In the two weeks ended 29 January our Prime Minister made no less than 15 speeches at a time when most Australians, including journalists, are at the beach. Not surprisingly he got limited media coverage. Now he is having a go with an essay in The Monthly on a theme he ran with last year, viz. the need to reject extreme capitalism and unrestrained greed.
In his latest foray Rudd argues for social democracy to replace "free-market capitalism, extreme capitalism and excessive greed" . But the essay lacks any specific proposals and confuses the reader by arguing against abandoning altogether the advantages of open, competitive markets. Is this picking up Tony Blair’s third way and, if so, how come social democracy in the UK appears to have performed almost as badly as the supposed free marketeers in the US? Which bits of the competitive market system are we to keep?
These kind of forays illustrate that Rudd is way out of his depth. While the current financial and economic crisis will undoubtedly be one of the worst ever experienced, credit cycles have played a major role in economic fluctuations for centuries. Such cycles have occurred with governments of different political persuasions and, hindsight aside, the economic profession has not developed a formula for predicting or preventing them.
These fluctuations have also occurred despite the existence of highly regulated monetary and banking systems. Australia had one such recent experience with a social democratic government in the early 1970s.
It would be interesting to learn what was Rudd’s favourite social democratic government.
Des Moore is the Director of the Institute for Private Enterprise.