IN THE PREVIOUS chapter we discussed the character of the commodity-based production system that underpins market societies. The ability of such societies to generate substantial and long-term economic growth is one of their most striking and impressive features. Economic growth has transformed our way of life, leading in many countries to a material standard of living unprecedented in history. When growth is high the economy seems to work well, delivering profits, higher incomes and jobs. However, economic growth sometimes falters. Periods of low growth, or ‘recession’, can lead to wider economic crises giving rise to unemployment, hardship and social misery which can also generate more serious society-wide crises.

Managing the cycles of economic growth and decline has therefore become a central preoccupation of governments. In this chapter we consider the nature of economic growth and how it is measured and potential problems generated by growth in affluent societies. We also examine some of the different understandings of growth and the political implications of such analyses. Finally, we address the periodic crises that are a feature of capitalist economies as well as the relationships between economic growth and political legitimacy.