Impervious to experience, strangers to reason: the communities secretary, Eric Pickles, and the chancellor, George Osborne, have learned nothing from the economic crisis. They claim that laxer town planning "is key to our economic recovery". But the European countries hit hardest by the economic crisis – Greece, Italy, Spain and Ireland – have weak planning controls and urban sprawl. The nations that have proved most resilient have tougher laws and compact settlements.

Strong planning is one of many factors, but it is symptomatic of a political culture that puts the national interest above the self-interest of the rich and the long view above the quick buck. Pickles and Osborne are seeking to rip up England's planning system for the same reasons that they want to drop the proposed new banking rules: corporate power, cronyism and plutocracy, the forces that got us into this mess.

Weak planning exacerbates economic problems because capital is diverted from productive uses into speculative ventures; cities decline as they hollow out; and badly sited businesses, disaggregated settlements and long travel times drag down economic efficiency. On Sunday the New York Times reported that doubling urban density raises productivity by between 6% and 28%.

Economic growth should not be the purpose of the planning system. It should ensure that human needs are met while the environment is protected. But if growth is your aim, strong planning is more likely to deliver it than weak planning. The government's attack on planning is likely to deliver the worst of both worlds: trashing the environment while trashing the economy.

Like the National Health Service and the welfare state, our planning laws arose from the great political settlement that followed the second world war, in which people of all classes gave their lives for their country. The intention was that Britain, saved by collective sacrifice, would never again be run for the exclusive benefit of the rich and powerful. That promise is being gnawed away by political parties controlled by the elite.

In the Daily Telegraph last week Geoffrey Lean claimed that the assault on sound planning has been caused by young metropolitan wonks in the coalition replacing "the old grouse-shooting knights of the shires". In fact it is the grouse-shooting knights of the shires, through their Country Land and Business Association, who have led this attack on the planning system. When faced with a choice between its ill-defined "rural values" and making buckets of unearned cash, there's no doubt about where the shot falls. This is the reassertion of old power against democracy.

Under the government's draft national planning policy framework, it will be almost impossible to resist development, however destructive or detrimental it might be. Except within the green belt, national parks and areas of outstanding natural beauty, everything will be permitted unless there is a powerful reason why it should not be, and the powerful reasons have been ruled out in advance. Local authorities, it says, should "approve all individual proposals wherever possible".

Gone is the policy of building on brownfield sites (places that have previously been developed) before greenfield sites. Greg Clark, the minister in charge, has repeatedly misled the nation on this point. The new framework's impact assessment is unequivocal: page 51 says it is "removing the national priority for brownfield development". Gone is the duty to ensure that new developments minimise the need to travel and don't jam up the roads – unless the impacts are "severe": a word the document fails to define. Gone is the presumption that the countryside, outside specifically protected areas, should be defended.

The wrecking ball swinging from this chain is the government's redefinition of sustainable development. "Development means growth", the new document says, and "without growth, a sustainable future cannot be achieved". All development thereby becomes sustainable, and all sustainable development must be approved. "A presumption in favour of sustainable development", the draft insists, must be "the basis for every plan, and every decision … the default answer to development proposals is yes".

It lists the kinds of sustainable development that councils will now be expected to approve. They include motorway service stations, roads to the airport and advertising hoardings. If these are sustainable, what isn't?

There is a simple test of the government's intentions. If there's a presumption in favour of sustainable development, there must also be a presumption against unsustainable development. You scour the document and find one instance, a qualified presumption against coal mines. Which is welcome – but that's it. Every other change to the landscape is classed, by default, as sustainable.

It gets worse. The draft document says that councils must grant planning permission wherever their "relevant policies are out of date". As the planning expert Andrew Lainton shows on his indispensable blog, some 95% of local authorities will not have up-to-date development plans by the time the final document is published. In January John Howells, Greg Clark's parliamentary secretary, explained to the British Property Federation that in these cases developers can build "what they like, where they like and when they like". Lainton also notes that even when a plan is up to date, the draft document fails to state that schemes contrary to the plan should be refused. This is not just the weakening of the planning system. It's total abandonment.

The weapon the government uses to defend this speculators' charter is emotional blackmail: accept our scheme or the homeless rot. It's instructive to see how people with no record of concern for the poor become their champions as soon as there's something in it for the feral rich.

No one in their right mind disputes that England needs more homes, especially affordable homes. No one disputes that the planning system should deliver them. But the main impediment to house building in recent years has not been planning, which now approves some 80% of housing proposals, but money. In the comprehensive spending review last year, the government – doubtless motivated by its newfound concern for the poor – cut the affordable housing budget by 60%. Credit has dried up, effective demand has shrivelled, the housebuilders are going bust. Weakening the planning system won't resolve any of these problems.

Plutocracy passes through a perpetual cycle. It lobbies against the restraints that curb its destructive greed. It succeeds. As a result it collapses. It gets rescued, at enormous cost, by the forces it fought: regulators, planners, tax collectors, an interventionist state. It recovers, dusts itself down, then resumes its attack on the people who rescued it. This assault on planning belongs to the cycle. But the damage the plutocrats mean to inflict will not be reversible.

• A fully referenced version of this article can be found on George Monbiot's website