How We Got Hooked on Growth, how economic growth became society’s ultimate goal
Economic growth became society’s ultimate goal largely through its historical connection with the idea of progress and the economic and social upheavals of the 20th century. Initially, after World War II, economic growth was pursued primarily as a means to secure full employment and rebuild war-torn societies. Over the 1950s and 1960s, this goal evolved, and economic growth itself was prioritized as the primary objective for societies, especially in developed countries. The measurement of economic growth by increasing real GDP became the standard metric to assess a country’s economic performance and prosperity.
Several factors contributed to this growth fixation:
The rise of capitalism in the 20th century established consumerism at the heart of economic systems, requiring constant production and consumption to sustain economies. This created a societal dependency on continued economic growth as a means to generate wealth and jobs.
Technological innovation and increased productivity drove sustained economic output growth, especially during and after the Industrial Revolution, which broke societies free from the Malthusian trap of limited resources constraining incomes.
Political and economic frameworks after WWII, influenced by Keynesian economics, emphasized growth as necessary not only to improve living standards but also to maintain employment and social stability.
Growth became synonymous with progress and improvement, moving beyond a means to an end, so that policies grew oriented toward maximizing GDP and consumption rather than just meeting basic human needs.
While there have been critiques and calls for alternatives focusing on sustainability and well-being rather than endless growth, growth remains the dominant societal goal because it is deeply embedded in economic systems, cultural values, and policy frameworks.
Economic growth became society’s ultimate goal due to its roots in the ideas of progress, post-WWII reconstruction priorities, capitalist consumer economies dependent on expansion, and sustained increases in productivity and living standards driven by technological innovation.
Economic growth became society’s ultimate goal through a mix of historical shifts, intellectual developments, and political choices that prioritized measurable prosperity over other values. Here’s how it unfolded:
Industrial Revolution (18th-19th Century): The Industrial Revolution sparked unprecedented increases in productivity and wealth. Innovations like steam engines and mechanized production made sustained economic growth possible. Societies saw tangible improvements—higher living standards, better goods, and urbanization—which tied progress to rising output.
Rise of Capitalism and Markets: As markets expanded, thinkers like Adam Smith argued that individual pursuit of profit could drive collective wealth. This laid the groundwork for equating economic expansion with societal success. The idea of “progress” became tied to increasing production and consumption.
Invention of GDP (1930s-1940s): Simon Kuznets and others developed Gross Domestic Product (GDP) as a way to measure economic activity during the Great Depression and World War II. GDP gave governments a clear metric to track “growth” and compare nations. It became a shorthand for prosperity, despite Kuznets himself warning it wasn’t a full picture of well-being.
Post-War Boom and Policy Focus: After World War II, rebuilding economies and avoiding another depression pushed Western nations to prioritize growth. The U.S. Marshall Plan, Keynesian economics, and the Bretton Woods system all leaned on boosting production and trade. Growth became a political tool to signal success, especially in the Cold War rivalry between capitalism and communism.
Consumer Culture and Advertising: By the mid-20th century, mass production needed mass consumption. Advertising and credit systems (like installment buying) fueled demand, making consumption a cultural norm. People began to associate personal success and happiness with material wealth, reinforcing growth as a societal goal.
Political and Corporate Reinforcement: Politicians learned that promising growth won votes—jobs, wages, and infrastructure all depended on it. Corporations, meanwhile, thrived on expanding markets and profits, lobbying for policies that favored deregulation and globalization to keep growth humming.
Globalization and Neoliberalism (1980s-Present): The rise of neoliberal policies under leaders like Reagan and Thatcher cemented growth as a global obsession. Deregulation, free trade, and financialization prioritized GDP over social or environmental costs. Developing nations were pulled into the growth paradigm through IMF and World Bank policies tying loans to market reforms.
Cultural Lock-In: Growth became a self-reinforcing cycle. Schools, media, and institutions framed rising GDP as progress. Alternatives—like steady-state economics or prioritizing well-being—were sidelined as radical. People internalized the idea that a “healthy” society meant a growing economy.
Why It Stuck: Growth is easy to measure, aligns with human desires for more, and suits powerful interests (governments, corporations). It’s also addictive—once societies tasted rising standards, stepping back felt like failure. Yet, critics point out flaws: GDP ignores inequality, environmental damage, and non-market values like community or leisure. Movements like degrowth or well-being economics are now challenging the obsession, but growth’s grip remains tight.
How Economic Growth Became Society’s Ultimate Goal
The idea of endless economic growth as the primary goal for societies is a relatively modern phenomenon. For millennia, societies were largely static in terms of per capita output. While empires expanded and individuals accumulated wealth, the concept of a continuously expanding “economy” as a whole was not prevalent.
