Markets, Productivity, and Happiness in a Historical Perspective

Classical stationary state and modern sustainable growth

Zouboulakis Michel, University of Thessaly

Classical Political Economists had a strong faith in the inexorable course of history towards material progress and social wellbeing. Yet, they disagreed on the future of capitalist growth. Smith envisioned a sustainable growth depending upon the interaction of labour productivity, the level of the net revenue and the rate of saving. As long as these three factors were active, growth could continue endlessly enabling “general opulence”. On the contrary, Malthus, Ricardo, James Mill and McCulloch depicted a dark future for the economic system, under the pressure of increasing population and nature’s decreasing returns, leading to constantly falling net returns to industry, falling rate of profits and finally stagnation. Technological innovation, population self-control or scientific improvements were undervalued as counteracting factors able to sustain development. Interestingly, there was one classical economist, John Stuart Mill, who offered a positive image of the stationary state as a superior level of civilization of a society that has resolved the problem of production and distribution of wealth among its members and focused on the personal improvement of its members. In the twentieth century, Mill’s desire was partly fulfilled as far as the problem of production is concerned. Nonetheless, and despite the serious redistribution of wealth in western developed countries after the WWII, capitalist growth globally, faces a new threat concerning its sustainability: environmental degradation with devastating social and economic consequences. The aim of this communication is to examine the interaction between classical economic analysis of development in the long run and the description of future economic reality as a matter of a political agenda. Facing today’s urgent problem of sustainable development in front of the climate crisis, we believe it is urgent to study the Classical Political Economy debate, and see whether we may find elements of sustainability that place some emphasis on the future environmental effect of policies and business practices.


Keywords: stationary state, sustainable growth, classical political economy