Economics with social conscience

Emerson, 53, the only professional economist in Rudd's cabinet, has a "unifying political philosophy" that he describes as embracing the universal values affirmed in the United Nations Millennium Declaration.

He counts among these values freedom, equality, solidarity, tolerance, respect for nature and shared responsibility, summarising them as "prosperity and fairness through opportunity for all in a market democracy".

For the economist with a doctorate from the Australian National University, the traditional Labor values of prosperity, fairness and compassion fit well with "supporting an open, competitive economy that rewards effort, risk-taking and entrepreneurship, and where opportunity, not welfare, is available to all".

Does Emerson speak for Rudd then, in his description of Labor as the party for competition and compassion, drawing as he does his inspiration from Adam Smith, David Ricardo and Karl Marx, liberally sprinkling his speech with references to "the Rudd Government"?

We cannot be sure. Emerson is yet to respond to questions New Sunday Times put to him.

Bank economist Saul Eslake is afraid that may not necessarily be the case. "Rudd is no economist," Eslake says of Emerson's fellow alumnus who came after him at ANU.

Rudd, 50, graduated with first class honours in arts (Asian Studies), majoring in Chinese language and Chinese history. "Rudd is a clever, able politician first and foremost," says Eslake, chief economist of ANZ and sought-after commentator among market economists.

Eslake, appointed to advisory panels on trade and foreign affairs to the government of John Howard, was moved to seek a transcript from Emerson of his Sydney Institute address. He finds Emerson’s thinking on equality of opportunity beyond equality of outcomes appealing. "It is a philosophy that reflects mainstream economists," Eslake maintains.

The challenge for government, as Rudd saw it in his maiden speech in Parliament, is "the creation of a competitive economy while advancing the overriding imperative of a just society".

Some people call this the "third way", he said then. It is, he asserts, "a repudiation of Thatcherism".

Emerson echoes this in his Sydney Institute address, describing what he calls market democrats as a "modern incarnation of the traditions of the Hawke/Keating (Labor) governments (1983-96), later imported by (former British Prime Minister) Tony Blair and refined as 'the third way'."

"Market democrats harness the power of the market for the public good," says Emerson, who at ANU studied under the tutelage of Hawke/Keating adviser Professor Ross Garnaut.