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April 01st 2009 print

Geoffrey Luck

Kevin Rudd as Philosopher-Politician

What makes Kevin Rudd run? The first answer to the question came eleven years ago, in the first words of the Member for Griffith’s maiden speech to Parliament:

Politics is about power. It is about the power of the state. It is about the power of the state as applied to individuals, the society in which they live and the economy in which they work. 1

Since then, and especially in the last sixteen months since the former junior diplomat and reputed bureaucratic bullyboy came, surprisingly, to lead the nation, Australians have been wondering how he would translate those challenging words into action. The ascent of Rudd had surprised the Labor Party as much as it had surprised the country. A cold calculating intellectual without a typical ALP background or factional support had convinced sceptical colleagues to trust him to deliver government on the basis of a challenge between arcane economic and philosophical theories. “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else,” 2 he had lectured the parliament in that first speech, a speech so unconventionally serious.

In office, Rudd set about governing with a Whitlamesque flurry of symbolic gestures calculated to differentiate himself as sharply as possible from the Howard years. He set hares running in multiple directions with committees and commissions to review a multitude of policies and issues. He convened a tightly scripted supposed national summit of ideas which failed to move national debate beyond the clichés of left-wing café society. Like a mad modern Caligula, he declared war on everything—from obesity to binge drinking, Japanese whalers, Iran’s President Ahmadinejad and most disastrously, on inflation, which encouraged the citizenry to believe they were insulated from the world economy.

A year after coming to power some of his supporters were growing uneasy. “What is Rudd’s Agenda?” 3 questioned Robert Manne’s review of that year, noting, “Rudd aspires to be the architect of a new Asia-Pacific Community … a somewhat amorphous regional entity,” but had done little about it. He dismissed Rudd’s disavowal of “heavy handed regulation” of the traditional Left as of no real-world importance, since nobody still defended central planning or national ownership. He described Labor’s new policy on illegal immigrant would-be asylum seekers as “logically nonsensical”, adding that “The new humanitarianism of the Rudd government’s asylum-seeker policy is free-riding on the ‘success’ of the Howard government’s inhumanity.” Manne castigated Rudd for his reaction to the Henson photographs, which he said had appalled the Left, delivering its judgment that “he is not an aesthete or libertarian”. Finally, he expressed his deep disappointment that the Prime Minister had dragged his heels on so-called climate change, which he had previously defined as the greatest moral and political challenge of our era. Manne could also have noted the egotistical hubris in Rudd’s announced intention that Australia would lead the world in three areas—emissions control, re-regulation of the markets and Asia-Pacific affairs. (These ambitions have already been thwarted by the G7 nations’ decision to investigate Canada’s regulatory system, and by the USA– China accord on emissions policy, struck by Secretary of State Hillary Clinton in late February.)

Such academic carping largely went over the heads of the Australian public. Solid opinion polls confirmed a general confidence that the new government’s assurance of “economic conservatism” meant that it had “got the balance right” in the interests of “working families”. For months, the country was led to believe it was effectively “de-coupled” from the global downturn by the strength of its resource industries, its China market and the solidity of its banking system. Then as the depth of the financial crisis was finally dawning on Australians, Rudd was ready with his diagnosis of the problem and the prescription to save the country. The publication of his 7000-word essay in the February edition of the Monthly put economics on the front page of every newspaper and injected a new element of apprehension into public debate. With superb timing, Kevin Rudd dragged his cherished dream of democratic socialism from the wings of the political stage to the footlights.

Rudd’s article was in fact the last in a trilogy. The first, some eighteen months earlier, had eulogised an obscure German Pastor, Dietrich Bonhoeffer, whom he had curiously described as “the man I admire most in the history of the twentieth century”. Bonhoeffer’s courage in challenging the tyranny of the Nazi state provided Rudd with a model to justify “Faith in Politics” 4—the title of his essay. Rudd seems to have been unaware of its internal contradictions. He began with an attack on the America of George W. Bush and the Australia of John Howard where “we see today the political orchestration of various forms of organised Christianity in support of the conservative incumbency”. “Right-wing Christian extremism had become John Howard’s religious handmaiden,” he asserted. Yet he argued for a Christian Socialism in which the churches were injuncted to “boldly tell the truth to the state” on issues including industrial relations, global climate change, asylum seekers and poverty. Far from what at first appeared to be a defence of the right of individual parliamentarians to bring their religious convictions to bear on political matters, Rudd was enlisting the churches to support his socialist incumbency.

