Thursday, April 24, 2008

Time to move on from old divisions

A few weeks ago Kevin Rudd addressed the annual dinner of the conservative Sydney Institute. Kev is like that, broadminded, as his speech showed. But commentators were agape when MC and chief executive of Barclay's Capital Australia, Nick Johnson, took the mike to say:

"Someone told me this week this isn't a socialist government, but that sounded to me like a wonderful catalogue of things done and things to do that many socialist governments should be pretty proud of."

Most tuned in Americans would recognise the key sentiment of Rudd’s speech:

"Now more than ever, we need a real debate that transcends the old battlelines of the left and right of Australian politics. The global context in which this debate now occurs has moved a long way over the last 20 years.

Market-based economic solutions have now been embraced across much of the current and former communist worlds. At the same time, we have seen a parallel recognition in the capitalist West that Adam Smith's invisible hand does not represent the solution to every economic problem."

Most electorates lean toward a middle of the road approach to government, but how does the "reforming centre" judiciously balance the market against society, the private sector against the state, individual initiative against social responsibility?

Rudd, like Obama, faces the fallout from policies which never even tried to find balance. Much of the damage, with the acquiescence of leaders like Australia’s John Howard encouraged the excesses of the Bush administration. Now we are left to pay the penalty for blindness to global warming and a swing to corporate welfare.

One outcome is the current global credit crisis. Any commodity, if supplied free, will be abused and misused. The US Federal Reserve pushed the price of money to zero, after adjusting for inflation, for three years. The commodity was abused accordingly and our new crop of leaders has the job of fixing the mess.

That fix will be hard enough without needless aspersions being flung from the sidelines. Or corporate heads have already shown how light they are on savvy. At least they can now get in and take a positive approach during the repair process.


lindsaylobe said...

So far both Sherry and Tanner have shown remarkable constraint in relation to the recent corporate collapses in Australia, preferring to take a measured approach and review existing provisions rather than seek wholesale change.

The USA has followed the prescriptive route with more and more laws and onerous provisions whereas I prefer descriptive principles, rather than to try and prescribe in detail a list of detailed obligations.
Prescriptive obligations create a compliance approach restricted to only those obligations documented.

Descriptive type principles on the other hand require imagination and are likely to lead to a more comprehensive review within the “Spirit of the Law”.

The same argument applies equally to economics which should be seen as tool, not to be confused with a compassionate yet encouraging view to ones country and its divergent communities.
Hence I also see the need for guiding principles to be included and frequently referred to in the narrative that makes up Annual Report cards for the economy as a whole.

Australian companies are beginning to adopt socially environmentally responsible business practices. But it needs to stay in the mainstream of shareholder and stakeholder concerns, acknowledged at every level in the community.
Over 80% of investors want to see more reporting of Corporate Social Responsibility.

Best wishes

Cart said...

Lindsay, it is not hard to notice the sort of caution this government is observing in dealing with these issues. Even in my old Liberal days I was wary of laissez fair, which is admittedly part of the tradition.
If I feel you are educating me here I have to admit I appreciate the effort. Being an auotdiadact has its limitations. You certainly manage to put my emotional responses into valid critical argument, even when I express them badly.
I really do appreciate they way you meld the markets and the economy in a totally relevant way. It is folly to reject one in favour of the other, but difficult to distinguish them at times; well not for you.
Thanks again