Arthur Miller wrote that "an era can be said to end when its basic illusions are exhausted". The central illusion of the age of capital - economic growth - may be ending.
All brands of politics and economics are deeply rooted in the idea of robust economic growth, combined with the belief that governments and central bankers can exert substantial control over the economy to bring this about. Economic growth has become the universal solution for all political and economic problems, from improving living standards, reducing poverty to now solving the problems of over-indebted individuals, businesses and nations.
In The Shadow of Keynes, Chicago economist Harry Johnson writing with his wife Elizabeth about England in the 1970s described this pre-occupation: "...faster economic growth is the panacea for all... economic and... political problems... faster growth can be easily achieved by a combination of inflationary demand-management policies and politically appealing fiscal gimmickry."
Politicians and policy makers relentlessly pursue growth.
In his 1929 novel The Great Gatsby, F Scott Fitzgerald identified this fatal attraction: "Gatsby believed in the green light, the orgiastic future that year by year recedes before us. It eluded us then, but that's no matter - tomorrow we will run faster, stretch out our arms farther."
But in nature, growth is only a temporary phase which ceases with maturity.
As academic Jay Forrestor noted: "Past civilisations have grown into overshoot and decline. In every growth situation, growth runs its course, be it in seconds or centuries."
Satyajit Das is a former banker and the author of Traders Guns & Money and Extreme Money. He was featured in Charles Ferguson's 2010 Oscar-winning documentary Inside Job.
Copyright: 2013 Satyajit Das All Rights reserved