The Rise of the Technocrats

by Henry Farrell on November 10, 2011

I’m at a workshop, unable to blog properly, and saving my eurozone energies for revisions to a piece for _The Nation_ (the ending of which has changed dramatically twice, and which is likely to change dramatically again before its Friday deadline). But this “piece in the FT”: is not very far from what I would be writing if I had the time.

bq. Apparently, the answer to the huge problems of the eurozone is the replacement of elected premiers with economic experts – approved officials dropped from European institutions. In Greece, Lucas Papademos, a former vice-president of the European Central Bank, has been pushed hard for the job; in Italy, Mario Monti, another economist and a former EU Commissioner, is much mentioned. They may lack a democratic mandate but they’re fantastically well regarded in Frankfurt. It remains to be seen if either will clinch the role. But what exactly is the great attraction of technocrats?

bq. If ever modern Europe needed brave, charismatic leaders to carry their nation through turbulent times, it would seem to be now. Instead, it is as if the crew of the Starship Enterprise had concluded that Captain Jean-Luc Picard is no longer the man for the job and that it is time to send for the Borg. Efficient, calculating machines driving through unpopular measures across the eurozone with the battle cry “resistance is futile” are apparently the order of the day. Faced with a deep crisis, once-proud European nations are essentially preparing to hand over power to Ernst & Young.



otto 11.10.11 at 1:53 pm

Also: technocrats only for some countries.

No insertion of a former Eurocrat into Merkel’s job, for example.


Neville Morley 11.10.11 at 1:59 pm

I can’t help feeling that this is deeply unfair to the Borg.


MattF 11.10.11 at 2:01 pm

There’s also the little problem that technocrats are as imperfect and as biassed as everyone else, if not more so. We should all repeat, as many times as necessary: ‘Politics matters’, ‘Politics matters’, ‘Politics matters‘.


Steve LaBonne 11.10.11 at 2:09 pm

As Paul Krugman has pointed out, “technocrat” carries a connotation of actual competence- which is in short supply among this lot, with their addiction to pre-Keynes economic fallacies. I’d rather call them something like “bankster shills”.


Daniel Bailey 11.10.11 at 2:33 pm

@ 2: I wholeheartedly agree!


straightwood 11.10.11 at 2:39 pm

Let us now praise famous technocrats:

Hail to Lawrence Summers, award-winning economist, former President of Harvard University, and distinguished faculty member! As director of the White House National Economic Council, his deep commitment to deregulation and aversion to infrastructure spending contributed greatly to America’s splendid economic recovery.


guthrie 11.10.11 at 2:57 pm

I was going to comment something link #3 and 4, but they’ve done a far better job than I have.
So what this gives the politicians is a backup for cuts in the neoliberal vein?
“It isn’t me, reality forces us to do these cuts, as our expert here says.”


Pub Editor 11.10.11 at 3:00 pm

Wait, this is like that episode in Season 4 where Data (unemotional, relentlessly logical Data) clears the bridge and basically takes over the ship.

No, that’s unfair to Data. Data would do a better job than the central bankers. As would the Borg.


Pub Editor 11.10.11 at 3:01 pm

And Neville Morley at #2 may win the thread.


William Timberman 11.10.11 at 3:10 pm

Paul Krugman and the DeLong/Yglesias/Summers axis keep insisting that there’s good technocrats (them), and bad technocrats (Jean-Claude Trichet, Wolfgang Schäuble.) That may be true, but it’s also irrelevant, as the last ten years have surely demonstrated to anyone with eyes to see.

As MattF says, politics matters. It’s really the only thing that does. The rest is about who gets cast in bronze and who doesn’t, something which is always decided after the fact.


Geoffrey de ste. Croix 11.10.11 at 3:26 pm

Interesting historical contrasts and comparisons with the Technocracy movement of the early 20th Century.

In his book, Akin illustrates the developing technocrat ethos that “Industrial Democracy” with its legions of ‘rational planners’ and ‘social engineers’ were needed to replace corrupt Parliamentary Democracy. Rational planning required that experts be freed of party politics to bring their neutral eye and methods to solving the problems of economy and society.

Fast forward to 2011 and it is clear that politics has to be freed from the technocrats to solve the problems of economy and society…..


Barry Freed 11.10.11 at 3:34 pm

If I had a twitter account I’d retweet this by Justin Horton/ejhchess who regularly comments here and around as ejh :
Crisis caused by groupthink among economists best addressed by appointing economists to head governments, say all economists


michael e sullivan 11.10.11 at 3:38 pm

Well, the difference is that if you are going to put a technocrat in charge of economic policy and ram it down people’s throats no matter the unpopularity, better it be a Krugman, DeLong or Romer (even a jerk like Summers) whose ideas have a reasonable shot at producing a long term good result, than a bunch of people wedded to already obviously wrong ideas almost guaranteed to lead to bad outcomes.

If what the last ten years have told us is that it’s always politically impossible to have sane economic policy no matter who is in charge, then I don’t really understand why it’s worth talking about anything anymore. Just hunker down and get ready for collapse.


John Quiggin 11.10.11 at 3:49 pm

@William T – you’re missing the “crat” in technocrat. With the exception of Summers, none of the people you’re talking about has held significant executive power (stints in junior positions with the CEA don’t count in this context). They have made their case in public, arguing from a position of more factual knowledge and expertise than their opponents.

To say “politics matters” doesn’t mean “facts and expertise don’t matter” . The Repubs have tried out the latter approach and look at the trainwreck it’s produced for them.


Lee A. Arnold 11.10.11 at 3:57 pm

Politics matters, or as the economists would say, preferences are exogenous. So, if it were necessary or efficient for everyone to become an altruist in regard to a certain problem, such a change might be engendered by an inspiring leader, but economists could never predict it or advise it. Indeed, any advice from economists has been to let selfishness hold sway, on Hayek’s mistaken belief that complex systems such as the market always self-organize to the best outcomes. It is interesting that Adam Curtis’ BBC documentary “The Century of the Self” points out that Reagan’s people (and later, John Major’s campaign) used something like SRI’s “Values and Lifestyles” typology in order to formulate their candidate’s rhetoric so as to appeal to the “self-actualisers” category, a category which, by that time, had come to characterize majorities of the populations, in response to the 1970’s human potential movement. Deregulation, and taking care of no. 1! We’ve been sold a half-witted bill of goods.


