Post-Democracy in Italy and Europe

by Henry on March 1, 2013

Mark Mazower has a good piece on Italy in today’s Financial Times.

The turmoil produced by the Italian elections has directed attention back to where it should have been all along – to the politics of the eurozone crisis. We have had six months of complacency, rising stock markets and wishful thinking. The conventional wisdom was that the crisis had been contained, with Ireland recovering and the risk of a Greek exit from the eurozone reduced. But this view always ignored the politics. … Technocrat prime minsters, such as Italy’s Mario Monti or Greece’s Lucas Papademos … are creatures of banking and economics. While they may understand money, that no longer recommends them to the voters who would rather have someone who understands them. The result is dangerous. It is but a short step from writing off the political class to writing off the institutions of democracy. So far most voters have not done this in either Italy or Greece. But some have and the temptation is there for more to do so

John Quiggin and I predicted something like this in our Foreign Affairs piece back in 2011 (I don’t think we can congratulate ourselves particularly – this was blindingly obvious to anyone who even began to think seriously about the politics). But I think Colin Crouch’s arguments about post-democracy potentially provide a deeper understanding of what is happening.

Crouch argues that the advanced industrialized countries are now post-democratic. While democracy still has some consequences, it is ever less relevant to political decision making. Politicians are constrained by the power of capital, and by tangled networks of relationships with business. The privatization of the state creates a world which conforms neither to the free market dreams of neo-liberalism, nor (more obviously) to the older dreams of social democracy. Instead, it creates a realm of decision making that is neither subject to the free market nor to democratic choice. Although Colin doesn’t talk about it in the book (for good reason: it was written in 2001), this problem has been grossly exacerbated by austerity politics. National politics, bad as it is, is increasingly being displaced by a European decision making process dominated by the ECB and the neo-liberal bits of the European Commission. The problem of post-democracy is becoming more specific, more obvious, and more directly associated in public debate with the European Union.

This makes for easier mobilization in the countries at the receiving end of austerity politics. An abstract set of political developments that might earlier have given rise to vague unease becomes a specific villain, associated with particular and personal economic pain, that people can organize against. It also creates enormous problems for the social democratic left, which is both tied to the system as it is, and broadly pro-Europe. I was at the Partito Democratico summer school last year, along with several other academics, as warm-up speakers before Bersani gave his big address (which was of course what everyone was there to hear). Talking to people there, I got the sense that they were far more worried by the Cinque Stelle people than by Berlusconi. All of the smart and politically motivated young people on the left – whom they might have expected to gravitate towards the Democrats a decade before – were going for Grillo instead.

The problem is that Grillo’s movement – and its equivalents on the left in other countries – are much clearer about what is wrong with the current democratic system than about what they might do to replace it. This is not true of the right wing protest parties and movements. The Golden Dawn in Greece can articulate a coherent alternative to the current system – a xenophobic nationalism which shades into more or less explicit fascism. It is not committed to democracy as such.

Grillo’s movement, and other leftwing movements want more democracy rather than less, but they aren’t able clearly to articulate how this would work. They would like to recover a better way of doing democracy in a post-democratic Europe but they are not sure how to start. Engaging with the system as it is, e.g. by entering into government in coalition with other parties, would be to destroy their own basis of legitimacy. But articulating an alternative is extremely difficult, given the strictures of post-democracy and the lack of obvious levers to create an alternative.

You could read the problems of movements like M5S optimistically, as the inevitable birth pangs of a new democratic alternative. Or you could read them pessimistically, as the doomed efforts of people to figure out something new in a system that is rigged against them. I’m somewhat more inclined towards the pessimistic reading myself, but acknowledge that it’s early days yet.

{ 87 comments }

1

David 03.01.13 at 4:55 pm

I suspect that what we are dealing with here is the effective end of a certain type or interpretation of democracy. Essentially it is elite representative democracy which has failed, because our rulers are too insulated from ordinary people and their concerns, and too captured by economic forces, many of which they themselves are responsible for unleashing, via privatisation and deregulation. But history proceeds in stages, and you won’t get a tidy and rapid transfer to a better situation. The next few years, I suspect, will be devoted to pulling down the rotten edifice we have – it’s perhaps unreasonably early to expect people, even as they are levering out the bricks -to have a fully worked-out idea of what to build instead.

2

Mao Cheng Ji 03.01.13 at 5:06 pm

I read Grillo’s interview today, and it’s pretty clear on what and how. They want to stop the looting, and hold the politicians accountable. He has actual numbers there. This is neither left or right, this is a cleaning crew.

3

Mao Cheng Ji 03.01.13 at 5:13 pm

4

Sebastian H 03.01.13 at 5:18 pm

The problem with technocrats right now is even when they fail they get to keep power. Woot, they kept inflation down. Guess what, if your policies lead to crippling unemployment, inflation isn’t the only evil in the world.

5

david 03.01.13 at 5:29 pm

That BBC interview makes Grillo sound like a standard US tea-party devotee: appeals to populism, with the blithe self-assurance that a handful of disliked programs are representative of the major budget shortfalls.

6

aretino 03.01.13 at 5:36 pm

It’s not clear what is meant when people say M5S is neither right nor left, but it looks rather like a party with right-wing policies and left-wing marketing.

7

marcel 03.01.13 at 5:40 pm

With apologies to Sebastian H, but …

The problem with [bankers these last few years] is even when they fail they get to keep [their income, bonuses and wealth]. Woot, they kept [mortgage rates] down. Guess what, if your policies lead to crippling unemployment, [high mortgage rates aren't] the only evil in the world.

8

Bruce Wilder 03.01.13 at 5:40 pm

Sometimes, you do have to demolish a faulty structure, but demolition is, inherently, destructive and hazardous. It is natural to be ambivalent, and anxious, even if you are not part of the structure to be destroyed. But, if you are part of that structure, or nearby, well . . .

9

Rich Puchalsky 03.01.13 at 5:52 pm

“It also creates enormous problems for the social democratic left, which is both tied to the system as it is, and broadly pro-Europe.”

This is one of the things not talked about enough in John Quiggin’s recent post about a possible turn-around to the left — the problem of all versions of “the left” being ideologically more or less discredited. It’s not just Marxism any more, it’s social democracy and (in the U.S.) left-liberalism that don’t seem to have any way of breaking free of the policies that people actually object to, or of articulating a positive agenda that would replace those policies with something else. It’s a fossilized left that is quite articulate about the problems of the 1970s or 1980s, but in today’s terms … for instance, what happens when people talk about going after the banksters in the U.S., then turn to the idea of what is actually being done or what could possibly be done by the U.S. system. I have no clue about what’s going on e.g. in Britain with a Labor party that can’t seem to do anything against comically bad austerity, but I assume it’s more of the same.

That’s why you get descriptors like “cleaning crew” or “neither right nor left”. There’s no cohesive left, so anyone promising to do things differently looks like some kind of sui generis hybrid.

10

David 03.01.13 at 6:04 pm

I think it’s left-wing parties, rather than ideas, which are discredited. These parties discredited themselves by swallowing neoliberal policies without a burp, disowning their own ideals in the process. There are plenty of sensible, vaguely left-wing things that could be done, but every mainstream political party has rejected them in advance. Send in the clowns: there’s nobody else.

11

LFC 03.01.13 at 6:19 pm

How much importance, if any, does Crouch attach to Mitterand’s U-turn in ’83 (?) as a moment when it became v. clear that left parties in power could not or would not stick to their policies in the face of capital flight?