The following month, November 2006, Rudd followed with an even sharper attack on what he derided as “Howard’s Brutopia”5, claiming free-market fundamentalism had led to a “commodification of human beings”. Its purpose clearly was to drive a wedge between the Howard policies and the social liberalism of Deakin, Menzies, Fraser and Peacock. That essay also saw his first dabbling in economic theory. The philosophical inheritance of social democrats, he said, was from Adam Smith, as interpreted by Keynes, Samuelson, Galbraith and Nugget Coombs. Labor was “other-regarding”, compared with modern Liberals who were “self-regarding”. This struck many people as pretentious for a man who had studied no economics. Ross Garnaut, Professor of Economics at the ANU, and Rudd’s chosen expert to report on the impact of climate change, had few misconceptions about his junior’s abilities in that field when ambassador to China: “He would shamelessly come to me to ask what a lot of economic terms meant—he didn’t know, but he wanted to learn,” 6 Garnaut is quoted as saying. This “facadism”—an architectural pretence that the cherished front represents what lies behind—is key to understanding a man who never wants to appear less than perfect. As Nicholas Stuart found when writing his pre-election biography, Rudd prevented numerous people who knew him well from speaking to Stuart. 7 Control of public support begins with control of the image.

If Kevin Rudd had studied economics, he might have chosen to adopt Joseph Schumpeter as his hero, instead of John Maynard Keynes. Although no Keynesian, in his landmark work Capitalism, Socialism and Democracy Schumpeter 8 foresaw that the success of capitalism would lead to a form of corporatism, and a trend to social democratic parties. Both economist and social scientist, Schumpeter observed that according to democratic theory the electorate identified the common good and politicians carried this out. But, he said, due to people’s ignorance and superficiality they came to be manipulated by politicians, who set the agenda. Prescient.

Kevin Rudd’s vanity publishing reached its apogee with his essay “The Global Financial Crisis”9 in early February. A largely incoherent collection of political invective, jumbled statistics and misinterpreted economics, its stated purpose was to overthrow the free-market orthodoxy of the Bush–Howard era, which he called neo-liberalism, and replace it with the logic of a social-democratic state. He proposed to rescue Australia from “free-market fundamentalism … revealed as little more than personal greed dressed up as an economy philosophy … to prevent liberal capitalism from cannibalising itself”. Somewhat pompously, he re-defined the role of the state as rescuing the private financial system from collapse, providing direct stimulus to the real economy and designing a national and global regulatory regime. The clue to the superficiality of the essay’s arguments, indeed the patchwork nature of its ideas, was contained in the small-type italicised attribution at its foot, noting that “Mr Rudd was assisted, with comments and contributions, by staff, advisors and others with a common interest in the ideological origins of the current crisis.” There were no other footnotes or references.

Commentators were quick to pounce on the sweeping generalisations, the mis-attributions and the penchant for erecting straw men to demolish. Reduced to essentials, Rudd’s case was one of a Wagnerian conflict between heroes—Franklin Delano Roosevelt and John Maynard Keynes—and villains—Margaret Thatcher and Friedrich Hayek. Unfortunately, the characters in his Niebelung Ring do not fit his script. Despite his fervent belief, Roosevelt did not cure the Great Depression, and certainly not with Keynesian policies to increase aggregate demand. As economists Harold Cole and Lee Ohanian 10 have pointed out, both employment and per capita consumption declined during the New Deal from 1933 to 1939. Any benefits from stimulation and easy money were negated by government controls on prices and wages, and measures to curb what Roosevelt believed caused the depression—excessive competition. It was an atmosphere which encouraged union militancy and led later to the so-called 1950 “Treaty of Detroit”, in which the United Auto Workers extracted the generous health and pension benefits which have since bankrupted the American automobile industry.

It is easy to understand why Roosevelt has come to personify the virtues of a democratic socialist state, when we read this in his first inaugural speech:

If we are to go forward, we must move as a trained and loyal army willing to sacrifice for the good of a common discipline … We are, I know, ready and willing to submit our lives and property to such discipline, because it makes possible a leadership which aims at a larger good … I assume unhesitatingly the leadership of this great army of our people dedicated to a disciplined attack upon our common problems … I shall ask the Congress for the one remaining instrument to meet the crisis—broad executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe. 11

It is worth taking time to examine the reasons behind the failure of Roosevelt’s principal New Deal initiative which followed the theme of that speech. Joshua Hendrickson of Wayne State University, Detroit, writing as “The Everyday Economist” 12 points out that one of the problems of the New Deal policies was that they were decidedly not Keynesian in that they did not attempt to stimulate demand, but rather they attempted to stimulate prices: “many of the New Deal policies were aimed at restricting supply (namely in the agricultural sector) in order to raise prices”.

