KEVIN RUDD has denounced the unfettered capitalism of the past three decades and called for a new era of “social capitalism” in which government intervention and regulation feature heavily.
In an essay to be published next week, the Prime Minister is scathing of the neo-liberals who began refashioning the market system in the 1970s, and ultimately brought about the global financial crisis.
“The time has come, off the back of the current crisis, to proclaim that the great neo-liberal experiment of the past 30 years has failed, that the emperor has no clothes,” he writes of those who placed their faith in the corrective powers of the market.
I know let’s try a command economy. I understand it worked great for the Soviet Union.
[blockquote]He urges “a new contract for the future that eschews the extremism of both the left and right”.[/blockquote]
I carry no water for unfettered capitalism, but I rather wonder which parts of the extremism of the left these new “social democrats” are eschewing.
Pretty words, used – in my experience – by people on the political left who know that an essentially moderate-conservative or centrist citizenry is put off by leftist economic and political ideas no less than they are by unfettered greed. But then, in due order, the leftist economic policies and political encumbrances appear.
“Unfettered capitalism”? Really? Let’s see.
Here in the States there hasn’t been an oil refinery built since my now-greying son was in nappies. Construction has been prevented by regulations and threats of lawsuits. It takes ten years to garner permission to open a mine.
USDA regulations exceed 28,000 words, and that’s just for cabbage. You have to get permission to fill in a low spot on your own property. The local Home Depot was told its floor area had to be less than a certain amount, so it would not “compete unfairly.”
In Canada police remove imported kosher foods from the shelves — during Passover — because the labels aren’t in French. Dairy farmers have to purchase permission to produce milk. In France police scan company parking lots to make sure nobody’s working more than the legal maximum of 35 hours. In Britain they’re now prohibited from selling beer in pints. In the Netherlands you can’t start a band if the bureaucrats believe the country already has enough bands.
You get the drift. Rudd is talking piffle.
What caused the current economic problems was too much debt and too much easy money, and it appears the Fed and Congress believe the solution is more of the same.
You don’t need to look at the Soviet Union. Think about England in the 60s and early 70s. The market system was re-fashioned in the 70s because it wasn’t working well. In fact, was the British economy in those days a “market system” at all? Or is that British speak I don’t understand?
Like Todd Granger, I’m not a big fan of unfettered capitalism (believing, as I do, in Original Sin), but specifics would be helpful. This article suggests a mish-mash of ideology and questionable ideas, starting with the notion that Franklin Roosevelt’s own re-fashioning of government and economic resolved the great depression. Since it didn’t work then, will it work now?
We actually have not had unfettered capitalism in a long time, if ever.
Its worth remembering that Kevin Rudd is an Australian, and he is speaking from hat perspective. He is not advocating a Soviet or British system.
Rudd sees the global credit crisis as being the product of American irresponsibility.
Watch what you wish for, Mr. Rudd. If you want to re-introduce the heavy hand of government into economic decision making, you will have to deal with one of the unfortunate consequences, which is the government regulating for the benefit of favored groups, including favoring domestic producers over foreign ones. When digging for economic policies of the past, you invariably uncover all the fossils, not just the one you’re looking for.
Once again context is important. It was Mr Rudd’s party, the Labor party that floated the (Australian) dollar, and freed the (Australian) Reserve bank from government control, reducing the room for government to reglate for favoured groups. Steven in FC is quite right to point out that difficulty. Sensible, thought out deregulation has worked.
But it took the US to deregulate to the point that banks could wrap debt into derivatives.
OB — not to make too much of a fuss, but the goofball, third-order, slice’n’dice, unknown counter-party, toxic waste pieces of paper passed off as mortgage securities … were [i]not[/i] ‘de-regulated.” They were never regulated in the first place, though the Bush administration tried unsuccessfully on several occasions.
That they [i]should[/i] be regulated probably requires rather less intellect than that of a fencepost, or perhaps a potted plant. Do not, however, blame de-regulation.
This was neither a failure of capitalism nor a failure of basic regulation — and banks ought to be well-regulated, as they are (in essence) a public utility — it was a failure of government oversight directly traceable to corruption and obstruction on the part of certain Congressional politicians; Dodd, Conrad, Rangel … to name just a few.
“A New Order”?? At the cost of showing my age; where and when have I heard that phrase? – more decades than I care to admit to. I think it was a person named Adolph Hitler. Then a man named Franlin D. Roosevelt used a similar phrase. Some things don’t change do they?
Bart,
I would not wish to get into a discussion about which variety of US politician to blame. But I think we are agreed that the failure of the US to control its banking sector will lead to suffering around the world.
Australia indeed: I saw “Prime Minister” and immediately thought “England”. Thanks for the correction, OS.