12

Rich Puchalsky 03.01.13 at 6:25 pm

Plenty of vaguely left-wing things, yes. People have quite concrete ideas about what to do — “put banksters on trial for financial crimes”, “practice Keynesianism rather than austerity”, “implement a carbon tax”, (for the U.S.) “get single-payer health care”, “stop assassinating people”. But these concrete ideas become vague and disconnected because there is no way that a mainstream political party as such can support them, and there is no such thing as a mainstream political ideology that can’t be supported by a party. Or rather, these kinds of ideas are straightforward parts of social democratic / left-liberal ideology, but that ideology is now just as theoretical as Marxism is, because no party can really support it any more.

I don’t think it’s really the triumph of neo-liberalism at work. Neo-liberalism is just as much of a phantom ideology as the rest, only taken out and brushed off when it’s convenient for the elites. I think an analysis of a twilight of the elites is much more convincing — what the center-to-right really wants is neo-feudalism. They don’t want the supposed destructive / creative power of capitalism any more than anyone else does; they just want a stable and hierarchical system in which they are at the top. The left is pretty much thrown back on anarchism, because the state as such has been so thoroughly co-opted.

13

roger gathman 03.01.13 at 6:53 pm

Although I appreciate the spirit of Mazower’s analysis, there’s something deeply weird about this sentence: “It is but a short step from writing off the political class to writing off the institutions of democracy.” As a matter of fact, it was the political class, not the voters, who have de facto written off the institutions of democracy by putting in place people like Monti, who has never been elected to anything.
That kind of inversion, in which a policymaking rhetoric saturates the concepts it is talking about so deeply that it reverses them, reminds me strongly of the way the elites would talk about Iraq. Just as the “surprise” rejection of Monti reminds me of the way the NYT reporters and D.C. pundits were astonished, in 2006, when their man, Chalabi, failed to get two percent of the vote. It is the same bubble mentality, in which the realities that impinge upon the investors and their allies, the politicians, trump the realities that impinge upon the vast majority of the population. In order to reconcile the disjunction from reality, the vocabulary used to describe it is turned upside down – and thus, technocrats placed by unelected EU functionaries in the seat of power in various countries represents “democracy”, while the voters struggling to get rid of them and their policies represent “anti-democratic populism.”
Oh well. We see now but as in a glass, darkly…

14

Billikin 03.01.13 at 7:36 pm

I am having trouble understanding this from Mazower. It sounds like double speak to me.

“While they may understand money, that no longer recommends them to the voters who would rather have someone who understands them.”

Well, it’s a nice phrase, but is that what is motivating the voters? Rather than, say, not liking austerity. Does he really mean this?

Mazower: “The result is dangerous.”

It is dangerous for the citizenry to be listened to? Really? I am starting to think that maybe Mazower is dangerous.

Mazower: “It is but a short step from writing off the political class to writing off the institutions of democracy.”

The political class? Who are they? Politicians and their rich donors? Are they being written off? And if so, so what? The supply of politicos exceeds the demand. (Hat Tip to Victor Mollo. :)) And how does voting lead to writing off the institutions of democracy? Does Mazower know what they are?

Mazower: “So far most voters have not done this in either Italy or Greece. But some have and the temptation is there for more to do so.”

Save democracy by stamping out the vote!

Well, I thought I didn’t understand Mazower, but now I am afraid that I do.

15

Mathmos 03.01.13 at 8:28 pm

This “populism” construct is being purposefully deployed to discredit citizen involvement that threatens the role of the traditional political class.

Also, Bersani is pro-Euro, the people isn’t. Do the math.

16

John Quiggin 03.01.13 at 8:47 pm

As Fareed Zakaria points out here (I’m not a fan, but I googled for “1970s crisis of democracy” and came up with this link), the current discussion is very similar in some ways to the one that took place in the mid-1970s,
http://fareedzakaria.com/2013/01/11/the-new-crisis-of-democracy/

What Zakaria doesn’t observe, but very relevant to this post, is that the 1970s crisis was the opposite of the current one in many ways. Rather than post-democratic rule by unaccountable elites, the big concern, expressed by bodies like the Trilateral Commission, was that the masses were becoming ungovernable. In particular, wages were too high, unions were too militant and so on. Underlying all this was the breakdown of Keynesian social democracy and the Bretton Woods system.

I see the current situation very much as the 1970s in reverse. Market liberalism has failed, but its advocates still hold political power, and it is far from clear what is going to replace it. In this context, it’s unsurprising that democracy isn’t looking too good.

17

Niall McAuley 03.01.13 at 9:01 pm

Italian election indecision shock result!

Western Democracy has been shaken to its roots by shock Italian election results which were indecisive, results unprecedented in recent history memory decades oh sod this, I’m off

18

Henry 03.01.13 at 9:11 pm

LFC – don’t recall it being mentioned in this book in particular, although I suspect it can be found elsewhere in Colin’s voluminous writings.

John Q. – By not-exactly-coincidence, the classic response to the ‘ungovernability’ shtick is Colin Crouch and Alessandro Pizzorno’s 1979 book, The Resurgence of Class Conflict in Europe Since 1968.

19

Chris Mealy 03.01.13 at 9:19 pm

Can anyone recommend anything about what happened with Mitterand? I feel like I’m missing the real story on that.

20

John Quiggin 03.01.13 at 9:27 pm

What an amazing non-coincidence!

21

LFC 03.01.13 at 9:29 pm

Further to JQ 16

Iirc, the Trilateral Commission report to which Zakaria refers was written by Joji Watanuki, Michel Crozier, and Samuel Huntington (Zakaria mentions only the last by name), and the catchphrase for which it became famous (or notorious), again iirc, was “democratic overload”. The idea being that there was, in effect, too much democracy and, as JQ says, wage demands too high, too many demands on the system in general.

No doubt various factors led to the breakdown of ‘the Keynesian accommodation’ in this period; and it’s interesting btw that Hobsbawm’s account in The Age of Extremes, while of course putting a somewhat different political spin on it than the Trilateral Comm., mentions the ” ‘worldwide wage explosion’ at the end of the 1960s” and the “shift in labour’s mood” from the “moderation and calm of wage negotiations before 1968″ to those after (p.285). He relies on, among other sources, Marglin and Schor, eds., The Golden Age of Capitalism (1990).

22

LFC 03.01.13 at 9:36 pm

@Chris Mealy

I think there are excellent accounts of that episode in various books but, off the top of my head, I can’t give you the titles. I’m sure a few minutes of research in any decent library catalog will yield results.

23

genauer 03.01.13 at 10:10 pm

what a bunch of crap everywhere.

The way I see it, Grillo is pretty compatible with German values

On http://www.beppegrillo.it/en/2013/02/the_end_of_the_third_republic.html#comment-23444
nobody objected to that since 2 days : – )

What we dont need, are american bankers and economists : – )

24

genauer 03.01.13 at 10:34 pm

all new movements try some new versions of party democracy

Greens, WASG, pirates, ….. whatever comes next.

instead of bitching, it is better to take a look, and see, what could work.

25

Philip 03.01.13 at 10:37 pm

‘The problem is that Grillo’s movement – and its equivalents on the left in other countries – are much clearer about what is wrong with the current democratic system than about what they might do to replace it. This is not true of the right wing protest parties and movements. ‘

It seems pretty much true of UKIP to me i.e. it is not clear how leaving the EU would impact the UK or if we could do it and stay in the common market. But then the UK is an outlier within the EU.

26

Phil 03.01.13 at 10:38 pm

Niall – just from memory, when was the last Italian election that resulted in no party or group of parties being able to form a government?