The National Industrial Recovery Act of June 1933 13 authorised the President to regulate the banks and stimulate the economy. It set up the National Recovery Administration and the separate Public Works Administration to undertake civil engineering works. These went ahead in parallel with other infrastructure projects such as the huge Tennessee Valley hydro-electricity project. But the NIRA hobbled America with 10,000 pages of regulations controlling thousands of industries. It depended on great appeal to patriotism which included the famous “Blue Eagle” poster on shops and businesses encouraging, “Buy American”. The NIRA was overturned two years later, when the Supreme Court found it unconstitutional, saying: “extraordinary conditions such as an economic crisis may call for extraordinary remedies but they cannot create or enlarge constitutional powers”. 14

Six months after the passage of the NIRA, Keynes was becoming concerned at Roosevelt’s deviation from his theories. He wrote him an open letter, published in the New York Times on the last day of 1933.15 (He had sent the President a personal advance copy.) His letter continued to urge Roosevelt to increase national purchasing power through government expenditures, but made a number of critical observations of American policy. Stressing the need to accelerate capital expenditures, he was already beginning to realise the difficulties in maturing capital works quickly on a large scale. He also recommended “the maintenance of cheap and abundant credit and in particular the reduction of the long-term rates of interest”. He was urging a strong monetary policy in parallel with fiscal stimulation. 16

Rudd decries a lack of compassion in neo-liberalism, taking Margaret Thatcher’s phrase about society sneeringly out of context. It is worth recalling exactly what she said:

I think we’ve been through a period where too many people have been given to understand that if they have a problem, it’s the government’s job to cope with it … They’re casting their problem on society. And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbour. People have got entitlements too much in mind, without the obligations. There’s no such thing as entitlement, unless someone has first met an obligation.17

Can any nation afford the demands of every pleading social group? In economic terms, they are rent-seekers, the same as the lobbyists seeking subsidies for the car industry, or any other sectoral industry interest.

Which brings us to Rudd’s convenient misrepresentation of the economic philosophies of Hayek and Keynes. Rudd chooses to set them up in opposition, as in a sort of economic Punch-and-Judy show. He has characterised Hayek as the arch-priest of the cult of personal greed. In fact Hayek argued that the economy is simply too complex to be managed by a planned order. Market mechanisms, especially the price mechanism, lead to the most efficient use of resources, he said. This is the “spontaneous order” Rudd’s essay refers to, but is in no way set in contrast to concepts of social justice. In The Road to Serfdom18 Hayek was at pains to elucidate the socialist roots of Nazism, not to advocate a laissez-faire capitalism—Rudd’s “let it rip” jibe. And the idea that free-market Hayekian neo-liberalism has operated in some sort of regulatory vacuum (which Australia is not) is absurd. Rudd’s essay indeed illustrates Hayek’s famous “fatal conceit”—the idea that “man is able to shape the world around him according to his wishes”.19

On Keynes, Rudd has conned Australia by slavishly following American hyperbole. The Wall Street Journal dubbed Keynes “The new old Big Thing in economics”; the Christian Science Monitor ran an article headed “Raising Keynes: An old economist finds new rock-star status”. But we can be grateful to American economists who are now analysing President Obama’s rescue package for pointing out how Keynes is being misrepresented in the interests of democratic socialism. Mario Rizzo, Professor of Economics at New York University, writes:

By the late 1930s, Keynes was not an advocate of many of the countercyclical policies being advocated today … [he] did not think that public works expenditure was very effective in countering existing or impending recessions. For one, he believed it was difficult to get the timing right; it would take a long time to plan and execute the appropriate projects (indeed many of the projects would not take effect until the pressing economic problem was inflation and not recession).

Rizzo went into some detail to explain Keynes’ preference that public works investments be made without deficits:

But if they were to be made as ‘loan expenditure’—that is, through a deficit in the portion of the government’s budget allocated to long-term expenditures like infrastructure—the expenditure should be covered by a surplus in the portion of the budget allocated to ordinary expenses like transfer payments or through a special fund accumulated in prosperous times for just such purposes. If a deficit were incurred, the investments should be ‘self-liquidating’, that is they should repay their costs over the long run. His strong, but not rigid preference was against deficit financed public works.

