A thorough analysis of the inner mechanisms and dynamics of capital can only explain the ongoing pressure of growth in the economy to a limited extent. However, it is essential to take a look at the behavior of governments in order to gain a more comprehensive understanding of the causes and the intensification of this pressure. Historically, governments have always been closely involved in promotioninvolved in the interests of capitalist expansion. They have actively taken measures to advance and strengthen the capitalist economic order. For example, the enclosure movement in Europe and overseas colonization were ultimately legitimized and institutionalized by state power. Since the early 1930s, during the greatWorld economic crisis, however, a development can be observed that further increased this pressure and once again significantly accelerated the dynamics of capitalism.
The Great Depression and the Development of Gross Domestic Product
The world economic crisis, which began in the early 1930s, led to a massive destruction of the economies in the United States, Western Europe and many other parts of the world. This crisis forced governments to urgently seek solutions to repair the economic damage. In the US, government officials turned to Simon Kuznets, ayoung and innovative economists from Belarus, and asked him to develop a system that captures the production of all goods and services produced in the US every year. The aim was to identify problems and be able to intervene in a targeted manner by understanding the economic processes. Kuznets then developed a key figure, the so-called”Gross national product” (BSP), which later formed the basis for the term gross domestic product (GDP) known today. However, Kuznets itself expressly warned of the limits and shortcomings of this indicator. He made it clear that GDP adds up the market value of all economic activities without distinguishing whether these activities are useful or harmful. it doesNo difference whether a value of 100 dollars is spent on tar gas or for education. Even more crucial is that the GDP does not take into account the ecological and social costs of production. If, for example, wood is extracted by cutting down a forest, the GDP increases – as well as with extended working hours, shifted retirement age or pollution,which leads to more hospitalizations. However, GDP says nothing about the loss of natural habitats, ecosystem destruction or the stresses of the human body and mind through overwork and pollution.
The limits of GDP as an indicator of prosperity
GDP is thus an extremely limited indicator that does not provide any information about the actual burdens and the sustainability of economic activities. It does not cover any negative consequences such as environmental destruction, social inequalities or health damage caused by production. At the same time, it ignores many positive aspects that cannot be measured in money,but of central importance for human well-being. Activities such as self-sufficiency with food, caring for older relatives, housework or support in the circle of friends and family are left out if they are not replaced by paid services. Only if someone hires a company for these activities will they flow into the GDP. cownetRightly warned against using GDP as the sole benchmark for economic progress. He advocated improving this system and taking more account of social and environmental costs so that governments can develop a holistic and human-oriented perspective.
The influence of World War II on measuring growth
But all these considerations receded when World War II threatened to break out. National security and the survival of the states were now the most urgent concerns. The global threats from the National Socialists, Japan and other Axis powers required a mobilization of all resources. In this context, the idea of all economicActivities – including the negative – to use the available production capacities and financial resources for the war efforts, increasingly reality. This aggressive view of the gross national product was largely enforced after the war. At the Bretton Woods International Conference in 1944, where leading politicians from all overworld came together to set the rules for the post-war global economy, GDP was introduced as a central indicator of economic progress. This decision contradicted Kuznets’ original warnings, which had made the limits of GDP clear. However, the growth of the GIP has since become the most important goal of national economic planning -Regardless of whether it actually improves human well-being or accepts ecological and social burdens.
Growth as an end in itself and the consequences for society
Basically, it is not problematic to measure some aspects of the economy in order to assess the state of the economy. However, GDP itself influences the real world in two ways: on the one hand, it has no direct influence, on the other hand, the growth of GDP can very well have far-reaching effects. Once the focus is on growth, not only will theproduction, but also those activities that are recorded in GDP. This happens regardless of the associated costs, be they social or ecological. The original GDP function was to measure the level of economic performance – whether this level was too high and threatened overproduction or oversupply, or whether it was too low and thepopulation was not sufficiently supplied. During the Great Depression, it was clear that production was too low, which is why Western governments invested massively in infrastructure projects, created jobs and stimulated demand. The aim was to increase GDP in order to improve the living conditions of the people. These measures corresponded to the so-called “progressiveera” under President Franklin D. Roosevelt. At that time, the declared goal was to increase the level of economic performance in a targeted manner in order to achieve social improvements and more prosperity for the population. Growth was therefore understood as a means to an end to increase the quality of life.