27

Hidari 03.01.13 at 10:39 pm

My own personal feeling is that we can’t even begin to move forward until we have a looooooooooooong discussion about the Euro with, as they say, “everything on the table”, and with people (to use a Blairism) prepared to “think the unthinkable”. The fact that no one seems willing to even contemplate this discussion at the moment in mainland Europe is not a good sign.

28

Mao Cheng Ji 03.01.13 at 11:41 pm

“looooooooooooong discussion about the Euro”

But few people associate the current troubles with the Euro. And, empirically, a lot of the EU (and no-EU) non-Euro states are in trouble too. Look at Bulgaria; does having Lev instead of Euro help them?

29

LFC 03.01.13 at 11:48 pm

But few people associate the current troubles with the Euro

Well, at least parts of the public in severely affected countries probably, and with some reason, associate the current troubles with the present Eurozone economic set-up as a whole, no?

30

bob mcmanus 03.02.13 at 12:08 am

1) I prefer Sheldon Wolin’s “managed democracy” because it better highlights the aspect of spectacle of politics as deliberate distraction. A spectacle that is largely produced by the masses themselves now, as we worry about the Euro and laugh at the latest Stupid Republican trick. A spectacle that is in itself a major site of production of surplus for capital. Elections are terrific profit centers.

2) Max Sawicky said a long time ago:”We don’t make policy.” My opinion on the Euro doesn’t matter. My expressed opinion on the Euro is no longer even a “safety valve.” It is exploitable production. Same with my vote or campaign contribution.

Since we are totally irrelevant to policy, we need to imagine a politics and direct action that is liberated from policy preferences.

tiqqun, tc, endnotes. What can I say, they make sense to me in ways very little else of the left does anymore. Desertion in place, disruption, sabotage. Autonomism without affiliation or organization.

31

gordon 03.02.13 at 12:45 am

Billikin (at 14) picks up on Mazower’s “It is but a short step from writing off the political class to writing off the institutions of democracy”.

This quote reflects M’s analysis of the collapse of democratic institutions in post-1918 Europe which can be found in his book “Dark Continent”. There, he describes how the political classes of France, Germany, the successor States of the Austro-Hungarian Empire, Italy and some others (writing from memory here) lost credibility as they failed to grapple effectively with post-War and Depression economic and social problems. M. suggests that this loss of credibility paved the way for anti-democratic forces in most of Europe in the 1930s. We Anglophones remember the German Nazis and the Italian Fascists for obvious reasons, but lots of countries had their home-grown anti-democratic, right-wing groups.

Post-WWII, according to “Dark Continent”, there was a resurgence of faith (or at least willingness to try again) in democratic institutions. But to my mind, M.’s analysis of this period is incomplete. He didn’t give enough thought to the influence of the Cold War and the way it truncated the development of democracy in Western Europe, and how that led to considerable disillusion once again on the part of the immediate post-WWII generation.

That generation began to see that the centre-Right coalitions which mostly held power in post-WWII Europe were inadequate representatives of popular feelings and aspirations, and owed their continuity more and more to manipulation of the democratic process and to outside influences, predominantly from the US. The Cold War stunted and twisted the development of democratic institutions in post-WWII Europe, and the result was, in part, the appearance of radical Left groups which sometimes participated in the formal processes of democracy (like the German Greens) and sometimes didn’t (like the Red Brigades). But behind those manifestations, and especially during and after the Vietnam War, disillusion with the elites was spreading just as broadly as it did after the WWI settlement.

I tend to place Grillo and his 5-Star Movement in that context, another manifestation of an unease and dissatisfaction which has been growing since the late 1960s. We haven’t seen a parallel growth in the appeal of undemocratic “saviour” movements (except perhaps the Golden Dawn in Greece), but if Mazower’s analysis of post-WWI Europe is a guide, we will.

32

LFC 03.02.13 at 4:01 am

@gordon
Re the Cold War (allegedly) “stunting,” “twisting” and “truncating” democracy in post-1945 W. Europe: maybe, but you’d have to say a bit more to persuade me. Certainly the Cold War had an effect on domestic politics in various countries but I’m not convinced that effect was as uniformly harmful as you suggest. But I don’t know the history as well as I might.

33

cripes 03.02.13 at 4:13 am

In any case, growing awareness of the total fraudulent nature of western “democracy”whether liminal or subliminal, is bound to create openings that can be exploited by by mussolini’s or gramsci’s, or something. We’re not far from 416 AD.

34

jfx 03.02.13 at 4:15 am

I am interested in the comparison of Grillo and the Tea-Party. Does the 5-star movement have a strong demographic core the way the tea-party is mainly white, older folks?

@Mao Cheng Ji , thanks for the link to the interview but you and I read it very differently. He has no plan, just a soundbite which could cut a few percent off the budget, and his thoughts on a governance strategy are incoherent:

BBC: If you are going to destroy something, you have to be pretty sure you know what you are going to replace it with….

Beppe Grillo: No, that is not right. We want to destroy everything. Not rebuild on the same rubble. We have different ideas. It is like any work. You have to have a clean slate. Then, you have a programme, a new way of thinking. It is a way of thinking. Not a restoration. Parties out. Citizens instead of parties. It is turning the pyramid upside down.

35

Gene O'Grady 03.02.13 at 5:32 am

What in the world happened in 416?

Long time since I was very familiar with Italian affairs, but I seem to recall that the last time no one could (or would) form a government after an election was 1922. Didn’t work out too well.

36

Hidari 03.02.13 at 6:56 am

“But few people associate the current troubles with the Euro.”

No because it seems to be de rigeur amongst the chattering classes to not talk about the Euro….despite the rather relevant fact (as I have pointed out in previous posts) that almost all currency unions in history have failed.

” Look at Bulgaria; does having Lev instead of Euro help them?”

Obviously not and I am not pretending that everything is peachy in the global economic environment. Anything but. But

a; generally speaking countries that are far removed from the Euro are doing a lot better than those that are close to it and

b: the whole purpose of the Euro is anti-social-democratic (and actually just anti-democratic). If you read up about the Stability and Growth Pact (SGP) you will find lots of references to “fiscal discipline”. “low inflation” “excessive deficits” and similar neo-liberal blah.

But (surprise!) “The Pact has proved to be unenforceable against big countries such as France and Germany, which were its strongest promoters when it was created. These countries have run “excessive” deficits under the Pact definition for some years. The reasons that larger countries have not been punished include their influence and large number of votes on the Council of Ministers, which must approve sanctions; their greater resistance to “naming and shaming” tactics, since their electorates tend to be less concerned by their perceptions in the European Union; their weaker commitment to the euro compared to smaller states; and the greater role of government spending in their larger and more enclosed economies. The Pact was further weakened in 2005 to waive France’s and Germany’s violations”.

So the whole thing was fundamentally, structurally unfair right from the start.

https://en.wikipedia.org/wiki/Stability_and_Growth_Pact

The Bulgarian economy is pegged to the Euro incidentally.

For those who are so keen on the Euro you are aware that pursuing this course may end up with the end of the EU yes? And you are happy to take that risk?

37

Hidari 03.02.13 at 7:37 am

“What in the world happened in 416?”

Sack of Rome by the Visigoths; a mainly peaceful conquest (Roman propaganda to the contrary). Normally seen as one of the major steps in the collapse of the Western Roman Empire, which it was, which is why I approve of it.

38

Mao Cheng Ji 03.02.13 at 7:46 am

29, “Well, at least parts of the public in severely affected countries probably, and with some reason, associate the current troubles with the present Eurozone economic set-up as a whole, no?”

