Radical Liberals Condemn and Disparage Technocrats

The following exchange took place between an American radical liberal and me on the appointment of the two technocrats Mario Monti and Lucas Papademos as prime ministers of Italy and Greece.

Bruce Wilder says,

You seem to have lost the essential premise: the “looming economic catastrophe” is largely the creation of the technocrats, and “all the misery that implies” has been embraced by the technocrats with all the enthusiasm an 18th century physician had for purgatives and bleeding.

Con George-Kotzabasis says,

Bruce Wilder, your “essential premise” walks on crutches. In a physical crisis in which you might lose your leg you don’t stop from going to a surgeon just because there are bad surgeons about. To label all surgeons (technocrats) as incompetent and refuse to go under their knife is to lose your leg. That is why your argument, factually and intellectually, waddles on crutches.

Bruce Wilder says, 11.13.11 at 6:09 pm

Con George-Kotzabasis @ 105

If your life was threatened by a growing cancer, affecting your lungs or your kidneys, and you went to a surgeon, and the surgeon said, “To save your cancer, I recommend amputation of your leg,” I would hope you would run from the room, with your legs still intact.

These particular neo-liberal technocrats are just these sorts of mad incompetents, prescribing senseless maiming in place of a treatment plan. There are, apparently, no politicians available, to stand up and veto the insanity, “brave” and “charismatic” or otherwise.

The corruption and incompetence of the politicians—indeed, the whole polity—in Greece and Italy—played nearly as critical a part in the epidemiology of crisis as the neoliberal technocrats. It is worth remembering that the popular support for the European project has often rested on the hope of improving the quality of governance and institutions. For all the grousing over the minutiae of Brussels and the trivia of Strasbourg, the hope of European Union was always to promote high-minded, principled liberal institutions as a prophylaxis against authoritarianism and populist corruption. This was, I suspect, always a very big part of the appeal of the euro: German monetary policy for the South, an internationally respected currency immune to runaway inflations, etc. The Italians, as I recall, embraced the euro ahead of every other country; they were overjoyed to be rid of the lira, the joke currency of Europe, so inflated in value that coins were impractical—phone booths required a special token and street vendors gave candies in place of change. The euro is very popular in Greece as well, and I suspect that that popularity, as much as the fecklessness of politicians, is a factor in preventing Greece from taking the obvious step of unilaterally embracing default in abandonment of the euro. (Purely from a technocratic point-of-view, the equivalent of a competent surgeon would be a technocrat doing the preparations in secret, which would make a unilateral return to the drachma feasible. That’s the “right” thing to do for Greece, from a “technical” standpoint and from the standpoint of protecting Greece from the “amputation” of privatisation and a prolonged deflation. An efficient calculating machine would have been crystal clear from the outset that, on the numbers alone, Greek default was inevitable; delay could only prolong and intensify the suffering.)

The Big Picture, here, may well be that economic and institutional centralization has found its limits, at least for the moment. Certainly, the neoliberal architectural principles employed over the last 25 years are a bust. Are we so stupid that neofascism must follow? Many would say that authoritarianism was always an implied part of the neoliberal agenda.

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Con George-Kotzabasis 11.14.11 at 2:10 am

Bruce Wilder
In serious discussion it is wise to enter it carrying a sieve in one’s hands to separate the wheat from the chaff.

Your crystal clear “efficient calculating machine” that would implement your proposal of default, would be no other than a wise, brave, imaginative, and humane TECHNOCRAT. So what exactly you have against technocrats? They are OK if they adopt your plan and only transported to Hades in toto for their mortal sins, if they don’t! Default was and is always an option. The distinguished economist Deepak Lal and exponent of the Austrian School of economics, long ago suggested such a schema. Lucas Papademos and Mario Monti both presumably have this option in their arsenal to be used as a last resort if everything else fails. But before they use this ‘nuclear’ option, they must try, and be given the right by all objective analysts and commentators, to resolve this economic crisis by ‘conventional’ means that could avoid a default which would open a big hole in their countries GDP and throw their people into pauperization for decades to come.

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Bruce Wilder says, 11.14.11 at 2:37 am

Instead of “support the troops”, we are now asked to support the neo-liberal technocrats.

Con George-Kotzabasis, are we to take no account of the part the technocrats played in “designing” the euro? Are we to take no account of the failure of the ECB to carry out bank supervision or to regulate derivatives? It is a little late in the progress of neoliberal disaster capitalism to be attributing good faith, let alone expertise, to these bozos.

