times, mainly through increased use of the three fossil fuels: coal, oil, and
natural gas.
The lethality of weapons increased even faster. World War I artillery shells
could kill hundreds; the bomb dropped on Hiroshima on August 6, 1945,
killed 70,000 people, and a similar number died from wounds or radiation
sickness. In the 1950s, the U.S. and the USSR developed even more powerful
bombs that used hydrogen fusion, the energy that drives all stars.
Capitalism emerged as the dominant social and economic system. But it also
evolved in new directions. I have argued that capitalism was a fundamental
driver of the Modern Revolution. That conclusion looks even more plausible
after the collapse of the communist societies that had seemed, brieÀ y, to offer
an alternative.
Yet the impact of capitalism was contradictory, for it generated
unprecedented wealth as well as new forms of poverty. This is because in
capitalist societies, innovation is driven by the gradient in wealth and power
between entrepreneurs, who own signi¿ cant capital resources, and wage
earners whose main asset is their own labor. Without inequality, capitalism
cannot work.
In the wealthiest societies, capitalism evolved into “consumer capitalism,”
in one of the most important transformations of the century. Karl Marx had
argued that as capitalism developed it would impoverish most wage earners,
generating huge revolutionary movements that would eventually bring about
its collapse. By the end of the 20th century it was clear that this prediction
had proved wrong. Why? Marx had missed something that would be seen
clearly by industrialists such as Henry Ford, economists such as John
Maynard Keynes, and politicians such as Franklin Roosevelt (1882–1945).
As productivity outstripped population growth, producers had to work harder
to ¿ nd markets for the massive numbers of goods they produced. Early-
20 th-century pioneers such as Henry Ford saw that wage earners themselves
provided a huge potential market. But they could only purchase goods if their
wages rose. So it was in the interests of capitalists to raise wages and increase
consumption. Such arguments were tested in the American “New Deal” and
analyzed in the work of economists such as John Maynard Keynes.