WASHINGTON -- We are now witnessing "the crisis of the old
order." The phrase, coined by the late historian Arthur
Schlesinger Jr. to describe the failure of unfettered capitalism
in the late 1920s, also applies to the present, despite
different circumstances. Everywhere, advanced nations face
similar problems: overcommitted welfare states, aging
populations, flagging economic expansion. These conditions
define the global crisis and explain why it's struck the United
States, Europe and Japan simultaneously. We need to move beyond
daily headlines to understand this larger predicament. The old
order, constructed by most democracies after World War II,
rested on three pillars. One was the welfare state. Government
would protect the unemployed, aged, disabled and poor.
Capitalism would be tamed. A second was faith in economic
growth; this would raise everyone's living standards while
permitting income redistribution. Growth was ordained, because
economists had learned enough from the 1930s to cure periodic
recess