More generally, there has been a systemic tendency for technological and product fixes to recurrently produce monopoly windfall profits in high­ income countries where innovations concentrate, while low-income coun­tries rarely share in the windfall. Moreover, protectionism has also played a prominent role in maintaining or restoring the global competitive posi­tion of high-wage sites of production. To put it differently, we found that while spatial fixes tended to erode the North-South divide, technological fixes, product fixes, and protectionism tended to reconstitute the divide continually.

The financial fix and the shift in international regimes are critical explanatory factors because they are the two elements that distinguish the late-nineteenth- and late-twentieth-century periods of globalization from the thirty to forty years following the Second World War. As we argued in Chapter 4, the Golden Age of Capitalism in the 195 Os and 1960s was characterized by continual spatial, technological, and product fixes that weakened labor movements at specific points in time and space, but that overall produced a trend of labor movement strengthening that lasted until the 1970s. The turning point was in the 1980s, with the intertwined take-off of the financial fix and dismantling of the labor-friendly international regime.

World labor unrest in the twentieth century, we argued in Chapter 4, has been embedded in a pendulum swing between crises of profitability and crises of social legitimacy. The crisis of profitability marked by the Great Depression of the late nineteenth century was resolved through a series of fixes that undermined livelihoods and established ways of life throughout the world. The outcome was a deep crisis of social legitimacy and a vicious circle of mounting labor unrest, revolutionary crises, and world war. After a half century of increasing systemic chaos, the postwar social contracts involved an explicit recognition that workers had to be protected from unregulated global market forces. Although profits were never completely subordinated to livelihood, there was a widespread recognition that unless capitalism could be shown to be capable of providing physical and economic security, it would not survive the growing revolutionary challenges from below. Workers could not be treated as simple commodities to be used or left unused according to market forces. Nevertheless, such a philosophical and policy stance by the 1970s had come to be seen as a growing fetter on profits, and in the 1980s it was abandoned by the world's elites. The world-scale dislocations of established ways of life and livelihood caused by this late-twentieth-century swing toward unregulated markets is once again producing a deep crisis of social legitimacy for world capitalism. Whether the crisis of social legitimacy is (will become) sufficiently troublesome to the world's elites so as to provoke a new swing of the pendulum back toward an emphasis on livelihood and security remains to be seen.