Sunday, November 27, 2011
Financial crisis as technocratic opportunity
The Piping Shrike is a blog which analyses Australian politics. But today it has something to say about where the financial crisis really came from, and why it's replacing hollowed-out party politics with open technocratic rule.
Saturday, November 26, 2011
Wednesday, November 16, 2011
Saturday, November 12, 2011
Italy
Italy's new prime minister will be an ex "European Commissioner" rather than an ex-banker, but otherwise the story is similar: the internal political process in the indebted country has failed, and the new leader belongs to a supranational ruling class. Only it seems that I had misidentified the ruling elite: it's not the financial class, it's the Euro-technocratic class.
Normally, party politics provides the public face of democracy, and the civil service stays out of sight. But now we see the traditional politicians displaced from power, in favor of open technocratic rule. Furthermore, the agenda that the new governments serve is coming from outside - they will be implementing "austerity" and "reforms" demanded by "the European Union".
It has been suggested that Greece's quandary was largely due to the currency union. If they still had their own currency, the drachma, they could have devalued. I think that what we are seeing now is the further, political consequence of this impotence. These countries are not only without their own currencies, they are no longer in charge of their own political destinies.
In the previous post, I promised to say something about Papandreou's short-lived idea of a referendum, and about the Irish presidential debate. The Irish debate achieved notoriety because the leading candidate was brought low by a single satirical "tweet" that was brought up by the debate moderator. But what caught my eye was a failed attempt by the last-place candidate to bring up Ireland's debt deal with the EU and the IMF. There are calls for a referendum in Ireland too, though so far this idea doesn't have any powerful backers.
Normally, party politics provides the public face of democracy, and the civil service stays out of sight. But now we see the traditional politicians displaced from power, in favor of open technocratic rule. Furthermore, the agenda that the new governments serve is coming from outside - they will be implementing "austerity" and "reforms" demanded by "the European Union".
It has been suggested that Greece's quandary was largely due to the currency union. If they still had their own currency, the drachma, they could have devalued. I think that what we are seeing now is the further, political consequence of this impotence. These countries are not only without their own currencies, they are no longer in charge of their own political destinies.
In the previous post, I promised to say something about Papandreou's short-lived idea of a referendum, and about the Irish presidential debate. The Irish debate achieved notoriety because the leading candidate was brought low by a single satirical "tweet" that was brought up by the debate moderator. But what caught my eye was a failed attempt by the last-place candidate to bring up Ireland's debt deal with the EU and the IMF. There are calls for a referendum in Ireland too, though so far this idea doesn't have any powerful backers.
Monday, November 7, 2011
Greece
There is something to be said for (occasionally) publicly airing opinions that are more intuitive than reasoned. It's a way to test the "intuitions" behind the opinion. Subsequent events will provide negative or positive feedback, and you'll know whether to trust or distrust those feelings.
So, in this spirit, let me describe my intuitive response to the headline from Reuters that "Ex-central banker front-runner to become Greek PM". I emphasize that I'm responding just to the headline, not to the article.
My first thought is that this is about the supranational financial class placing one of its own in charge of Greece. My second thought is that this is about the supranational financial class using major media (in this case, Reuters) to create the image that their man is the front-runner, with the hope and expectation that this image will become reality.
I will also want to tie this back to the short-lived idea of a referendum in Greece, and to something I saw in the recent final Irish presidential debate; but first, let me clarify my references, above, to the "supranational financial class".
I am not claiming that there is an identifiable banking illuminati who rule the world. There are multiple centers of power, and what happens in politics and political economy is the result of negotiations among those multiple centers of power, as well as the interaction between top-down power and the daily stream of contingencies, emergencies, and administrative demands which emerge to challenge those who hold any form of power at any time.
So when I say that the supranational financial class does this or that, I don't want to be read as attributing agency to that class, in the way that one would attribute agency to an individual or even to a committee. The conception is more of a class of people who are both the ruling class and the most favored class in the core of the cold-war "West" (North America, European Union, Japan), a class who, for all their factional differences, have a common political interest. Paradoxically, this "common political interest" is that finance should remain non-political - I am thinking above all of that very contemporary institution, the "independent central bank", but also of economic technocracy, belief in free trade and deregulation as political norms to be extended to the whole world via the WTO and the IMF, and so forth.
