Thursday, 10 November 2011

Blessed are the bankers for they shall inherit the earth


© Mark Strozier

This weekend is probably the time for Italy to impress the world with its new government of technocrats. Fortunately I took the time to look up the word technocrat before penning this blog as otherwise my initial title Italy ruled by robot army” might have seemed unnecessarily alarmist.

As I am now given to understand, the proposition is to hand the reins of the bucking bronco that is the Italian parliament to a group of bean counters. 

That makes sense. First, it would be fighting dysfunction with functionaries. Second, it provides an answer to one of the perplexing issues of the past year: as democracy triumphed over failing autocracies in North Africa, what would triumph over failing democracies in the “developed” world. Now technocracy emerges as the next logical stage in societal evolution.

During the seventeen years Silvio Berlusconi has spent bouncing in and out of the Palazzo Chigi, he has been the subject of many superlatives. Never, though, has he been considered the world’s most important leader. His successor may be.

A technocratic government would focus on pro-market policies including the economic reforms demanded by the troika and constitutional reforms to improve governance. Such a government could be very encouraging for markets however the chosen apolitical-policymakers will need the coercive influence of the ECB as a shield against the viper’s nest of vested interests that is Italy’s swollen parliament. Currently the ECB is the only force preventing a sharper rise in Italy’s bond yields. That support has to be conditional upon parliamentary support for the technocrats. Otherwise instability will remain the only constant.

Where will the drive towards technocracy end? In the US every republican candidate for next year’s presidential elections has pledged to remove Ben Bernanke from office (as chairman of the Federal Reserve Open Markets Committee). As arguably the most qualified technocrat in the business you could get good odds on the Mr Bernanke having the last laugh – deposing the eventual winner as the world finally loses patience with US partisan squabbling.

GUY FOSTER

1 comment:

  1. Hah! Robot army or not the market seems to be impressed.

    ReplyDelete