Not that I noticed. I don’t think the idea that printing more Euros would turn Berlusconiland into paradise has captured the public’s imagination; not quite yet. But this is an anecdotal observation.

39

Hidari 03.02.13 at 8:21 am

“I don’t think the idea that printing more Euros would turn Berlusconiland into paradise “

How about less Euros? About “zero” was the number I was kinda homing in on. Y’know maybe that’s too many. But definitely with “zero” as being kinda an upper limit.

40

Mao Cheng Ji 03.02.13 at 8:41 am

Well, as you can see from the election results, there is a strong perception that the political elite is corrupt and self-serving.

Now, who knows, it’s possible that the hypothetical honest and responsible government would opt for zero Euros, but first thing first, right? It’s not really a chicken-egg thing, is it?

41

Niall McAuley 03.02.13 at 8:49 am

This particular indecisive result may not have happened before, but Italian politics are famous for indecisive elections leading to wobbly coalitions which only last a few months.

8 governments in the 1990s, 11 in the 80s, big changes to the voting system in the mid-90s to try and get stability.

42

Hidari 03.02.13 at 9:16 am

“Now, who knows, it’s possible that the hypothetical honest and responsible government would opt for zero Euros, but first thing first, right? It’s not really a chicken-egg thing, is it?”

At the time I wrote the comments above I didn’t realise that Grillo wants to have a referendum on the Euro. So that might lead to a very interesting situation.

43

Billikin 03.02.13 at 9:56 am

@ gordon (31)

Thank you very much for filling a lot in.

On first reading, I picked up on the fear of totalitarianism. That was part of what confused me. But as I wrote the post, it seemed like there was a fear of democracy, as well.

44

Tim Worstall 03.02.13 at 10:55 am

“National politics, bad as it is, is increasingly being displaced by a European decision making process dominated by the ECB and the neo-liberal bits of the European Commission. “

As a fully paid up neo-liberal I do rather resent having current events as being described as having been driven by a neo-liberal agenda or policies. This is assuming that neo-liberal does actually have a meaning beyond “vaguely righty stuff I don’t like”.

Hidari’s got it to my mind (sorry Hidari, that’s your reputation shot if I agree with you) that yes, it does all indeed tie in around the euro. And that just isn’t a neo-liberal policy nor a victory for any sort of one.

Indeed, it’s easy enough to find archetypal neo-liberals like Friedman insisting that the euro was always going to end in tears. And it’s the work of mere moments to identify the ECB as making the same mistakes the Fed did in the 30s: again, running along exactly the lines of Friedman’s critique. We have falling money supplies all over the place: the neo-liberal policy indication at such a point is to keep printing money.

Yes, yes, fiscal expansion etc: but whether you do that or not you should still be cranking up the presses. Which the ECB simply isn’t doing.

Sure, there might be other things that are indeed neo-liberal: tax competition for example. Free movement of capital (often much the same thing). But the basic macroeconomics of the eurozone just ain’t part of the neo-liberal playbook. So it’s somewhat galling to get blamed for what’s happening.

To make the same point in a different way. The neo-liberal solution is the Iceland one. Sure, bankruptcy happens. So, have bankruptcy, clear the slate and start again. That Ireland did the opposite can’t (or at least shouldn’t) be blamed on the neo-liberals.

45

Hidari 03.02.13 at 11:33 am

“Indeed, it’s easy enough to find archetypal neo-liberals like Friedman insisting that the euro was always going to end in tears. “

Actually that’s not entirely true. Friedman’s view was a bit more nuanced than that. If you read the paper below you will see that ““Monetarists . . . favor stable policy rules that reduce variability and uncertainty for private decisionmakers. They argue that government serves the economy best by enhancing stability and acting predictably, not by trying to engineer carefully timed changes in policy actions which are frequently destabilizing” (Meltzer 1991:31). In a sense, the monetary-fiscal constitution embedded in the
euro reflects the change in the thinking on these matters brought
about by Milton Friedman’s “counter-revolution in monetary theory”
(Friedman 1970).”

So the ideological “undercurrent” of the Euro was very Friedmanite.

Friedman’s real issues were not so much with the Euro itself but with the way it was brought in, and with various technical issues associated with it, which is a rather different matter.

However he did make one highly apposite point.

He wrote;“What most troubles me … is that members of the euro have thrown away the key. Once the euro physically replaces the separate currencies, how in the world do you get out?”

This is the key point. What should be happening now is that Greece should leave the Euro for a bit, get its house in order, and then return. As I pointed out in a previous comment, one of the few successful currency unions, the CFA Franc, has people leaving and entering all the time.

But for reasons I am not entirely clear about, it seems to be “received wisdom” that leaving the Euro would lead to famine plague and pestilence. I mean over and above the famine plague and pestilence the Euro has already caused.

http://www.cato.org/doc-download/sites/cato.org/files/serials/files/cato-journal/2008/5/cj28n2-10.pdf

46

Slex 03.02.13 at 12:52 pm

@ Mao Cheng Ji 03.01.13 at 11:41 pm

Bulgaria has a currency board and the Bulgarian lev is pegged to the euro, which in practice is not very different from using the euro.

But very few people in Bulgaria would blame the currency board for any of the country’s problems.

It is interesting that many of the participants in the protests which brought down the government in Bulgaria want the same as Beppe Grillo – parties out, citizens in. Now none of the parties in the parliament wants to take responsibility for making a government and the country is headed for early election.

In the meantime the president has tried to pacify the protesters by giving them more say with the creation of the so called citizen councils (grazhdanski saveti, which is none other than the Russian “soviets”). Of course, once you decide to create such councils, the real problems begin because there are no clear criteria why this guy is in the council and the other is out. Besides, that’s when citizens start to realize that different citizens want different things and that the only thing they agree on is that they don’t want parties, but disagree on many other things. And the logical solution to this is to have like-minded people choosing someone to represent them politically and to defend their interests, which is, more or less, what a political party does.

Whatever the problems are, abandoning political parties is not part of the solution.

47

Shay Begorrah 03.02.13 at 12:53 pm

Tim Worstall@41

As a fully paid up neo-liberal I do rather resent having current events as being described as having been driven by a neo-liberal agenda or policies.

Almost everyone not part of the currently governing European elite agrees that the European component of the global financial crisis was substantially enabled by neoliberal policy preferences (unregulated financial capitalism, uncontrolled capital flows, non-interference in overheated markets and so on). As mentioned above the Euro was seen not just as absolutely compatible with Freidmanite economic liberalism but as a driving force for its adoption, a lever to shift the social democratic state.

I would agree that the currently politically allowed solutions in the Eurozone are not fully compatible with neoliberal ideals but this is because the mandated solutions need first to protect neoliberal class interests. Chief among those interests are the protection of private financial capital and conservative political capital (“No turning back” might ring a few bells.).

So perhaps we can say that the lack of solution now is not so much a problem of the dominance of “neoliberalism” but the dominance of neoliberals?

48

Slex 03.02.13 at 1:12 pm

@ Tim Worstall 03.02.13 at 10:55 am

The euro makes it much more difficult for separate countries to conduct discretionary monetary policy. As I see it, anything that takes away discretion from the government fits well into the neo-liberal agenda (or maybe I should say, the conservative economists’ agenda).

49

rf 03.02.13 at 1:23 pm

“The neo-liberal solution is the Iceland one. Sure, bankruptcy happens. So, have bankruptcy, clear the slate and start again. That Ireland did the opposite can’t (or at least shouldn’t) be blamed on the neo-liberals.”