Barry Freed 11.10.11 at 3:59 pm

I can’t help feeling that this is deeply unfair to the Borg.

You’re not kidding, I know this is about the crisis in Europe but, speaking as an American, all I can think is that at least the Borg offer full employment.


Rich Puchalsky 11.10.11 at 4:00 pm

There’s a significant question, though, about whether facts and expertise exist in the realm of economics. I personally think that they do, in the same sense that they do in the realm of law, but they don’t in the same sense that they exist in the sciences.

Or, really, see here.


Steve Williams 11.10.11 at 4:22 pm

Papademos has just been announced PM.


Sandwichman 11.10.11 at 4:24 pm

C. Wright Mills’s word for technocrats was “crackpot realists”.


William Timberman 11.10.11 at 4:32 pm

John Quiggin @ 13

No indeed. I don’t disagree with you at all. Those of us who take part in the political process, including the crats themselves, are, or should be, grateful for those experts who provide us with the insights necessary to build a New Jerusalem — if indeed one is to be built, we’ll need architects every bit as much as slave-drivers in the brick pits.

But the problem of power precedes the problem of organization and management, and entropy is always lurking in the shadows. That chaotic upheavals are no better for us in the short run than ossified bureaucracies are in the long run is a truism which doesn’t help us much, I fear. Historically we’ve always tended to oscillate between the two poles, and managing the sine curve between has always been what we’ve hoped for, although now it appears we’ve failed to be successful at it once again.

Whether or not there’s any net progress at the end of all of this oscillation — a la Fukuyama or Pinker — is something we argue about all the time, without much in the way of resolution as far as I can see. We do the best we can — everyone does, I think — and hope for the best.


straightwood 11.10.11 at 4:37 pm

Beyond the difficulty of misidentifying talent, there is the more challenging problem of limits to individual ability. Herbert Hoover was an accomplished, intelligent, and diligent administrator, with managerial qualifications superior to those of the current American Presidential candidates. Yet the enormous challenge of the Great Depression simply overwhelmed him. He failed to achieve a recovery because of the weakness of contemporary economic theory and the political difficulty of taking strong government action. We err greatly by assuming that the best managers can handle any problem.


William Timberman 11.10.11 at 4:39 pm

…and hope for the best as well. As strategists no less than as tacticians we’re are always subject to a little self-deception along the way.

Note to self: Look to see what’s been inadvertently selected before you hit backspace and bang down on the final period key.


elm 11.10.11 at 4:42 pm

michael e sullivan @12

You’ll never get Krugman, DeLong, or Romer because that’s not what this “technocracy” is about. The “technocrats” involved are still politicians, they’re just more specialized. They’re politicians who are popular with the bankers and popular with the Eurocrats.

They weren’t selected for their knowledge or expertise, but for their usefulness to the establishment and the elite.

The FT definition of technocracy is maddeningly incorrect:

The definition of technocracy is rule by experts – in particular the scientists and engineers. In this case it means the financial engineers and political scientists; brilliant but bloodless functionaries making decisions based on empirical evidence without worrying about carrying the citizenry with them.

There’s no reason to think that the decisions of actually existing technocrats are based on empirical evidence. Their failure to recognize a shortfall in aggregate demand isn’t brilliant. The “expertise” of the Eurocrats is what created and exasperated the current messes in the first place.


Neville Morley 11.10.11 at 4:46 pm

We really need an analogy that captures the way these people seem genuinely to think of themselves as the infallible and invicible emissaries of a super-rational hegemonic swarm, while actually being completely crap. Russell T. Davies-era Cybermen?


Sandwichman 11.10.11 at 4:50 pm

“Paul Krugman and the DeLong/Yglesias/Summers axis keep insisting that there’s good technocrats…”

My Dinner with Maynard: “On this point you are more Keynesian than I.” (an excerpt from “Recollections of a Dinner for John Maynard Keynes,” F. Taylor Ostrander, (2002) Research in the History of Economic Thought and Methodology, Volume 20-A, pages 43–50).

Leon Henderson arranged and was host of the dinner for Keynes. It was held on Tuesday June 10, 1941 in a private dining room at the National Press Club. Present were Keynes, Henderson and his two deputies Ken Galbraith and Joe Wiener and his guests: Sumner Pike, a member of the Securities and Exchange Commission; Isador Lubin, one of the six assistants to the President; Professor Jacob Viner, economic consultant to Secretary Morgenthau; and John Cassels.

Also present were two senior advisors to Henderson, Columbia Professor J. M. Clark and Duke Professor Calvin B. Hoover.

Everyone present knew Keynes’ famous brochure published in early 1940, How to Pay for the War, in which he advocated very strong fiscal restraint on civilian consumption including “compulsory saving.”[emphasis added] …


William Timberman 11.10.11 at 5:00 pm

elm @ 22

Yeah, but this stuff — economics and politics — is hard. Which reminds me of the businessmen who used to fulminate against academics in government bureacracies — How many of you have ever had to meet a payroll! — while dumping toxic sludge in the nearest river, and hiring Pinkerton mercenaries to shoot strikers outside their factory gates.


SamChevre 11.10.11 at 5:08 pm

Is the problem with technocratic vs democratic decision-making? Given most people on this site’s position on, say, US carbon emissions, or school funding decisions, it seems the problem is more that European technocrats are wrong than that they aren’t democracts.


soullite 11.10.11 at 5:08 pm

These people aren’t technocrats, they’re aristocrats and it’s about time people started calling them on that fact.


cian 11.10.11 at 5:15 pm

it seems the problem is more that European technocrats are wrong than that they aren’t democracts.

Part of the reason they’re wrong is that they’re completely separated from the general population of Europe. So they don’t know what they think, what they’re going through, or that attempts to push this stuff through will probably lead to riots and worse. However, they do hang around in the same elite circles as bankers, industrialists, etc. So unsurprisingly they tend to take on the opinions of those they’re around. Its human nature really.


Greg Hays 11.10.11 at 5:18 pm

So Jean-Claude Trichet walks into a talent agency …


Chris Bertram 11.10.11 at 5:34 pm

_If ever modern Europe needed brave, charismatic leaders to carry their nation through turbulent times, it would seem to be now._

Well indeed. But even the “non-technocratic” politicians are the spawn of ENA, PPE or Harvard on the whole, and are in the slots they’re in (as opposed to in being in the punditocracy or heading some agency or being in the KSG …. ) by accident of biography.

