This book challenges the conventional wisdom about the effects of globalization on domestic politics in the industrial democracies. There is a glut of research claiming that the international integration of markets in goods, services, and above all capital has eroded national autonomy and, in particular, all but vitiated social democratic alternatives to the free market. In contrast, I argue that the relationship between the political power of the left and economic policies that reduce market-generated inequalities has not been weakened by globalization; indeed, it has been strengthened in important respects. Furthermore, macroeconomic outcomes in the era of global markets have been as good or better in countries where powerful left-wing parties are allied with broad and centrally organized labor movements (“social democratic corporatism”) as they have where the left and labor are weaker.

These findings have broader implications for the relationship between democracy and capitalism in the contemporary period. People who propose dire scenarios based on visions either of the inexorable dominance of capital over labor or of radical autarkic and nationalist backlashes against markets overlook the ongoing history of social democratic corporatism.