Afaik, Iceland’s solution ended up a lot like Ireland’s? (Once again afaik) Iceland paid back most of its bank debt, so there aren’t really the plethora of options available that people like to claim. (I’m open to correction though, of course)

50

Tim Wilkinson 03.02.13 at 2:16 pm

LFC: Re the Cold War (allegedly) “stunting,” “twisting” and “truncating” democracy in post-1945 W. Europe: maybe, but you’d have to say a bit more to persuade me. Certainly the Cold War had an effect on domestic politics in various countries but I’m not convinced that effect was as uniformly harmful as you suggest. But I don’t know the history as well as I might.

If you do decide to gain some familiarity with the history, Italy is certainly a good place to start. Some key terms to look for are ‘Gladio’, ‘Anni di Piombo’/’Strategy of Tension’, ‘Ordine Nuovo’, ‘Office of Strategic Studies’/’CIA’, ‘Propaganda Due’, ‘Piano Solo’, ‘Golpe Borghese’, ‘Historic Compromise’/’Aldo Moro’/’Via Gradoli’/’Mario Moretti’/’Camillo Guglielmi’.

YouTube has Allan Francovich’s BBC Timewatch series on Gladio, which should be of interest, in particular, but by no means only, parts 2&3 of the instalment entitled ‘The Puppeteers’; there’s also a vid about the Moro killing which is a bit ropey but contains much of the relevant info, albeit along with some (easily recognisable) speculation.

If the realities of parapolitical manoeuvring are a bit rich for your blood (cf. JFK’s rendezvous with death, which doesn’t seem to have been deemed relevant on a recent CT thread all about democracy and political murder), then you could start with the kind of barely-covert action that the CIA (and NYT) is happy to chat casually about:

http://www.nytimes.com/2006/07/06/us/06wyatt.html?_r=0

“The mission was to ensure the [1948] electoral victory of Italy’s Christian Democrats over the Communist Party. Mr. Wyatt helped deliver millions of dollars to the eventual victors; the precise cost of the covert campaign has never been declassified, though the details of the operation were…The C.I.A.’s practice of buying political clout was repeated in every Italian election for the next 24 years, and the agency’s political influence in Rome lasted a generation, declassified records show.”

51

Phil 03.02.13 at 2:21 pm

Italian politics are famous for indecisive elections leading to wobbly coalitions which only last a few months.

…and get replaced by another stitched-together coalition. The situation now is qualitatively different – any government needs to have a majority in both Houses; it’s arithmetically impossible to form a majority alliance in the Senate without including M5S; and M5S are not available for alliances. This isn’t “the government has a weak mandate” or “the government could fall”; there is no government, and no credible opposition waiting in the wings either.

the “surprise” rejection of Monti

I don’t think anyone was surprised by the rejection of Monti – everyone was expecting the two leading alliances to be led by Bersani and Berlusconi. Admittedly, coming fourth was unexpected. I think what really did for him, ironically, was allying himself with existing centre-right parties; if he’d run alone he would almost certainly have done a lot better. (After all, Grillo’s shtick is based on opposition to all the old parties – and Monti could have argued that he governed the country without assistance from any of them.)

Grillo’s current position is that the PD (Bersani) and PdL (Berlusconi) should form a government, and the M5S will vote for those policies it supports. (This is a bit odd, because a PD/PdL coalition would have a big enough majority to ignore M5S completely. But it would achieve Grillo’s key political goal, viz. keeping his own hands clean.) The PD want Grillo to support them; some grillini are leaning that way, but the party isn’t likely to go for it – old politics and so on. (In the Senate, M5S would actually have to vote for the PD forming a government; a minority government supported passively by abstentions isn’t possible.) The PdL want the PD to give up so that they can have a go at courting someone other than Bersani – this may mean Grillo or may mean they want to dictate the next leader of the PD (nothing would surprise me). There’s also a faint possibility of another ‘technical’ government (presumably not led by Monti), which some grillini have said they’d favour – this is also a bit odd, but presumably they reckon that the anti-political appeal of a party-free government outweighs the negatives of austerity, European integration etc.

I don’t think the rise of Grillo is anything to cheer about. The good things he’s saying has been said before, by more serious, principled and talented politicians – Vendola recently, anti-corruption campaigners like Di Pietro or Leoluca Orlando further back. (Vendola’s party got 3.2% of the vote in the lower house, which amounted to 37 seats thanks to their alliance with the PD. Di Pietro’s and Orlando’s parties, together with several others (including the Greens and what’s left of Rifondazione Comunista), stood as Rivoluzione Civile; between them they got 2.2% of the vote and no seats.) Grillo is succeeding where they failed, not because he’s saying things that need saying, but because he’s wrapping those things up in populist anti-political rhetoric – a rhetoric that Italy has heard many times before, from the Lega Nord right back to the Fronte dell’Uomo Qualunque. He’s part of the problem, not part of the solution.

52

Tim Worstall 03.02.13 at 2:57 pm

@48. “The euro makes it much more difficult for separate countries to conduct discretionary monetary policy.”

Agreed, that’s actually part of the design of it. Only the ECB can undertake monetary policy of any kind.

“As I see it, anything that takes away discretion from the government fits well into the neo-liberal agenda”

Well, no, with monetary policy not so much. And this also squares the circle with the Friedman bits up above.

“““Monetarists . . . favor stable policy rules that reduce variability and uncertainty for private decisionmakers. They argue that government serves the economy best by enhancing stability and acting predictably, not by trying to engineer carefully timed changes in policy actions which are frequently destabilizing” “

Indeed, one of those things being that the monetary authorities shouldn’t allow the money supply to collapse. As with his critique of the Fed in “Monetary History of the United States”. How you prevent the collapse is discretionary: but not the idea that you shouldn’t prevent the collapse.

And the money supply in the peripheral states has indeed been collapsing. And that’s the ECB’s fault. Or perhaps that of the designers of the system. They should have been monetising the debt. Exactly the one thing they’ve been bending over not to do.

Tant pis etc but we really all rather did hope that central bankers understood now what it was that the Fed got wrong then.

“(or maybe I should say, the conservative economists’ agenda).”

Oh, there are very definitely economists and politicians, some of them even conservatives, who think that the right policies are being followed. It’s just that none of them can really be called neo-liberals….almost, but not quite, by definition they can’t.

“Afaik, Iceland’s solution ended up a lot like Ireland’s? (Once again afaik) Iceland paid back most of its bank debt, so there aren’t really the plethora of options available that people like to claim. (I’m open to correction though, of course)”

Well, I think there’s quite a large difference there actually. Iceland has paid back that debt: Ireland hasn’t. Indeed, won’t for 30 or 50 years or whatever.

53

rf 03.02.13 at 3:07 pm

But if Ireland negotiated a better deal inside the Euro than Iceland did outside it, then the Euro can’t be the *only* problem, as in:

“Hidari’s got it to my mind ..that yes, it does all indeed tie in around the euro. “

54

LFC 03.02.13 at 3:20 pm

@T Wilkinson
I’d heard of Gladio (but not read v. much about it). Thanks for the links.

55

Mao Cheng Ji 03.02.13 at 3:30 pm

48 “The euro makes it much more difficult for separate countries to conduct discretionary monetary policy. As I see it, anything that takes away discretion from the government fits well into the neo-liberal agenda (or maybe I should say, the conservative economists’ agenda).”

MAI, back in the 90s, was an attempt to enact a purely neo-liberal deal: to insure the domination of global business interests over national governments. Euro – not so much, I don’t think. Membership in the EU entails more serious limitations. Any treaty makes it more difficult to conduct independent policies, but you get something in return.

