This is a careful and detailed account, based on extensive archival research, of attitudes to the objective of economic growth at the OEEC and OECD. It is, in part, as the book’s title suggests, about how that objective came to be seen as of overwhelming importance, with everything else either being a benefit that would flow from it, or else just a secondary objective. It is also, though, as the author is keen to point out, a history of the OEEC and OECD, of how it was shaped by the growth objective, as it shaped that objective; how it helped to propagate that objective; and of how its place in global governance helped define the self-identity of ‘the developed countries.’
As a history of the institution, it aims at telling only a part of the story, since growth policy and policy arising from hesitation over the desirability of growth are far from being all its concerns. But the author takes full advantage of the opportunity that focus provides for a narrative continuity, and his treatment is full, persuasive, and elegant. There is a clear picture of the development of the institution as it negotiates its own position with respect to the member states whilst forming and shaping the discourse and mode of analysis in those countries on the question of economic growth.
The standardization of the national accounts around the idea of Gross Domestic Product was the first key step, with this making possible the comparison of growth rates. Cold War concerns, as well as international comparisons unfavorable to some countries, spurred interest in setting policy for growth as well as employment, and the OECD was a key contributor to the adoption of growth targets. Doubts about the desirability of growth started to appear at the end of the 1950s and remained a feature of discussion into the 1970s. Despite those, and the economic crises of the later part of that period, the importance of growth was reasserted. In the end, rather than its being called into question either by environmental concerns or economic crisis, the end of the 1970s saw it upheld with, if anything, even more conviction, as a universal panacea.
The institutional history is valuable and expert, and the parallel discussion of the organization’s treatment of the issues around growth also offers much, but there are hints that the author has another agenda in mind as well. The story about the emergence of the growth objective is presented as a response to a puzzle as to why it should be that an objective with so many critics could acquire such support. Indeed, as the author shows, there are plenty of doubts about it—again starting with questions as to the extent to which GDP is a measure of interest, and including all the welfare, resource, population, and environmental questions that accumulated in the period.
Yet, while there are those doubts, there are answers too, and Schmelzer sometimes seems a little reticent about them. Equally, there might be questions about the real importance of the doubts he raises in the history of the organization. The basic arguments in favor of growth are, after all, readily apparent. Robert Marjolin is quoted early on, saying that American material prosperity hypnotized the Europeans, who saw it as their goal. Indeed—that will do, one might think. And American prosperity promoted attempts at emulation. Indeed. The Cold War presented both an ideological challenge to the West and a military one. Growth was an answer to both. As social consensus seemingly started to break up, principal manifestations were very much concerned with shares of output—what could be more natural than to seek to overcome the problem by expanding the pie? On the environment, it is not hard to see that growth itself need not be the problem. An appropriate tax regime guides economic activity to socially desirable ends; it is certainly not a foolish thought that technological advance offers solutions to environmental problems; and how would one expect the pro-market reformers of the 1980s and after to suggest their policies be assessed? The growth sceptics bring challenges to these ideas, but not unanswerable ones.
So the interest in Schmelzer’s story cannot really be in explaining how growth came to be advocated—there is just not enough of a mystery there. But let the author have his quirks. The assessment of the case for growth is not a true objective, and so even without this slightly artificial problem there is a good project in investigating the thinking of the OECD. That project is well executed, and the book makes a fine contribution in offering an insightful treatment of the history of an institution that has figured so large in policymaking around the world.
