RESULT:

The first serious challenges to the capitalist model emerged in the early 20th century, mainly in the form of communism. These early challenges took hold in several nations, but were ultimately unsuccessful in displacing capitalism and were either abandoned or grew to more closely resemble capitalism over time. More moderate state intervention for the public good, in the form of economic regulation and welfare systems, were established in many nations in varying forms, and endured in primarily capitalist market economies.

In the early 21st century dramatically increasing wealth disparity, exacerbated by rapid inflation generated by corporate price-gouging and coupled with ecological collapse from over-exploitation of natural resources, created a groundswell of resistance to capitalism among a significant proportion of the population, some of which achieved significant steps towards reform. This trend towards change was disrupted by the outbreak of the Third World War, which itself was precipitated at least in part by political unrest resulting from governments’ refusal to reform the economic system in favour of a more equitable one.

In the decades immediately following the war and first contact with the inter-stellar community, the establishment of a global government, coupled with the need to rebuild an economic system from the ground up, and the immediate experience of the pre-war system, prompted a swift transition to a new economic model that could provided access to people’s basic needs without exceeding planetary constraints. As this system was already similar to key proto-Federation economies, it spread easily as the Federation coalesced.

In the two centuries since, the economic system has remained relatively stable, but technological developments and resource-use efficiency have enabled a consistent increase the level of basic support the state could provide, to the extent that the state can now provide not only basic needs, but all reasonable needs, eliminating most of the need for any competition over resources.