Well really what caused that is the socialist/communist revolutions of the early 20th century.
Massive reforms (e.g. the new deal, introduction of Social Security, recognition of union rights, etc) were made in capitalist countries (along with massive anti-communist propaganda) in order to stop the spread of revolution. These were TEMPORARY concessions that we have seen wither away slowly since then. A little cut here, a program cut there, union rights weakened a bit with this law or that.