Thursday, September 13, 2012

Dutch Elections

The Dutch election results are unequivocal: the pro-EU parties of the center-right and center-left won a resounding victory, Geert Wilders' xenophobic and Europhobic extreme-right party will lose 1/3 of its seats, and Emile Roemer's Euroskeptic Socialists fared poorly.

To be sure, the Netherlands is one of the lucky ones: a northern economy in trade surplus. Still, it's interesting that wherever "Europe" has been put to a test vote, a referendum on the Europe question, as this election was billed, Europe has won--even in Greece. This should give pause to those who argue that Europe is an anti-democratic project, that the European Central Bank has become the supreme autocrat, and that "the people" would reject Draghi's program if only they could. These are the sentiments of people who confuse their own judgments with "the people's." The latter are often confused, ambivalent, and far less certain of what they want than their self-appointed spokespersons. And this, as I say, has been the case not only in the fortunate Netherlands but also in the unfortunate Greece, albeit less univocally. The people just want this torment to end.

The ECB's recent actions will of course become wildly unpopular--unless they work. Since there seems to be nothing else afoot at the moment, the people are not about to be panicked by the cries of "anti-democratic" usurpation of power. Their approval may be quiet, but it is approval. Not only the Dutch but the German Constitutional Court seem content with only the mildest of checks on the bank's power (future increases of ESM funding must be submitted to the Bundestag, the court said). And for now, that is where things stand, pending either an easing of market tensions or a heightening of social tensions. I'm sure there is a pithy Tocquevillean generalization to be uttered about democracy's response to the deep redistributional dilemmas posed by a major financial crisis, but the right formula eludes me at the moment. It seems that the people are more forbearing than they are sometimes given credit for, more willing to experiment in times of high uncertainty, and perhaps rather more optimistic than they have a right to be that things will work out in the end.

They are not, however, eager to plunder the rich, as they are sometimes accused of being. They know that the banks have already taken serious writedowns, and they also know that their own savings are tied up in the banks. They may want to help those in difficulty but are wary of bankrupting themselves in the process. So they temporize while rejecting the extremes. As Tocqueville might have observed, such inaction lacks the decisiveness of the hotheaded aristocrat sure of himself and persuaded that he knows where honor lies. Sometimes patience is a virtue. Could this be one of those times?

8 comments:

brent said...

It is amusing to hear you debunk one version of "the people" and the trope of ventriloquism by which radicals claim to speak for them ("plunder the rich") ... only to engage a moment later in a more moderate version of the same trope ("They know that the banks have already taken serious writedowns, and they also know that their own savings are tied up in the banks"). Perhaps your other characterization ("confused, ambivalent, and far less certain of what they want...") is more accurate: the Dutch voters polled all over the spectrum, flirted with supporting populisms left and right, returned to the sheepfold before the polls closed last night ... but have surely not come to endorse, or even understand the role of Big Finance in reshaping the lines of power in the EU. When they do ... but wait: who am I to say what they will do?

Art Goldhammer said...

Touché.

Mitch Guthman said...

"Hesitation and half measures lose all in war."

Art Goldhammer said...

Two comments on that, Mitch: first, the euro crisis is not a war, and second, even in war the remark is false. The way to lose everything is to commit yourself fully to a poorly understood attack with insufficient information.

PF said...

The story of European integration on an aggregate mass political level has, in many ways, always been one of mild, passive acceptance. The really heated political battles have almost always been among factions of elites.

George Ross said...

It might be worth reviewing what happened in the Dutch campaign. Perhaps the demagogues got caught out by leaders who actually tried to make sense of the
situation rather than making up stories about it. It can actually happen, still, in our times, despite what is going on the the USA.

Mitch Guthman said...

Art,

A couple of points in response:

First, if patience were a virtue the financial crisis would have solved long ago. Europe is at least three and by some accounts five years into this crisis. There have been countless summits and fact-finding commissions; whole forests have sure been laid waste to print their minutes. Innumerable facts have already been found. We are drowning in facts. If your plan and that of Europe’s leaders is simply to wait for the business cycle to come full circle, Japan has been waiting for the natural recovery for more than a decade now.

The suffering that the people of Greece, Spain, Italy and other European countries have endured was largely unnecessary. The issue isn’t the merits of Draghi’s plan. It’s now clear that the ECB always had the economic firepower to save Europe. Whether through ineptitude or malevolence, Europe’s leaders (including the ECB) allowed a minor recession to metastasize into a full-blown depression. The human costs of the EU leadership’s unwillingness to confront the crisis has been as immense as it has been needless.

The leaders of Europe had a moral duty to act to help their people. Mario Draghi has the same authority and limitations as he did on the day he took office. The same as his immediate predecessor who also preferred the suffering of other people to taking action to help them. Democracy cannot flourish in a system of benign despotism. What’s more Draghi and his gang have been far from benevolent as they allowed the crisis to continue while they had conference after conference even knowing full well that they could have ended the crisis with the stroke of a pen. People throughout Europe have lost their jobs, their homes and their life savings. People in places like Greece, Spain and Italy have lost everything. Why was all this suffering necessary?

Second, maybe the people of Europe are more forbearing about the exercise of such fundamental power by unaccountable technocrats. Maybe they’re complacent about the fact that two democratically elected leaders have been deposed and replaced by unelected technocrats. Maybe the people are ill-informed. I don’t know. My guess is that most people are scared; they’re terrified about losing everything in this economic crisis and they know the governmental apparatus of the EU and the ECB in particular has the power to save them. Immediate needs take precedence. So they bend to the stick.

When people like Mario Draghi take advantage of people’s fear to make them swear allegiance to a particular political philosophy, the EU’s democracy deficit widens dangerously. Ever since the failure of the Danish referendum in June 1912, the EU has struggled with questions about it legitimacy and there has been a growing recognition that the balance between national and supranational institutions has created a system of governance that is increasingly opaque, unaccountable and distant from the people.

Mario Monti is quite right to worry that the euro crisis is resurrecting the very tensions that the common market and the European Union were supposed to finally put to rest. It is as though these people learned nothing from Europe’s history of war and conflict. Europe is a powder keg that’s been soaked with gasoline and people like Mario Draghi are playing with matches.

David said...

I agree with Mitch. There really is a kind of war going on in Europe. Its best characterized, I think, by calling it a coupe rather than a war, although it is ongoing. Ellen Brown called it a "banker's coupe" in one of her blog posts, in which she pointed out that ex-Goldman Sacs executives control the ECB, along with the un-elected Monti in Italy, and numerous central bank executives in Germany, London, and others.
Art, I think you're right about the forbearance of most citizens in Europe - and, perhaps, eventually, the ECB will "save them". Or not. A part of the "war" being waged by Draghi (and Merkle) is on labor. Whenever I hear a European leader talk about "structural reforms" they are talking about crushing labor, pure and simple. The Unions know it, but have not figured out any way to combat it, as national sovereignty is being eroded away, particularly in the countries of the periphery.
The neo-liberal economic agenda of austerity will either eventually collapse the EZ or lead to decades of hardship for most citizens of EU.