep toward utopia.