Tuesday, November 15, 2011

Radical Liberals Condemn and Disparage Technocrats

The following exchange took place between an American radical liberal and me on the appointment of the two technocrats Mario Monti and Lucas Papademos as prime ministers of Italy and Greece.
Bruce Wilder says,
You seem to have lost the essential premise: the “looming economic catastrophe” is largely the creation of the technocrats, and “all the misery that implies” has been embraced by the technocrats with all the enthusiasm an 18th century physician had for purgatives and bleeding.

Con George-Kotzabasis says,

Bruce Wilder, your “essential premise” walks on crutches. In a physical crisis in which you might lose your leg you don’t stop from going to a surgeon just because there are bad surgeons about. To label all surgeons (technocrats) as incompetent and refuse to go under their knife is to lose your leg. That is why your argument, factually and intellectually, waddles on crutches.

Bruce Wilder says, 11.13.11 at 6:09 pm
Con George-Kotzabasis @ 105
If your life was threatened by a growing cancer, affecting your lungs or your kidneys, and you went to a surgeon, and the surgeon said, “To save your cancer, I recommend amputation of your leg,” I would hope you would run from the room, with your legs still intact.
These particular neo-liberal technocrats are just these sorts of mad incompetents, prescribing senseless maiming in place of a treatment plan. There are, apparently, no politicians available, to stand up and veto the insanity, “brave” and “charismatic” or otherwise.
The corruption and incompetence of the politicians—indeed, the whole polity—in Greece and Italy—played nearly as critical a part in the epidemiology of crisis as the neoliberal technocrats. It is worth remembering that the popular support for the European project has often rested on the hope of improving the quality of governance and institutions. For all the grousing over the minutiae of Brussels and the trivia of Strasbourg, the hope of European Union was always to promote high-minded, principled liberal institutions as a prophylaxis against authoritarianism and populist corruption. This was, I suspect, always a very big part of the appeal of the euro: German monetary policy for the South, an internationally respected currency immune to runaway inflations, etc. The Italians, as I recall, embraced the euro ahead of every other country; they were overjoyed to be rid of the lira, the joke currency of Europe, so inflated in value that coins were impractical—phone booths required a special token and street vendors gave candies in place of change. The euro is very popular in Greece as well, and I suspect that that popularity, as much as the fecklessness of politicians, is a factor in preventing Greece from taking the obvious step of unilaterally embracing default in abandonment of the euro. (Purely from a technocratic point-of-view, the equivalent of a competent surgeon would be a technocrat doing the preparations in secret, which would make a unilateral return to the drachma feasible. That’s the “right” thing to do for Greece, from a “technical” standpoint and from the standpoint of protecting Greece from the “amputation” of privatisation and a prolonged deflation. An efficient calculating machine would have been crystal clear from the outset that, on the numbers alone, Greek default was inevitable; delay could only prolong and intensify the suffering.)
The Big Picture, here, may well be that economic and institutional centralization has found its limits, at least for the moment. Certainly, the neoliberal architectural principles employed over the last 25 years are a bust. Are we so stupid that neofascism must follow? Many would say that authoritarianism was always an implied part of the neoliberal agenda.
Con George-Kotzabasis 11.14.11 at 2:10 am
Bruce Wilder
In serious discussion it is wise to enter it carrying a sieve in one’s hands to separate the wheat from the chaff.

Your crystal clear “efficient calculating machine” that would implement your proposal of default, would be no other than a wise, brave, imaginative, and humane TECHNOCRAT. So what exactly you have against technocrats? They are OK if they adopt your plan and only transported to Hades in toto for their mortal sins, if they don’t! Default was and is always an option. The distinguished economist Deepak Lal and exponent of the Austrian School of economics, long ago suggested such a schema. Lucas Papademos and Mario Monti both presumably have this option in their arsenal to be used as a last resort if everything else fails. But before they use this ‘nuclear’ option, they must try, and be given the right by all objective analysts and commentators, to resolve this economic crisis by ‘conventional’ means that could avoid a default which would open a big hole in their countries GDP and throw their people into pauperization for decades to come.
Bruce Wilder says, 11.14.11 at 2:37 am
Instead of “support the troops”, we are now asked to support the neo-liberal technocrats.
Con George-Kotzabasis, are we to take no account of the part the technocrats played in “designing” the euro? Are we to take no account of the failure of the ECB to carry out bank supervision or to regulate derivatives? It is a little late in the progress of neoliberal disaster capitalism to be attributing good faith, let alone expertise, to these bozos.