The great irony of Robert Manne’s defence of the PM’s Monthly essay is that while he accuses Rudd’s critics of partisan blindness, Manne’s approach is not dissimilar. The major contribution Manne makes in his response is simply to ridicule the neoliberals who stood up to attack the PM.

Still, the rest of Manne’s defence is weak. Manne fails to engage with the two core critiques of Rudd’s essay.

1) This great ‘neoliberal’ movement never happened, or at least it didn’t happen in the way Rudd and Manne seem to think. There have certainly been some privatizations of government assets, but the massive, economy wide deregulation which everybody appears to have occured simply has not occured. Regulation has itself grown dramatically in the ‘neoliberal’ period, in all sectors of the economy.

(Pages of legislation is an accepted, if highly flawed, way to measure government and regulatory activity. There is discussion about this issue, and many other charts, including of subordinate legislation, in my book: The Growth of Australia’s Regulatory State: Ideology, accountability and the mega-regulators.)

This regulatory expansion is crucially just as true in financial markets, as my colleague Julie Novak (who Manne singles out for criticism, seeming unaware how doing so undermines his argument that regulation had decreased) pointed out in The Canberra Times. New and ambitious national and international regulations have been steadily permeating the financial sector over the last few decades, no matter how many people have now memorized the phrase ‘Glass-Steagall’.

2) Rudd has nothing to replace his neoliberal boogieman with. The Australian’s ‘Cut & Paste’ comparisons between Rudd and Chavez only work because Rudd is unable to articulate how he might be different from hardcore left-wing demagogues, a point Mark Latham explored in a powerful (but unfortunately not online) essay in the AFR’s ‘Review’ section a month or so back. If neoliberalism has been such an atrocious failure, then what is next? Surely if neoliberalism has failed in finance, it is a failure in other economic areas. (Like the outsourced Job Network program…) But the only concrete recommendation in his essay is a global regulatory mechanism for the banking sector. In other words, Rudd can come up with nothing more paradigm shifting than Basel III.

Manne’s defence falls into this same hole. Does the greed which neoliberalism encourages only manifest itself in derivatives markets? Or is there a broader revolution to be had? For Manne and Rudd, the revolution is both all-encompassing (“neoliberalism must be overthrown…“) and extremely small (“…so let’s slightly restructure the IMF!”) Yet that appears to be enough to bring much of Australia’s left to the barricades.

Both Manne and Rudd would presumably add a compact on global warming to the revolutionary manifesto, but considering that the mainstream political interest in climate change is relatively new, it is also hard to see how an international agreement on carbon dioxide would be a revolution either. Certainly it would not be a reversal of current trends in regulation.

Manne fails to get off the ground because he can’t quite bring himself to second-guess the Prime Minister’s simplistic caricature of government in the late twentieth century. I suspect the source of this problem is the word ‘neoliberal’ itself - its use does nothing more than unquestioningly grant its premise.

I have a very lengthy piece coming out in the next IPA Review on the Prime Minister’s essay and his philosophy of government, available now online: “Keeping up with Kevin: Kevin Rudd’s testosterone technocracy” (The March IPA Review will be available in a week and a bit.)

After Kevin Rudd’s essay has been so highly criticised from all sides of politics, it’s fascinating to read the few voices which defend it. In Online Opinion, Jason Wilson comes to the PM’s support: “Rudd’s essay is much more than spin”

Rudd’s account of the crisis and neo-liberalism in general is hackneyed, inaccurate and teeth-grindingly partisan - I think Wilson is right to argue that the more important part of his essay is what he plans to do, not his critique of the Liberal Party. But spelling out the future of Australian social-democracy is also the biggest failure of the PM’s essay.

So if we are simply to take The Monthly essay at ‘face value’ as Wilson believes most commentators have neglected to do, it should worry us more than if we were to look at it purely from a political perspective. Rudd proposes not a whole lot more than a change to international banking regulation and an increased use of stimulus packages, but describes it in the most revolutionary terms - Basel III will probably be big and convoluted and highly regulatory, but additional multinational regulation is hardly sowing salt into the Carthage of neo-liberalism.

Is all this hyperbole reflecting a a Prime Minister who is naive, or one which is extremely self-important? Instead, looking for deeper political motives is giving Kevin Rudd the credit he probably deserves. As a piece of spin, or a political gesture, it is quite powerful (if you’ll forgive my self-quote):

His Monthly essay reflects a desire to brand the Liberal Party as rabid ideologues - which he did very successfully during the 2007 campaign - as well as win back the Labor intelligensia that have been put off by the government’s embrace of internet filter, its strong words against Bill Henson, and its apparently weak stance on climate change.

But as an intellectual argument, or a philosophical piece on the future direction of the Australian government, the essay is a damning combination of over-excitable and shallow. Give Rudd the benefit of the doubt: he doesn’t believe everything he says.

I have a piece in the Sunday Age today on the Productivity Commissions’ investigation into lifting the ban on the parallel importation of books: “Bring on the acid bath” (I didn’t choose the title, or the cartoon, which makes it seem like I’m advocating the destruction of books! Anyone who has seen my apartment’s wall to wall Ikea Billy bookshelves would know that is not true…)

One caveat which was unfortunately cut from the article concerns the possible use of private contracts to enforce price discrimination in different markets. But doing so might come up against the resale price maintenance provisions of the Trade Practices Act, which, as I said in the original piece, would make the ban on parallel importing yet another example of a law being implemented just to resolve the absurdities created by an earlier law.

