The politics of technocracy – Stuck in a post-post-ideological world

11th September 2012

Among the most dangerously misleading – although common – criticisms to throw at politicians is that they "lack ideology". It is supposed to suggest that an individual is weak willed and liable to bend to every whim of the electorate. Yet in practice it all-too-frequently operates as a cloak designed to disguise uncomfortable political decisions as either responding to or pre-empting a public need.

As such, though it is a slur that has dogged David Cameron since he entered 10 Downing Street, it is unlikely to have cost him much sleep. Indeed the Coalition government was formed using the language of technocratic necessity. In an interview with the Guardian after the elections the Liberal Democrat leader Nick Clegg came close to describing his decision to join forces with the Conservatives as a public good:

"There are those on both the left and right who are united in thinking this should not have happened. But the truth is this: there was no other responsible way to play the hand dealt to the political parties by the British people at the election. The parliamentary arithmetic made a Lib-Lab coalition unworkable and it would have been regarded as illegitimate by the British people. Equally, a minority administration would have been too fragile to tackle the political and economic challenges ahead."

By avoiding having to tie his government to a set of explicit values, however, it has become harder for the public to critique policy on ideological grounds, with focus instead given to technical factors such as cost. Clegg broadly defined the government's agenda as "liberalism", but acknowledged that "others may have other names for it".

If that was an invitation to start opening up the agenda for scrutiny it does not appear to have been followed up.

The more things change, the more they stay the same

Of course, it would be unfair to view this as a problem unique to the current government. In Europe, for example, the appointment of Mario Monti as Italian prime minister was seen as a technocratic coup. But what are the implications of this?

The latest post on Unlearning Economics tries to address this problem as it applies to economists:

"Simply stated, economics is the science of how society produces and distributes scarce resources. In this sense, economics necessarily requires that economists make value based judgments when prescribing economic policies – is this method/pattern of distribution desirable? Says who?

Despite this, mainstream economists generally insist that their science is value free."

As the post claims, the problem is not that economists should be making value judgements; it is that they are doing so while claiming that their theories are technocratic.  In fact, it may well be considered necessary for economists to make such judgements but "these should not be cloaked in the guise of objectivity and inevitable economic ‘laws'".

In order to see the consequences of these orthodoxies one need only look at the discussions on government debt. Before the financial crisis Western countries (with a few notable exceptions) took a relaxed approach to a nation state taking on debt to meet spending commitments – indeed in the case of the eurozone it became a structural necessity. In the aftermath, however, public debt has become the bugbear of government policy.

This shift in focus is suggestive of a more fundamental value shift but it is one that has gone largely unremarked upon. Yet its implications for economic policy are profound.

The imminent threat of a sovereign debt time bomb has been the predominant line of attack used against Keynesian economists such as Paul Krugman, who has repeatedly called for more government spending to pull countries out of recession spirals. His is not an argument against attempts to control spending over the long term but a matter of timing:

"When the private sector is frantically trying to pay down debt, the public sector should do the opposite, spending when the private sector can't or won't. By all means, let's balance our budget once the economy has recovered – but not now. The boom, not the slump, is the right time for austerity."

For all that people can disagree with Krugman's analysis, his value judgements are pretty clear. He views austerity "as an excuse [for the political right] to dismantle social programs". The case for austerity was made on technocratic necessity but with growing calls to abandon the policy George Osborne should make his value judgements equally clear.

Moving towards a new orthodoxy

Perhaps part of the explanation for this aversion to debt is the psychological legacy of the financial crisis. The fragility of debt-fuelled growth was made suddenly apparent when credit markets froze following the collapse of Lehman Brothers in September 2008. Such was the trauma inflicted on policymakers and the broader public that the idea of a debt-funded recovery has become unthinkable.

"If something is seen as having failed it tends to be fashionable to discard it and pick up something new. In the internet age things can quickly become prevailing orthodoxies," says Neville White, Senior Socially Responsible Investment Analyst at Ecclesiastical. "It makes it very difficult for politicians to do a U-turn, even if that might be the most intelligent route."

This goes some way to explaining the appeal of misguided attempts to conflate public debt with household finances. If debt is viewed as "bad" in the abstract then it is as wrong for governments to load up on as it is for individuals.

By making their values, and through them their social objectives, clear politicians may find it easier to alter course if the facts underpinning policy choices change. Presenting policy as unchallengeable deductive reasoning is not only misleading but ultimately counterproductive.

 

More on Mindful Money:

Interviews: The New Economists

Positive thinking is bad for investing

The Zeitgeist Investor – Keeping cool amid the storm

To receive our free daily newsletter sign up here

The Financialist

Leave a Reply

Your email address will not be published. Required fields are marked *