Before I proceed with the simultaneous elaboration and critique of these ideas, I might express another thought, which is that it may simply be a mistake to pay too much attention to these headline events, unless you are materially affected. What I have in mind here is the thesis that the "BRIC" countries are the world's new center of economic gravity, and specifically that they are now an independent force in political economy as well. Everyone has noticed that China does not really fit the western model of how economies are supposed to work, and it seems to herald a new era of pragmatic economic statism, in which new and returned powers (I mean states) feel free to exert sovereignty over the economy within their borders, whether or not their methods conform to the western playbook, and also to make deals (with each other, with the old powers, with lesser players) for the purpose of strategic political gain, not just economic gain.
From this perspective, one should simply not pay very much attention to what is happening in Europe and America; it is just the inevitable arrival of Japanese "stagnation" in the other countries of the former economic core, and its political manifestation will be a lot of meaningless churn. Of course the appearance of an "ex-banker" as "front-runner" to be the next leader of Greece represents an attempt by the transnational system that has ruled the West for over 60 years to preserve the system in Greece, the country at greatest "risk" of putting politics back into political economy, and rediscovering that, in principle, the state has final say over these matters within its borders. It may succeed, it may not succeed; Greece may stay in the EU, Greece may leave the EU; but meanwhile, far more important things are happening elsewhere; that would be the BRIC-centric philosophy.
So, in this spirit, let me describe my intuitive response to the headline from Reuters that "Ex-central banker front-runner to become Greek PM". I emphasize that I'm responding just to the headline, not to the article.
My first thought is that this is about the supranational financial class placing one of its own in charge of Greece. My second thought is that this is about the supranational financial class using major media (in this case, Reuters) to create the image that their man is the front-runner, with the hope and expectation that this image will become reality.
I will also want to tie this back to the short-lived idea of a referendum in Greece, and to something I saw in the recent final Irish presidential debate; but first, let me clarify my references, above, to the "supranational financial class".
I am not claiming that there is an identifiable banking illuminati who rule the world. There are multiple centers of power, and what happens in politics and political economy is the result of negotiations among those multiple centers of power, as well as the interaction between top-down power and the daily stream of contingencies, emergencies, and administrative demands which emerge to challenge those who hold any form of power at any time.
So when I say that the supranational financial class does this or that, I don't want to be read as attributing agency to that class, in the way that one would attribute agency to an individual or even to a committee. The conception is more of a class of people who are both the ruling class and the most favored class in the core of the cold-war "West" (North America, European Union, Japan), a class who, for all their factional differences, have a common political interest. Paradoxically, this "common political interest" is that finance should remain non-political - I am thinking above all of that very contemporary institution, the "independent central bank", but also of economic technocracy, belief in free trade and deregulation as political norms to be extended to the whole world via the WTO and the IMF, and so forth.
Before I proceed with the simultaneous elaboration and critique of these ideas, I might express another thought, which is that it may simply be a mistake to pay too much attention to these headline events, unless you are materially affected. What I have in mind here is the thesis that the "BRIC" countries are the world's new center of economic gravity, and specifically that they are now an independent force in political economy as well. Everyone has noticed that China does not really fit the western model of how economies are supposed to work, and it seems to herald a new era of pragmatic economic statism, in which new and returned powers (I mean states) feel free to exert sovereignty over the economy within their borders, whether or not their methods conform to the western playbook, and also to make deals (with each other, with the old powers, with lesser players) for the purpose of strategic political gain, not just economic gain.
From this perspective, one should simply not pay very much attention to what is happening in Europe and America; it is just the inevitable arrival of Japanese "stagnation" in the other countries of the former economic core, and its political manifestation will be a lot of meaningless churn. Of course the appearance of an "ex-banker" as "front-runner" to be the next leader of Greece represents an attempt by the transnational system that has ruled the West for over 60 years to preserve the system in Greece, the country at greatest "risk" of putting politics back into political economy, and rediscovering that, in principle, the state has final say over these matters within its borders. It may succeed, it may not succeed; Greece may stay in the EU, Greece may leave the EU; but meanwhile, far more important things are happening elsewhere; that would be the BRIC-centric philosophy.
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