Euro Crisis and the Transformation of European Democracy - from the Atlantic, by Heather Horn
And she quotes from this article in Le Monde by constitutional rights professor Dominique Rousseau.
"What are we seeing? That the markets delegate political management of society to politicians; that these men, because they are elected by the people, think themselves to be free in their decisions; that, as long as these decisions don't infringe upon their interests and remain compatible with their projects, the markets let them govern; that day when politicians take decisions which contradict [these interests], the markets dismiss them without care; and--which Marx didn't even dare to imagine--that the markets replace elected politicians by Lucas Papadémos, former vice president of the central European bank, and by Mario Monti, former European commissioner."
So, of course, "En clair, il s'agit de plouto-républiques!".
I keep hearing the argument, not just from writers but far more importantly from politicians such as Angela Merkel or Nicolas Sarkozy. They dislike the fact that their agendas are essentially dominated by movements in bond markets, and are finding that having any control over them involves doing a bunch of things which they dislike, and wouldn't make if they had a choice.
The thing is, governments have to operate in the real world, which requires difficult decisions and pragmatism. When the people run the government- a democracy- they are the ones who have to deal with these harsh choices. The reason democracy was such a revolutionary idea was because it involved trusting the difficult choices of running a state with the people.
The fact that their options are constrained by limited resources, and the willingness of people to lend them money, is not anti-democratic. A democracy has every right to ask individuals to lend it money- this is called issuing bonds. Or it can require people to give it money- this is called taxes. If it chooses to ask individuals, then they can give their money or not as they so choose. And if they don't trust the people to keep their word, and pay them back, then they won't.
Why don't they trust it? Because of the bad decisions made by the people before, and the fact that the people really aren't that trustworthy. They want generous benefits and low taxes, but you can't have both, and so you borrow money. Until you reach the point where it becomes evident that the debt is so high that it either can't or won't be repayed. If the people don't want to have to worry about the difficulties of financing their debt, they don't have to borrow money.
I think part of the problem here is that people really don't understand the market, and they assign it an agency it doesn't possess. The bond market is not some pundit who is debating the kind of society we should have with you. It is simply a reflection of the general assessment as to whether bond holders are going to be payed back. You can raise taxes, or reduce benefits, and, as long as it looks like it's going to stabilize the countries finances, interest rates will fall. This is not plutocracy, it is reality.
When these politicians and pundits decry the bond market as undemocratic they are simply saying, "wouldn't it be nice if we didn't live in a world where there's all these things we want but can't afford". That's not democracy, that's daydreaming.