Rizzo concluded his article: “It is worth pointing out how much is being done in Keynes’ name that has nothing to do with what Keynes taught or believed. This ‘rock star’ economist may be the hottest thing around, but surely he is also rolling over in his grave.” 20

Apart from its misuse of theories, Rudd’s essay contains many errors:

·The practice of “mark to market” of assets is not a unique feature of booms, involving increasing valuations only. The devaluations can be seen today in the destruction of wealth in every investment vehicle.

· The originate-and-distribute model was not an invention of the boom. It has been the basis for all merchant bank securitised investments for decades. The problems came with increased complexity and compromised ratings.

·As one of Rudd’s favourite economists, Nobel laureate Joseph Stiglitz, pointed out, not all householders who over-committed to housing loans were victims of rapacious mortgage brokers. Some deliberately falsified their incomes to qualify for loans; others speculated on a continual rise in housing prices. 21

·If, as the essay put it, the “social democratic state, not the unfettered forces of the market” were called to rescue the mortgage giants Fannie Mae and Freddie Mac, that was only rough justice. Fannie Mae was a creature of Roosevelt’s New Deal, with mortgages backed by government guarantee. In 1970 when Freddie Mac was created, both Government Sponsored Enterprises were authorised to pool and sell their mortgages. This launched the US housing bubble and the sub-prime fiasco.

·“Financial markets have not self-corrected.” What then is the 40 to 50 per cent decline in equity markets worldwide, if not a correction from boom-time valuations?

After criticising free market capitalism for trading securitised mortgages which proved worthless, the Rudd government is now bent on creating a new speculative market to trade carbon credits—twenty-first-century alchemy to turn air into gold. The danger of applying Rudd’s confused economic thinking to reality became apparent in the government’s proposed $42 billion package to save Australia from recession, or worse. In a global credit freeze, where mountains of debt had been incurred as a result of living beyond our means, Rudd’s remedy was a strategy to stimulate consumer demand. By December 2008 Australia’s total household debt stood at $1.1 trillion 22 and was still increasing. So too were the total charge card balances, which that month reached $45 billion, 23 of which $33 billion was accruing interest—that is, cardholders were willingly (or perhaps unknowingly) paying 12.67 per cent to 18.67 per cent interest 24 for the privilege of rolling over their unpaid balances for another month. But the citizenry was showing signs of realising that they needed to de-leverage, as much as corporations. As early as September last year, the percentage of total disposable income saved had trebled,25 albeit from a pathetically low base, and there were early indications that the ratio was increasing. As unemployment rises, there is a strong likelihood that a significant portion of the government’s gift of $900 to individuals will also go to reducing household debt.

As one economic commentator, Michael Stutchbury, 26 has already pointed out, at a time when the world has given Australia a pay cut (on its mineral exports), it is dangerous to borrow more to finance consumption, and budget for handouts to pensioners. This will create enormous pressure on the already strained global capital markets, further crowd out private sector borrowing, and inevitably lead to future interest rate rises, and a resurgence of inflation. Although Rudd’s essay pays lip service to striking a balance between fiscal and monetary measures, it dismisses monetary policy as ineffective as “pushing on a string”. Whether this was intended as a dig at the Reserve Bank or not, it brought this gentle riposte in the bank’s February statement, referring to the declining inflation rate and the difficult environment for growth:

The Board has responded to these developments with a series of unusually large reductions in the cash rate at its recent meetings. This has brought the monetary policy setting to a position that is providing significant stimulus to the economy, with the cash rate now well below its previous cyclical lows. Substantial pass-through of these reductions to most borrowers over recent months has also seen variable lending rates fall significantly. [emphasis added]27

Rudd’s professed “robust support for the market economy” echoes Paul Klugman, another Keynesian economist he quotes, who claims “I admire the virtues of free markets as much as anyone.”28 The 2008 Nobel Economics laureate for his work on new trade theory, Krugman is best known for his highly political columns in the New York Times. The Economist surveyed his writing:

A glance through his past columns reveals a growing tendency to attribute all the world’s ills to George Bush … Even his economics is sometimes stretched … Overall, the effect is to give lay readers the illusion that Mr Krugman’s perfectly respectable political beliefs can somehow be derived empirically from economic theory. 29

In his admiration of Krugman, Rudd mirrors his view of Bush, politics and economics. Daniel Klein is Professor of Economics at George Mason University, Virginia. He analysed all 654 of Krugman’s columns from 1997 to 2006, and concluded that he is best interpreted as a committed social democrat and Democratic partisan. Klein writes:

I suspect that Krugman and many others push the people’s romance as a way of promoting the collectivism that they favour … I see a penchant that gives rise to a mentality, particularly of people of high strata who are chiefly concerned with being among what they regard to be the top of the pyramid of culture and power.