_”Formerly all the world was insane,”—say the subtlest of them, and blink thereby. _


Josh G. 11.10.11 at 5:51 pm

In America, rule by experts was actually quite popular in the decade or so following the end of World War II. We were willing to give experts a lot of sway because they’d ended the Depression, won WWII, and created a postwar economic boom. It was the general strife of “the sixties” (really 1964-1976 or so) that killed technocracy in the US. The Vietnam debacle was the most obvious example, but stagflation and out-of-control crime and disorder were also important factors.

Europeans are going to be much more reluctant to listen to self-appointed technocrats when they not only don’t have any track record of past positive accomplishments, but are fairly clearly working as representatives of upper-class interests against the interests of middle-class members of society. These bankers and economists are supposed to be experts, but they’ve been wrong about nearly everything important in at least the past 30 years, and many of them have been busy stuffing their own pockets with as much money as they can carry. Under these circumstances they should not, cannot, and will not be trusted.


P O'Neill 11.10.11 at 5:58 pm

#11 is excellent but shouldn’t it be

Crisis caused by EU elites best addressed by appointing EU elite members to head governments, say all EU elites?


Marshall 11.10.11 at 6:04 pm


Marshall 11.10.11 at 6:06 pm

Don’t know what happened to my link:
“Michigan Sizes Up Taking Over Flint”


niamh 11.10.11 at 6:11 pm

What is perhaps even more worrying is that a new mode of European decision-making is emerging that bypasses all normal practices, in favour a self-appointed inner circle comprising Angela Merkel, Nicolas Sarkozy, Christine Lagarde, Mario Draghi, Jean-Claude Juncker, Olli Rehn, Herman van Rompuy, and Manuel Barroso, only two of whom have any direct democratic mandate (whatever you may think of the way they are using this) –
Meanwhile, Misha Glenny points out that yet another consequence of imposing crushing austerity in Greece is that it undermines all the government’s efforts in recent years to rein in organized corporate banditry –


StevenAttewell 11.10.11 at 6:13 pm

Slight corrective:

Herbert Hoover was an accomplished, intelligent, and diligent administrator, with managerial qualifications superior to those of the current American Presidential candidates. Yet the enormous challenge of the Great Depression simply overwhelmed him. He failed to achieve a recovery because of the weakness of contemporary economic theory and the political difficulty of taking strong government action.

It’s not the case that contemporary economic theory or political difficulty inhibited Hoover. Hoover called two separate conferences – the President’s Organization for Unemployment Relief and the President’s Emergency Committee on Employment – and both of them recommended massive Federal public works. Hoover didn’t follow their lead. Senator Wagner pushed through bills for a Federal employment office system, Federal relief for the unemployed, and public works – Hoover vetoed all of them, and had to be bullied into accepting inadequate alternatives.

Let us be very clear about why Hoover failed – he failed because he had an ideological commitment to balanced budgets, the gold standard, and voluntarism and he made a choice to stick to that commitment when other alternatives became apparent.


gman 11.10.11 at 6:26 pm

I think a distinction needs to made between “technocrats” broadly and the “technocrats” who can get on television and get published en masse.

Technocrats by and large knew the rationale for the Iraq was was BS. The technocrats that were handed pens and microphone in the run to war gave the rationale credibility.

Same for this financial crisis. Many/most technocrats knew the “expansionary austerity confidence fairy” was BS. You would never know that by watching television or reading papers..Krugman and Wolffe excluded..


elm 11.10.11 at 7:09 pm

Their disrespect for democratic processes seems to go very deep, from what I’ve seen.

In Ireland and now Greece and Italy, they use outgoing governments to force austerity and bank bailouts on the people. After that’s been done, they’ll deign to let the people vote on a new government only so long as it’s bound by those commitments to screw the people for the benefit of banks.


bert 11.10.11 at 7:21 pm

Niamh, I liked that Misha Glenny article too — drawing on his “McMafia” expertise. It brought a new perspective to the Greek problem, for me anyway. Oligarchs keen to loot the state, with their funds safely offshore, actively scheming for the government to fall and Greece to be forced out of the euro.

I didn’t like the referendum. Among a range of drawbacks, it risked California-style fiscal policy. Populist, incoherent, intractable.
But I like this move to technocracy as an alternative to democracy even less.
Faceless governments imposing painful crisis measures from behind a wall of riot police? Not the future Europe wanted for itself. It’s a Chilean-style policy. In the Latin American literature, they had a name for that whole approach: bureaucratic authoritarianism.
Perhaps a term that needs dusting down.


Barry Freed 11.10.11 at 7:43 pm

Faceless governments imposing painful crisis measures from behind a wall of riot police?

For some reason I have a hankering to watch Soylent Green again.


Pete 11.10.11 at 8:38 pm

Even as a British Euroskeptic, a few years ago I would have regarded predictions of “Faceless governments imposing painful crisis measures from behind a wall of riot police” as Europe’s future as being beyond the pale, the preserve of swivel eyed right wing loonies; now it’s starting to look like “told you so”.


shah8 11.10.11 at 8:42 pm

Just so people know, Wolfgang Schauble does not deserve to be placed with that monster, Trichet.


elm 11.10.11 at 8:46 pm

Pete, I’m not sure the British solution of face-having governments imposing painful crisis measures from behind a wall of riot police is significantly better.


Hermenauta 11.10.11 at 9:07 pm


William Timberman 11.10.11 at 9:14 pm

shah8 @ 42

Sometimes he does, sometimes he doesn’t — he contains multitudes. As a technocrat, however, he never seems to lose any sleep over the positions he takes on those rare occasions when circumstances do threaten to force his reach to extend beyond his grasp. In recent days, those circumstances have unfortunately been much in evidence, and in his responses to them, the misery they’re likely to engender seemingly kommt nicht einmal in Frage.

