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

The 'Asian miracle' was a miracle of growth. Determined to beat the West at its own game, the little tigers learned to roar by sustaining growth rates of eight, nine and even 10 per cent per annum over a decade or two. In one of the great reversals of history, Western commentators and market pundits in the 1980s began to berate their governments for failing to match the growth performance of East Asia; the strategies of the Asian tigers became the model to be emulated. This usually meant faster trade liberalisation, lower wages, labour market 'flexibility' and deep cuts in taxation and social security. The little tigers of East Asia had apparently learned their lessons from the industrialised countries so well that they had become the teachers, and political leaders in the West became the dutiful students. Why? Because eight per cent is higher than four per cent.

Socialist countries, too, were smitten by growth. The ideological divide of the Cold War that threatened to destroy the world was not over the desirability of economic growth. On that all agreed. They disagreed over which system of economic organisation, socialism or capitalism, could generate more of it.

There can be little doubt that in recent decades the most evangelical promoters of growth fetishism have been the economists, the profession that since the 1970s has achieved a position of unrivalled dominance in public debate and policy formation throughout the world. One particular school of economists has achieved uncontested control, the neo-classical, neo-liberal or free-market school.

Today, the benefits of growth are taken to be so self-evident that one has to search hard to find any reference to them in the economics texts. Open any university text and the subject is immediately defined as the study of how to use scarce resources to best satisfy unlimited wants. These "wants" are assumed to be those that consumption satisfies, and the text is occupied with the analysis of the behaviour of consumers in their quest to maximise their "utility". By subtle fusion, human beings have become "consumers" and human desire has been defined in terms of goods; it follows that the only way to make people happier is to provide more goods. In other words, the objective is growth.

Governments of all persuasions are now mesmerised by economic growth and find it awkward to think about national progress more broadly. Growth, investment, development, competitiveness, free trade - these aspects of the market system are powerful political symbols, before which political parties of the left and right kneel.

In the past 25 years politics in the West has been marked by the ideological convergence of the main parties. The process has been one in which social democratic parties abandoned their traditional commitments and converged on the free-market policies of the conservatives. It is now commonplace to observe that the conservatives, seeing their political ground occupied by the parties of the left, purified their neo-liberalism, discarded the old ideas of social conservatism and shifted further to the right.

This process is now starting to turn in on itself. In New South Wales, for instance, when the Liberal party replaced a right-wing leader who had lost two elections with a moderate, one party official observed that they had not been able to outflank the Labor Government from the right, so it was time to try to do so from the left.

The political implications of this ideological convergence through the 1980s and 1990s have been profound. Under the impact of these changes, and especially the convergence of the political parties, the political culture of Western democracies has been transformed. People no longer know what the parties of the left stand for. Their policies have no resonance with ordinary people. Party loyalty has been eroded because the sense of class solidarity that once defined the parties of the left has evaporated.

The more the parties converge in substance, the more they must attempt to differentiate themselves through spin. The politics of spin are the politics of falsity and there is a popular belief that the democratic process has become an elaborate charade. The major parties, now dominated by careerists who stand for nothing, whip themselves into frenzies over matters that are trivial, lashing out at their opponents with declarations of outrage, while tacitly agreeing not to break the neo-liberal consensus on the things that really matter. No wonder people are alienated and political space is created for the emergence of parties of the far right. The irony is that, instead of blaming the system and those who benefit from it, some of those who become alienated turn their bitterness on those least able to protect themselves - single mothers, immigrants and Indigenous people.

Growth fetishism and its neo-liberal handmaiden therefore assail democracy itself. Social democracy is being superseded by a sort of market totalitarianism. When older people speak bitterly of the corruption of modern politics, they nevertheless feel that it is an historical aberration on the constancy of democratic rights and that in the end the people can still have their say. Disturbingly, younger people hear only the accusation that the system is incurably corrupt, and they believe it.