Macroeconomic democracy and productivity growth: a historical perspective

This article examines the long-run determinants of productivity growth from a macro-historical and institutional perspective. Contemporary economic literature frequently explains productivity dynamics through isolated factors – such as technological progress, market liberalisation, inequality, or monetary policy – often leading to partial or mutually inconsistent conclusions. The analysis therefore builds on the author’s previously published concept of macroeconomic democracy as an integrated analytical framework encompassing multiple dimensions, including the distribution of income and capital, the role of inheritance, the democratisation of corporate governance, the functioning of the market mechanism, and the stabilising roles of the monetary system and political democracy. The paper does not generate new statistical data; rather, it reinterprets existing historical and empirical evidence within this theoretical framework. It adopts a historical-comparative methodology. The findings indicate a systematic historical association between higher levels of macroeconomic democracy and stronger long-term productivity growth. None of the analysed dimensions appears sufficient in isolation. Sustainable productivity growth emerges from their coherent institutional interaction. Macroeconomic democracy does not replace markets or innovation; rather, it provides the institutional environment within which their productive potential can develop over the long run.