Rudd's essay is much more than spin

Predictably, there has been some grizzling about the essay's linking the actions of the previous government to the fix in which we find ourselves. But the cap fits. There is little to argue with in Rudd’s description of the Howard government’s direction:

[They] reduced investment in key public goods, including education and health. [They] also refused to invest in national economic infrastructure … [They] set about the comprehensive deregulation of the labour market ... [They were] driven by a philosophy of minimal government intervention in the market. Most critically, the Howard government oversaw an unprecedented expansion in household and national debt.

In other words, despite chest-beating over "border security", the Howard government dismantled some of the structures and institutions that made Australians feel safer. They enacted their determination to increase private wealth at the expense of our store of social goods. By comparison, Rudd sets out some principles that can underpin the actions of a more interventionist state. As if he needed to say it again, or any more explicitly, he signals that the heyday of the ideas that animated the last decade has passed.

Rudd’s answers to our current dilemmas draw on a range of big ideas about the state’s proper role in the economy, but the stakes are appropriately high. Rudd thinks that governments must now move to regulate capitalism, while cherishing the market's fostering of innovation and enterprise. Otherwise, “there is a grave danger that new political voices of the extreme Left and nationalist Right will begin to achieve a legitimacy hitherto denied them.” While the commentators' employers run supplements on “credit crunch chic” or talking up cheap real estate, the Prime Minister - a student of Bonheoffer - is meditating uneasily on the 1930s.

He takes this opportunity to ask and answer the questions social democrats have always asked themselves. What is the state for? Can the market’s destructive effects be contained at the same time as its powers for concentrating innovation and enterprise are preserved? How to resolve the tension between democracy and the inequalities of the market? How to defuse the social tensions brought by widespread poverty? How can a society under pressure safeguard both freedom (in the form of the market), and the democratic demands of justice? How to demonstrate that democracy is worth fighting for?

These questions are not treated airily. Most reviews of the essay have completely ignored concrete proposals Rudd makes. He suggests “credit-market regulation, intervention and demand-side stimulus in the economy”. The stabilisation of banking systems is justified as protecting a “public good”. The current intervention in credit markets may be wound back, but “clearly the days of effective non-regulation and unconstrained financial innovation are gone, and must not be allowed to return. The consequences for the economy are too great.”

Demand-side stimulation is happening around the world, but Rudd buttresses it both with neo-Keynesian theory and clear-eyed appraisal of events. Unlike some critics, he wants above all to minimise large-scale unemployment, so “the state must involve itself in direct demand-side stimulus to offset the large-scale contraction in private demand”. For good reasons, this approach has achieved widespread currency. At present in the US, for example, a huge fiscal stimulus package is in train because it’s clear to anyone with eyes that monetary policy has nowhere left to go. The difference is that Rudd tries to give the strategy some intellectual ballast.

The spectre of poverty is a strong presence in this essay. I’d argue it's also a significant element in the Prime Minister’s character and political beliefs. Rudd was poor as a child. I’m inclined to believe the Prime Minister when he says that his family's near-destitution was formative. He would be personally aware of the particular effects of economic downturn on rural and regional areas. It’s probably only those who have never been poor who can dismiss its impact on individuals and families, or discount it as a political motivation. Those who have known it understand the anger it can elicit, and the risks it carries of disenfranchisement or disengagement from mainstream life.

I’m prepared to accept that Rudd’s most fundamental beliefs - as a politician, and perhaps as a Christian - are expressed in the passages where he outlines the commitment of social democracy to ameliorate poverty:

The social-democratic pursuit of social justice is founded on a belief in the self-evident value of equality ... human beings have an intrinsic right to dignity, equality of opportunity, and the ability to lead a fulfilling life ... This contrasts with the Hayekian view that a person’s worth should primarily, and unsentimentally be determined by the market.

For Rudd, “trickle-down” solutions to poverty are far too slow.

Rudd's essay has been painted as an exercise in political spin, but it's much more than this. Of course there are problems. Passages are verbose where they should be clear, and prosaic where they could be lyrical. There is some jargon that mystifies what it would explain. But these may just be attributes of the democracy we live in, and the Prime Minister we’ve elected. Another problem: if this is an invitation to talk about the direction we feel Australian governance should go in, its unclear how we might best respond. The Australian government is still dragging the chain in embracing new possibilities for public debate and consultation.

Despite these quibbles, we should acknowledge that an essay is a natural way for Rudd to open up this conversation. And we badly need to have some kind of national discussion about the disbursement of so much public money, and so many guarantees. Rudd argues that social democracy, and a view of the state as a social utility, can justify his current efforts. The argument is considered. Those who disagree with his world view should do him and the rest of us the courtesy of responding in kind.

The essay's reception raises larger questions. We’re sometimes poorly served by those whom we trust to interpret political events. Some Canberra commentators, and not a few bloggers, seem unable to take anything that comes from a politician at face value. This is a sign of immaturity in our political debate, not sophistication. A comparison with political commentary in the US will show that writers there are capable, when necessary, of the seriousness that citizenship and democracy occasionally demand.

The glaring element of realpolitik that hasn’t been considered is that Rudd’s opponents in the Liberal Party are the very least of his current difficulties. For the moment, he doesn’t need to write long essays during his Christmas break to create trouble for Malcolm Turnbull. Turnbull and his colleagues are taking care of that. We currently have a Prime Minister who’s prepared to take risks in putting his case for change on the public record. How long will we need to wait for a media class that is equal to this gesture?