It was not "social compromise" and the "welfare state" that produced the long boom and the "golden age". Rather they were all by-products of militarised state capitalism. Prosperity rested on the cone of the H-bomb.37
Labour power in the Great Boom
Throughout the first post-war decades unemployment was at levels known previously only during brief boom periods. In the US unemployment was less than 3 percent in the early 1950s; in Britain it hovered between 1 .5 and 2 percent; in West Germany a high level of unemployment caused by the economic dislocation of the early post-war years fell to 4 percent in 1 957 and a mere 1 percent in 1960.
So the problem for industrialised capitalist states was not coping with unemployment, but its opposite-ensuring that employment grew at sufficient speed to feed capital's seemingly insatiable appetite for labour power. The US employed workforce rose by 60 percent between 1940 and 1970. Such expansion demanded completely new supplies of labour power. Whether politicians and government administrators liked it or not, the state could not leave supplying the key raw material for economic or military competition, labour, to the vagaries of a "free" labour market. The state had to supplement-and even partially supplant-the wages system with services and subsidies provided by itself on a much greater scale than previously.
One answer to the shortage of labour power lay in reducing the agricultural workforce still more, with state-sponsored amalgamations of small farms-an approach followed in much of Western Europe. Another lay in encouraging massive emigration of people from less developed countries to the cities of the industrial countries (from Turkey, Eastern and Southern Europe to Germany; from Yugoslavia, Portugal, Spain and Algeria to France; from the West Indies and the Indian subcontinent to Britain; from Puerto Rico to the US). A third solution-again adopted almost everywhere-was the drawing of married women into paid employment. Yet each of the ways of enlarging the labour force created new problems for capital and the state.
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Capitalism in the 20th Century