1. Pre-Modern Context: Stagnation and Survival
Before the Industrial Revolution, most societies operated under conditions of limited growth, often described as a “Malthusian trap.” Any increases in productivity tended to be absorbed by population growth, keeping per capita income stagnant. The focus was on subsistence, survival, and sometimes territorial expansion or personal wealth accumulation, rather than an abstract notion of aggregate economic growth.
2. The Enlightenment and the Rise of “The Economy”
The shift began in the 18th century with the Enlightenment and the emergence of “political economy” as a distinct field of study.
- Adam Smith and The Wealth of Nations (1776): Often considered the father of modern economics, Adam Smith didn’t explicitly define “economic growth” as we understand it today, but his work was foundational. He envisioned an economy powered by human nature and trade, where the “invisible hand” of self-interest, guided by free markets and minimal government interference, would lead to increasing wealth and prosperity. This laid the groundwork for the idea that a growing economy was a natural and desirable outcome. His concepts of division of labor and capital accumulation were seen as key drivers of this increasing wealth.
- The Idea of Progress: The Enlightenment fostered a belief in progress – that human society could and should continuously improve. This intellectual shift provided a fertile ground for the idea of economic progress as a key component of overall societal advancement.
3. The Industrial Revolution and Tangible Growth
The late 18th and 19th centuries witnessed the Industrial Revolution, a period of unprecedented technological innovation and sustained increases in productivity. This was the first time in human history that societies experienced sustained, significant growth in per capita output, allowing many to escape the Malthusian trap.
- Mechanization and Innovation: New machines, factory systems, and advancements in areas like steam power, iron, and steel dramatically increased the capacity to produce goods. This tangible experience of increased production made “growth” a visible and desirable reality.
- Shifting Labor and Urbanization: As agriculture became more efficient, surplus labor moved into manufacturing, leading to urbanization and further specialized production, which in turn fueled more growth.
4. Classical Economists and the Formalization of Growth
Following Smith, classical economists continued to explore the mechanisms of wealth creation:
- David Ricardo: Built on Smith’s ideas, analyzing how underlying forces like technology, wages, profits, and rents influenced economic growth.
- John Stuart Mill and Karl Marx: Both recognized the potential for indefinite mechanization to drive production.
While some, like Malthus, warned about resource scarcity, the dominant intellectual current moved towards understanding and promoting the drivers of this new, dynamic economic expansion.
5. 20th Century and the “Growth Paradigm”
The 20th century saw economic growth become an almost universally accepted and pursued policy objective, especially after the Great Depression and World War II.
- Keynesian Economics: John Maynard Keynes, while focused on stabilizing economies, contributed to the idea of managing aggregate demand, which implicitly supported the goal of full employment and economic expansion.
- Post-WWII Reconstruction and Development: The imperative to rebuild war-torn economies and to bring developing nations out of poverty solidified economic growth as the central metric of success. GDP (Gross Domestic Product) emerged as the primary measure of this growth, becoming a shorthand for national well-being.
- Cold War Competition: The ideological struggle between capitalism and communism also played a role, with both sides seeking to demonstrate the superiority of their economic systems through growth rates.
- Technological Advancements and Consumerism: Further technological revolutions (e.g., in electronics, communication, and transportation) and the rise of mass consumerism created a continuous demand for new goods and services, reinforcing the idea that growth was not only possible but necessary to meet societal aspirations.
- Financial System Incentives: Modern financial systems are deeply reliant on growth. Returns on investment, interest on loans, and shareholder expectations are all predicated on the assumption of a growing economy. This creates a powerful structural incentive for continuous expansion.
6. The “Normal” State: A Modern Construct
Today, the “growth paradigm” often appears ubiquitous and natural. However, as some scholars point out, this perception is uniquely modern. The underlying assumption is that economic growth is:
- Good: Associated with increased living standards, poverty reduction, and societal progress.
- Imperative: Seen as necessary for employment, repaying debt, and maintaining social stability.
- Limitless: Historically, the focus has been on its indefinite potential, with less emphasis on ecological or social limits until more recently.
- A Remedy: Often presented as the solution to various social problems.
Emerging Challenges to the Growth Paradigm
While deeply embedded, the unquestioning pursuit of growth has faced increasing scrutiny, particularly in recent decades:
- Environmental Limits: The recognition of climate change, resource depletion, and biodiversity loss has highlighted the conflict between endless growth on a finite planet.
- Inequality: Concerns about rising income inequality in many growing economies have led to questions about whether growth automatically translates to broad-based well-being.
- Well-being vs. GDP: A growing movement questions whether GDP is an adequate measure of societal progress, arguing that it fails to account for factors like environmental quality, social cohesion, and individual happiness. This has led to discussions about “post-growth” or “degrowth” economies.
Society became “hooked on growth” through a confluence of intellectual shifts (Enlightenment ideas of progress), technological revolutions (Industrial Revolution), the formalization of economic thought, and the practical demands of nation-building and global competition in the 20th century. This historical journey transformed growth from an unobserved phenomenon into the central, often unquestioned, goal of modern societies.
