Revenge of the Technocrats

Three weeks ago, I suggested that democratic politics had reasserted itself in Europe – to the consternation of those who wanted Greece and Italy to fall into line on the policies needed to address the eurozone crisis.

This past week, by contrast, has seen moves to minimize those democratic impulses. On Friday, Italy’s newly appointed prime minister and respected eurocrat, Mario Monti, won a vote of confidence on the composition of his new government in Italy’s lower house of parliament – a government whose cabinet does not include a single elected official.

Monti proposes to double up as Finance Minister, with a plan to balance the budget, stimulate growth, overhaul Italy’s pension system, and fight against decades of tax evasion. It’s an agenda that technocrats have long wanted to pursue, but that democratic politics in Italy had apparently made very difficult. 

But it’s not just the technocrats who are frustrated with democracy. It’s also the financial markets. As The Guardian columnist Jonathan Freedland argued last week, 2011 may be remembered as the year when democracy was being demanded and fought for in one part of the world (during the Arab Spring), while it was exposed elsewhere “as paralysed and impotent in the face of economic crisis.”

By contrast, the leaders of the world’s non-democratic states, wrote Freedland, “had a spring in their step” at the G20 meeting in Cannes, confident that they could “face down whatever the economic meltdown threw at them.” Without the constant pressure of an unruly electorate, states like China, Saudi Arabia, or Singapore could – in theory – push austerity down and through their societies, or engage in massive stimulus. The markets know this too. This is why they appear less pessimistic about these states’ capacity to weather the storm than they are about the capacity of the U.S., Italy, and the rest of the eurozone.

 See what Jennifer Welsh wrote three weeks on the reassertion of democratic politics.

Read John Hancock’s argument on how democratic politics can cause problems.

The shrewd observer of democracy in America, Alexis de Tocqueville, once lamented the inability of democratic governments to fashion a coherent foreign policy – one that could sail above petty local concerns and squabbles and take the “long view.” What the current crisis suggests, however, is that markets have adopted de Tocqueville’s critical stance regarding democratic states’ domestic policies, as well. 

So does this mean the era of democracy’s triumphalism is coming to an end? After the fall of the Soviet Union and the revolutions in Eastern Europe, western commentators declared democracy to be the “winner” in the contest to bring progress and prosperity to citizens. Some went even further, claiming that – because democratic states tend not to go to war with one another – a broad campaign to democratize was also the best answer to the problem of interstate conflict.

But if Italy is any indication, democracy is having a bit of a rough ride. The technocrats’ rise to power is eerily reminiscent of the words of another commentator on democracy, the Austrian-American economist Joseph Schumpeter, who argued that it was impossible to have “rule by the people” (the essence of democracy), given their short-term perspective and lack of knowledge and expertise. As Schumpeter famously wrote: “If results that prove in the long run satisfactory to the people at large are made the test of government for the people, then government by the people, as conceived by the classical doctrine of democracy, would often fail to meet it.”

This seems to be the view of those who believe it is time for the technocrats to rule for the people, by doing what is “best” for them. The problem, of course, is that decades of liberal democracy have created a people that is anything but homogeneous, with a single and definable interest. Despite the rhetorical commitment to equality that underpins democracy, economic inequality is a striking feature of many of the democracies now facing crisis.

So where does this leave democracy? The core of this system remains the capacity to change government without bloodshed. As political theorist Adam Przeworski once put it, in a democracy, “people who have guns obey those without them.” That (among other things) is what distinguishes Italy from Syria. Moreover, the very fact that there is the prospect of a government changing fosters a spirit of compromise that makes the resolution of conflict more likely. 

As the markets express their dissatisfaction with the fickleness and indecisiveness of democracy, those pulling the strings behind those markets should perhaps ask themselves whether they would really like to live under any other system.

Photo courtesy Reuters.