The Hegemony of Growth
The OECD and the Making of the Economic Growth Paradigm, written by Matthias Schmelzer 

Cambridge University Press, 2017

396 pages

Price Paperback:  £24.99

ISBN: 9781107587557

History of the Future of Economic Growth. Historical Roots of Current Debates on Sustainable Degrowht, escrito por Iris Borowy and Matthias Schmelzer

Routledge Taylor & Francis Group, 2018

200 páginas

Precio Paperback: £36.99

ISBN: 978113849967

Double review made by Fernando Collantes, University of Zaragoza, Spain

Are we obsessed about economic growth? What are the social and ecological costs of securing steady increases in our production levels? What is progress about nowadays – achieving more growth or dethroning growth as the chief aim of public policy? These are important questions that have attracted some scholarly attention, but the answers given so far have commonly lacked a historical dimension. As a result, most of them, both on the pro- and on the anti-growth sides, are based on implicit ideas about our past that are plagued with biases and mistakes. The outstanding work that historian Matthias Schmelzer has been carrying out in the last few years aims at correcting that problem by providing a rigorous, profound historical analysis of the rise of the notion of economic growth from 1945 to the present.

In The hegemony of growth, a book that is based on his doctoral dissertation, Schmelzer uses the OECD as a lens to narrate the story. In the beginning (prior to the Second World War) the notion of economic growth was not really present among politicians, economists or citizens. However, between approximately 1945 and 1968 the notion of growth came to be positioned at the core of the economic policy debate, both in the North and in the South. A small group of economists enthusiastically set themselves to the difficult technical task of defining what growth was and, even more importantly, developing instruments and conventions that would allow for consistently measuring growth through time and space. They did so not only out of intellectual curiosity, but also because they were strongly backed by politicians who viewed growth as an effective tool of social stabilization. The OECD was particularly influential here. The promotion of growth, both conceptually and as a policy goal, became crucial to the making of OECD’s identity as an international organization oriented towards policy advice and soft power, as well as the basis of its legitimacy in the eyes of financing member states.

This synergy between the academic and political spheres was strongly challenged after what, following Immanuel Wallerstein, Schmelzer calls the “revolution of 1968” – the emergence of new ideas about the human being, society and nature that were critical about the emphasis laid on economic growth, underlined the social and ecological costs of growth, and urged to build an alternative societal model. The paradigm of growth, however, managed to survive. The economic crisis that started in 1973 favoured the consolidation of growth as the key policy goal, due to both its intrinsic virtues and (again) its effectiveness as a social stabilizer. Moreover, the works undertaken in order to translate the ideas of 1968 into new social indicators were not successful at producing an alternative to GDP that was as operational and as widely accepted as the latter. As a result, the paradigm of growth was able to survive by absorbing what originally had been frontal criticism. Over the last four decades, our societies would have consequently become “addicted to growth”, in a formulation that Schmelzer seems to take from historian Avner Offer.

This line of argument is developed and extended along new, complementary directions in the multi-authored book that Schmelzer, together with historian Iris Borowy, edited shortly after. In History of the future of economic growth (which originated at a session of the International Conference on Degrowth), historians, politicians, economists and philosophers join forces in order to send us the message that the notion of economic growth is relatively recent in history and that it has probably gone too far in the policy agenda. Some of the topics covered by Schmelzer in a succinct way in The hegemony of growth are explored here more systematically. In particular, the brilliant contribution by Jeremy Caradonna explores the tension between the growth imperative and the search for environmentally sustainable development, concluding that the growth imperative has been strong enough to domesticate environmental concerns. Schmelzer himself, in collaboration with philosopher Barbara Muraca, contributes what perhaps is the freshest chapter in the book – an exploration of commonalities and differences in post-growth thought in three different intellectual traditions (English-speaking countries, southern Europe, and Germany).

