INTRODUCTION

DARK VISION

Thirty years ago, Australia’s self-styled economic reformers began a revolution that they won and the little people lost. This revolution devastated numerous once affluent working-class communities like the one in which I grew up, turning many of their inhabitants into something entirely new: the non-working class. Like all revolutions, it produced a grand reform narrative that portrays its leaders as heroes and those who oppose them as naive and self-interested reactionaries. This one-sided narrative must now be challenged.

At the heart of this tired revolution – which lurches along, led by the managerialist class it placed in power – is Joseph Schumpeter’s concept of ‘creative destruction’: the idea that in order to create a new economy, we must continually annihilate the old one. The task now is to rid ourselves of this heartless and morally barren concept and rediscover our moral voice so we can build a country that is once again worthy of us.

When you think about it, creative destruction is an ingenious piece of doublethink. By smashing things up, it claims, we are actually building them, and the people whose little world is being smashed should thank us for doing such a good job of it. The demolitionist becomes the engineer, the economist becomes the hero, the pig stands on two legs. But, we should ask, can an economic theory exist in the absence of a moral position? And if it can’t, what is the moral position of creative destruction?

In an aside in his famous history of the great economists, The Worldly Philosophers, Robert L. Heilbroner – who studied under Schumpeter at Harvard – gives us a clue. He tells us that in the late 1930s, after the Wall Street Crash had delivered power to the Nazis and created the preconditions for World War II, Schumpeter’s students were regularly shocked to hear him ‘declare, with obvious enjoyment, that depressions, far from being unmitigated social evils, were actually in the nature of “a good cold douche” for the economic system!’ The Great Depression a good thing? The inventor of creative destruction seems to have had all the morality of a pyromaniac.

The idea of creative destruction is presented to us as reason itself, and far superior to the romantic nostalgia of those who protest against it. But is creative destruction really better? Is it based purely on reason? Or is it motivated by a dark vision of humanity? Does it have its own bleak – or, more accurately, shallow and banal – conception of life and how it should be lived? Let’s find out. Let’s investigate the economic reformers’ idea of creative destruction from the point of view of some of those on the receiving end.

Where should we start? At home.

When Australian economists turn to economic reform, something strange happens: they reflexively start talking about China, the way a man cheating on his wife can’t help but mention his mistress. ‘Look at this aerial photograph of modern Shanghai,’ they say. ‘Look at it glitter, look at it gleam! There, in China – that’s our future, and creative destruction will help us reach it.’ I want them to talk about Australia for a change – not just the bits they can see from their business-class window seats as they depart for the cities of Asia, or the abstractions represented on their PowerPoint slides. Specifically, I want them to talk about the places where a lot of the destruction took place, like my old home town, whose fate, sadly, is not unique.

Once they do, something becomes obvious: not everyone is a winner from economic reform. Their friend creative destruction may indeed create, but it also destroys – usually the lives of other people in far-off suburbs, about whom they know little and care less; people who don’t have access to the opinion pages of the national dailies to tell us how well it’s all working out, now that the factories are gone and the unions have been broken and the public assets have been sold off and the middle classes with their private schools and private hospitals have cut free and left. These are people for whom Australia hasn’t necessarily changed for the better.

So let’s change our focus. Let’s put away the wide-angle camera lens, walk through some back streets, disobey the ‘Do Not Enter’ signs and have a good look at the results of the revolution the economic reformers began thirty years ago. If the creative destroyers want to take credit for all that glitters and all that gleams, then they must also take the blame for all the broken glass and all the graffiti and all the rust and all the pop-up rubbish dumps that now pollute our vision.

This is the story of what the creative destroyers have done. It is the story of a revolution that the little people lost.