Kevin Rudd's spin on capitalism is almost pure myth

But even more disturbing than this exercise in propaganda is the political agenda that Rudd intends to use it to advance. As Paul Kelly observes, “Rudd dates the neo-liberal ascendancy from 1978-2008 and speculates with breathtaking hubris that the post-2008 epoch might be called "social capitalism" or "social democratic capitalism". He says it will be defined by an activist state and open markets”.

In other words, Rudd intends to use this essay to justify his unconstructive policies which involve excessive government intervention. Examples include FuelWatch and GROCERYchoice, which anyone who understands how markets work knows would be ineffective in reducing prices. Similarly, there’s the doling of billions of dollars to car makers and “Ruddbank”: initiatives which are sold as being about protecting jobs, when even more jobs could be saved if the economy is stimulated by means of reductions of personal income tax rates.

Other policies which involve excessive intervention include the bank deposit guarantee, which disastrously resulted in a flight from non-bank institutions, and the Gillard industrial relations regime, which will compound job losses during this current economic downturn.

It was interesting to see Malcolm Turnbull compare Rudd with Gough Whitlam, as there are a number of parallels. A global recession welcomed the Whitlam government soon after its election, and the Whitlam government reacted with over-spending, and a re-regulatory overhaul of industrial relations. While the Whitlam government slashed tariffs at a time when levels were very high, Kevin Rudd has introduced extra protectionism for the auto industry by means of his distorting subsidies in a period of lower protection.

Sadly, the Rudd Government appears to be repeating many of the mistakes of the Whitlam years, where the economy’s recovery was hampered by government intervention. If Rudd keeps pursuing policies which appeal to Labor’s left-wing faction, he may well turn out to be as unpopular as and infamous as Whitlam himself.

Rudd’s plan to bring Australia back to levels of spending, regulation and protectionism similar to the 1970s is a betrayal of the Hawke and Keating legacy, as well as Rudd’s pre-election claim that he was an economic conservative.