Kevin Rudd's Twisted Mind
Kevin Rudd is a desperately confused man, a man who has lost his grip on reality. Rudd demonstrated his confusion in a recent article, The Global Financial Crisis (The Monthly, Feb 2009).
Rudd claims that the dominant ideology of the past 30 years has been ‘free-market fundamentalism’, ‘extreme capitalism’, “which became the economic orthodoxy of our time”. According to Rudd,
Neo-liberal economic philosophy has its roots in the theories of Hayek and von Mises, who believed that society should be characterised by the “spontaneous order” which emerges when individuals pursue their own ends within a framework set by law and tradition. Ideally, the role of governments is simply to enforce contracts and protect the allocation of property rights.
This is a relatively accurate description of their position. But is this an accurate description of the society of the past 30 years? Certainly not!
In this view of society, the role of the state would be limited to the protection of the right to private property. This means protection from external and internal aggressors (army and police force), and the adjudication of disputes about property (courts). The state would do nothing more.
The dominant orthodoxy of our time has been government intervention (the mixed economy), the welfare/warfare state, social democracy. We would have to see many policies abolished before we achieved some sort of ‘extreme capitalist’ wonderland. We would need to abolish the central bank, income tax, company tax, the welfare state, and withdraw from Afghanistan and Iraq.
While Rudd claims that ‘extreme capitalism’ has been the dominant force for the past 30 years, he praises the Labor governments of Bob Hawke and Paul Keating, in part for their economic deregulation! Hawke and Keating were governing for 13 of the last 30 years. Do these Labor governments form part of the past 30 years where extreme capitalism reigned supreme?
What about the other 17 years under Fraser and Howard? Was this an ‘extreme capitalist wonderland? Did Malcolm Fraser dismantle the Whitlam legacy? Did the Howard government repealed welfare, refuse to support wars in Afghanistan and Iraq, repeal labour laws, outlaw fractional reserve banking, abolish the Reserve Bank, and allow a commodity currency to flourish in its place?
Given this record of achievement, one wonders why Rudd claims that the political home of neo-liberalism in Australia is the Liberal Party. While I am sure the Liberal party has some members who would agree with Hayek and Mises, the party is committed to government intervention.
At the heart of the current economic crisis is fiat money, central banking, and fractional reserve banking. These are all institutions of the state, and opposed by the likes of Mises and Hayek.
Rudd makes a case against government (and in favour of the Mises position) without realising it, blaming the Federal Reserve for pouring fuel on the fire of excessive borrowing. Rudd writes,
Easy monetary policy was seen as an elixir that could cure any market instability that arose. In fact, it added yet more fuel to the fire, in the form of cheap money available for lending.
The central bank is not part of the free market. In the free market only funds already saved can be borrowed. It is only the central bank of the state that can send interest rates to the floor and flood the market with ‘liquidity’. Hayek and Mises are against central banking, and this is precisely the policy that has lead to the current depression.
Rudd also claims that neo-liberals (I take it he means the ‘extreme capitalist’ followers of Hayek and Mises) are ideological bedfellows of the neo-conservatives in the foreign policy sphere! Nothing could be further from the truth. Mises and Hayek, pro-war? Ridiculous!
Kevin Rudd has also been exposed by Michael Costa in Rudd on a dangerous, ill-informed crusade (The Australian, 6 Feb 2009)
Kevin Rudd is living in an alternate universe. If only he didn’t have to live in ours.
© Danny Haynes
Tim Haynes, 8 March 2009, 21:16:
I don’t think I am willing to read Rudd’s essay. Mainly because it is long. But between you and Costa it seems there is consensus on it’s confusing and illogical ideology.
Rudd should stop using big words like “neo liberelism” if he wants to continue appealing to average joe. the wool is being removed from peoples eyes and the real Rudd is being revealed.
Nathan Fragar, 10 March 2009, 09:29:
KRudd is giving credence to “The Hollowmen” who are driving his political spin machine. It would appear there is a belief if you repeat something, anything enough times, then people start believing it.
KRudd is attempting to be all things to all people. In doing so he compromises on everything, and in the end accomplishes nothing, but it may sound good.
KRudd is desperately trying to deflect as much criticism for the current economic state from his government. It’s not about economic modelling, more about the perception of authority and direction.
Lincoln Feng, 23 April 2009, 16:33:
The PM has attempted to bite too much for him to be able to digest. It is still too early to see if he will be judged as a good PM even he is focused on what his job is, because of the ineffectual oppositions and his prolonged honeymoon period. His adventure to an area where he has little understanding and credential at an abnormal time of financial and economic crisis, is interesting but dangerous, not just for himself but for the nation as a whole, because his incompetence will result in billions and billions dollars for the nation. Hope he has the wisdom of self-aware, or learn to have that soon.