This judgment seems justified by Klugman himself:

On many issues, especially the big ones, voters do not have a clear vision of where their interests lie. What politicians do is define that vision for them, in a way that rebounds to their own benefit … in other words, politics on the grand scale is not about interests but about ideas.30

The hallmark of economics, like all good science, is not its ability to forecast the future but to explain things. Also, like all good science, it moves forward incrementally and individually, not by consensus. To read the acceptance speeches of Nobel prizewinners is to understand that the laureati recognise the contributions of predecessors on whose shoulders they stand, even if they disagree with their theses. The disappointment of Rudd’s essay is that it promotes the polarisation of economic thought along political lines. As such, it serves to stifle instead of encouraging constructive debate in difficult economic times.

But economics does not have to be reduced to adversarial theories. Eric Beinhocker showed in his The Origin of Wealth 31 that slavish attachment by Left and Right to particular theories is sterile. Now a senior adviser to McKinsey, he has straddled the business and academic worlds, and from his experience, opened a more optimistic window on the field of economics. Beinhocker believes that economics got off on the wrong track by modelling its thinking on physics instead of biology. The result was a too slavish dependence on mathematical models and a continual search for equilibrium, with competing explanations of how to achieve it. Instead, he argues, the economy is a complex adaptive system—more like the brain, the internet or an ecosystem. Wealth, he argues, was created through an evolutionary process, which he saw as a universal formula, not merely a biological phenomenon.

That of course is a wholly inadequate summary of a 500-page book which charts the history of economic thought before demonstrating the relevance of game theory, frog learning, Lego model building, the Prisoner’s Dilemma, competing hierarchies, the Second Law of Thermodynamics and the Santa Fe Institute. This last is important. Set up as a research body for cross-disciplinary study of complex systems, it hosted a colloquium between economists and scientists in 1987. This led to the development of the SFI Artificial Stock Market, a model which demonstrated the dynamics of complex decision-making in a situation approaching reality. From that small abstruse beginning, the idea of complexity economics has grown. Its importance is that it puts an end to the equilibrium concept, which was at the centre of both classical and Keynesian theories.

As Beinhocker explains it, “The key distinction between a capitalist and a socialist economy from a Complexity Economics perspective is whether the ultimate arbiter of economic fitness is a market or a hierarchy.” 32 He goes on:

A Complexity perspective would say that government regulations form part of the fitness environment that companies compete in. As long as markets provide the mechanism for selecting and amplifying Business Plans, then the economic evolutionary process will innovate and adapt in response to those regulations.33

Beinhocker acknowledges that neither the Left nor the Right in politics may be happy with the idea of government as a “fitness function shaper”. The Right doubts its cost efficiency, while the Left trusts the rationality of bureaucrats more than the creative power of markets. He admits that Complexity Economics as applied to public policy is still in its infancy. But he is able to progress to a definition that the economic role of markets is to “provide incentives for the discovery and differentiation of Business Plans, apply the fitness function shaped by consumers, technology and the state”. 34 He sees the question not as one of states versus markets, but how to combine states and markets to create an effective evolutionary system. Perhaps that does not sound so very different from what we have in the Australian economy, but it does emphasise the need for a light hand of government and the dangers of interfering ideology.

We may well ask why Kevin Rudd is the first prime minister who has found it necessary to craft a theoretical intellectual framework within which to set his economic and social policies. Harvard Philosophy Professor Robert Nozick’s essay “Why Do Intellectuals Oppose Capitalism?” 35suggests an answer. What Nozick calls “wordsmith” intellectuals resent capitalism for not according them the high status they come to expect from their experience in school. “Intellectuals now expect to be the most highly valued people in a society,” he wrote, “those with the most prestige and power, those with the greatest rewards. Intellectuals feel entitled to this, but by and large, a capitalist society does not honour its intellectuals.” Nozick goes on:

From the beginning of recorded thought, intellectuals have told us their activity is most valuable … Those who valued other things more than thinking things through with words, whether hunting or uninterrupted sensual pleasure, did not bother to leave enduring written records. Only the intellectual worked out a theory of who was best.

