Technocracy has been here all along

Want to escape technocracy? Start listening to generalist thinkers, not just financiers and economists, says philosopher Stephen Rainey.

Recently, as it is hard to ignore, economic matters have come to dominate the headlines in unprecedented ways, and in doing so have come to preoccupy the minds of citizens everywhere. The facts of asset leveraging, debt and the increasing attention paid to credit entitlement are etched in the current zeitgeist and are set to make for an increasingly multi-polar world.

Certainly, this means a shift away from the 'Western' and 'emerging market' assumptions that have hitherto been taken as read. For reasons not limited to simple self-interest, this must be acknowledged should any manner of stability be possible in the future. But why is it that transactions, apparently quite abstract and incomprehensible to most people, could suddenly have such a deep impact on the everyday lives of so many people? Truth is, we’ve all been prey to technocracy for some time, not just Greece and Italy, and will continue to do so until the value of generalist perspectives are taken seriously.

Two reorientations in recent capitalism

As recently as November 2011 in a BBC Radio Four documentary, Adair Turner, former head of the UK's Financial Services Authority was bemoaning "intellectual failures of understanding" among policymakers that he supposed had led to policy decisions being taken in ways that permitted problematic financial activity. Among politicians it had become a commonplace that financial services were somehow a natural next step in the evolution of capitalism, akin to the change to industrial from agrarian capitalism. This tacit assumption was coupled with — or perhaps caused — a change in perception of just what financial services was intended to do in the first place.

In the same documentary Mohamed El Erian, of major bond market trading company PIMCO, noted how the "financial services industry" started to be referred to as the "financial industry." What might have begun as a shorthand, however, brought about a re-imagining of the purpose of the enterprise. What changed was that the connection between what financial services industries did and the real economies that they serviced broke down. 'Financial industry' took on an air of self-sufficiency — as if the endeavours of those in that industry created finance, rather than the more realistic but perhaps more humble aim of facilitating financial action by means of servicing a real economy.

The combination of these views leads to a problematic outcome.

In supposing financial services to be a natural step in the evolution of capitalism, it is posited that there is an internal logic to capitalism that, in reaching a crucial stage of evolution, ought not to be stopped for fear of derailing capitalism itself. The principle of capitalism for many reasons is a highly prized achievement of human endeavour. Were it not for the mediation of capital in power and influence it would arguably be impossible to advance as a society beyond traditional structures reliant upon the individual magnetism of charismatic individuals, or authority as imparted by sainted bloodlines and so on. In this respect, capitalism is the great leveller. If Turner is right, then policymakers were feeling the weight of this as they framed policy concerning financial services. It is in such a context that we can see how easily policymaking could come to serve financial services.

The autonomy of financial services is implicit in the position El Erian outlines too, but it is even more strongly manifested in that the change of identity from financial services industry to financial industry obliterates the connection to the real economy that the financial services only really exist to augment.

Again, the connection to the noblest possibilities of capitalism in principle is worth mentioning in connection to this point. On the assumption that financial services were the next step in capitalism, there was formed a policy background that could serve these services. This was so to facilitate the proper unfolding of the logic of capitalism. This itself is predicated in the highest hopes for humanity (rather than malign intent) we can presume. But now, with the disconnection from the real economy that the financial services are meant to serve, the presumed autonomy of these services is suddenly turbo-charged. The newly christened financial industry is assumed to have an internal logic that it is imperative to allow to unfold unhindered, and this unfolding need have no connection to actual economies.

These 'actual economies', moreover are just those relations among real people, retailers, banks, civic authorities and so on, mediated by the institution of capital. In other words, owing to two problematic assumptions flagged by Turner and El Erian, the financial services industry came to be an autonomous sphere of activity, encouraged by policymaking to engage in self-sufficient action unrelated to the everyday comings and goings of human plans and interests. In the name of capitalism, it disconnected from the loci of capitalistic interactions. A peculiar and damaging contradiction indeed.

The consequences of this contradiction have been playing out in the social, political and private spheres since 2008. One need only scan the news media to get a flavour of the tragedy, confusion, anger, spite and vitriol that have flowed from it. What this suggests is that too much faith is currently placed in expertise. When experts make shoddy assumptions, what check is there on them? Laid out as above, the issue is stark and frankly baffling. How could this have been so? The solution must lie in a destablising mechanism somewhere within governance. One good place to start would be to arrest the reliance upon experts as the ordained high-priests of specialist wisdom. The value of generalists is worth investigating.

A view from outside the cocoon of finance might easily have spotted the worrying nature of the posit that capitalism has an internal logic whose unfolding must be facilitated even at the expense of relevance to real economies. It won’t be had from people whose knowledge is undeniably high-level and expert. By definition, these people know in great detail a vanishingly small area of a generally obscure field. Reality doesn’t bend to the abstractions of expertise.

People fear technocracy in the wake of Greece and Italy. It’s been there all along. It got us here.

Image by Alastair Rae. CC licenced.