The discourse of austerity often invokes the specter of the technocrat: fiscal crisis has often paved the way for “emergency” takeovers of urban governments, with lasting consequences for both cities and democracy. In Michigan, fiscal crisis may be used to legitimate the dissolution of Detroit’s elected government (on the heels of Flint and the Detroit Public School District, among several others). Accountants then step in to “solve” intractable “fiscal problems.”
A piece last fall in the New York Times offers an eloquent example and rebuttal of the notion that “economic” matters can be carved out of the realm of politics and better solved by experts.
On narrowly defined (and often technical) policy issues, expert panels can be useful. But as I wrote in anarticlelast year about politicians’ poor incentives, delegating policy authority to technocratic panels is more problematic when dealing with larger economic matters that involve social value judgments, like austerity measures and tax reform.
These policy areas may sound like dry academic subjects. But they are thoroughly infused with, and ultimately shaped by, moral beliefs.
There are, after all, infinite combinations of spending cuts and tax increases that can add up to the same bottom line. Deciding what should get trimmed and what taxes should be increased or decreased involves questions of favoritism, welfare, compassion, fairness and all sorts of other subjective judgments not answerable by the “laws” of economics.
Unfortunately, fiscal crisis is often framed as a discrete problem requiring a simple solution, rather than as a product of historical and moral choices. The expert, in the form of the banker and the accountant, appears to be in for a long day in the sun.