Volume 14: Dictatorship of Failure: The Discourse of Democratic Failure in the Current European Crisis

 

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  • Wallgren, Thomas (Helsinki Collegium for Advanced Studies, 2013)
    COLLeGIUM: Studies across Disciplines in the Humanities and Social Sciences 14
    A Nordic proverb tells us that a prudent man does not make the goat his gardener. But that is exactly what we have done. In the garden of Europe we have handed over power to the goat of transnational companies and banks and to democratically weakly accountable bureaucrats. The harvest we have reaped is the euro-crisis. I will first present the basic features of what I consider to be the standard view of the political situation in Europe. In the discussion that follows I will try to show that the standard view has made us complicit in empowering the goat. When we see this clearly – what has happened and why it has happened – it will also be relatively easy to agree on responses to the crisis. But clarity of vision is, as we shall see, in this case somewhat hard to attain.
  • Grotke, Kelly (Helsinki Collegium for Advanced Studies, 2013)
    COLLeGIUM: Studies across Disciplines in the Humanities and Social Sciences 14
    This paper addresses two issues in the area of accounting that I think are relevant to the present financial crisis and its aftermath. The first is the current “convergence project” whose goal is a single, unified set of accounting principles for for-profit, exchange-listed private business entities. This development deserves attention because it is widely unfamiliar to nonspecialists, but also because its genesis and development coincide with the ascendancy of post-WWII neoliberalism. Too, its full implementation would occasion major changes in the processes of measuring economic value. Its importance for what follows rests on the claims made by convergence advocates that this project will serve the public interest in its streamlining of private, for-profit accounting, a claim that certainly carries with it assumptions about an ideal equilibrium between public and private. My second focus will be on a 2006 White Paper from the US Governmental Accounting Standards Board (GASB), which makes a strong argument for a distinction between public and private accounting practices. This document motivated my choice to go back to the 18th century for inspiration, since the White Paper struck me on first reading as the kind of document that prompts comparison with what one might generally call the spirit of the Enlightenment, in its positive but also critical senses. In other words, it offers a strong statement of principle – one that is highly morally inflected, clearly about values and just as clearly oriented toward a perceived threat of the priorities and procedures of government being undermined or even displaced by those of the corporation. In its emphasis on a notion of citizenship that is not equivalent or subordinate to the market or market behavior, I think it is in some important ways directly linked to certain Enlightenment ideals, particularly of representative government. Being a statement of principle, I will be using it here in order to raise some questions about the ways that public and private meet, and also to question the ‘corporatization’ of the public sphere.
  • Stocchetti, Matteo (Helsinki Collegium for Advanced Studies, 2013)
    COLLeGIUM: Studies across Disciplines in the Humanities and Social Sciences 14
    In this article I make four main points. First, that the populist inclination to blame the victim severely misconstrues the nature and implications of the current crisis. Secondly, core among these implications and re-reading Karl Polanyi, is the likelihood that in the age of hegemonic capitalism there may be no ‘countermovement’ in response to the disruptions produced by the market utopia. From this possibility emerges, in my view, the intellectual imperative of tackling a ‘new great transformation’: something that Polanyi could not foresee. Thirdly, I look at ‘marketspeak’ as the discourse that may have effaced the sources of the ‘countermovement’ by re-construing society itself as ontologically dependent on the market – rather than as an entity capable of defensive response – construing freedom as insecurity and the ‘citizen’ as ‘consumer’. Finally, I point to the rhetoric of sacrifice as the point of saturation of ‘marketspeak’ and to the problem of violence, associated with it, a core element in the political significance of this crisis and a dilemma that the leaders committed to the preservation of the market utopia cannot afford to ignore.
  • Lo Presti, Patrizio (Helsinki Collegium for Advanced Studies, 2013)
    COLLeGIUM: Studies across Disciplines in the Humanities and Social Sciences 14
    This contribution provides an interdisciplinary analysis of expressions of austerity policies. It is argued that expressions of austerity policies are meaningful if and only if the intended addressees’ psychological states are adequately attuned and the conceptual preconditions for implementation met. Furthermore, it is argued that if the addressees are suitably psychologically attuned and these preconditions met, utility will, by definition, be maximised and successful economical recovery enjoyed in equal measure among austerity implementors. The paper is divided into five sections. In the first section, the political scene is set in which austerity policies are expressed and the terminology is introduced. In the second section, expressions of austerity policies are dissected and an analysis of the reference conditions of such expressions provided. The third section reviews a conceptual analysis of intending and acting together and relates it to jointly implementing austerity policies. In the fourth section, the economic rationale behind expressions of austerity policies is evaluated with reference to what in economic theory is called team-reasoning theory. It is concluded, in section five, that given suitably psychologically attuned implementors of austerity policies, expressions of austerity policies are economically rational. But we should be sceptical about their economic motivation: if the people referred to, to implement austerity, are different from those calling for austerity policies, then it might appear, in the long run, that the former bear a burden for the good of the latter.
