Tuesday 31 March 2009

Kevin Rudd on social democracy and a new capitalism

Those looking for some light pre-G20 reading might enjoy this essay by Australian premier Kevin Rudd, on the global financial crisis, the end of the Hayekian era of neo-liberalism, and the challenge for social democracy published in Australia's The Monthly.

Here's a snippet.

In the current crisis, social democrats therefore have the great advantage of a consistent position on the central role of the state - in contrast to neo-liberals, who now find themselves tied in ideological knots, in being forced to rely on the state they fundamentally despise to save financial markets from collapse. This enables social-democratic governments to undertake such current practical tasks as credit-market regulation, intervention, and demand-side stimulus in the economy. The uncomfortable truth for neo-liberals is that they have not been able to turn to non-state actors or non-state mechanisms to defray risk and restore confidence, rebuild balance sheets and unlock global capital flows. This is only possible through the agency of the state.

Of course, not everybody will agree with this. I had the pleasure of doing a BBC Kent radio interview with Mr Daniel Hannan on Friday night. He could not see why his advocacy of the Icelandic economic miracle was relevant, whereas I felt that advocating minimal national and international regulation was the problem, not the solution, Hannan did seem to counter that the crisis had indeed arisen from too much regulation rather than too little.

Also on the theme of reforming capitalism, LabourHome is hosting a lively debate about the James Purnell speech on 'egalitarian capitalism' which was published here on Next Left. It is good to see that James Purnell has also braved the fray to offer a few responses in the comments.

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