Growth Imperatives: Historical Perspectives on the Rationality of GDP

Abstract

This thesis investigates what history can say about the rationale for the modern pursuit of economic growth, expressed as a rate of increase in Gross Domestic Product (GDP). The thesis compares different historical explanations for the GDP growth objective. The main body has three parts. Part I examines the history of the GDP metric itself, including its precursors in earlier concepts of national income. It investigates developments between 1890 and 1950, where it establishes that previous histories are contradictory. According to many recent works, what counts as output in GDP was decided by events in the 1930s and 1940s. In contrast, an older tradition emphasizes continuity between GDP and late 19th century concepts. A re-evaluation of key sources shows that the recent idea of discontinuity is based on misunderstandings and exaggerations. The wartime national accounts reflected older ideas about how the economy works. Part II presents a history of ‘growth imperative’ thinking, i.e. the idea that capitalist societies must grow in order to avoid crises, from Adam Smith until today. This historical overview shows that growth imperative theories provide a rationale specifically for the pursuit of exponential GDP growth, which is otherwise hard to understand. Furthermore, it shows that the supposed scientific defeat of such theories has been exaggerated. Part III examines what the politics of growth looked like before the GDP, looking at Sweden in the 1920s and 30s. The results suggest that growth imperative motives transformed a vague concern with national income increases into a focus on the growth rate, including population growth. These growth imperative motives emerged from an earlier search for expanding markets and were not a new ‘obsession’ with a number, as some commentators have held. The thesis proposes that the GDP growth objective is not best understood as an expression of historically contingent ideas about what counts as socially valuable. Instead, the relevance of GDP growth today depends on how the economy works, which is ultimately an empirical question.