How did European nations dominate the world economy at the beginning of the 20th century?

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.