The idea that anyone, let alone the government, has a clue about what the internet will look like in eight years' time is preposterous. In 2001 we were still calling it the information superhighway. Who knows what we'll be calling it in 2017?
Yet Prime Minister Kevin Rudd would have us believe that the Department of Broadband, Communications and the Digital Economy (yes, that's its actual title), which can't even get an internet filter to work, should be trusted with $40 billion to pick broadband winners.
The announcement is just the latest addition to the ever-expanding list of bad decisions. From the bank deposit guarantee, to "RuddBank", to the stimulus packages, it seems the worse the decisions get, the more popular Rudd becomes.
And this is a trend that may continue -- until the public realises that taxes must rise to pay for Rudd's promises.
Another trend likely to continue is that the business community will keep quiet about what's happening. As two decades of reform is being unwound and as federal expenditure grows at a rate not seen since the 1970s, the nation's corporate leadership has gone missing from the public debate.
Business appears to be remarkably relaxed about not only what is being decided but how the government is making its decisions and how those decisions are implemented. The notion that governance should be according to legislation and subject to parliamentary scrutiny is being replaced by government according to nods, winks, and public threats from ministers.
Governments of all persuasions have always tried to influence the behaviour of individuals and companies by non-legislative means. But as the Rudd government attempts to re-regulate the economy, the phenomenon has worsened and the exercise of arbitrary power has grown more obvious.
Take the government's treatment of the banks as an example. Rudd and Treasurer Wayne Swan have basically said that in exchange for the government's deposit guarantee, the banks should lower interest rates. Bank bosses are now faced with the situation of having to comply with both the law and with what they think are the policy preferences of the politicians.
The bosses are in an invidious position. They are required by the Corporations Act to maximise shareholder returns, at the same time as ministers are beseeching them to pass on interest-rate cuts regardless of the commercial consequences. The irony is exquisite because it was "uncommercial lending" by banks in the United States that gave us the sub-prime debacle.
There are other problems when opinion instead of legislation is used to regulate the economy. Opinions change constantly and while laws do too, press releases aren't subject to the checks and balances of the parliamentary process.
Laws (at least in theory) should allow citizens to plan their actions with a degree of certainty as to what the consequences of those actions will be.
It is hardly surprising that no-one is investing in new power generation given that the design of the emissions trading scheme changes on an almost weekly basis.
Put simply, what is absent from policy-making in Canberra is an appreciation for the importance of the rule of law. And the person who perhaps best demonstrated the significance of the rule of law in free societies is Friedrich Hayek, who also happens to be the person Rudd has spent the past year denigrating.
As we now know, because he keeps telling us, the Prime Minister is something of an expert on Friedrich Hayek. According to Rudd, it was Hayek, the Austrian economist and Nobel prize-winner, who bequeathed to the world "neo-liberalism".
Hayek summed it up in The Road to Serfdom, his seminal work published in 1944. For him, the rule of law was what distinguished liberal societies from those that suffered under arbitrary rule.
The rule required that government "in all its actions is bound by rules fixed and announced beforehand -- rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances".
"Since legislators, as well as those to whom the administration of the law is entrusted, are fallible men ... the discretion left to the executive organs wielding coercive power should be reduced as much as possible."
Maybe the Prime Minister does not like Hayek precisely because Hayek warned against anyone putting too much faith in governments run by fallible men (and women).
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