Wednesday 08 Apr 2020 | 20:59 | SYDNEY
Wednesday 08 Apr 2020 | 20:59 | SYDNEY

Rudd confronts the neo-con con


Graeme Dobell

6 February 2009 08:45

With the demise of neo-liberalism, the role of the state has once more been recognised as fundamental.

- Kevin Rudd, essayist and Prime Minister.

There’s been much discussion of the idea that the good ol’ Westphalian system is back, hacking its way through the door with a Jack Nicholson leer. Or, to lift  a wonderful sentiment from Mark Twain, it seems reports of the death of the nation-state have been greatly exaggerated.

Governments do look like the last bits of the system still standing at the moment. George W Bush set himself up as the heir to Ronald Reagan, but departed office having presided over the nationalisation of Citigroup and Bank of America, along with the world’s largest insurance company, AIG. That’s really blindsiding the Gipper.

No argument that we are all in a most unfamiliar place. What has it meant and where will it lead? Onto the stage steps that well-known essayist Kevin Rudd. Having chewed on his biro over the summer break, the Prime Minister has offered his interpretation of the global financial crisis. The Rudd diagnosis is that it’s all the fault of neo-liberalism, ‘that particular brand of free-market fundamentalism,, extreme capitalism and excessive greed which became the economic orthodoxy of our time.’

The Rudd essay can be sliced and diced is several ways: first as political theatre, second as an attempt at description and analysis, and third as an effort at prescription. At the risk of revealing my flippant and immature side, let’s view the politics of this as almost pure fun.

Some of the old Howard squad have leapt in to rail against the essayist as a dastardly politician who has ‘grabbed this unparalleled opportunity for some revisionist myth-making designed to spin a new political ascendancy for the next and subsequent genrations.’

Well, of course, myth making or narrative or explanatory stories are what leaders do as they gather the voters around the fire. A veteran hack in the old Parliament used to proclaim in mock horror: ‘I’m shocked – shocked! – shocked to discover that politics – POLITICS – is being played in this very building – in the Parliament of the Commonwealth of Australia. Imagine that these elected representatives would gather to pursue political advantage. Who would have thought it??!!!”

So Rudd scores marks for an excellent bit of political theatre, offering up some rhetorical biff and bang. On the insult front, it’s almost restrained compared to the previous Rudd effort in this form, when he claimed the Howard Government was shipping Australia off to an economic ‘Brutopia’. Howard, by the way, was also an excellent player of the game. Take a glance at his  2006 Quadrant speech on the triumph of the marketeers, the ‘defining ideological struggle of the 20th century’ and standing against ‘the fangs of the left’.

Second, consider the Rudd essay as description and analysis. It sits squarely in the James Reston tradition. The New York Times man said of his columns: ‘How do I know what I think until I see what I write?’ In this effort, Rudd has assembled some fine quotes and enlisted some interesting names as he peers through the dust of crashing economies. The witnesses quoted against the evil neo-liberals include George Soros, Amartya Sen, JM Keynes, Joseph Stiglitz and Paul Krugman. The zippiest quotes are given to the politicians.

From France, President Sarkozy pronounces: ‘Le laissez-faire, cést fini.’ From China, Vice Premier Wang Qishan offers this fortune cookie: ‘The teachers now have some problems.’

Part of the problem with the Rudd analysis is that he doesn’t manage to pin down his  labels or make them stick. He rails against neo-liberalism, but really seems to be attacking the old Washington hole-in-the-Wall-St gang that used to be called neo-cons. Just as the neo-cons spent much of their time fighting with conservatives, the Rudd-defined neo-liberals are foes of liberals as much as anybody else.

Others have played this definitional game with more finesse. The old Tory pol Chris Patten sets out a strong case for what he calls ‘liberal internationalism’. The qualities Patten nominates for this label are all supported by Rudd: rule of law, democratic government, open markets, free trade, and reform and reinvigoration of global institutions. And noting our starting point (the fundamental importance of the state), Patten is ‘not convinced – liberal internationalist lapel badge notwithstanding – that the state has withered away because of globalisation.’

A key element of the political game is the naming and owning function. Rudd’s problem is describing where we are now heading. He thinks we are bound for a system of open markets unambiguously regulated by an activist state, with three possible labels: social capitalism, social democratic capitalism or simply social democracy. Not even as catchy as the Third Way. And when titles are given to this era it is more likely to describe the nature of the calamity, not the slow cure. 'The Global Crash', I suggest, is going to trump 'social democracy' as the headline.

Finally, the prescription for the future. Rudd argues that the financial crisis is producing a political crisis, and that the long term geo-political implications will ‘impact on the future strategic leverage of the West in general and the United States in particular.’ Rudd’s favoured vehicle for confronting this geo-political challenge is the G-20. If  nothing else, the G-20 would mean Australia could be confident that it was present at the creation with a top table seat.

As a working wonk, Rudd also offers a list of what must be done. Let me restore the dot points that were stripped out to meet the essay format. Governments must:

  • Reform existing global institutions, especially the IMF.
  • Craft consistent global financial regulations to prevent a race to the bottom.
  • Establish stronger global disclosure stands for financial institutions.
  • Build stronger frameworks for responsible corporate conduct (and executive pay).

You can see why hacking at the dreaded neo-liberals got the headlines.

Photo by Flickr user tellmewhat2, used under a Creative Commons license.