56

Hidari 03.02.13 at 3:40 pm

@53

I didn’t say (or imply) that the Euro was the only problem. But it is a big problem.

57

Harold 03.02.13 at 4:06 pm

For LFC, while boning up on Italian postwar history, you might look at the documentary, “Excellent Cadavers” by Alexander Stille (the documentary, not the fictionalized version), Rossi’s “Salvatore Giuliano” (somewhat fictionalized but basically accurate) and “Il Divo” about Andreotti.

@6 “Right wing policies and left wing marketing” — sounds very familiar. This is how the destruction of public schools is being pursued by the big text book publishers in this country, together with Walmart , Microsoft, and big real estate.

58

Hidari 03.02.13 at 4:49 pm

“Italy’s comedian-cum-power broker will have raised further eyebrows in Eurocrat circles today with a suggestion that Italy ought to leave the single currency.

In an interview with a German magazine, Beppe Grillo said “if conditions do not change” Italy “will want” to leave the euro and return to the Lire.”

http://www.independent.co.uk/news/world/europe/beppe-grillo-suggests-italy-might-leave-the-euro-8517790.html

59

Bruce Wilder 03.02.13 at 5:09 pm

TW: “As a fully paid up neo-liberal I do rather resent having current events as being described as having been driven by a neo-liberal agenda or policies.

Yes, yes. No True Scotsman. Got it. Can we move on?

60

rf 03.02.13 at 5:24 pm

“I didn’t say (or imply) that the Euro was the only problem. But it is a big problem.”

Yeah that was directed at Tim Worstall. Unless I’m missing a step, on the specific point of debt writeoffs, this:

“it does all indeed tie in around the euro”

and this:

“To make the same point in a different way. The neo-liberal solution is the Iceland one. Sure, bankruptcy happens. So, have bankruptcy, clear the slate and start again. That Ireland did the opposite can’t (or at least shouldn’t) be blamed on the neo-liberals.”

contradict eachother if you’re accepting that Iceland didn’t ‘clear the slate and start again.’

61

Bruce Wilder 03.02.13 at 5:28 pm

I think “neoliberal” can be a useful term for the coming together in one river, of several streams of thought and rhetorical rationalization. In an American context, it starts with Charles Peters (Washington Monthly) and a sort of Third Way Clinton/Obama barely left-0f-center accommodation with the rich and powerful, while mouthing socially progressive shibboleths. In an international policy context, it is exemplified by the Washington Consensus in its most smug market triumphalism. One of its tricks is a tight dialectical symbiosis with Friedmanite conservative libertarianism, so those heirs of “classical liberal” laissez faire become practically part of the clan.

I think it is more than fair to brand the Euro as executed a neoliberal policy program. First, to establish an ECB, authorized to finance only a 3% sovereign deficit, reflects a remarkably strong faith in the power of monetary policy, as has been said. But, more than that, pressing austerity on the peripheral countries, and demanding “market” and institutional reforms and privatization, which only make sense in a neoliberal policy frame, makes the policy, neoliberalism. Whether Portugal has rent control or Greece owns its national railway has nothing whatsoever to do with macroeconomic monetary policy, and everything to do with a neoliberal policy agenda of “market liberalization” and privatization as an approach to everything. But, Olli wants “structural” reform, and the “structural” reforms Olli wants are justified in the neoliberal rhetorical frame of “flexibility”, market magic, the confidence fairy, etc.

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Bruce Wilder 03.02.13 at 5:37 pm

This idea that “bankruptcy” and clearing the slate was considered a live and legitimate option in 2007-2008 or since, by the powers-that-be, and that it should be considered part of the neoliberal brand, seems absurd to me. The Friedmanite agenda of greeting the Great Depression Redux with a policy of keeping the plutocracy in place at all costs, under the guise of preventing the deflationary collapse, was used to justify “guaranteeing” all kinds of fraudulent deals, effectively transferring the promised streams of funds from entities that could not possibly pay, to the sovereigns and their taxpayers. Austerity is simply the other shoe dropping. So sorry, those pensions you were going to pay out, that nice social welfare state — you cannot afford them, because you have to pay Goldman Sachs instead — it’s the price you pay to keep the sky from falling on your head. And, that’s neoliberalism in action. Whether it is Larry Summers or Olli Rehn, it is neoliberalism.

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Rich Puchalsky 03.02.13 at 5:53 pm

“Yes, yes. No True Scotsman. Got it. Can we move on?”

Not to defend Tim Worstall, exactly, but this kind of depiction of neoliberalism in action as “So sorry, those pensions you were going to pay out, that nice social welfare state — you cannot afford them, because you have to pay Goldman Sachs instead” makes it ideologically vacuous. If it’s keeping the plutocracy in place at all costs, then that’s what it is, and there is nothing new about it other than a few preferred obfuscations and legal tics. At that point you have familiar “stupid or evil” choice: are people like TW stupid because they can’t see that this is what neoliberalism is, or are they evil because they see what it is but support it anyways?

I prefer to look at it a bit differently, in that there are some people who actually believe in a neo-liberalism that does not consist simply of keeping the plutocracy in place, but that the system is no more able to to deliver what they want than it can deliver for anyone else. They are used for ideological justification, just as we all are in different contexts, but if the system is really the plutocracy against everyone else, that’s not a neoliberal system as such.

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Niall McAuley 03.02.13 at 6:11 pm

False Dichotomy Alert.

65

bianca steele 03.02.13 at 7:58 pm

@59 I thought the TW blurb was amusing. Like, “as a good anti-democrat, and a fully paid-up block leader, I am offended that my personal opinion is not taken into account in determining anti-democratic policies.” OTOH if he wants to disown anti-democracy, or else membership in the demos, that’s another story, and sorry if I misread you.

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Bruce Wilder 03.02.13 at 8:20 pm

I don’t see neoliberalism as a system, but as an ideology apologizing for, and rationalizing, a policy agenda, which has had the effect of institutionalizing a plutocracy.

As to the deep issue, it seems to me to be the central, imperfectly solved problem of all governance is: Quis custodiet ipsos custodes? That is, given that hierarchical governance is a potentially very useful and productive part of large-scale social cooperation, how does a society employ hierarchy, without having those at the top of the pyramid use their power to ruin the mutually beneficial social bargain, and take the rewards of becoming predators or parasites, instead of accepting constraints, and the more limited returns to be the good shepherd or constant gardener.

(Representative) democracy governing a nation-state with a market economy, in regional and world community, has been the model for an attempt to institutionalize constraints on political leadership to the end of limiting or preventing socially destructive predatory/parasitical behavior. As a model, it has competed in Western politics with centralized absolutism in one form or another, from the absolute monarchs of the 17th century down to the fascist dictators of the 20th.

There are two functional issues, somewhat orthogonal to each other, one to the other, which entangle the competition of democracy with despotism with ideas, theories and expertise. One of the problems is breaking the incentive bound. Hierarchy works as a mode of social cooperation, because of the power of breaking the incentive bound in motivating and directing people. The “incentive bound” is the problem of the fat man, who wants to lose weight and also wants to eat rich, delicious food, and the problem is that he is, simultaneously, the individual, who longs to be thin, and, also, the individual, who enjoys eating, and feels hungry. He’s conflicted, and will struggle to follow any program of rules, because of this conflict. Hierarchy breaks the incentive bound. The boss decides what is to be done, but doesn’t bear any of the costs of the doing, and can discipline people for failing to follow the rules, out of all proportion with the expected cost of any particular instance of shirking (or whatever you want to call not making the effort to follow the rule). The traffic cop can write a ticket for speeding, imposing a fine for breaking that rule, even though the speeding, in that instance, has no bad consequence (in fact, if left unperturbed, the driver would have expected to benefit from getting to where she was going, quicker).

