Many writers have discerned links between the welfare state and social democracy. A few have examined the connections between the welfare state and war. The links connecting war, social democracy, and the welfare state are here examined, and it is argued that all three can be fruitfully understood as aspects of a tendency to state capitalism which prevailed in the first half of the twentieth century but which has increasingly been offset by a countervailing tendency to internationalization. The welfare state and social democracy, as national-state centered phenomena resting on the capacity of individual states to manage their own segments of the world economy, flourished in the first period but have been undermined in the second. The tendency to militarism and war has flourished in both.