The ACCC itself supports the removal of the parallel importing ban, but its response to the claim that the use of private contracts to segment markets would come up against the TPA is very weak - claiming that it doing so would in many cases ‘likely’ to be not illegal, and that it is easy enough to get an exemption from the ACCC itself. The idea that a small time bookseller will go through the bureaucratic process of gaining a regulatory exemption just to import a few hundred books is absurd. Even more absurd is the idea that booksellers should just chance it in the courts.

Writers and publishers should be allowed to contract with whoever they want under whatever conditions, and property owners should be able to sell across borders. The combination of the Trade Practices Act and the ban on parallel importing mean we are a long way from an open market in literature.

A few Nanny State bits this Australia Day weekend:

The Victorian government’s approach to the alcohol-fuelled violence issue - to place the blame directly on licenced venues - is starting to have a serious impact on the industry. As Sydney decreases their licence fees to try to ape some of Melbourne’s cultural scene, Melbourne is increasing the price of its licences. It is hard to see how a licence fee price hike will directly tackle a problem of violence - probably as well as John Brumby’s urge for young people to “have a bit of respect” late last year.

The public health lobby is now sufficiently far along in its quest to ban junk food advertising for children from television that it is starting to think through the logistics of doing so, as in this recently published study. I argued in the IPA’s Preventative Health Taskforce submission that the case for such policy has by no means been made - yet, as the Taskforce itself and this latest study show, such bans are in certain circles a foregone conclusion.

According to this Herald Sun article, there is a proposal to grant teachers the power to confiscate junk food from children’s lunch-boxes. But it isn’t entirely clear from the article who is making the proposal - it may come from the results of a survey of principals, but it doesn’t appear to come from the Victorian Principals Association itself.

Oliver Hartwich in The Australian today argues for an extension of liberal fondness for federalism to local government - if the principle of subsidiarity is a good thing for states, why wouldn’t it be a good thing for local government? Localism, after all, should be a key liberal tenet.

Hartwich is certainly right when he argues that “Australia could be better served if it tried to delegate more tasks to lower tiers of government” - but this is not infinitely true. There are diminishing returns to localism. Hartwich claims that devolving services down to local councils would make local politicians more accountable. However, “democratic” accountability is more than just the occasional ballot. What we commonly describe as political accountability is a combination of pressure created by elections, and (I think much more crucially) the pressure created by strong media attention. It would be hard to argue that our state governments are adequately scrutinised by the press, let alone our local governments. Giving councils extra power would not necessarily make them more accountable, it would just make them more powerful.

But there is a far more prosaic reason to oppose an expansion of local government prestige, whether by constitutional recognition or expanded taxing and spending powers. These are seriously the last people you want to grant extra power to. Australian local government has an abysmally low reputation, and one it deserves. It is plagued by never-ending corruption scandals. It is at the ragged edge of the Nanny State. It is, indeed, a comfortable bastion of stupidity.

This could all change if local governments are granted more power, but I’m not holding my breath.

Anyway, when it comes to dramatically changing the Australian constitution, I’m more of a top-and-tail sort of guy. Local government should be eliminated, and the responsibilities of the Commonwealth should be cut down to the absolute minimum - the sort of customs union that many business leaders agitated for in the lead up to federation. (As a side note, there’s few better conversation stoppers than admitting to a politically inclined person that you think federation was a mistake.)

If we are redrawing the structure of Australian government in a liberal direction, this would surely be the best solution.

Update: My colleague Julie Novak details some of the financial questions raised by constitutional recognition.

Liberal MP Mal Washer said it was “crazy” to freeze politicians’ pay… “The reason I think it’s crazy is … because one of our biggest problems is recruiting good people into politics,” Dr Washer said. Without proper pay, there was a risk only “clowns”, “losers”, “screwballs” and “halfwits” would want to enter politics.

Hahaha. I’m much more concerned about politicians who think that government can and should do things which it can’t and shouldn’t:

“We need highly professional, highly skilled people to run the economy,” he said.

Of course, Washer is right. So the last thing we want is high politician salaries to attract those professional, highly skilled people out of the economy and into the vast sink hole that is Australian politics.

My Sunday Age column this week was on the issue of exclusive men’s clubs: “Leave the poor old chaps alone“, including a reference to Velociraptors and Guitar Hero World Tour.

I’m experimenting with Twitter and have dutifully added a twitter feed to the sidebar of this site (follow me here). It doesn’t seem like Twitterers in Australia have anything close to the necessary critical mass, and certainly I’m struggling to identify more than 2 or 3 people on the non-left side of politics using the service, but I’ll stick it out for a bit to see how it goes.

If you are interested in “following” me, I’ll most probably be interested in “following” you…

The University of South Australia research into childhood obesity is yet another data point to suggest that the obesity epidemic is much less a crisis than it has been presented by the public/preventative health crowd. Nevertheless, I was struck by this dissenting comment:

Public Health Association of Australia’s Mike Daube said it was probably too early to say that childhood obesity rates had levelled off, noting it had taken decades to achieve equivalent results in anti-tobacco campaigns.

How, after all, could the obesity problem be fixing itself if the government hasn’t fixed it yet? If the South Australia research is an accurate depiction of these trends - and we can all play the dueling studies game - it should remind us that there are more inputs into individual decisions about health than those the government provides. Cultural and social forces can act to influence health just as much as government advertising campaigns or taxation measures can.

And there is no doubt that there is a strong cultural movement against obesity. It’s easy to track cultural changes by the firms eager to profit from those changes. Gym membership has, over the last decade, been a remarkable growth industry (although, with the financial crisis, may be stagnating). And shows like The Biggest Loser and What’s Good For You have been strong cultural advocates for weight loss and healthy eating over the last decade. Government is not the only actor in contemporary Australia.

There isn’t really that much to be learnt from the Quadrant / Sharon Gould / Katherine Wilson hoax except for this disturbing fact: rice is made out of people.