The other problem, orthogonal to the first, is working out a theory of the way the world works, from which to derive sensible rules to enforce, rules that make for mutually beneficial social cooperation, rules a governor, who wished to be a gardener or shepherd, would want to discover.

One of the great advantages of representative democracy with limited and separated powers, as conceived in the 18th century, over a despotism of unlimited powers (or with discretion over which powers to assume), is the way in which it forces broad political deliberation over rational principles. Despotisms, even despotisms that aspire to enlightened self-restraint, tend toward arbitrary expedience and have difficulty making and keeping strategic committments, even though that supposed ability is regarded as a selling point by some of their advocates, and can find their legitimacy eroding rapidly, as fashion comes to rule public political understanding. This was, of course, the story of the ruin of the Bourbon monarchy in late 18th century France.

Democracies have the problem of the unbroken incentive bound, as all sides and interests enter the democratic fray, and intensity of interest may outweigh numbers, when the problem of organizing political activity comes into the balance. It is hard for America, for example, to reform health care, because so many powerful interests are feeding off the economic rents they derive from the very defects of the system, which everyone agrees is dysfunctional. (It is not surprising that we might wish for the strong hand of the enlightened despot.) Democracies, though, have found that their representative institutions — legislatures — when constrained to law-making rather than direct arbitration as a court (which was historically not uncommon), can delegate regulatory authority to expert agencies, which, in turn, can be required to make rules in a rational process.

I see the project for European unification as part of that long process of taming the ruling classes, and their penchant for stealing everything and building castles and palaces and having dress-up balls and lovely little wars. That’s how the centre-Left got so identified with the European project.

My problem with the unholy alliance of conservative libertarianism and neoliberalism, which dominates all of our political discourse, dictating the frames and vocabulary and elementary memes, is that it fundamentally misunderstands the political economy, as a convenient misdirection in the service of plutocratic takeover. It transforms public choice economics from a cautionary critique into a blueprint. And, it all starts with the endless prattle about “market” economies, when there are scarcely any markets in a so-called market economy. The result is idiocracy.

And, the Euro is a perfect example of idiocracy in action, courtesy of neoliberal ideological dominance of the political discourse. It is almost impossible not to get sucked into rhetorical narratives where austerity is the responsible, enlightened path to progress.

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Dietrich Sommer 03.02.13 at 8:29 pm

“John Quiggin and I predicted something like this in our Foreign Affairs piece back in 2011 (I don’t think we can congratulate ourselves particularly…”

Interesting pieces both, but I don’t see how the early piece predicts political developments.

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Tim Wilkinson 03.02.13 at 8:46 pm

To be fair to Rich, the ‘or’ in ‘stupid or evil’ is not exclusive: it’s ‘and/or’ rather than the XOR familiar from electronics (or whatever they’re calling it these days).

To be fair tout court, [update: Bruce has somewhat pre-empted this] ‘neoliberal’ is the name of a real-world position and not to be confused with some market-liberal fantasy.

It’s not as though the likes of TW’l are committed either to ‘let [x set of] property rights be enforced though the heavens fall’ or ‘let the ideal market be implemented so as to achieve the Walrasian – oh OK, Axtellian – equilibrium’. If the latter were the case, one might expect a little more concern about oligopoly, lack of perfect information, effects of wealth outside the narrowly economic sphere, etc., etc., as well as the fundamental issue of the aetiology of ‘revealed’ preferences – the quasi-science of marketing and specifically advertising having, beneath a paper-thin veneer of euphemistic jargon, the manipulation of market behaviour – by way of hopes, dreams, fears and desires no less – as its primary goal.)

LFC – yes, well worth reading up on – it’s a rollicking roller-coaster ride, with the Vatican and at least two distinct mafias involved in the wider context, too.

It might be worth mentioning that within a year or two of the collapse of the USSR and the ensuing split in the PCI (Communist Party), a long-overdue investigation into political corruption known as ‘Mani Pulite’ (‘clean hands’), finally got under way, precipitating a reorganisation of the party-political landscape so revolutionary that the result is known as the ‘Second Republic’.

Antonio Di Pietro, one of the most prominent of the judges involved in the campaign, a main focus of which was party funding, later conceded that allegations against the only party to escape censure, the (in any case fractured) PCI, of illicit Soviet funding, were in fact well-founded; however, since this can of worms was not opened at the time, the issue of US funding for the Christian Democrats doesn’t seem to have been brought up either. (The issue of who started it and who gave more is perhaps of little significance, but it is clear enough that the US was the richer and more aggressive of the two Yalta protagonists, and it is, unlike the USSR, known to have been heavily involved from the start.)

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Phil 03.02.13 at 11:26 pm

Apples and pears. I think we can be pretty sure that the CPSU was “involved from the start” in funding the PCI; how much, for what reason and with what effect are the key questions. (The answers being “not all that much”, “on general principles of keeping the show on the road” and “very little or none”.) Funding in the sense of “spotting an opportunity and keeping the money coming until the right result was achieved” was a US speciality. Paul Ginsborg – no conspiraloon he – described the flow of US funding to the Christian Democrat camp in 1948 as “breathtaking in its size, its ingenuity and its flagrant contempt for any principle of non-interference in the internal affairs of another country”.

I had hopes for the Second Republic, but I think now it was stillborn. For that Signor B can bear most of the blame, but not all of it by any means.

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Sebastian H 03.03.13 at 4:39 pm

As far as the original post goes, it isn’t clear why this situation should cause a loss in faith in democracy when all the mechanisms around the euro, and many of the mechanisms surrounding important decisions in the EU are pseudo democratic at best, and actively anti democratic at worst.

What seems equally likely is that the continued policies of the ECB and the unenforced against France and Germany stability pact create a situation where the EU ends up discredited, and democratic impulses in member countries end up chopping it into pieces. It may or may not take an anti democratic country leader to get to that place, but if so, that will be largely influenced by the ECBs recent position that it can deliberately undertake punishing policy steps to drive governments it dislikes out if office, without being able to deliver on rewards that will keep governments it likes in office. (All very anti democratic if you ask me, but EU propaganda appears to pretend the opposite).

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Igor Belanov 03.03.13 at 7:15 pm

I think the confusing part of this discourse is the emphasis on ‘democracy’. Given that the significance of elections is usually quite limited in liberal democracies and their other central features, constitutionalism and the rule of law, are under no real threat, it is more accurate to describe the trend as one of a reduction of the political sphere. It is not only the ECB that tries to insulate itself against popular demands and to ignore real conflicts of interest. Policymakers and politicians do this at all levels, and have generally been very successful, particularly in promoting ideologies relating to ‘managerialism’ , ‘classlessness’ and so on. Even in the current ‘crisis’ there has been little articulation and assertion of political interests and organisation, though plenty of finger-pointing and hot air about foreign governments, immigrants, ‘Europe’ and so on.
The difference between national politics and European institutions at the moment is not the ‘democratic deficit’ but the fact that the EU and ECB are unable to mobilise nationalism to improve their legitimacy. Talk of leaving the Euro or the EU is meaningless if the actual ends are not specified. It is treated in some quarters as the equivalent of waving a magic wand.