That said, you’re right — neither he nor his boss, the good Frau Merkel, seem to have any but the best intentions vis-a-vis the potential victims of their missteps. Trichet I have far more doubts about…


Josh G. 11.10.11 at 10:01 pm

Like the anti-globalization activists before them, the Euroskeptics were painted by the establishment as paranoid extremists. Also like the anti-globalization activists, events proved that the Euroskeptics were absolutely right, and that their opponents were at best mistaken and at worst lying for their own personal and/or class benefit.


P O'Neill 11.10.11 at 10:21 pm

One of Papademos’ credentials is that, er, he brought Greece into the Euro.

This is the bankster style logic of “we have to pay the people who screwed up even more money because they’re the only ones who how to sort it out.”


elm 11.10.11 at 10:37 pm

P O’Neill @ 47

Once more, Ireland sets trends for the EU.


dbk 11.10.11 at 10:49 pm

Greece’s new PM: Lucas Papademos, former Governor of the Bank of Greece (1994-2002) and VP of the ECB (2002-2010).

internet factoid of the day:
Larry Summers: SB Economics, MIT (1975)
Mario Draghi: PhD Economics, MIT (1976)
Lucas Papademos: PhD Economics, MIT (1977)
Ben Bernanke: PhD Economics, MIT (1979)

on-the-ground take: the political (social capital) cost of implementing what is planned for Greece over the next 3-4 months is too high for any politician/ political party even remotely dependent on a popular mandate to withstand.

useful starting-point for discussion in this respect: Privatisations to be effected are listed on pp. 32-33.

Who needs dystopian SF or internal critique-of-the-fantasy-genre when they can witness it live in Dolby surround 7.1 (or whatever)?


bert 11.10.11 at 11:17 pm

And Mario Monti, a former European Commissioner, is a member of the Trilateral Commission and the Bilderberg Group. No kidding.
The references to him in the Book of Revelation too obvious to need pointing out.

I have to say, in Britain at least euroscepticism was overwhelmingly the unthinking reflex of lumpen nationalists. Be very careful about accepting anyone’s claims of vindication. Not unless you’re shown, in writing, evidence that they saw the current screwup coming.


P O'Neill 11.11.11 at 12:15 am

Be very careful about accepting anyone’s claims of vindication. Not unless you’re shown, in writing, evidence that they saw the current screwup coming.

Who, in 1990, said:

It [the Euro] would also mean that there would have to be enormous transfers of money from one country to another. It would cost us a great deal of money. One reason why some of the poorer countries want it is that they would get those big transfers of money. We are trying to contest that. If we have a single currency or a locked currency, the differences come out substantially in unemployment or vast movements of people from one country to another. Many people who talk about a single currency have never considered its full implications



David Littleboy 11.11.11 at 12:25 am

As an MIT technocrat*, let me point out that politics not only matters, it matters completely, crucially, critically, totally. If you start out with a block of wood intending to make a crossbow, you aren’t going to end up with a loom. If you pick a technocrat who doesn’t give a rat’s rear end whether people starve or not, people are going to starve. So it’s not that technocrats are bad or good, its that evil heartless right-wing technocrats are just as evil and heartless as the rest of their right-wing brethren. We all love bashing Larry Summers, but I’d bet dinner in Tokyo that he’s nowhere near as evil and heartless as any freshwater or G.Manikiw type economist you could think of.

*: albeit one who quickly escaped from the high-tech fast lane to the somewhat more leisurely life of the freelance translator.


bert 11.11.11 at 12:30 am

That would be evidence in writing, P.
I linked to this on another thread, which is book length.

By contrast.


Canadian 11.11.11 at 2:00 am

I feel like Alice in Wonderland reading this discussion. The politicians in Greece and Italy have failed and they are turning to technocrats to do what they are unwilling to do. So blaming the technocrats for austerity or whatever is bizarre. I remember Larry Summers saying that a country only calls in the IMF when its in deep trouble.


bcgister 11.11.11 at 2:05 am

Greg Hays @ 29
“So Jean-Claude Trichet walks into a talent agency …”

Trichet couldn’t work that joke — he wouldn’t allow the needed inflation.


Watson Ladd 11.11.11 at 2:16 am

David: Wait, so those who promote the idea that people shouldn’t be coerced are evil? Wrong maybe, but evil? What about those who defend the interventions of the welfare state into strictly private life? Or who defend the idea that nations should lock out those who don’t look like them? Can we have moral debate without degenerating into a bar fight?


David Littleboy 11.11.11 at 2:27 am

“Can we have moral debate without degenerating into a bar fight?”
Not if you’re a libertarian.


derrida derider 11.11.11 at 3:59 am

If ever modern Europe needed brave, charismatic leaders to carry their nation through turbulent times, it would seem to be now.

That is not something to be wished for. On the precedent of the 1930s it’s exactly what Europe will get unless the less brave, less charismatic leaders get their act together damned quickly.


mclaren 11.11.11 at 5:58 am

I have to wonder to what extent this entire argument represents the fundamental attribution error.

We now appear to have an increasing amount of evidence converging on the conclusion that the basic structure of the 21st century global economy fundamentally defective, regardless of how runs it or how it is run.

Consider, for example, that scientists predict that by 2050 all sea life will be fished out of the oceans. Or consider that over just the last 12 years, we’ve added a billion people to this planet’s population with no signs of slowing down. Or simply consider the ever-escalating size and severity of the global financial collapses since the self-destruction of the Soviet Union. If you saw a mechanical device suffering this kind of escalating series of increasingly severe breakdowns, you’d have to conclude that the machine was headed for total breakdown. It’s the kind of thing you see in a car when you don’t put oil in the engine and don’t put water in the radiator.

A reasonable person would have to ask whether the entire system of eternal-economic-growth-based capitalism has not become wholly unsustainable as our planet reaches its carrying capacity. Add in the fact that the disappearance of communism as an even notionally viable alternative appears to have yanked the moderator rods out of capitalism as a means of organizing society, leading to the resulting global meltdown.

Alternative non-capitalist methods of organizing society appear to be whipping capitalism’s ass wherever they appear, from Wikipedia to Craigslist to bittorrent to squelettes (in South America especially) and recent innovations like couchsurfing and tool lending libraries. Everywhere you look, the concept of markets clearing and setting a price seems to be getting demolished and blown up in favor of giving stuff away for free and sharing.


Curmudgeon 11.11.11 at 6:16 am

@michael e sullivan :

If what the last ten years have told us is that it’s always politically impossible to have sane economic policy no matter who is in charge, then I don’t really understand why it’s worth talking about anything anymore. Just hunker down and get ready for collapse.

