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Rudd's breathtakingly cynical essay

By Marko Beljac - posted Wednesday, 4 February 2009


Now, however, we have begun to appreciate, what should have been all too apparent, that economic growth (such as it was) was largely due to the housing boom (actually an asset price bubble) and the effect that rising commodity prices had on the terms-of-trade and capital investment. Tanner, in a further display of cynicism, now attributes that growth to the resources boom, having previously been a part of the herd that attributed growth to neoliberalism. Consider also the "we'll keep pursuing major reforms" declaration that Tanner makes in the above linked article.

Moreover, much of the economy was actually under performing as evidenced by the "two-speed economy" discussed by economists. The housing and commodity booms actually masked what was happening in the wider economy, especially in manufacturing.

During the run up to the 2007 election the ALP was looking for an economic narrative to try and break through the perception that Howard and Costello were superior economic managers. They adopted a two-track strategy. The first was to blame alleged government induced bottlenecks for rising inflation and the consequent tightening of monetary policy. The second was to point out that the economic reforms that had given us such a miracle economy were largely the responsibility of the previous Labor government.

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Overnight Rudd has over-turned the dogma from one of "we are responsible for the economic reforms" to "the economic reforms are a failure, and the Liberal Party is the home of neoliberalism".

What complete, total and utter cynicism.

In essence, however, this only scratches the surface of the depth of cynicism that Rudd betrays in his essay and his policies.

We can begin to appreciate this by asking; what precisely is neoliberalism?

It is commonly supposed that neoliberalism is a doctrine that extols the virtues of the free market and that it is a philosophical doctrine that values the market in and of itself and where the operation of the free market is moreover seen as an ethic in itself. Policy has reflected a philosophical commitment to these views, it is supposed.

There are two problems with this common position which is even held by critics.

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First, for Adam Smith, taken to be the intellectual father of free market economics, the market is not valued in and of itself. Smith was a philosopher of the Scottish Enlightenment who considered his most important work to be The Theory of Moral Sentiments not An Inquiry Into the Nature and Causes of The Wealth of Nations.

For Smith the free market was to be valued and promoted for the unfettered operation of the free market would lead to equality. The obvious logical corollary to the Smithian view is that if markets do not lead to equality then they can have no moral justification. There is a chasm between Smith's viewpoint and the idea that the operation of the market is self-justifying through a process of reification as the sophisticated would say.

However, there is a second more basic problem with the common view. To appreciate this we again turn to Smith. In his critique of mercantilism, the mercantile era never really ended we might add, he famously stated that "all for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind".

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About the Author

Mark Beljac teaches at Swinburne University of Technology, is a board member of the New International Bookshop, and is involved with the Industrial Workers of the World, National Tertiary Education Union, National Union of Workers (community) and Friends of the Earth.

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