ABSTRACT

Following World War I, capitalism was to a very considerable extent displaced, modified, and for a time, seemed in danger of extinction. In the Soviet Union, Communism replaced the market system almost entirely, and although the fascist countries preserved much of its forms, they deprived capitalism of its substance. "American capitalism changed its nature in the 1920s by heavily encouraging the consumer to go into debt, and to live with debt as a way of life". Marx had predicted that capitalism would inevitably end in a convulsive depression. By the middle of the twentieth century, it was clear that socialist policies had very significantly infiltrated and transformed capitalism as it had existed fifty years earlier. Following World War II and for the next half century, the most influential American exponent of capitalism in its pre-New Deal version was Professor Milton Friedman.