That’s pretty much the sum of it.

There can be no outcome to the current economic crisis that doesn’t end in some flavor of right wing authoritarianism imposing austerity-by-riot-police as long as the democratic process only allows a choice between factions who disagree only on how quickly the median standard of living should be reduced.

Nothing breeds support for fascism like austerity-induced declines in living standards. Unless elite opinion pivots against causing mass impoverishment within–at most–the next five years, we are perhaps almost irrecoverably far down the slope towards empowering a Hitler v2.0 on both sides of the Atlantic.

A Roman-style complete collapse of civilization is almost certainly off the table but the probability that the western developed world faces an irrecoverably negative paradigm shift is near certain.


Con George-Kotzabasis 11.11.11 at 7:05 am

Henry in a spectacular display of cynicism has placed the crown of cynicism on his head. But true and wise cynics, like Diogenes, live in a barrel and bask under the sun despite the passing shadows, no matter how great, as Alexander’s was. Tell me Henry in which barrel you live and I will tell you how many carats weighs your cynical wisdom.

Charisma without expertise is empty headed; charisma with expertise but without moral strength is useless, and indeed, can be destructive. Andreas Papandreou, the father of George, had both charisma and expertise but was bereft of moral fortitude and he became destructive of modern Greece, as he was the prime progenitor of the economic ills that are plaguing the country today. Barack Obama had only charisma and none of the other two attributes and he has become the most useless of U.S. presidents. Lucas Papademos and Mario Monti are both framed in the prodigality of knowledge, to paraphrase Shakespeare, as both are endowed with charisma and technocratic knowhow and we will soon witness whether they also have the moral strength to implement the correct economic and political measures that are begotten by the few armed with knowledge and wisdom, and not by the polloi, armed with passionate ignorance. (Read your democracy in the latter).


Harald Korneliussen 11.11.11 at 7:58 am

Curmudgeon, there’s also this occupy wall street movement going on. They have so far been pretty adamant in rejecting charismatic leaders and technocrats both.

There is an outcome which I would consider a very positive paradigm shift, which we can hope will come out of it (and which I think they work for:) genuine democratic reforms, in other words increasing effective political equality.

I’m following with interest the various initiatives toward sortition, for instance Lawson and Simms’ proposal of a popular jury. Fishkin is also making himself heard. So far it has not gained much attention with the OWS crowd, but it’s a plausible way we could get more democracy without trusting in the good will of leaders and our ability to find them.


Barry 11.11.11 at 12:37 pm

William Tmberland: “That said, you’re right—neither he nor his boss, the good Frau Merkel, seem to have any but the best intentions vis-a-vis the potential victims of their missteps. Trichet I have far more doubts about…”

They do stuff which should fail, it fails (and not for not doing enough of it), they continue and extend the policies, which again fail, making things worse, leading to more of the same. These policies seem designed to profit elite cronies, who are backing the decision makers.

These people don’t have ‘best intentions’ towards anybody but themselves and their backers; methinks that you’re confusing not twirling one’s mustache while cackling at the suffering of their victims with not being evil.


Guido Nius 11.11.11 at 12:42 pm

It is quite heartening that after so many decades Europe is at the center of the world news again. Forget about the long lasting pacification, forget about creation of social models in which the key faults of the Soviet and the Anglo-Saxon model were avoided and forget all of the current mess was initiated by the forced import of deregulation. No, let us focus on the anecdotes and make fun of the attempts to evolve gradually respecting all institutions that were built up over the last couple of centuries.

I blame Prof. Krugman for pontificating about additional spending across the board followed by more pontificating about how simple this is to solve if only we were not too stupid to see it. I guess it takes a technocrat to put a whole continent of voters in their place. The Germans were right in 2008 and they are right in 2011. As countries are starting to heed their advise in 2011 after dismissing it in 2008, there is a chance we’ll fall on our feet in 2012.

And anyway, if we got rid of Berlusconi, Murdoch and populism in 2011, the long term looks much better than ever.


bert 11.11.11 at 1:07 pm

Canadian @54.

Firstly, I think it’s a little unfair to lump Papandreou in with Berlusconi. If you want to find failure in Greece, start with the party that’s now being brought into ‘national unity’ government.
That said, I can’t imagine anyone disputing your Larry Summers quote. There is clearly a problem here. The question is how to go about solving it.

Imagine a circus performer riding two horses. One represents the world of international finance and elite-level governance. You ride this horse by making deals at summits and retaining the confidence of the markets. The other horse represents domestic politics. You ride this horse by making a coherent case to the electorate and to key groups in society that’s persuasive enough gain functioning levels of support, since without this support you won’t sustain governing majorities in parliament.

The Chilean approach was to beat the second horse into submission, and that’s not the case here. But the move to technocracy places too much emphasis on the first horse. And the difference with previous attempts to introduce technocrat government (Italy in the 90’s for instance) is that popular anger is aimed directly at the technocrats and their programme, not at the corrupt politicians from whom they have come to deliver us. Conflict is inevitable, which is where the riot police come in.

Henry has consistently talked about democratic shortcomings. I think his focus on integrationist institutional solutions raises problems, but on the core point he’s absolutely right. And without a minimal level of democratic buy-in, these technocrat governments risk failure sooner rather than later.


Guido Nius 11.11.11 at 1:16 pm

64: you do know that the reason why the switch of prime minister in Greece and Italy has been slow is because it needs a majority in parliament? Maybe you think there should be quick elections (as Berlusconi does and the Greek right did) but the people to decide that are those in parliament representing the voters. There are lots of democratic issues but I do not see where in either country the government change could have been different.


bert 11.11.11 at 1:37 pm

Where can we get a Lula?


Walt 11.11.11 at 1:52 pm

Guido, the Germans read leading the EU to epic disaster. You won’t see it until it’s too late, but you will see it, because it’s going to happen. Krugman is right, a fact that you are destined to learn to your sorrow.


bert 11.11.11 at 2:03 pm

Loose money and a fiscal stimulus in the core will make the very narrow road out of this mess a little wider. But don’t blame everything on the Germans.