The Periclean Dimensions of Antonis Samaras as the Future Prime Minister of Greece

By Con George-Kotzabasis—December 10, 2011

We have forced every sea and land to be the highway of our daring. Pericles

In the present storm-laden dark sky of Greece, a glittering new star has made its appearance which like a beacon of the sky is attempting to navigate the battered ship of Greece into calmer waters and save it from shipwreck. This new star is the leader of the Opposition of the New Democracy Party, Antonis Samaras, who since he has become its leader two years ago, has displayed unprecedented qualities of leadership and economic and political insight and daring, in this critical economic situation that Greece traverses, that only a statesman of Periclean dimensions could exhibit.

The criticism of Samaras from early on as leader of the Opposition of the Papandreou government, which he has depicted as amateurish and inept, has been totally justified. His early warnings that the policies of the socialist government of Papandreou were wrong and the torrent of taxes that the latter rained upon the middle classes would be disastrous for the economy. In October 2009, when Papandreou began his premiership, public debt was 298 billion euros, 125% of GDP. Today it has reached the whopping amount of 360 billion euros, 165% of GDP. Gross National Product in 2009 was 238 billion and presently has shrunk to 218 billion. According to OECD estimates it will decrease even more by 6% in the near future and unemployment will increase to 18.55%, affecting tragically younger people.

Further, Samaras predicted that the first EU Memorandum that imposed draconian austerity measures on Greece would neither decrease the budget nor would it put the economy on a track of recovery. As an economist he cogently argued that in conditions of deep recession austerity measures would exacerbate the economic crisis not dampen it. He was severely criticized and reprimanded when the New Democracy Party voted in parliament against the extreme austerity measures. Moreover, he had the moral strength and political insight not to be tempted to fall to the seductive calls of Papandreou to participate in a unity government to deal with the national crisis. Samaras gave as his strong reasons that since the PASOK Government was refusing to change its economic policies, that followed the blueprint formulated in the European Memorandum without attempting to modify it in certain crucial parts that could deter the further weakening of the economy, and which had failed the country, he, and his party, would not take part in a coalition government merely for the purpose of being an “accomplice” to these flagrantly wrong policies.

Samaras made a series of proposals that he encapsulated in his “Restart of Greece” by which the country could avoid the shoals that would cause its economic sinking. Last May in his Zappeio II Proposal the Leader of the Opposition presented a number of policies that could put Greece on the road of economic recovery and its corollary, the ability to pay off its debts. His restart programme would necessitate a “shock treatment” but with positive results. (a) A severe cut in public spending and on pensions, only above the level 700 euros. (b) A reduction of taxes on household income and businesses and a decrease in VAT in all sectors of the economy particularly in tourism which is pivotal to the Greek economy. (c) The abolition of all means test for the acquisition of a house and on capital repatriation so to inject money in the financial system. (d) The legalization of all buildings constructed without permits-there are more than a million-which will bring substantial increases in state revenue. (e) The state is to pay off all its debts to private individuals thus increasing market liquidity. And banks to commit to the real economy 20% to 30% of the guarantees they receive. This will further increase liquidity in the market and be an incentive to stop capital flight. (f) The state must not make any cuts to the Public Investment Programme with its high multiplier effect that is a powerful instrument to combat recession. (g) The acceleration of denationalization of public owned entities, which the Papandreou government was slow to implement, and the stimulation of the development of property which is the economic engine of the country. All these relief measures will increase state revenue and the Restart programme will balance the budget within just over three years, and start paying off Greece’s debt.

This daring Restart programme is not an abstraction and Samaras is quite aware that to concretize it he has to convince the lenders of Greece, i.e. the EU, of the urgent necessity of making changes to the present economic policies that clearly have failed, if the goals of the Memorandum of 26^th of October, to which he is irrevocably committed, are to be achieved. This task of convincing Greece’s European partners of a change in tack has been eased, as High German officials admit now that the initial programme was wrong.

Finally, Samaras warns (not exactly in the following words) that this contagion that is threatening to engulf the European continent is not only economic and political but also social, and could lead to an explosion of European Spring protests that could not be contained and could transform radically the political landscape of the continent by the reappearance of the infernal star of the swastika in the political constellation of Europe.

But History has shown repeatedly nations at moments of great dangers, produce great and illustrious leaders that saves them at the eleventh hour from destruction and obliteration. From Themistocles to Charles Martel to Winston Churchill, the invasions of barbarians and dictators were defeated by the sagacity, imagination, and moral strength of exceptional leadership. Antonis Samaras from his words and deeds without any doubt belongs to this lineage of leadership. Greece facing the abyss of economic bankruptcy, poverty, and mob rule with the dangers that are historically inherent in such combination, i.e. the resurgence of fascism, has a unique leader in Antonis Samaras that could prevent this stupendous threat from consummating which would consign the country into the doleful state of penury and into the captivity of dictatorial regimes.