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November 11, 2011


Dick Pountain

"Ça ira, ça ira, ça ira,
à la lanterne tous les technos..."


I've been puzzled by how neoliberalism has drawn strength from its systemic crisis. But it's dawning on me how this works.
1) 30 years of dominance means alternative movements in civil society are fragmented and marginal, while social democratic parties have been compromised or bought off.
2) 'Too big to fail' means banks have the perfect tool of blackmail.
3) 'Too complex to manage' means bankers aka technocrats have a huge advantage over mere politicians in claiming to be able to manage the crisis economy.
4) Who better to 'calm the markets' (as in Jesus quieting the storm?) than a cadre of technocrats?
5) Democracy is now, in EU and USA, very clearly subordinate to 'the markets'. This is a recipe for big trouble and the rise of populist parties, who can easily be made into the gravediggers of democracy.

Dick Pountain

Ian - I would add a

6) The effect of affluent individualism. Over the last 30 years of more or less continuous boom (in the West) people have gladly retreated from political involvement into private consumption, but that has meant absorbing the neo-liberal credo, that only money is really real, right into their very psyches. Whenever a politician proposes any remotely collective solution, the little voice is always saying "What does this mean for *my* salary/bank account/pension/rent/share portfolio". Bankers are subconsciously trusted even as they are hated and vilified, whereas politicans are just vilified.

Will Davies

I would highly recommend After the Great Complacence: Financial Crisis and the Politics of Reform, Ewald Engelen et al (OUP 2011), produced by the CRESC group at Manchester (alternatively, check out their online working papers, from where much of the book is compiled). This is the first effort to systematically analyse the crisis in terms of the interplay of elites, technocrats, financial interests and public interest in the UK. The politics of expertise and the 'econocracy' is crucial to the story they tell.


Thanks both.
The book sounds excellent.

It's worth listening to Robert Frank at the LSE, last night's edition of Analysis on Radio 4. A good illustration of ideological divisions over tax, and he gave a neat example of the effect of what Michael Jacobs calls the Invisible Elbow, the always-present companion to the Invisible Hand.

Dick Pountain

Will - on your advice just got CRESC Working Paper 94 ("Misrule of Experts?" and it's dynamite. Thanks for the tip, these people are remarkable.

Joe Fernwright

I think there is a misunderstanding of what has happened here, with reference to Greece and Italy. That is the idea that the technocrats have taken over.
To start with Greece. Papandreou as prime minister signed the austerity package with the EU , presumably because he thought it was the best deal available and it was a better alternative to Greece having a complete default. But of course a lot of Greeks didn't like the "austerity" -loss of living standards - involved. Papandreou didn't want to take responsiblity - and the resulting unpopularity - for the cuts. So he came up with the idea of a referendum so the people could take the responsibilty. However the timescale didn't fit - money needed to be borrowed before the referendum could be held. Still unwilling to take the responsibilty personally he resigned.
His party, or he himself, then engineered a grand coalition with the main opposition party so they too had to accept the unpopularity for the cuts. In other words they want the "technocratic" PM to serve his purpose of taking the unpopularity. Then it will be back to politics as usual.
Italy is very similar except that the "fall" of the Berlusconi regime was engineered within the ruling coalition itself, which retains its majority and can reassert itself once the unpopular business is done, albeit probably with new leaders of both parties.

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