To answer your question a bit more directly, Guido, this from #64:
“… domestic politics. You ride this horse by making a coherent case to the electorate and to key groups in society that’s persuasive enough gain functioning levels of support, since without this support you won’t sustain governing majorities in parliament.”
To focus on the last four words and skip the rest is a mistake, I think.


Mike Jones 11.11.11 at 3:28 pm

The more things change, the more they stay the same (so to speak). A resort to technocrats running governments is a revisit to original Fascism in Italy. We saw this again after WWII in the US with city manager style governments and “vote for the man, not the party” politics. The underlying asssumption with a resort to technocrats is that the present system with a small percentage of the population accumulating the great majority of wealth is correct and that material consumerism is the right choice for populations. The media feed this with their so-called reality shows and shows like “Dancing with the Stars”. The present system is beginning to collapse because of inherent contradictions. Technocrats are just a sop to the public as a way to postphone the inevitable reordering of societal norms and objectives.


William Timberman 11.11.11 at 4:20 pm

Barry @ 62

You may be proven right in the end, but right now it looks to me as though Merkel’s evil aura is simply a natural consequence of her finding herself wedged between Scylla and Charybdis. On the one hand, she’s had to convince an electorate fundamentally opposed to helping people who don’t look or act like Germans that they’re in the same boat with the sinners, like it or not. The Germans at the tiller won’t be able to get where they’re going if they throw everyone else overboard.

On the other hand, she’s had to cobble together some kind of European financial and political governance that works long enough to calm investors, but doesn’t also convince everyone else that she’s bidding become the dictator of Europe. This wasn’t easy when the likes of Trichet, Sarkozy, Berlusconi and her own Bundesverfassungsgericht were all she had to work with.

It’s easier now, perhaps, with the crisis really scaring the pants off everyone, and Trichet and Berlusconi, at least, out of her hair. Sarkozy, given the the interest rates his own bonds now have to offer, is also looking much less the aggravating popinjay that he’s been up to now. Still, the crisis is worse. She has less maneuvering room, and can’t suggest beginning to negotiate any long-term treaty changes before the cart is set upright again, and the mutual animosities abate a bit.

This is not a job I would want. It would put me in the hospital in a day. What impresses me about Merkel is her iron constitution, and her not trying to jam the pieces together before they really fit. She may not be able to pull off a miracle, but it’s hard to imagine anyone else who could. The short version: she doesn’t seem to me to be an ideologue, as Trichet was. This is a good thing, I think. Then again, I’m not a German politician, or her brother-in-law, so what do I know?


Bruce Wilder 11.11.11 at 4:50 pm

The neoliberal technocracy imagines a political economy without opposing power. Supply and Demand of the Market are not opposing interests, reconciled in conflict, but a relationship of power to dependency, in which efficiency is served by allowing power to organize and exploit and direct, while removing all means and will to resist.

Nothing serves this program better than narratives of inevitability. Guido Nuis: “There are lots of democratic issues but I do not see where in either country the government change could have been different” is exemplary.


Guido Nius 11.11.11 at 4:56 pm

I may be wrong, Walt, but I certainly don’t long for an epic disaster to prove me right. As far as I can see Europe would push through the Tobin tax and some real banking reforms if the UK would let that happen. That I think is the real political issue in Europe: drop the UK unless the UK drops its resistance to systemic changes. In the meantime, yes, I agree that the ECB should be a lender of last resort. The question is whether we are at such last resort. The evidence of the last months suggests that at least we weren’t there yet as there were many sensible measures that were taken like removing Berlusconi and removing the Greek opposition demagogy of opposing for quick gain’s sake.

bert, I’d like to have real European parties and an elected European President heading the European Commission. The thing is that we are not there and the only orderly way we can get there is by national parliaments agreeing to it. There is a lot of this ‘the civil society has to give broad support’ but look at Spain nearing elections: I hope not but it will probably be a swing to the right so either the supposed civil society’s opinion is not the one people suppose it is or it this civil society is the last thing that will sustain any a parliamentary majority. After all, it is not because there is activism in Athens that this activism is supported by anything near a majority of the Athenians. If the evolution in the recent weeks in Greek has shown anything then it is that what was supposed to be a popular uprising was in fact some people being very very noisy indeed.


Trevor 11.11.11 at 7:25 pm

“One thing is for certain: there is no stopping them; the ants technocrats will soon be here. And I for one welcome our new technocrat overlords. I’d like to remind them that as a trusted TV personality popular blogger, I can be helpful in rounding up others to toil in their underground sugar caves.”


cian 11.11.11 at 7:47 pm

I wonder if when the Euro finally does come off the rails, if all the people so loudly declaring that there isn’t a problem, and that austerity is the answer will admit that possibly they were wrong. Probably not I guess.


Leinad 11.11.11 at 8:13 pm

Of course not. The Greeks and Italians got all shouty and scared away the Confidence Fairy.


Walt 11.11.11 at 8:51 pm

Guido, let me guess: you blame climate scientists for warning you about global warming, too.

Berlusconi, while a clown, had nothing to do with the crisis, and removing him will do nothing to end it. If the ECB hadn’t raised rates twice in the midst of the worst recession in 75 years, Italy would have toughed it out. But they did, and with the predictable consequences you now see.


William Timberman 11.11.11 at 8:53 pm

Bruce Wilder @ 73

The Pythia couldn’t have put it any better.


Henri Vieuxtemps 11.11.11 at 9:09 pm

@78, …I bet a quarter percent lower interest rates would solve the global warming problem too.


David 11.11.11 at 9:23 pm

There is something quite jarring in all this Anglo-centric handwringing about the Euro and its inevitable doom.

By now, how many times have we heard stupid phrases such as:
‘we just crossed the point of no-return’ ?


Walt 11.11.11 at 9:49 pm

When you’re watching a slow-motion trainwreck that you can do nothing to stop, it’s hard to know the exact moment when it’s actually too late.


Guido Nius 11.11.11 at 10:11 pm

Cian, there is a problem and austerity isn’t going to fix it but as long as Europe cannot converge its debt ratio’s, its deficits and its fiscal policies there will be a risk of the most benign social models ever to have evolved of crashing. This will be bad for Europeans but certainly also not good for the rest of the world as it would mean they risk to get stuck for a long long time in a US/UK style of Murdochracy.

Really, is defending a Tobin tax now on a par with denying climate change?


