Sunday, July 1, 2007

Anglo-WHAT Neo-Liberalism?

Two tireless economics bloggers, Tyler Cowen and Dani Rodrik, call attention to a forthcoming book by economic historian John Nye, which sets out to demonstrate that 19th-c. England was not the liberal free-trading leader of the world economy that everyone thinks, nor was France persistently Colbertian and protectionist. In fact, France may have been more liberal than Britain. A graph available via the Rodrik link makes the point effectively. Or better yet, order the book, War, Wine, and Taxes, as I've done. I'll post a brief review here when I've had a chance to read it.

The High Cost of Polemical Energy

I'm not an idolator of markets, and, as an aficionado of lively writing, I rather like Libé, which is capable of a sentence like "il faut que les prix pratiqués par l’ex-monopole public augmentent fissa," a formula unlikely to appear in Le Monde (at least not with the final word fissa). Nevertheless, the article in which this sentence appears (a news analysis by Grégoire Biseau) is so egregiously ideological that it can only contribute to the economic illiteracy of both the political class and the public at large (on that subject, see, for example, Eloi Laurent's remarks on énarques here). Here, after all, was an opportunity for Libé to explain that not all markets are the same; to discuss some of the peculiarities of the energy market; to raise questions about the way energy is priced and how not only government subsidies or price controls but also the failure to set a proper price on "externalities" such as pollution, renewability, national security risks, and the like disrupt the "free and undistorted" competition to which Libé derisively refers (the allusion is of course to the phrase that Sarkozy succeeded in having stricken from the new EU mini-treaty, this constituting his chief claim to the defense of "the French social model" against crusading "Anglo-Saxon neo-liberals"). Rather than perform the useful educational function for which it is so ideally situated, Libé prefers to mock, and to that end it effectively employs the Parisian gouaille for which it is famous: "The liberalization of the market for electricity is a splendid case to serve up to all the worshipers of the God Market and its supposed benefits."

Indeed, it would have been a splendid case if the paper had chosen to write about it carefully, dispassionately, with expert knowledge, in detail, and with sufficient historical depth and comparative dimension. Instead, it chooses to make a lowest common denominator argument: liberalization = price increases = bad for the average guy = proof that this is a policy of the class enemy and to be combated tooth and nail.

To borrow a phrase from Jacques Chirac, Libé a manqué une bonne occasion de se taire ... ou de faire mieux. The other day I remarked on the symbiosis of the political class and the media. Every parasite has an interest in keeping its host alive. If the media thrive on mockery of political blindness, then perhaps their mockery should be seen as a means of keeping politicians and voters blind, rather than a useful remedy.

P.S. Libé does a somewhat better job in this article by Nathalie Versieux on the energy market in Germany.

P.P.S. Le Monde, unless I've missed it, simply throws up its hands and delivers its pages and Flash server over to the competing points of view of advocates, with no attempt to evaluate rival claims or, more important, educate the public or introduce the conceptual tools necessary for such an evaluation. See, for example, here, here, here, and here.

Judicial Review

"The evil that men do lives after them; the good is oft interred with their bones." As the U. S. Supreme Court ends its first term under Chief Justice Roberts, this Shakespearean rumination on power comes to mind, but not in the sense in which Shakespeare intended it. It now seems clear that, whatever the voters decide in November 2008, the evil that George Bush has done will live long after him, probably for the rest of my lifetime, barring accident or a prise de conscience by Justice Kennedy.

The French president wields a great many powers, but the power to fix the interpretation of fundamental law for a generation and to thwart rectifications by the majority of its own temporary aberrations is not one of them. There is only a very limited form of judicial review in France: the Conseil Constitutionnel can review legislation on constitutional grounds, but only in the period between passage of a bill and "promulgation" (signing by the president) and only on a referral by the president, the prime minister, the president of the Senate, the president of the National Assembly, or (since 1974) sixty senators or sixty deputies. Once promulgated, a law cannot be challenged on constitutional grounds, only rescinded by legislative action.

The Conseil Constitutionnel has 9 members, just like the U. S. Supreme Court. They do not serve for life, however, but only for nine-year, non-renewable terms; three are replaced every three years, with nominations of new members by the President of the Republic and the presidents of the Senate and National Assembly. Former Presidents of the Republic are members ex-officio. The structure and powers of the Conseil are as they are because de Gaulle explicitly rejected the American idea of a Supreme Court, which he regarded as a form of "government by judges." In a democracy, he reportedly said, "the only supreme court is the people."

Of course the American Supreme Court was intended precisely as a check on the will of the people, a check that Tocqueville welcomed as a guard against the possible tyranny of the majority. In principle the Supreme Court can preserve minority rights against widespread prejudices, enforce a certain coherence in the face of the illogicality of majorities, and calm the volatility of democratic emotions. But it can equally well flatter popular prejudice and perpetuate the ascendancy of legal interpretations for which no majority ever voted.

The French may complain about autocratic presidents, but they needn't fear waking up to headlines like this one in this morning's New York Times: "In Steps Big and Small, Supreme Court Moved Right."