Beyond economic growth

In the 2016 Australian federal election, the Coalition campaigned under the mantra of “Jobs and Growth”, one that may have played a role in their victory. This tendency to elevate the economy above other considerations is a modern phenomenon common to many industrialised countries.

While growth is generally considered to be an intrinsic element of any economy, it’s the result of choices that were made in the late 17th century when the Bank of England was being established. The goals behind organising the financial system in this fashion were to foster competition and encourage development. It was only in the 1930s that a system was drawn up for measuring economic performance: this was the birth of Gross Domestic Product (GDP) that is ubiquitous today.

A desirable level of growth is considered to be positioned at around 2–3 per cent annually, one that is sufficient for large companies to make profits. If it rises too high, it risks “overheating” the economy and later sending it backwards into a recession. Below this level is considered to be weak and unhealthy. If its performance drops too far, the resulting lowering of the national currency value could trigger instability and even panic if investors scramble to remove assets from