Especially with The hegemony of growth, Schmelzer is making a major contribution. It is not just what he brings to the historical debate. It is also (and perhaps more relevantly for this journal’s readers) what he brings to the broader social science debate. Schmelzer subjects conventional ideas about economic growth to a history-based shock therapy. The notion of growth is not eternal, nor is it outside history’s arrow of time – it has had a birth and a development, and it may also die (or at least become aged) in the future. One of the most interesting subplots in Schmelzer’s story has to do with the unfortunate simplification of growth both as a theoretical notion and as a measurable variable, as the cautions and nuances of the early days were gradually left behind. For instance, the first specialists in national accounting warned that GDP should not be taken as a direct measure of welfare, but in the end this is exactly what happened. Similarly, some early traditions of national accounting, for instance in Norway, measured GDP in a different way, trying for instance to incorporate the value of unpaid domestic work. When Schmelzer goes deep into this story and tries to understand why we do not impute value to unpaid domestic work in our GDP calculations while we do impute value to (for instance) real estate property, the uncomfortable conclusion is that the former seemed too difficult (or, perhaps, intrinsically irrelevant) to the all-male team of intellectuals who led the international process of standardizing the statistical procedures for GDP estimation in the 1950s. The detailed archival work undertaken by Schmelzer allows us to perceive the tree of possibilities that were still alive in the central part of the twentieth century, as well as the way in which this tree was pruned in order to produce a useful but problematic standard.

But it is not just the way in which Schmelzer questions conventional ideas about growth as a panacea. It is also what his work contributes to the development of alternative ideas. In modern economic thought, early dissenters about the primacy of growth include John Stuart Mill, Richard Tawney and John Maynard Keynes. This was followed by a wave of major works on the issue by authors such as John Kenneth Galbraith or E. F. Schumacher in the decades after the Second World War. More recently, Clive Hamilton, Juliet Schor and Robert and Edward Skidelsky (among others) have bravely fought to keep the discussion alive. All of them have made really interesting theoretical contributions, but, as Schmelzer seems to say via Foucault in a modest footnote (page 342), there comes a time when history becomes more effective than theory at destroying false certitudes and inspiring fresh thinking. My personal impression is that post-growth scholarship is currently way beyond that threshold. What we need now is not one more recycling of the well-known theoretical criticisms of growth, but a more mature understanding of the way in which growth, both as a notion and as lived experience, conquers society. Only that way may dethroning growth become feasible.

By identifying what we may call the social bases of the growth paradigm as an intellectual construction, Schmelzer and the authors of the collective book make a remarkable advance in the conceptual part of this project. This does not mean that the debate is over, though. A pending task would be to identify the relative importance of different institutions and academic groups in the rise of the growth paradigm. The OECD seems to have a special relevance for this story, but more research would be needed on other international organizations or on core States in order to assess more precisely the OECD’s role. Also, there is room for linking this research to the field of the history of economic thought. A remarkable proportion of scholars in this field (among them, for instance, Alessandro Roncaglia) is critical about the marginalist turn that took place in economics in the late nineteenth century and that led to the individualistic, static, deductivist framework that still dominates the training of economists today. Seen from this angle, the shift towards a more aggregate, dynamic, empirical view of the economy, such as the one that is embodied in national accounting and growth economics, may well have been (whatever its limitations) a historically progressive development.

All in all, an even larger for room for research and debate can be perceived outside the conceptual arena and into growth as lived experience. As Borowy and Schmelzer themselves suggest in the introduction to the collective book, the story that they are telling is so far basically a top-down story. It is probably necessary to learn more about the way in which consumers and citizens, with their myriad of everyday decisions, contributed to the reproduction of an economic system increasingly oriented towards growth. Much recent work in the history of consumption, for instance by Victoria de Grazia, Penelope Francks or Frank Trentmann, invites us to understand this other side of the equation, so frequently neglected (if not arrogantly despised) by post-growth theorists. Paraphrasing John Lennon, “Growth is over (if you want it)”. But, why do we (as a society) not want it? As long as we do not understand properly the social bases of the paradigm of growth, it is unlikely that our work will contribute to transcending it.

Schmelzer’s historical analysis, with an eye always put on the human element that underlies all structures (including conceptual ones), makes a very valuable contribution in this respect. All social scientists interested in development, welfare and progress may find his work useful and illuminating