From growth target to growth as an end in itself
However, this perspective only lasted a certain amount of time. With the establishment of the Organization for Economic Cooperation and Development (OECD) in 1960, the attitude changed fundamentally. It was no longer about improving the level of economic performance through targeted measures in order to achieve social and humanitarian goals. Instead, the so-called “optimal growth”Explained to the goal of economic planning – i.e. growth that knows no bounds and should be continued indefinitely. The British government set the ambitious goal of growing 50 percent within a decade – an exceptional expansion rate. This was the first time in history that the idea was spread that growth in itself is a goal that is independent of socialor ecological considerations can be pursued.
The Cold War and the growth competitions between East and West
This idea was quickly adopted internationally. During the Cold War, the competition between the West and the Soviet Union was mainly held by the respective growth rates of the gross domestic product. Who could increase GDP faster? For the West, growth was not only a sign of economic strength, but also a prerequisite for a stronger oneDefense power and a better position in the geopolitical power struggle. The rapid growth thus also became an instrument of political and military competition.
Neoliberal turnaround and unleashing of capital growth
Over time, the direction of Western economic policy changed fundamentally. Political strategies aimed at social improvements, higher wages, trade unions, investments in health and education after the Great Depression were increasingly being questioned. Instead, growth was considered in itself, regardless of social or ecologicalaim. The result was the so-called neoliberal turn in the 1980s, which was mainly promoted by Ronald Reagan in the USA and Margaret Thatcher in Great Britain. The aim was to restore profit rates through deregulation, privatization and cuts in the social sector. This policy led to the state largely evolving from direct economic controlWithdrew and the primary goal was to create favorable conditions for capital accumulation. It became increasingly clear that GDP growth became an end in itself – a “growth” that hardly takes into account any social or ecological concerns.
The global expansion of the growth compulsion to the south
This growth logic was also adopted in the Global South. After the end of the colonial period in the 1950s, many newly independent states relied on strategies aimed at economic independence and social development. They used customs, subsidies and investments in education and health to improve living standards and dependence on colonialismto overcome. The average income in these countries increased steadily in the 1960s and 1970s, on average by around 3.2 percent per year, with growth always being understood as a means of independence and human development – similar to the West after the Great Depression. But with the increasing dominance of Western interests, this development came intosway.
The interventions of international financial institutions and the consequences for the south
The Western powers, especially through their control over the World Bank and the International Monetary Fund (IMF), intervened massively in developing countries’ economic planning during the 1980s debt crisis. They introduced so-called “structural adaptation programs” that aimed at liberalizing the economy, abolishing customs duties, abolishingCapital controls and the privatization of public companies. The aim was to promote foreign capital and to facilitate access to cheap labor and raw materials. These programs fundamentally transformed the economies in the south: They forced governments to give up their social and humanitarian goals and instead exclusively onAttraction of capital and export. The consequences were devastating: In the two decades after the introduction of the neoliberal strategies, massive crises, increasing poverty, growing inequality and high unemployment occurred. Income levels in the south fell during this time and fell on average to only 0.7 percent growth per year.Meanwhile, large multinational corporations were able to benefit from the new conditions: They made record profits, while the income of the richest percent of the population in developing countries began to rise sharply. The growth rates in the West recovered, but at high costs: The social structure, the living conditions of the people and the environment were massively burdened.
Long-term consequences and the growing global inequality
The legacy of these interventions is a dramatic increase in global inequality. The income gap between the rich north and the poor south has multiplied in recent decades. Today, the real income gap between these two worlds is about four times the size of the end of the colonial era. The consequences are profound: There is a growing gapbetween the affluent countries and the poorer countries, which has a wide variety of social, economic and ecological effects. The decades-long measures of growth compulsion in the name of capital have led the world into a situation where social, ecological and political tensions are increasing – with unforeseeable consequences for theStability and peace on a global level.