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rf 03.03.13 at 9:45 pm

But aren’t we confusing things here, the ‘erosion of democracy in advanced industrialised countries’ and reality of the conditionality of democracy in countries on the periphery of the international system? In this ‘framing’ you don’t look at the plutocracy or democracy in the core, but at nationalism and geopolitics, just another example of how little room for manoeuvre countries on the periphery actually have.

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Shay Begorrah 03.03.13 at 11:46 pm

rf@72

But aren’t we confusing things here, the ‘erosion of democracy in advanced industrialised countries’ and reality of the conditionality of democracy in countries on the periphery of the international system?

The Eurozone peripherals get to enjoy both flavours of kackwurst, Deutschebloc fiscal policy imperialism and the lack of alternate domestic political possibilities.

However if democracy was a little more local, a and a little less managed, then other options to resisting the German/ECB pincer movement could have been taken.

Igor Belanov@71

Surely a major reason for the increasing hostility to the European project is that current international political arrangements are more vulnerable than were the earlier national ones to the pre-existing negative trends in Western liberal democracy that you mentioned ?

If the power and political options of the people are attenuating more rapidly with ever closer union is that not a good enough reason to reject it?

The lesser of two evils will do for starters.

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rf 03.04.13 at 1:41 am

Coincidentally here’s an article on how Iceland actually dealt with the crisis

http://www.ft.com/intl/cms/s/0/bfdff83a-7a60-11e2-9cc2-00144feabdc0.html

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Shay Begorrah 03.04.13 at 8:41 pm

rf@74

I think the crucial bit of the FT article is here:

Iceland, in fact, spent more as a percentage of GDP than any other country apart from Ireland in rescuing its banks, according to the OECD.

with the invisible proviso “so far” for those trapped in the Euro.

When you remember that Ireland’s GDP overstates the real size of its economy the OECD direct fiscal costs graph looks pretty damned awful (2.5 times worse) for the poster gimp for the ECB method and remarkably good for Iceland’s burn ‘em all approach.

Iceland’s 2012 unemployment level also peaked at half Ireland’s and less than 2/3 of the Eurozone average.

Is there really anyone left who thinks the Eurozone’s approach to the European component of the global financial crisis was not inferior to the Icelandic model (outside of the Deuthsche bloc and the European Commission )?

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Igor Belanov 03.04.13 at 9:00 pm

‘The Icelandic Model’????

It’s a country with a population the size of Hull, hundreds of miles from continental Europe, outside the EU. How can it be a model for Ireland, let alone Greece, Spain or Italy?

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rf 03.04.13 at 9:25 pm

I don’t really know enough about it to have anything of interest to say Shay, (although that’s never stopped me) but I’m closer to Igor Belanov on this one. I don’t know how useful the ‘Icelandic model’ is when comparing to Ireland (I guess its low unemployment is related to factors specific to its domestic economy, demographics etc?) I think it does show that there was no silver bullet vis a vis debt, a painless recovery etc and, afaik, they’re still pretty enthusiastic about joining the Euro. I just don’t see what alternative there was/is for Ireland, and how different things would have been to resolving the crisis (as oppossed to not getting into it in the first place) outside of the Euro?
On the OP again though, surely the policies pushed on the periphery undermine the idea of an erosion of democracy in advanced industrialised countries. Weren’t these largely German policymakers implementing policies in the interests and preferences of German voters?

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Winchester 03.05.13 at 1:43 am

Yes, and Europe is America’s future.

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Tim Wilkinson 03.05.13 at 9:52 am

Phil @69 – no disagreement there from me. I have little doubt that the USA exerted far more influence than the USSR – despite which the PCI was a major electoral threat to DC throughout this period, hence the Strategy of Tension. Mention of the Yalta carve-up was an understated allusion to the fact that Italy had been assigned to the US ‘sphere of influence’.

To clarify, the issue of who started it and who gave more is perhaps of little significance only in the context of the question how much illicit influence the Cold War (rather than its prime mover, the US) exerted over W European ‘democracy’.

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Mao Cheng Ji 03.05.13 at 10:06 am

“Mention of the Yalta carve-up was an understated allusion to the fact that Italy had been assigned to the US ‘sphere of influence’.”

Not only it was assigned to the US ‘sphere of influence’, there are US military bases there all over the place, even now. The PCI never had a chance, it would’ve been the same as Greece.

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Barry 03.05.13 at 12:32 pm

Igor Belanov 03.04.13 at 9:00 pm

” ‘The Icelandic Model’????

It’s a country with a population the size of Hull, hundreds of miles from continental Europe, outside the EU. How can it be a model for Ireland, let alone Greece, Spain or Italy?”

I think that the idea is that according to the Austerians, it should be a smoking wreck, and the opposite happened.

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Barry 03.05.13 at 12:35 pm

rf: ” I just don’t see what alternative there was/is for Ireland, and how different things would have been to resolving the crisis (as oppossed to not getting into it in the first place) outside of the Euro?”

State that private debts are not the government’s problem. Sack if not imprison if not execute the bribe-taking b*stards who assumed the debt, tell the ECB to go to hell. They’ll take a horrendous hit, but the way I see it the current plan is to suck every Euro out of Ireland not needed to keep essential workers from starvation, and to do so until the end of time.

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rf 03.05.13 at 12:48 pm

I forgot to put in the word REALISTIC ; )
Really though, that wasn’t going to happen. Would have been nice, and I’m not excusing the way it turned out/the individuals who laud this outcome (those who implemented the policies/program I have more sympathy for) But this is the nature of the international system, it’s always a case of taking the least bad option and I don’t see the Icelandic model being all that better, for example

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Alex 03.05.13 at 12:56 pm

They’ll take a horrendous hit, but the way I see it the current plan is to suck every Euro out of Ireland not needed to keep essential workers from starvation, and to do so until the end of time.

Really?

http://www.forbes.com/sites/karlwhelan/2013/02/11/irelands-promissory-note-deal/

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rf 03.05.13 at 1:01 pm

Who shouldn’t be treated with kiddy gloves however, are those who refuse to own their own bulls**t and refuse to acknowledge that a lot of this has been counterproductive/deepy unfair ,who try to sell this as a morality play about Irish corporate tax rates or crony capitalists or whatever, and who have more sympathy with European technocrats etc than those out of work/who have emigrated. Those people suck

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Pninian 03.05.13 at 10:19 pm

Mazower: “It is but a short step from writing off the political class to writing off the institutions of democracy…”

What institutions of democracy? Is he talking about the institutions – ‘democratic governments’ – that colluded with the financial community to create perhaps the biggest financial crash in world history?

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Lawrence Stuart 03.06.13 at 2:15 am

From the OP: “I’m somewhat more inclined towards the pessimistic reading myself, but acknowledge that it’s early days yet.”

Pessimism perhaps is a function of the degree to which you believe post-democratic is a political fact. I think it is an extremely negative assessment of what could be. That may be because counter hegemonic politics as such don’t impress me much. I’m more concerned with keeping alive the politics of liberal plurality: the interplay of competing principles and interests within civil society, and between a diverse and fractious civil society and the state. And I’d argue that the best way to keep the faith is to keep the public square open and contentious.

Precisely because of their shit disturbing ways, M5S etc. (and the Tea Party even, why not?) are signs of a healthy social plurality, not the death rattle of democracy. I think such movements engage and inspire people because people viscerally understand the value of engaging and challenging the grey flannel orthodoxy of bland (state and corporate) technocracy.

Heterodoxy is an end in itself, not some bump on the road to the building of a steady state. Neither is it, mind, simply a negative force to be harnessed in building the revolutionary’s New Jerusalem.

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