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themselves in the wilderness for the first time in a generation, the transition to conservative administrations—while it had significant consequences for foreign affairs and even free speech—made little difference to domestic policy. Taxation was not a contentious issue and it was a Republican president, Dwight Eisenhower, who authorized the massive, federally-overseen project of the interstate highway system. For all the lip service paid to competition and free markets, the American economy in those years depended heavily upon protection from foreign competition, as well as standardization, regulation, subsidies, price supports, and government guarantees.
    The natural inequities of capitalism were softened by the assurance of present well-being and future prosperity. In the mid’ 60s, Lyndon Johnson pushed through a series of path-breaking social and cultural changes; he was able to do so in part because of the residual consensus favoring New Deal-style investments, all-inclusive programs and government initiatives. Significantly, it was civil rights and race relation legislation that divided the country, not social policy.
    The years 1945—1975 were widely acknowledged as something of a miracle, giving birth to the ‘American way of life’. Two generations of Americans—the men and women who went through WWII and their children who were to celebrate the ’60s—experienced job security and upward social mobility on an unprecedented (and never to be repeated) scale. In Germany, the Wirtschaftswunder (economic miracle) lifted the country in a single generation from humiliating, rubble-strewn defeat into the wealthiest state in Europe. For France, those years were to become famous (with no hint of irony) as “Les Trente Glorieuses”. In England, at the height of the “age of affluence”, the Conservative Prime Minister Harold Macmillan assured his compatriots that “you have never had it so good”. He was right.
    In some countries (Scandinavia being the best-known case) the postwar welfare states were the work of social democrats; elsewhere—in Great Britain, for example—the “social security state” amounted in practice to little more than a series of pragmatic policies aimed at alleviating disadvantage and reducing extremes of wealth and indigence. Their common accomplishment was a remarkable success in curbing inequality. If we compare the gap separating rich and poor, whether measured by overall assets or annual income, we find that in every continental European country as well as in Great Britain and the US, the gap shrank dramatically in the generation following 1945.
    With greater equality there came other benefits. Over time, the fear of a return to extremist politics abated. The ‘West’ entered a halcyon era of prosperous security: a bubble, perhaps, but a comforting bubble in which most people did far better than they could ever have hoped in the past and had good reason to anticipate the future with confidence.
    Moreover, it was social democracy and the welfare state that bound the professional and commercial middle classes to liberal institutions in the wake of World War II. This was a matter of some consequence: it was the fear and disaffection of the middle class which had given rise to fascism. Bonding the middle classes back to the democracies was by far the most important task facing postwar politicians—and by no means an easy one.
    In most cases it was achieved by the magic of “universal-ism”. Instead of having their benefits keyed to income—in which case well-paid professionals or thriving shopkeepers might have complained bitterly at being taxed for social services from which they did not derive much advantage—the educated “middling sort” were offered the same social assistance and public services as the working population and the poor: free education, cheap or free medical treatment, public pensions and unemployment insurance. As a consequence, now that so many of