The inaccuracies in this article start in paragraph 1. Hayek was Austrian!

Claim #1: that the Howard government consisted of “market zealots” who aimed to reduce the size of the state “as much as possible”
The reality may have been different but that was the Liberals claim

Claim # 2: that “free market economics” and “extreme capitalism” are to blame for the current financial crisis.
Yes, well most people agree that lack of regulation allowed the market to swing out of equilibrium.

Steve Keen argues that economists are using the wrong models of money supply. Far from following central bank policy the banks create money supply. http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/ At this stage of the economic cycle any money given to banks will be salted away. If you want to pump start the economy hand money directly to people who need it. "The trickle down effect" does not operate when the recipients use the handout to pay down debt or save.

"Since the Howard government hardly deregulated, and radically expanded the role of the welfare state, " I am sure that the poor sods who have to face Centrelink feel that Howard's lasting legacy was the sheer brutality of its inhuman compliance regime. See Adele Horin's description http://www.smh.com.au/news/opinion/youll-work-like-a-dog-to-make-centrelink-happy/2009/01/30/1232818724404.html

Now it would be nice to elect a government that had a vision for a sustainable Australia where the inhabitants had a decent standard of living rather than electing politicians who are mouthpieces for big business interests who look upon the continent as one large quarry with an uppity workforce that needs subduing. It would be nice if we purged the public service of people who believe that economic prosperity can only be achieved with a world underclass of half the population.

Myth? Certainly! If you start an argument with FALSE assumptions then the result will likely be at least as false, as Mr Rudd's argument demonstrates.

We have not previously had capitalism. We have an ACCC to ensure business can not get on with business; how could that exist under a capitalist system?

We have takeovers regulation panels to protect lesser business from better ones. Government propping up the least efficient and worst of businesses which really should be allowed to fold - like certain automakers.

Capitalism has not failed, it has not been tried yet.

Welcome Milo!

Fortunately for Australia "we haven't tried capitalism" because otherwise we would be in the same parlous position as the United States. Our [weak] regulators might have saved us from the worst excesses of capitalism.

Will Australia follow the United States, undoubtedly - because when America coughs the rest of the world catches cold.

Thanks Billie,

You have eloquently proven my point. It was NOT capitalism that brought about the US sub prime situation; it was government interference in the free market with Clinton directing banks to lend to unworthy (un credit worthy) applicants. Banks responded by protecting their own interests; securitised those rubbish loans and sold them off to the biggest sucker - which ultimately proved to be other banks!!

More proof? A very big Australian retailer wanted to buy a largish NZ based retail operation and was forbidden to do so by a competition regulator; said small NZ retailer is now in receivership and a vast number of people are unemployed because of government interference - not a failure of capitalism at all.

Autos: Why would maker T invest in new fuel efficient hybrid vehicles when maker G gets government handouts for not doing so? Which brand have customers voted for with their wallets? Capitalism? Not so.

Billie,

The United States is not a capitalistic state. You cannot have true capitalism while your currency is not backed by anything substantial (eg gold) and you operate a fractional reserve banking system.
It was US government intrusion into the markets that helped to promote the current crisis by artificially lowering interest rates and forcing banks to provide credit to un-creditworthy individuals.

Without having seen the article itself and going only on what one has read it does smell as if this is nothing more than a politically expedient way to tarnish the ‘conservative’ sides economic credentials. the press coverage to this point appeals completely to vapid pseudo intellectual demographic that constitutes Rudd's support base. The allusion to economy that permeates all facets of political discussion in Australia will continue until the day this planet adopts new economics and new social values. It is sad to see in this new world of environmental challenge and with myriad dilemmas facing our fundamental social institutions of family and community – Rudd leaves the real decay for another day - he chooses, callously chooses to expend his intellectual capital on issues such as this. The selective amnesia of Rudd is breathtaking. From what excerpts and commentary I’ve seen he blames Thatcher, Reagan, and Howard for the economic climate of this day. What happened to the proud legacy of the Hawke and Keating governments that was leveraged in an attempt to gain economic credibility in the lead up to the 07 election and the months immediately following that? let's not forget that it was Labour who dismantled the’ Keynesian’ state through privatization, lets not forget the financial deregulation of that same Labour era – and lets not forget above all that any government today is subject to the whims of market forces - only becausee the people they 'represent' pursue cravenly the gold consumerism affords.