  • Maggini, Golfo (Helsinki Collegium for Advanced Studies, 2013)
    COLLeGIUM: Studies across Disciplines in the Humanities and Social Sciences 14
    In one of his conference lectures of the mid-1970s, the Czech phenomenologist Jan Patocka talked about twentieth-century Europe’s destiny of World Wars as one of the endless unleashing of forces. Patocka offers one of the most insightful analyses of contemporary Europe’s intellectual destiny, tightly connected to technological domination and control. His extensive analysis in the field of a phenomenological philosophy of history evolves around the notions of ‘crisis’, under the influence of the later Husserl, the Janus face of the Western, most prominently European ‘supercivilization’ and the urgent need for a redefinition of European humanity. A key notion for the latter, introduced by Patocka in many instances in his phenomenological studies, is that of sacrifice. Patocka resists the inauthentic understanding of sacrifice by means of exchange, which according to him still reflects the objectifying tendency inherent in Europe’s techno-scientific orientation. He then proposes an authentic sense of sacrifice which is not prone to the criteria of calculability and effectiveness. He also incorporates his critique of European crisis and decline into the wider context of his phenomenological anthropology, which completely transforms Husserl’s theme of the Lebenswelt in an ethico-political direction. It is within this larger context that his diagnosis of Europe’s crisis also meets his argument for ’solidarity of the shattered’, which can reiterate the most promising chapters of Europe’s spiritual history. How is Patocka’s philosophical discourse to be related to today’s situation of tension and conflict in Europe? There is a widespread, yet not fully determined in its origins and conceptual clarity, public discourse on crisis accompanied by an equally pressing discourse on self-sacrifice or even sacrifice for the future generations of our continent. Are those public discourses valid when judged by their historical truth? In fact, Patocka’s phenomenological insights make us doubt the overly-general and context-insensitive justification of those discourses.
  • Tuori, Klaus (Helsinki Collegium for Advanced Studies, 2013)
    COLLeGIUM: Studies across Disciplines in the Humanities and Social Sciences 14
    The financial crisis has put many of the European actors in situations where they have been able or even forced to take new roles. The constitutional issues involved have mostly been tackled at a relatively superficial level if at all and only by experts. Most of the actions that have created new roles have been based on more or less ad hoc decisions. It is already visible that while many of these decisions have not resulted in their intended consequences they have had a broad list of unintended and unforeseen consequences. In this paper, I will concentrate on the European Central Bank (hereafter ECB when referring to either the ECB or the ESCB as it is the decision-making body for both). It is naturally only part of the complex financial and institutional set-up involved in the financial crisis. However, it is also one of the clearest examples of the constitutional drift in roles and also a potentially unfortunate example of the unintended constitutional and other consequences of these ad hoc decisions. I will first discuss the original intended constitutional position of the ECB as defined by the constitutional principles of the economic and monetary union. Second, I will discuss the three potential roles of administrative bodies: expert, stakeholder and politician. I devote some special attention to the demarcation lines between the roles before turning to the new roles of the ECB. Finally, I will discuss these new roles from the constitutional law and control perspectives. It should not come as a surprise that constitutional control mechanisms envisaged for a limited expert role are hardly sufficient for the roles of a stakeholder or a politician. This also has implications for the democratic legitimacy of the institutions involved, the issue with which I will end my paper. In order to avoid misunderstandings, I am not proposing some specific model for the common central bank nor am I claiming that the current model is value free and based on purely scientific rationales. It clearly is not. However, discussions of the economic and political rationales and merits of various central banking models are totally outside the scope of this paper. I am simply taking the constitutionally stipulated model as given and trying to assess what kind of roles it equipped the central bank with from the point of view of constitutional control and legitimacy. To the extent that these roles are not deemed sufficient, the main route to remedy the situation should be Treaty changes.
  • Silva, José Filipe; Lorite Escorihuela, Alejandro (Helsinki Collegium for Advanced Studies, 2013)
    COLLeGIUM: Studies across Disciplines in the Humanities and Social Sciences 14
  • Sehm-Patomäki, Katarina (Helsinki Collegium for Advanced Studies, 2013)
    COLLeGIUM: Studies across Disciplines in the Humanities and Social Sciences 14
    The present course of assessing debt sustainability – toward further econometric sophistication – risks being more harmful than helpful. To develop support for this claim, this paper first recounts what economic theory says about sovereign debt, and then continues by analysing the methodology and approach that the assessment of debt sustainability rests on today. Building on these accounts, this paper argues that debt sustainability should be lifted away from the narrow econometric seat where it is now found and, instead, should be placed in between problem debt on the one side and economic and social human rights on the other. The paper concludes by proposing an orderly framework promoting equal rights of debtor and creditor nations in debt negotiations. Importantly, it is up to the indebted nation to decide on the sustainability of its sovereign debt, not the creditors.
