It is a welcome change to see budgets spoken of in moral terms: usually economics is considered a morality-free zone. The government recently insisted on a moral responsibility to future generations to fix the deficit.
And in a press release the Australian Catholic bishops welcomed on moral grounds the compromise that saw dropped from the budget measures which would further disadvantage vulnerable people. The difference between the two conceptions of morality was that the government's argument was focused on the budget, whereas the bishops' argument focused on particular groups of people.
The bishops focused on fairness. They insisted that 'budget repair should be achieved without unfairly placing the burden on the most vulnerable and disadvantaged in our society'.
In giving priority to fairness they argued that the economy should serve people and not control them. They worked out of the Catholic understanding that the relationships between people which constitute the economy are only part of a broader set of relationships that form a good and just society. The economy must serve the flourishing of all people, particularly the most vulnerable.
The bishops recognised that this view of the economy is not universally held: 'Australia is in danger of allowing the economy to become a kind of false god to which even human beings have to be sacrificed.'
The indication that all is not well in any society is the way in which it treats the poor. In Australia the fact that almost 14 per cent of Australians, including 600,000 children, live beneath the poverty suggests the extent of the sacrifice already made to the economy god.
The bishops concluded their press release with a commitment 'to continue to address the structural causes of poverty and to promote the integral development of the poor'.
The press release does not break new ground. Its themes are those developed over more than a century of Catholic social reflection, although expressed with some of the pungent urgency characteristic of Pope Francis. Its interest lies in the fact that it no longer represents a fringe view. It represents a growing consensus about received economic wisdom.
"The bishops were right to welcome the negotiation between the major parties that modified some of the humanly destructive elements of the budget package. But that was only a beginning."
Neo-liberal economic theory may still rule in academia and in the public service, just as it is enshrined in the Coalition's mantras of jobs and growth. But it is increasingly seen by others as hollow and as self-destructive. It encourages greed and predictably concentrates wealth in the hands of the already very wealthy, increases inequality, weakens the capacity of governments to govern for the common good, and ultimately stymies the economic growth that is its own idol. The popular disillusion that it fosters, too, makes for fractious politics in which the trust needed in order to take strong economic measures, whether for good or for bad, is lacking.
In this predicament governments are reluctantly realising that politics must drive economics and not vice versa. It is no longer sufficient to define the national welfare in terms of economic growth, whether that is encapsulated in slogans of innovation, or of jobs and growth. These abstractions must be means to social goals so that economic freedom will be coupled to the carriage of the common good. The challenge facing governments now is to foster a conversation about what kind of a society we wish economic relationships to serve, and how to realise that society.
From this perspective the bishops were right to welcome the negotiation between the major parties that modified some of the humanly destructive elements of the budget package. But that was only a beginning. The conversation needs to be broader, extending to the challenges of the movement of peoples, climate change and the conditions that will encourage social inclusion in the face of technological change.
This larger conversation will necessarily involve an ethical dimension. It is about shaping the kind of society that is conducive to human flourishing. The primacy of politics, and so of ethics, will also mean returning to an older understanding of economics. Because the relationships that constitute the economy are so critical in the shaping of society, economics will also need again to be seen as part of moral philosophy.
This has practical consequences. The reviews into banks, big business, the financial industry, taxation and mining, for instance, will naturally focus on how these institutions serve society as well as their shareholders, and will place them under ethical as well as legal scrutiny. The same scrutiny will also be applied to the practices of tax minimisation, patenting and corporate behaviour involved in globalisation. The practices of multinational corporations and economic treaties will need to respect the welfare of the host society, and particularly of the disadvantaged.
Andrew Hamilton is consulting editor of Eureka Street.