Walt 11.11.11 at 10:35 pm

A Tobin tax is a non-sequitor. I think that FIFA should get rid of Sepp Blatter, but proposing that in this context makes about as much sense.


Glen Tomkins 11.11.11 at 10:59 pm


That this crisis has provoked from the system a turn away from politicans and towards technocrats, is the clarifying final act of that system.

Even if you completely agreed with their diagnosis and treatment plan, you would think that these defenders of the system would see the wisdom of getting politicians in front to implement that treatment plan. It involves unpleasantness for the non-wealthy majority. You would think they would want specialists in getting away with foisting unpleasantness on the majority handling the day to day PR, and be satisfied to have the serious, adult, technocrats call the shots from advisory positions.

Obviously, these people feel that the time for such games is over. Politicians cannot be trusted to maintain the rigid exclusion of demand side considerations. Rigidity wasn’t necessary before we were in a crisis, but now that we are in the crisis created by ignoring the demand side for 40 years, such rigidity is a strict necessity. They feel that they need people in authority who can be trusted. Their diagnosis of the cause of the present difficulty is that demand side considerations weren’t excluded rigidly enough. They think we need people who will not flinch from enforcing the consequences of contraction.

Modern economies are enormously productive. They produce such vast wealth, that unless that wealth is very carefully managed so that too much excess is not allowed to go to people who will not recycle it into consumption and generate demand, a huge imbalance is created as too much unused money accumulates compared to the limited opportunities for actual capital investment. This excess money still imagines that it deserves a sizable RoI, these people who possess it still imagine that they are Galtian overlords and Captains of Industry, etc., so they create bubble markets, and the intrusion of their excess turns even once real and useful markets into bubbles.

The governments of the West messed up. They didn’t hoover up this excess money on the front end. They relented a generation ago on top tax rates in the 90s, and left way too much drone money out there that had no place to go but into economic weapons of mass destruction. The resulting bubbles will have to do this necessary work of destroying what was never real money, because it does not generate demand for goods and services. But leave it to the bubbles and it happens on the back end, after this funny money has gotten entangled with real money, such as the deferred consumption money of pensioners. There is no recourse now but to have those governments that failed to prevent this on the front end take the responsibility for sorting out on this back end the real money of investors who need to be kept whole to keep up demand, from all those trillions in drone money that not only can be allowed to go up in smoke without any real harm to anything but some outsized egos, but must be allowed to go up in smoke if we are ever to have an end to this cycle of bubble crises.

What started in 2008 will go on forever until and unless we stop trying to save all this fake drone money. It never existed. It was always paper profits, gimmicks and chicanery. Until we start to respect the difference between real money and this stuff, we will continue to put real money and our real economies at the mercy of inherently unstable markets in fake assets. We have to stop bailing out the fake money, and instead accept the truth that it never existed.

We actually do need ruthlessness right now. But that ruthlessness has to be directed at wealth that has accumulated in excess of any possible use in consumption, deferred consumption, or capitalization. Directing it at the capacity of workers to generate demand is exactly the wrong strategy. So of course it’s what the system is dong now by putting up these technocratic austerians.

This excess wealth has taken on a life of its own, but all it wants to do with that life is to destroy itself. We can’t let it just kill itself, because it will take us down with it. We have to manage the work of destruction if it is to be done discriminately.

Let Greece default, and Italy follow it if that market insists on offing itself in panic. Don’t bail out the banks, have governments instead take them over under resolution authority when the sovereign default pushes them into insolvency. These governments, and only these governments, have the right and duty to then distinguish between counterparties who must be made whole as the banks fail because they need to be made whole to sustain demand, and that other large set who need to take 100% haircuts because they were gambling with excess money at the dogtracks, and their losses will be no real loss to anyone.


P O'Neill 11.12.11 at 3:11 am

Quote of the Day

Herman van Rompuy:

There’s more need to be done: the country [Italy] needs reforms, not elections


Meredith 11.12.11 at 5:49 am

Time to invoke e.e.cummings, “anyone lived in a pretty how town….” So much for the technocrats.
I can’t help but think of the technocrats’ pride in their mastery of mathematics, as if mastery were what mathematics was all about.
Mathematics is about new languages, imagination. The poetry of human invention, which depends on democracy, perhaps even anarchy (“the good kind,” as they say).


bert 11.12.11 at 11:57 am

Great catch, P O’Neill.

By the way, at #54 I forgot to put anything inside the link.
I was thinking of The Rotten Heart of Europe, which is by a European Commission economist who resigned from his job just before publication. It’s a good treatment of optimal currency areas and the like. It also includes plenty about German plans to dominate Europe and the dangers of another European war, which you can take or leave according to taste.

My other link was to the Sun’s “Up Yours Delors” front page. The headline’s clear in the image. This is the text below it:

bq. The Sun today calls on its patriotic family of readers to tell the feelthy French to FROG OFF!
They INSULT us, BURN our lambs, FLOOD our country with dodgy food and PLOT to abolish the dear old pound.
Now it’s your turn to kick THEM in the Gauls
They BURNED alive British lambs earlier this year because they couldn’t match our quality. They also:
– JEERED Mrs Thatcher when she visited Paris to boost celebrations for the bi-centenary of the French Revolution last year
– BANNED British beef after falsely claiming it had mad cow disease
– BLEATED when we found their foul soft cheese was riddled with listeria bugs
– GAVE IN to the Nazis during the Second World War when we stood firm
– TRIED to conquer Europe until we put Napoleon down at Waterloo in 1815
Remember folks, it won’t be long before the garlic-breathed bastilles will be here in droves once the Channel Tunnel is open.

You often get anti-AngloSaxon stuff coming the other way (hello, Guido!) but it’s rarely this dimwitted and crass. Gideon Rachman, for some reason, is surprised:

bq. 3) I was surprised by how much anger there was directed at Britain. This seemed a bit odd to me, given that the UK did not create this crisis and is not part of the euro-group. But there was much denunciation of us, for not taking part in the bail-outs, for blocking a transaction tax and for generally being a haughty pain-in-the-neck.


bert 11.12.11 at 12:43 pm

I don’t know why, but I managed to leave out the key paragraph from Murdoch’s finest, about the just-announced plans for monetary union:

bq. The ear-bashing from our millions of readers will wake the EC President up to the fact that he will NEVER run our country. His bid to replace the £ with the faceless ECU is the last straw, after centuries of Froggy Brit-bashing.