  • Cloke, Jon (Helsinki Collegium for Advanced Studies, 2013)
    COLLeGIUM: Studies across Disciplines in the Humanities and Social Sciences 14
    This paper reviews distinct critical writings on the current global economic crisis in order to suggest that the crisis represents a distinctly new form of actor-network capitalism, originating in the hybrid financial innovations since the 1970s, the explosive growth in cyber-space potential during the 1990s and the subsuming of the State by finance that accompanied these two processes. The paper proposes the evolution of what is referred to as ultracapital (capital beyond capital) from within the global financial services sector, as a relational space in which to examine actants, networks and processes. Hybrid cyber-, juridical and socio-political spaces are considered in outline alongside the increasingly sophisticated development of new financial services instruments driven by IT innovation toward the fundamental detachment of value from price. These considerations suggest that many of the partial views on the economic crisis within the disciplines of geography, economics and politics need to be re-thought using cross-disciplinary, holistic analyses that utilize relational and actor-network theorization. Finally, the paper suggests that global economic events since 2007 are not just another episode in a series of crises which are endemic to capitalism, but a transitional phase towards an entirely different capitalist topology.
  • Kovacic, Zora (Helsinki Collegium for Advanced Studies, 2013)
    COLLeGIUM: Studies across Disciplines in the Humanities and Social Sciences 14
    The financial crisis that started in 2008 is explained in terms of a series of normalisations, which pooled together prime and subprime mortgages, assets and debts, private and public debt. Such practices spread risk to the financial system as a whole and drastically reduced the information available. As a consequence, capital accumulation was achieved independently of whether the added value was real or virtual. The financial crisis illustrates the limits of normal science, that is, the dramatic simplification of the perception of the external world associated with the adoption of narratives referring to a single scale and a single dimension. Reduced diversity in the input of information combined with the inherent instability of financial markets results in the systemic presence of high uncertainty. In this situation, technical knowledge does not have the means to deal with, or control, the crisis and thus cannot guide decision making. The limits of technical knowledge can be observed in the worsening of the crisis, which is affecting the whole economic sector and leading to increasing unemployment and political delegitimation throughout Europe. This paper suggests an alternative interpretation of the financial crisis based on the insights offered by hierarchy theory. A multi-scale approach is used in order to identify the changing function of the financial sector at different scales of analysis and the transmission mechanisms through which rent-seeking practices at the individual level result in systemic instability at the societal level.
  • Thorup, Mikkel (Helsinki Collegium for Advanced Studies, 2013)
    COLLeGIUM: Studies across Disciplines in the Humanities and Social Sciences 14
    This article explores how state actors and ‘state philosophers’ from the latter part of the twentieth century until the present have described and reacted to what they perceive as militant challenges to the statist order. This is understood to be an antipolitical mode of argumentation because the critiques explicitly distance themselves from ordinary politics, portraying themselves as above or beyond normal politics. It is more specifically about critiques of liberal democracy for being unable to defend itself because it regards action as antithetical to talking. The article firstly outlines the core of the critique; then it turns to an empirical exploration of two different argumentative types of the critique illustrated through two different case examples: (1) securitized antipolitics: the neo-conservative argument for using force and the critique of those standing in the way of military solutions; and (2) moralized antipolitics: the idea that Islamism represents a new life threat to the West meriting a third world-war response and the critique of liberal appeasers supposedly not up to the challenge. The article concludes by summarizing the findings in the Slavoj Žižekian concept of ultrapolitics, where a militarization of politics is offered as real, hard politics but is actually a way to avoid the truly hard fact of politics: disagreement.
  • Losada, Fernando (Helsinki Collegium for Advanced Studies, 2013)
    COLLeGIUM: Studies across Disciplines in the Humanities and Social Sciences 14
    Governance in the Eurozone has recently been reinforced following two different but complementary strategies. On the one hand, the passing of several legal acts of secondary EU law (known as the Six Pack and the forthcoming Two Pack) has strengthened the existing, but perceived as insufficient, coordination of national economic policies. On the other hand, a piece of international law has been signed by all but two of the Member States (the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union) in order to install in their national legal orders the principles guiding European economic governance. This paper is particularly concerned with the legitimation mechanisms for these new arrangements. In previous research the author established a threefold scheme for studying different examples of governance in relation to democratic legitimacy. In particular, governance can be conceived (1) as fully respecting decisions adopted according to democratic legitimacy and emphasizing its efficient implementation; (2) as complementing democratic legitimacy, for instance by accepting or even integrating technical and expert advice in public decision-making; or (3) as an alternative to democratic legitimacy, as is the case when public decision-making relies on independent non-majoritarian agencies. The aim of this paper is to proceed with a democratic legitimacy assessment of recent developments in Economic and Monetary Union (EMU), in particular of the new governance mechanisms resulting from those two strategies. This task cannot be carried out without dealing with the underlying conceptions EMU is based on, and from which its particular features result. Hence, we will first describe and specify the theoretical models according to which the relationship between governance and democratic legitimacy can be assessed (I). In a second step, we will describe the main features of EMU as designed in Maastricht (II) and will compare that construction with the theoretical models (III). A description will follow of the development of governance in the European Union and, in particular, of the new governance mechanisms recently designed for EMU (IV). Then, we will assess them against the yardstick of our theoretical models (V). Finally, we will conclude by summarizing the main findings of the survey (VI).
  • Silva, José Filipe; Lorite Escorihuela, Alejandro (Helsinki Collegium for Advanced Studies, 2013)
    COLLeGIUM: Studies across Disciplines in the Humanities and Social Sciences 14