Rudd has gone further than other political leaders by adding theological support, modelling his philosophy of government on Dietrich Bonhoeffer. Why? There were many heroic people who opposed Nazism. Otto and Elise Hampel lost their only son at the front. They retaliated against the regime by sending anonymous postcards denouncing Hitler to fellow Berliners for two years, before they were caught and beheaded. 36 Bonhoeffer was both a theologian and an intellectual.

As we await the outcome of Kevin Rudd’s implementation of “social capitalism”, with its “open markets unambiguously regulated by an activist state”, we should remember the warning by yet another economist, Willem Buiter, Professor of European Political Economy at the London School of Economics:

Businesses failing is a natural and inevitable occurrence in a market economy with risk and uncertainty. It may be an individual or family tragedy, but it is not a social or economic problem, and it should not be a political issue. It is an integral part of how the machinery of a wealth-creating market economy works.

The responsibility of government is not to provide security at all cost—to keep us safe from all harm. It is to defend and safeguard our freedom. The main threat to our freedom is not Al Qaeda, other mad terrorists or the acknowledged totalitarian threats of the past and the present. It is government itself—the well-intentioned, paternalistic, we-know-what’s-good-for-you, we’ll-ram-your-happiness-(as-we-see-it)-down-your-throat apostles of benevolent despotism that are in the ascendant throughout what I used to think of as the free world.37

FOOTNOTES

1 Hansard November 1.1998 p 140

2 Ibid

3 The Monthly November 2008

4 The Monthly October 2006

5 The Monthly November 2006

6 Stuart, Nicholas: Kevin Rudd an unauthorised political biography pp 72,73

7 Ibid p 269

8 Schumpeter, Joseph: Capitalism, Socialism and Democracy p 61

                                                           The March into Socialism pp 415-424

9 The Monthly February 2009 pp 20-29

10 Cole, Harold L, Professor of Economics, University of Pennsylvania and

Ohanian, Lee E, Professor of Economics, UCLA

‘New Deal prolonged the Great Depression’ The Australian February 5, 2009

11 New Deal Network—Document Library: Inaugural Address March 4, 1933

12 The Everyday Economist (blog): ‘Keynesian Policies and the Depression’

 November 12, 2008

13 New Deal Network—Document Library: Presidential Statement on N.I.R.A.

 June 16, 1933

14 New Deal Network – U.S. Supreme Court Decisions:

  A.L.A. Schechter Poultry Corp. v United States 295 U.S 495 (1935)

15 New Deal Network—Document Library: An Open Letter to President Roosevelt December 16, 1933

16 Ibid Para 18

17 Thatcher, Margaret: Interview, Womens Own Magazine October 31.1987

18 Hayek, F.A.: The Road to Serfdom 1944

19 Hayek, F.A.: The Fatal Conceit: Errors of Socialism (Collected Works 1988)

20 Rizzo, Mario J; Taking the Name of Lord Keynes in Vain, The American

 (Magazine of the American Enterprise Institute) February 20, 2009

21 Stiglitz, Joseph in BBC World programme—Three Nobel Memorial prizewinners for Economics discuss the global financial crisis. May 4, 2008

22 Reserve Bank of Australia Statistics D2: Lending and Credit Aggregates

23 Reserve Bank of Australia Statistics C1: Credit and charge card statistics

24 Reserve Bank of Australia: Statement of Monetary Policy Table 10 p 52

 February 6. 2009

25 Reserve Bank of Australia Statistics G12: Gross Domestic Product—Income

components.

26 Stutchbury, Michael: Rudd must get radical. The Australian February 24.2009

27 Reserve Bank of Australia: Statement of Monetary Policy p.3 February 6.2009

28 Krugman, Paul: New York Times column February 9.2003

29 The Economist November 13.2003

30 Klein, Daniel B with Barlett, Harika: Left Out: A Critique of Paul Krugman Based on a ComprehensiveAccount of his New York Times Columns 1997 through 2006.Econ Journal Watch Vol 5 No 1 January 2008 pp 109-133

31 Beinhocker, Eric D: The Origin of Wealth. Harvard Business School Press 2006

32 Ibid p 422

33 Ibid p 426

34 Nozick, Robert: Why do Intellectuals oppose Capitalism? Cato Institute: Cato

Policy Report January/February 1998.

35 Fallada, Hans (Rudolf Ditzen); Every Man Dies Alone 1945. A novel based on the true story of Otto and Elise Hampel, translated from the German 2009.

36 Buiter, Willem: Maverecon Blog: Car Manufacturers: The case for doing nothing for the sector December 20.2008.