Could a Technocracy be Better than Democracy? - Page 39

THE markets first welcomed, then worried about the appointment of academic economists as prime ministers of Greece and Italy. Much political commentary traced the same trajectory. But the technocratic response to the euro’s problems is only part of a wider reaction to the financial and economic crisis: in many countries, the crisis has paralysed significant parts of the political system, leading to innovations and improvisations that try to short-circuit or patch up the normal working of democracy.

Perhaps the best example of this is the so-called “super committee” in the United States. Normally, all fiscal decisions are made by Congress, with the approval of the president. But by November 23rd, a special committee made up of three Democrats and three Republicans from each house of Congress, has to slice a mammoth $1.5 trillion off the budget deficit over ten years. Congress must then vote on whatever the super committee proposes—but may only accept or reject the plan as a whole. It may not amend the plan or vote on individual items, as is usual. And if Congress rejects the package, or the super-committee fails to come up with one, then the $1.5 trillion of cuts will be imposed automatically. American politicians, despairing of their inability to reduce the deficit in normal ways, have put a gun to their own heads. There have been partial precedents in American history but nothing quite like this.

In Europe, meanwhile, technocratic prime ministers are only the highest-ranking experts being recruited to help balance budgets and reform economies. Italy not only has an economics professor as prime minister (Mario Monti), it has also agreed that the IMF should scrutinise its reform programme. Greece has accepted that a troika of the IMF, European Central Bank and European Commission (the European Union’s glorified civil service) should supervise its austerity measures. So have Ireland and Portugal. Spain is an especially revealing case. On the face of it, its democracy is working as usual. The country is due to hold an election on November 20th and, if the polls are correct, the conservative Popular Party will unseat the ruling Socialists. Yet at the same time, the current government has agreed upon a series of economic targets with the European Commission, and in practice the PP’s leader, Mariano Rajoy, will have to take these targets as a guide to policy, even if he dislikes them (which, admittedly, he doesn’t).

Ordinarily, democracies seek public support for the policies they pursue and have various ways of mobilising that support, of which elections are the most important. But there are special reasons why the ordinary processes of mobilising the public should be strained at the moment. In euro-zone countries, the currency itself is unpopular. According to a recent poll by the German Marshall Fund, a think tank, 53% of people in countries that use the euro think the single currency has been bad for their national economy, against only 40% who think it has been a net plus. It is hard to rally the public behind austerity programmes at the best of times; even harder to solicit their support for measures to bolster a currency they do not like. Unsurprisingly, politicians have sent for outsiders to stiffen their resolve—and now have someone else to blame for the austerity measures they are imposing.

The special factor in America is the dysfunctionality of the political system. The past decade or so has seen a growing use of delaying tactics in Congress—such as the filibuster and so-called “hold” on appointments, so that decisions that were once largely formal or administrative have become mired in politicised controversy. This is the opposite of the problem in Europe, where the emergence of technocrats is supposed to make decision-making less partisan. But it is still a problem, as was seen in the disastrous wrangle over raising the national debt ceiling—an argument which ended in the downgrade of American sovereign debt. House Republicans have said they will not compromise with the president. But since the American political system requires a measure of compromise to work (and since the Republicans have a majority in the House of Representatives), parts of the legislative processes have almost seized up. This is likely to get worse during election year.

America and Europe share a common problem: the economic and financial crisis has discredited mainstream politicians. The right is popularly seen as the party of the rich, too close to unpopular bankers, and responsible for the financial deregulation of the 1980s which, on some accounts, was the source of all the trouble. But the left, which might have expected to have benefited from a capitalist meltdown, is no better off. Centre-left governments, at least in Britain and America, are also compromised by their earlier friendliness to finance and the left is seen as having been profligate, running up the debts that austerity is now needed to rein in. The result is that whereas in the early years of the crisis, the left was doing better in America and the right better in Europe (an echo of the 1930s), now there seems no pattern, except growing opposition to incumbents.

The Democrats won in America in 2008, while conservatives won in Britain, Sweden and the Netherlands in 2010. But America’s forthcoming elections are anyone’s guess. By most opinion polls, the favourability ratings for both big American parties, as well as for Congress, have reached record lows while opposition to congressional incumbents are at all-time highs (and rising). In Europe this year, the left won the Danish election and the French Socialists are ahead of the incumbent president, but the Spanish right is ahead of the ruling Socialists.

Exhaustion with the normal process of party politics explains why technocrats are being brought in. Usually, democracies are better at dealing with financial crises than autocracies because they are seen as fair. Elected politicians can distribute the pain of austerity without losing legitimacy because people (it is hoped) will accept tough reforms that are seen as legitimate. But if all the main parties are complicit in causing a crisis, the public may not accept solutions from any of them. Then, the system needs to find alternatives unblemished by the disastrous decisions of the past-and technocrats fit the bill.

But therein lies a danger. Almost by definition, technocrats command respect rather than popularity: they tend especially to drive the far left and right further to the extremes. And at the moment, the only politicians who are unquestionably thriving are those outside the mainstream already. Gerd Wilders’s populist Freedom party leapt to third in the Dutch election in 2010 and is now running second in the polls. Its Austrian equivalent, also called the Freedom party, is running neck and neck with the ruling party, while France’s National Front stands to do well in next year’s elections. As always, America is different. But the rise of the Tea Party Movement and the Occupy Wall Street demonstrations suggests that frustration with established parties is a growing force there, too. The rise of the “occupy” crowd, evicted from their Zucotti park site in New York in the early hours of November 15th, is especially important because its members are motivated by concern about social and income inequalities.

Technocrats may be good at saying how much pain a country must endure, how to make its debt level sustainable or how to solve a financial crisis. But they are not so good at working out how pain is to be distributed, whether to raise taxes or cut spending on this or that group, and what the income-distribution effects of their policies are. Those are political questions, not technocratic ones. And they will not go away just because a technocrat has been made prime minister.