Posts Tagged ‘Gillian Tett’

Standing up for democracy

That we face immense difficulties economically and otherwise is obvious on the day of Osborne’s autumn statement.  But how many noticed that on its eve a heavyweight commentator on Newsnight suggested, albeit somewhat tentatively, that we might have to consider alternatives to democracy to deal with the problems?

The commentator concerned was Gillian Tett of the Financial Times whose writing I generally like so I wonder how much this was just a loose comment made in the heat of the moment and how much she was reflecting a strand of opinion among the Great and the Good.  The relevent bit of the conversation was as follows (starts at 17: 40, lightly edited)

Tett: “The chief economist of the BIS, the central bank of central banks, gave a devastating speech recently where he pointed out that the real problem is that economic cycles tend to happen in multi-decade periods and governments only last for a few years and you have this fundamental clash right now that you need governments to be able to take a 5 – 10 year view and unfortunately they are looking at 1-2 years at the most – and that’s a real problem”.

Paxman: “Well, there’s no way round that  … not if you believe in democracy”.

Tett: “Not unless you start looking at more technocratic solutions like Mario Monti in Italy or something like that….  Maybe the next decade or two is going to be about people questioning this balance of how democracy works and looking at more technocratic solutions because the economic choices confronting the West right now are so painful that the pressure is not going to evaporate quickly”.

There is certainly a long wave component to economic cycles – that is hardly a new thought.  And the mismatch between political horizons and the longer ones supposedly required for effective long-term management of the economy is nothing new either.  They are certainly issues, but they are hardly the “real problem” – even when combined – so the proposed technocratic solution is predicated on a faulty analysis.

The real problem is (to put it at its simplest) that there is too much debt (not just the government debt that the Coalition obsesses about but also private debt) and that inequality is too high (these are, of course, linked).  Debt and inequality combine to work like a sea anchor on the economy, preventing it from making proper headway so the only answer is to write off some of the debt and reduce inequality.  That would indeed be painful to the 1% who own most of the debt.  But how does that compare with having no job, no home, no hope – and hungry children?

Any democracy, however imperfect, is likely to come down on the side of the 99% eventually even if the entire political establishment has lost the plot as completely as ours has.   And strangely enough, policies crafted for the benefit of the 99% are exactly what is required economically as well as for natural justice.