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Why the government's growth fetish is bad for Australia's democratic health

By Clive Hamilton - posted Wednesday, 9 April 2003


No issue more preoccupies the modern political process than economic growth. As never before, economic growth is the touchstone of policy success. Countries rate their progress against others by their income per person, which can only rise through faster growth. High growth is a cause of national pride while low growth attracts accusations of incompetence in rich countries and pity in the case of poor countries.

A country that experiences a period of low growth goes through an agony of national soul searching in which pundits of the left and right expostulate about "where we went wrong" and whether there is some tragic fault in the national character.

Every newspaper, every day, quotes a political leader or a commentator arguing that we need more economic growth to improve the level of national well-being and build a better society. The release of the quarterly national accounts unfailingly receives extensive coverage. Picking out growth in gross national product (GNP), journalists write as if they have an infallible technical barometer of a nation's progress. Derived by some of the best statisticians using the internationally agreed system of national accounting, GNP appears to provide a measure of prosperity that is immune to argument.

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If GNP growth reaches or exceeds expectations, government leaders crow about their achievements. If it falls below expectations, the opposition parties seize on the figures to attack the government for its ineptitude. Throughout history national leaders have promised freedom, equality, mass education, moral invigoration and the restoration of national pride; now they promise more economic growth. If at any time there were doubts about the ends to which a nation should aspire, they are no more.

In the thrall of growth fetishism, all of the major political parties in the West have made themselves captives of the national accounts. While they may differ on social policy, there is an unchallengeable consensus that the over-riding objective of government must be growth of the economy. Parties fight elections each promising to manage the economy better so that economic growth will be higher.

The answer to almost every problem is "more economic growth". The problem is unemployment; only growth can create the jobs. Schools and hospitals are underfunded; faster growth will improve the budget. We can't afford to protect the environment; the solution is more growth. Poverty is entrenched; growth will rescue the poor. Income distribution is unequal; more growth will make everyone better off.

For decades we have been promised that growth will unlock possibilities of which previous generations could only dream. Economic growth will deliver a life of ever-increasing leisure, more free services, devices to relieve the drudgery of household work, opportunities for personal enrichment, exciting space travel, and cures for the diseases of humankind. The lure of growth is endless.

But in the face of all of the fantastical promises of economic growth, at the beginning of the 21st century we are confronted by an awful fact, a fact that stands as an immovable obstacle to further progress. Despite high and sustained levels of economic growth in the West over a period of 50 years - growth that has seen average real incomes increase several times over - the mass of people are no more satisfied with their lives now than they were then.

If the purpose of growth has been to give us better lives - and there can be no other purpose - then it has manifestly failed. The reader can simply ask this question: Do I believe that on the whole people are happier now than they were 40 or 50 years ago? When asked this question, almost everyone says "no".

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The more we examine the role of growth in modern society, the more our preoccupation with it appears to be a fetish, that is, the worship of an inanimate object for its apparent magical powers. Economic growth purports to be a very ordinary activity, no more than an increase in the volume of goods and services produced each year. But closer analysis reveals that it "abounds in metaphysical subtleties and theological niceties".

The product of growth - which for ordinary people takes the form of its universal equivalent, money income - represents, of course, much more than a greater ability to consume. Increase in income is the very object of life in modern society, in which all of the hopes and schemes of men and women are invested. Indeed, increasing income has become pivotal to the creation and reproduction of self in modern society. Thus growth takes on significance not because it multiplies the pile of goods and services available for consumption but because of the excitation it produces in people - the promise it holds to attain bliss.

Growth fetishism is not confined to advanced countries. While the case for economic growth is much stronger in countries below a certain level of average income, developing countries are also obsessed with it, perhaps the last and most potent legacy of colonialism. They have little choice. Were developing countries to deviate from the single-minded pursuit of maximum economic growth, we can be sure that if the markets did not exact instant retribution, then the IMF and the World Bank would.

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This is an edited extract from Growth Fetish, published by Allen & Unwin in April.



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About the Author

Clive Hamilton is professor of public ethics at the Centre for Applied Philosophy and Public Ethics.

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