“In a democracy you have to push people to do things by scaring them”

17 Feb

This past Tuesday, at a roundtable on ‘the future of the euro’ at Harvard University, we heard Lorenzo Bini-Smaghi utter these exact words. His Royal Smaghi-ness was a member of the ECB executive board until last November, and was advising his audience on more than his personal political views. He was giving us a glimpse deep into the technocratic vision that predominates in Europe at the moment, and the particular techniques in play to manage the situation. What stood out in the banker’s comments was, first, an extraordinary ideological commitment to the euro and, second, a somewhat delusional vision of social control.

The context for the banker’s comments was a discussion of the austerity measures being rammed down the throats of the Greek public. The measures are but one of the preconditions for a bailout package that will include other disciplinary measures, like international monitors of Greek spending decisions. The ‘people to be scared’ that B-S had in mind were, most immediately, the Greeks. They were to be scared into believing that there was one way and only one way to resolve their debt crisis, and that if everyone did not get in line, the withdrawal of European help would lead to even worse consequences. But it became clear that Bini-Smaghi’s comments applied to more or less the whole European public, perhaps minus the ‘sensible’ Germans. At another choice moment, LBS said “The Italian situation is different from the Greek one, but don’t tell the Italians. That is only something you say outside Italy. Inside, you say the opposite.” In other words, you want them to be scared, even if you have to lie to them.

Why? Because otherwise two things will happen. For one, the majority of Italians or Greeks might get the crazy idea that they don’t have to screw themselves in order to save themselves. There might be alternatives to massive austerity and a bailout of the banks. For another, the greater the fear the greater the limits on political outrage, or at least, the more the local ruling political parties will feel pressure not to attend to local outrage.

Bini-Smaghi’s comments speaks volumes both about a certain technocratic vision or political method and its limits. The method is based on the thought that central bankers and related technocrats possess the technical expertise and know-how to know what the rational response is to an economic crisis. This knowledge is supposedly value-free, and a matter of pure economics. However, most people not only lack this knowledge, they take to the streets in a mistaken, irrational pursuit of their own interests. BS dismissively called this ‘politics.’

So far, so familiar. But the most striking thing about Lorenzo’s BS is that the technocratic vision of control is far more expansive. It is not an attempt simply to apply expert economic knowledge to economic policy. It is a more radical ideological project. The delusion is that the political domain can be subject to the kind of fine-tuned control ‘at the margins.’ It is not just that technocrats ought to run national governments, or at least monitor their spending, but that national publics themselves can be pushed, pulled and cajoled with precision. Bini-Smaghi was talking about incremental doses of austerity until public outrage boiled over, and then stepping off the gas. And if outrage becomes too threatening to the background project, then more and more fear of a withdrawal of bailout funds to scare political leaders into imposing budgets and repressing unrest. One almost wonders if there isn’t some model floating around technocratic circles in which the relevant variables are ‘fear’ ‘austerity’ ‘bailout money’ and ‘outrage.’ The policy strategy being a kind of optimization function in which the aim is to get as close to ‘outrage’ without it boiling over into revolution.

Of course the dream of total social control is nothing new. It rattles around in the mental recesses of any expert claiming a monopoly on the legitimate possession of pure knowledge. But it is in play here in a substantial way. The coyness of the troika – demanding one package of reforms one day, another the next, promising money then imposing more terms, softening stances when protests get too dicey but putting the screws to national leaders, and above all playing a long game of amorphous indecision so as to maximize the space for deception – is all part of this managerial political approach.

Aims are not the same as success. The aim of total social control, especially when it becomes ideological, and especially when it sees politics exclusively as a domain of irrational, emotional behavior that has to be manipulated by various techniques, is its own foolishness. For one, it leaves actors without the ability to acquire actual political knowledge – there appears to be no knowledge to acquire, beyond that of the techniques of manipulating irrational publics. For another, the social world simply is not amenable to that kind of technical, fine-tuned control. Tweaking with the margins of outrage in relation to doses of austerity and fear is not just a creepy and outrageous political project, it is a fool’s game.

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7 Responses to ““In a democracy you have to push people to do things by scaring them””

  1. philmader February 17, 2012 at 12:05 pm #

    Recordings (or third-party witnesses) for this would be great! To hear it from the horse’s mouth is priceless. This is heavily reminiscent of Leo Strauss’ conception of the noble lie, necessary of course for the greater social good, to be enforced by a small enlightened elite… Of course, Smuggy is a “Chicago Boy”…

  2. brent February 17, 2012 at 3:06 pm #

    I was there and can confirm both of Smuggy’s remarks. I can also say that he got no pushback from the other panelists, at least two of whom–Martin Feldstein and Jacques Mistral–represent the point of intersection between academic renown and policy-making–in Mistral’s case, on the so-called ‘Socialist left.’ Technocracy is their shared party, platform, and religion. The question of democratic consent was never voiced except, as noted, in terms of how to fool ‘em. If ever there was an argument for the foundational upheaval one hears about in some Occupy quarters, this was it.

  3. joel lazarus February 18, 2012 at 10:56 pm #

    This is truly frightening. The contempt and hubris. the game they’re playing is a fraught one: . It requires measuring how far they can push people from a position – physical and mental – wholly detached from them.
    I really appreciate your blog. Keep up the great work

  4. Magpie February 19, 2012 at 7:26 am #

    I agree with philmader: recordings are vital.

    And It’s not a matter of trusting or not eye-witnesses’ accounts.

    Here I’ll give one example. The author of the comment below is reputed to be a progressive. In a candid moment this is what he said:

    “You guys see no need for unemployment. I do. I think it serves an incredibly important psychological component to any healthy economy. I’ve feared for my job and been unemployed. Those moments shaped who I am and what I’ve become. They were invaluable in retrospect. If I’d been able to apply for a JG job I might not be half the man I am today. Maybe it’s just personal entrepreneurial experience speaking here, but I know what it means to hunt and kill for ones dinner. Very little, aside from great parenting and education, was handed to me in life. My psychological development through having to earn things has been a building block that no govt program can ever provide. Ever.”

    When faced with the fallout, what did he do? Delete the comment. It was taken out of context, I suppose.

    Unfortunately for him, others commenting in the same thread quoted him verbatim, in the same thread. And the record is there, including author’s admission the comment was removed, as a monument for posterity.

    Here’s the link, so that you can check:
    http://pragcap.com/the-evolution-of-mmt

  5. ltschudde February 21, 2012 at 12:58 am #

    Reblogged this on LT Schudde.

  6. Jim February 21, 2012 at 11:15 pm #

    The US banksters did exactly the same and continue to do it. “Too big to fail.”

Trackbacks/Pingbacks

  1. Guest Post: Europe’s Soft Coup d’Etat Part 1 « thecurrentmoment - February 20, 2012

    [...] must default if it wants democracy.’ Meanwhile, ECB bankers argue that you have to scare democratic publics into sado-monetarist bailout packages. And finance ministers, like the Netherlands’ Jan Kees [...]

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