Monday, January 28, 2019

Elite Capture

Elites across human history have been skilled at recruiting the top rebels into their own ranks, thereby blunting the threat of revolt. The latest prominent case is Greek Prime Minister Alexis Tsipras:
The 44-year-old Greek prime minister is barely recognisable as the leftwing firebrand who threatened to denounce Greece’s eurozone bailout, ban German politicians from visiting Athens and pull the country out of the euro if its creditors rejected his demands for debt forgiveness.

Four years after his first narrow election victory for his radical Syriza party, Mr Tsipras has become a surprising anchor of Greek financial discipline. His government is generating the sort of budget surplus that Athens’ creditors could once only have dreamt of. And he has reinvented himself as a southern European pragmatist, committed to being a co-operative EU partner while deepening relations with Washington in the interests of regional security.

“Tsipras now has a new international profile, that of the mature leader ready to incur political cost to carry out unpopular policies, whether it’s over Macedonia or the difficult economic reforms needed to keep Greece in the eurozone,” said Aris Hatzis, an Athens university professor of law and economics.
As a result, Tsipras is no longer popular and his party is expected to fall from power in the next election.

You can say, well, it's a good thing he failed to follow through on those threats because withdrawal from the Eurozone would have been a disaster for Greece. And maybe that is correct, although I think it is far from certain. But over the long run this sort of thing can breed toxic cynicism.

Consider the background to the revolution of Hugo Chavez in Venezuela: twenty years in which the leaders of both political parties called for reneging on the country's debts while out of power and then never did, in which anti-foreign, anti-banker, pro-people rhetoric never led to any changes in actual policies. Eventually the people got sick of it and fell for Chavez.

I think this is the big lesson for anyone who wants a world led by rational technocrats: if you persistently lie to and otherwise ignore the masses, they will turn to any available alternative, no matter how crazy.


Unknown said...

What you say is true--left unsatisfied, the masses will turn to folks like Chavez--but leaves unsolved the essential problem: even on a case-by-case basis, isn't what the masses (especially the loudest portion of the masses) want frequently so stupid that no responsible leader could enact it?

Isn't the best solution often to pretend to give the masses what they want, especially in the form of symbolism, while in fact giving them what they need? It might have been better had Tsipras been better at this, but the essential point remains.

I am personally quite put off by meritocratic self-satisfaction--especially of the let's-all-lean-in-and-work-130-hours-a-week sort--but is it not simply the case that very often what the masses want is a bad idea in both the practical and moral senses, especially an ignorant and dangerous xenophobia?

This is not to argue against a benign, palliative welfare-statism, which I thoroughly support. Nor is it to prejudice the specific issue of bossy German bankers vs. improvident southern Europeans, in which I a) instinctively side with the relaxed southerners, and b) don't understand at all the technical issues of money supply, interest rates, etc., etc., etc.

John said...

What always bothered me about the Venezuelan case was that elite political leaders intentionally whipped up sentiment against foreign debt every time they ran for office and then quickly reversed themselves. So this wasn't just something poor Venezuelans wanted -- I'm not sure how many poor Venezuelans had any opinion about the World Bank until elite politicians made a big issue of it. The temptation to use the worst possible arguments at election time was just too great for out-of-power politicians to resist.

Which is an argument against democracy, I guess, but one that implicates the elite as much as the masses. (Incidentally this is why I think oligarchy is impossible in North America or Europe; because the losing faction within the oligarchy would always go populist rather than accepting defeat. For us it's either democracy or dictatorship.)

What bugs me about the European case is that there really is a European elite who constantly travel around the continent holding meetings in fabulous 18th-century chateaux, with amazing catered meals, etc., coming to agreements that blatantly ignore the will of the voters, and in the case of European fiscal policy there are a lot of economists who think the austerity that resulted is a terrible idea. It's simply the consensus of that narrow European elite.