CONCEPT
Post-War Social Compact
The mid-twentieth-century bargain between capital and labor that, together with the Bretton Woods system and the welfare state, produced the most broadly shared period of prosperity in the history of industrial capitalism.
The post-war social compact — the implicit and explicit arrangements between capital, labor, and the state that governed advanced economies from the late 1940s through the early 1970s — exchanged higher productivity for higher wages, stable employment, rising living standards, and expanded public services. Combined with the Bretton Woods financial system, the welfare state, the G.I. Bill and the expansion of higher education, and progressive taxation that funded public investment, the compact produced the golden age of the 1950s and 1960s. The mechanisms that redirected productivity gains from capital to labor were not market outcomes. They were deliberately constructed through collective bargaining, legislation, and political consensus that the compact's alternative — unconstrained market capitalism — was socially and politically intolerable after the catastrophes of the 1930s and the two world wars.
In The You On AI Field Guide
The compact's architecture included strong labor unions with effective collective bargaining rights, progressive income and corporate taxation, public investment in education and