Origin Story: A Big History of Everything

by David Christian

The total wars of the early twentieth century turned governments into economic managers, as they tried to mobilize all the people and resources of modern industrial economies. We can roughly track the increasing role of government in economic management. In the late nineteenth century, the French government accounted for about 15 percent of French GDP, a very rough measure of total national production. At the time, that seemed like a lot. Contemporary governments in Britain and the United States accounted for less than 10 percent of their GDP. The wars of the early twentieth century forced governments to intervene more actively in economic management, and by the middle of the twentieth century, their economic role had increased everywhere. In the early twenty-first century, the average share of national expenditure controlled or managed by governments in the countries of the OECD (Organisation for Economic Co-Operation and Development, founded in 1960) was 45 percent of GDP, with most richer countries falling in the range from 30 to 55 percent.4 Some governments, such as the Communist regimes of the Soviet Union and China, attempted to micromanage the entire national economy.