Earlier this month, The Weekend Australian reported that Prime Minister Kevin Rudd 'had no interest in debating whether the private sector should be contracted to deliver government services'. In fixing problems in indigenous communities and elsewhere, the newspaper told us, Rudd was more interested in the quality of services than the 'delivery mechanism'.
Rudd's comments leave unanswered a key question: what does a progressive economic policy look like?
Despite the fact that one of our biggest challenges (tackling climate change) has resulted from the failures of free markets, Rudd and other Australian policy makers continue to remain uncertain about how, and to what extent, governments should intervene in the operations of the capitalist system.
To develop an understanding of what a progressive economic policy may look like it is necessary to take a realistic perspective on the extent to which governments can shape the economic circumstances that affect the people they represent.
As the economist Andrew Charlton pointed out in his book Ozonomics, given the international nature of the movement of money and capital, issues relating to interest rates and the general health of the resource-dependent Australian economy must be examined in the context of the global economy, rather than simply domestic political policies.
So, in an era of (mostly) global (mostly) free trade, how can policy makers develop an economic agenda that both seeks to harness the benefits of capitalism yet also, in a principled and consistent manner, draws a line in the sand and restricts the market in recognition of the environmental, aesthetic and social harms that it can inflict? The foundations of such a progressive economic programme can be built on a few key policies.
Firstly, at the level of domestic economic policy, governments need to recognise that they have a powerful information-gathering role to play. It needs to be acknowledged that to intervene with the running of a capitalist system on a principled (rather than merely pragmatic) basis, evidence-based policies are needed.
All governments would be served well by a national centre for social and environmental policy analysis that draws on existing talent within the private and public sectors. Uncritical supporters of the free market advance complex technical arguments as to why the slightest government intervention in the private sector erases the benefits of the capitalist system. The advocates of a new progressive economic policy need to develop an equally technical (yet more enlightening) scale