Suddenly, the tumultuous on-rush of clarity. As the technocrats and leaders who run the global economic system reflect on widespread angry reactions to globalization and rapid social change, a new language is permeating the discussion of economic issues. Top economic policy leaders are now saying that ‘inclusive growth” is crucial. They are saying globalization must “work for everyone”. We are hearing exhortations about paying attention to public opinion (that famously unruly and inconvenient beast!). According to Larry Summers, a notable commentator on these matters, (in a Financial Times piece titled: “Voters sour on traditional economic policy”):
People have lost confidence in both the competence of economic leaders and in their commitment to serve the wider public rather than the global elite.
A number of traditional economic leaders in the public and private sector seemed to be making their way through the traditional grief cycle – starting with denial, moving to rage, then to bargaining and ultimately to acceptance of the new realities.
Will anything change though? There is reason to be skeptical. For, at bottom, the issue is that the global technocracy insists on economic policy being the exclusive preserve of experts. So, once the experts do the numbers and they declare a trade agreement beneficial that should be the end of the matter. Or, once the experts decide that what appears to be a high level of immigration to the ordinary citizen is actually economically helpful they tell leaders to ignore public opinion and go for it. The point, naturally, is not that expert input into policymaking is not crucial. Of course it is. The point is: it is just an input. Wise leaders must add other considerations.
In my experience, many technocrats think they are army generals. They think they have to be as ruthless as generals have to be. Take for instance the situation generals often confront. An army general asks his staff: How many men do I need to take that hill from the enemy? “One thousand men, sir!” Then he asks: what’s the level of wastage? “30 per cent, sir!” He ponders and says: I can live with that. Get it done.
I am sure that you noticed that 30 per cent wastage means 300 human lives lost…husbands, sons, dads, comrades. Generals train themselves not to think about those 300 lives they will lose. For me, what is stunning is to hear technocrats proposing economic policies that will lead to a lot of suffering….lost jobs, families pushed into penury and industrial towns turned to wastelands. When this is pointed out to them, they often throw out Joseph Schumpeter’s notorious dictum that ‘creative destruction’ is ‘the essential fact about capitalism’. They quote statistical projections about the eventual overall benefit of the policy they are proposing.
What about the losers? Should something not be done for them? The same technocrats or a different subset of the tribe will raise serious objections: “Oh, you can’t increase welfare spending! Look at the fiscal situation! Too much debt is dangerous! In fact, we need to cut public spending quite drastically!”
Now, since wealthy individuals and powerful corporations have enough influence to so arrange their tax affairs as to pay very little tax (if they pay anything at all), austerity drives as well as globalization form a pincer movement on the middle class and the poor. No wonder public opinion is so agitated and demagogues are thriving almost everywhere.
What should change? Three things:
- Technocrats and the political leaders they serve need to realize that skilled stakeholder engagement improves policy even if some speed is lost.
- Reforms are not politically sustainable unless they enjoy broad support. In the same way, trade agreements, globalization, all the changes that the global elite are so keen on, will not endure without the legitimacy that only broad support within the citizenry can confer.
- Technocrats and the leaders they serve have to take public opinion seriously… not just at election time. And with regard to managing public opinion, the rule is: One Step Ahead, Not Three. You don’t pander to public opinion and reinforce ignorance and prejudice. Leaders have to lead public opinion by educating and informing citizens, mainly by promoting open debate and informed discussion of the great policy challenges. But it is daft to run too far ahead of public opinion.
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