How did European nations dominate the world economy in the early 20th century?

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European nations were among the first to experience the modern phenomenon of national industrial revolutions. As early as the mid-1700's Britain, France, Germany and Spain were already in the throes of rapid industrial and technological advancement. This advancement was fueled by the cheap labor and export economies of European colonial territories. European colonialism gave several nation-states access to valuable raw goods at cheap prices and to a wide-open market in which to sell finished products.

European nations dominated the world economy at the beginning of the 20th century because European national banks were able to maintain an even currency value throughout the 19th and early 20th centuries, and most experienced an increasing GDP throughout the early 20th century.  Import and export economies supported by colonial expansion and general exploration created a large middle class comprised of merchants, government officials, and educators.

However, Europe began to experience a decline following World War II, in which many economic and cultural centers were destroyed and many European nations became deeply suspicious of cross-national alliances.

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