Be Afraid

Lefties on the warpath:

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.

“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.

“Neo-liberalism and the free-market fundamentalism it has produced has been revealed as little more than personal greed dressed up as an economic philosophy.  And, ironically, it now falls to social democracy to prevent liberal capitalism from cannibalising itself.”

Mr Rudd writes in The Monthly that just as Franklin Roosevelt rebuilt US capitalism after the Great Depression, modern-day “social democrats” such as himself and the US President, Barack Obama, must do the same again. But he argues that “minor tweakings of long-established orthodoxies will not do” and advocates a new system that reaches beyond the 70-year-old interventionist principles of John Maynard Keynes.

UPDATE:  As Tim Blair puts it: “This’ll be hard to get used to. You know, after three decades of little or no government intervention or regulation.”

14 thoughts on “Be Afraid

  1. Here is something I have posted elsewhere.

    IF you have not read America’s Great Depression by Murray Rothbard please buy and read it. The book is a real eye opener and will show you exactly what is going to happen to Australia if this madness continues.

    http://www.mises.org/store/Americas-Great-Depression-P63.aspx

    Here is the description.

    Applied Austrian economics doesn’t get better than this. Murray N. Rothbard’s America’s Great Depression is a staple of modern economic literature and crucial for understanding a pivotal event in American and world history.

    The Mises Institute edition features, along with a new introduction by historian Paul Johnson, top-quality paper and bindings, in line with the standard set by The Scholars Edition of Human Action.

    Since it first appeared in 1963, it has been the definitive treatment of the causes of the depression. The book remains canonical today because the debate is still very alive.

    Rothbard opens with a theoretical treatment of business cycle theory, showing how an expansive monetary policy generates imbalances between investment and consumption. He proceeds to examine the Fed’s policies of the 1920s, demonstrating that it was quite inflationary even if the effects did not show up in the price of goods and services. He showed that the stock market correction was merely one symptom of the investment boom that led inevitably to a bust.

    The Great Depression was not a crisis for capitalism but merely an example of the downturn part of the business cycle, which in turn was generated by government intervention in the economy. Had the book appeared in the 1940s, it might have spared the world much grief. Even so, its appearance in 1963 meant that free-market advocates had their first full-scale treatment of this crucial subject. The damage to the intellectual world inflicted by Keynesian- and socialist-style treatments would be limited from that day forward.

  2. Yes Eric>

    I think it’s the best book ever written about the depression. Pity Murray whacked out in other things.

    18 months ago Kevin Bonhoeffer Rudd was telling us he was an economic conservative. Now he’s telling us he’s a social democrat. LOL.

    I think he has to be close to being one of the worst PM’s ever.

    He’s a complete bonehead.

  3. I have only read one other Rothbard book so far, What has the Government done to our Money and the case for a 100 percent gold dollar.

    What I liked about both of these books is his clarity, he is very easy to understand.

    If there was to be a return to gold it wold have to be done as part of a group such as the G20. Before the depression I wondered what would have happened if Australia had used the surplus to buy gold. $40c billion in gold would make for a strong currency.

    I am the only Classical Liberal in my group of friends, a year ago I had a bet with them that our next budget would be in deficit. I am not very happy to be proven right.

    If you are looking for something interesting to read try and pick up two books by Ludwig Erhart, Prosperity through Competition and Germany’s Comeback in the World Market. I am currently reading Prosperity, I have not yet started the other. Prosperity is superb.

    A related book is The Fourth and Richest Reich by Edwin Hartrich I have read this and it talks of Erhart’s policies and gives a history of Germany from the Weimar republic, written by a journalist is is a real page turner.

    These books talk about the superiority of the free market and the results when taxes, rationing and tariffs are cut, with the policies put forward by Prime Minister Rudd this will be relevant soon.

  4. Here is an interesting yet timely quote from Prosperity through Competition.

    “In any reckoning of failures the market economy is always debited with just those sins that belong to the account of planning and State control…”

  5. Here is the speech Prime Minister Rudd should have made this week.

    The following is by Ludwig Erhart, German Finance Minister at a party meeting in 1948.

    I do not regard myself as the representative of special interests, and certainly not as the representative of the interests of industry or trade. It would be quite wrong to assume that. To be responsible for economic policy means to be responsible to the people as a whole. I am deeply convinced that the difficult problems facing us can only be solved if in using the market economy we manage not to favour groups, but rather to secure a decent standard of living for all our people and continuously increase it through hard work and higher output. It is quite wrong to brand me as a man who is only interested in defending certain interests. The contrary is true. In the last analysis I demand not only great sacrifices from those responsible businessman who have power over the production and distribution network of the economy, but also their understanding and responsibility as well.

  6. “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.”

    Moron. The left usually gets what it wants. And when they want more, they will say anything to get it, honesty be damned.

    “Neo-liberalism and the free-market fundamentalism it has produced has been revealed as little more than personal greed dressed up as an economic philosophy”

    The only fundamentalist is the one who wrote this, failing to notice that government has grown consistently for quite some time.

    “I think it’s the best book ever written about the depression. Pity Murray whacked out in other things.”

    Excuse me?

    “18 months ago Kevin Bonhoeffer Rudd was telling us he was an economic conservative. Now he’s telling us he’s a social democrat. LOL.”

    If by conservative he means that he follows the tradition of listening to Keynsian cranks and socialist whiners, then yes, he can claim the mantle of ‘conservative’

  7. Eric – using the surplus to buy gold would not have strengthened our economy. In this regard your philosophy sounds more like merchantilism than classical liberalism. A classical liberal would have used the surplus to reduce the tax burden. Gold can be extremely useful as a unit of account and thus as a centre piece for monetary policy but it isn’t a magic talisman. Merely holding the stuff does not bring economic advancement.

  8. Reducing the tax burden would of course be better, but can you imagine the socialist parties in control of our government reducing the tax burden and firing a bunch of hangers on? I certainly cannot.

    I was not very clear at all with the gold comment, I was thinking with that much gold the country could have returned to a gold standard however it is probably just a pipe dream.

  9. Uh oh…

    Personally, I would read the subtext of these quotes as:

    All pre-election pretenses to conservative anything are off, and

    the current credit bubble meltdown will be used by the Micromanager-in-Chief to inject ever more extensive government control into society – in a way that will make Roosevelt’s New Deal pale by comparison ???

    Pending actual implementation of this agenda, you might reply that KR747 is just throwing a bone to the “Monthly” crowd – telling them what they want to hear. But why would he do that ? They are rusted on anyway and his only risk there is a leakage of votes to The Greens.

    This sounds like a manifesto for Big Brother Kevin’s ’09 Revolution. 😦

  10. Who is this ‘Kevin Rudd’ you refer to? I thought Julia Gillard was our leader! Is Rudd the minister for U-turns?

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  12. Rothbard’s understanding of money is lacking and schoolboy.

    Other than that, he was a great economist and advocate for a freer, less violent society.

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