December 21, 2016
Sir, I refer to Martin Wolf’s “Democrats, demagogues and despots”, December 21.
If a demagogue is “a leader in a democracy who gains popularity by exploiting prejudice and ignorance among the common people, whipping up the passions of the crowd and shutting down reasoned deliberation”, what do we call those that though with more discretion and elegance, do the same among the elite?
In this case I refer directly to those who promise: “We will make the banks safe, because we will force these to hold more capital against what is perceived as risky than against what is perceived as safe”, and are then believed, by for instance many prestigious columnists.
Is that not exploiting a prejudice against those who anyhow, precisely because they are perceived ex ante as risky, already find it harder and more expensive to access bank credit, and therefore pose no major risks ex post to banks?
Is that not exploiting a prejudice in favor of those who anyhow, precisely because they are perceived ex ante as safe, already find it easier and less expensive to access bank credit, and could therefore really pose major risks ex post to banks?
Is that not exploiting the ignorance or naiveté of those who believe regulators could make banks safe without affecting their social purpose of allocating credit efficiently to the real economy?
Of course technocratic demagogues do not operate within any type of democracy, far from it, most often mumbo jumbo and research papers suffices to impress. And of course they are no despots, at least not wittingly.
Like Martin Wolf I do feel very uncomfortable with recent developments. Clearly Brexit needed not to be, and Trump does not fit the profile of what we have grown accustomed to at least hope for as that of a president in the USA.
But the elite must accept it is very much responsible for what is happening. Just for a starter it has allowed many technocratic tribes, like in Brussels and Basel, to operate unencumbered for way too long. It would seem the “elite” has relinquished its responsibilities and now prefers to live in the comfort of blissful ignorance.
If in doubt, just see the difficulties I have had trying to get straight answers to some very basic questions.
The world is under the siege by growing environmental problems, by robots taking jobs, by fake news because truth is not competitive enough, by terrorism and growing violence, by crony statism, by facing excessive debts everywhere… and by much more. Sir, where is your elite?