ABSTRACT
The economic performance of the Western democracies over the half-century following World War II, especially the third quarter of the century, was generally highly successful. West Germany also joined the right turn toward greater emphasis on capitalism in the early eighties. Privatization—the transfer of state-owned companies to private ownership—is the most striking and fundamental way of converting from socialism to capitalism for it reverses the nationalization of industry at the heart of collectivism. A good entrepreneurial climate with flexible capital and labor markets is basic but insufficient because industry dedicates over 90 percent of its R&D spending to applied research. Capitalism became acceptable to socialists in many parts of the world. The developments of the 1980s and 1990s were of a kind and magnitude that brought the term "globalization" into use; a new phase of capitalism, worldwide in scope, had arrived. Globalization means that all over the world countries have "signed up" for free market capitalism.