I’m not normally this inept with the copy and paste.
Sorry. Oops.


Hidari 11.12.11 at 12:44 pm


cian 11.12.11 at 1:15 pm

There’s more need to be done: the country [Italy] needs reforms, not elections

Which to be fair is probably true. Just not the kind of reforms he has in mind.


vimothy 11.12.11 at 2:45 pm

Recently there was a thread here about immigration where I argued (or tried to) that European nation states shouldn’t cede sovereignty to unelected bureaucrats in Brussels. It didn’t get many takers. The OP suggested that no sane person would frame the issue in such a way. And yet, here we are…


Andrew F. 11.12.11 at 3:25 pm

Seems a bit shrill to me. There’s nothing undemocratic about these decisions. Nor is it particularly fair to claim that this is an abdication of power to “efficient calculating machines,” as though these decisions weren’t driven by a looming economic catastrophe and all the misery that implies, and as though Monti and Papademos lack humanity.


Chris Bertram 11.12.11 at 4:15 pm

#92 One can think that matters of basic justice shouldn’t be decided at the whim of politicians (which is what I argued on migration rights) without thinking that economic policy should be put in the hands of technocrats.


Everet 11.12.11 at 4:23 pm

Although I share your concerns about all this inflated hype over technocrats and the painful austerity measures they may produce, you have to admit that the political machines in Greece and (especially) Italy are WAAAAAAYYYY too dirty to ever get anything meaningful done. Is there no solution?


Bruce Wilder 11.12.11 at 5:54 pm

@93 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 for purgatives and bleeding.


Bruce Wilder 11.12.11 at 6:22 pm

@94 One day I hope you will explain to me how how sovereignty can discover a public interest without political solidarity, or institutionalize a policy in a decentralized political economy, without creating constraints on individual choice.


vimothy 11.12.11 at 6:34 pm

@94, Hmm–that seems to correlate rather suspiciously with your own policy preferences, but in any case, surely consistency demands that the framing is either insane in both cases or neither.


Chris Bertram 11.12.11 at 8:37 pm

vimothy: States can obviously agree treaties with one another, sign up to international conventions (including, in the hypothetical case on migration rights) , etc,, and, just as obviously they can agree procedures to resolve disputes over whether a treaty or convention is being breached or not. You seem to think that agreeing to be bound by such mechanisms amounts to the surrender of sovereignty to unelected bureaucrats, and that’s the rhetoric that smacks of paranoia to me. Clearly it’s not the justified, since, as sovereign states, states would have the power to ignore the decision and suffer whatever consequences ensued.

Bruce: please translate your remarks into English.


Andrew F. 11.12.11 at 9:17 pm

Bruce, actually the point of the quoted portion in the post seems to be that we need brave, charismatic politicians who feel a connection with humanity, as opposed to the “efficient calculating machines” now placed temporarily at the helm. My point is that the entire characterization is as unfair as it is inaccurate. The decision to select Monti and Papademos was motivated precisely by a connection with humanity – it was a decision motivated by the desire to avoid a truly catastrophic economic event.

And this is something not lost, in Greece at least, on the people.


john c. halasz 11.12.11 at 11:42 pm


bert 11.13.11 at 12:54 am

You’ll see the polls bump up in Italy too, no doubt.
Depending on their luck, these governments might stay upright for a while.
But they’re built on sand.

What things will look like when the next elections are eventually called, who knows.
Expect trouble though.


Charles Peterson 11.13.11 at 1:45 am

I love the post by Thompkins at #85, that’s the big picture.

Really this isn’t about democracy vs technocracy at all. Both are more notable for their absense. It’s about bootlicking pols facing the wrath of the people caused by the utter failure of neoliberalism hiding behind the bootlicking maths who most helped create it.


Charles Peterson 11.13.11 at 3:09 am

Krugman alternates between excellent posts on the growth of inequality in the era of market liberalism, like this one:

Boom for Whom

and questionable posts about how inequality doesn’t explain the downturn, like this one:

Secular Stagnation

I was wondering about this today, and keeping #85 in mind, and it seems obvious to me that the savings glut (if you could call it that, since it’s largely gambling IOU’s) is global, so obviously it isn’t captured by looking at the low savings in the USA.

Big manufacturing countries like Germany and China are the savers. Unlucky countries like Greece and Ireland are flooded by the bursting bubbles that result. Here in Triffin Dilemma USA we’re lucky that savers continue to throw their money at us. Well it’s a kind of luck, anyway, why complain about free money? The downside is we’ve let our domestic manufacturing atrophy (though Henwood argues it hasn’t nominally shrunk) to the extent it’s way out of balance with FIRE. This is not good for equality, the long run, and increasingly shorter medium runs as well.


Con George-Kotzabasis 11.13.11 at 4:00 am

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.


leo from Chicago 11.13.11 at 9:32 am

Nothing breeds support for fascism like austerity-induced declines in living standards.

My fear as well.


Andrew F. 11.13.11 at 4:57 pm

john @101, The post you link to criticizes the substance of the plan. And I agree that there are lots of good reasons to have doubts, but that’s a separate issue. The FT column is concerned with process, and specifically with the type of governance (in the column’s vision, anyway) brought by technocrats in contrast to that brought by supposedly more empathetic politicians.

I actually liked Papandreou’s referendum idea in that it would achieve, potentially, a popular buy-in for austerity measures, which might ameliorate doubts as to the political sustainability of those measures. But, if Monti and Papademos are the clearly popular choices, perhaps the heat of the crisis and unrelenting public discussion have accomplished something similar.


Guido Nius 11.13.11 at 5:36 pm

Second that.


Bruce Wilder 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 sort 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. Papademos and 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 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 is “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.


Gene O'Grady 11.14.11 at 5:53 am

In response to Mr. Wilder, I can remember one time when I dearly wished my ersatz ten lire coin had been candy. I assumed it was, popped it in my mouth, and discovered it was a bouillon cube.


bert 11.14.11 at 4:03 pm

Anyone reassured by the last line in this piece? Continuing with the not-quite-nailing-it Latin America analogies: it sounds to me like a Roosevelt Corollary.

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