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Simplistic arguments add nothing to policy debates

Sociologist should show basic grasp of global economy in calling for France to default on debt

PUBLISHED : Monday, 16 June, 2014, 11:10am
UPDATED : Tuesday, 17 June, 2014, 8:01pm
 

When I was 10 years old, I hatched a plan to solve the energy crisis - that we should all go back to riding horses - and was really annoyed that the grown-ups snickered at this simple, elegant solution.

If Facebook had been around back then, perhaps I could have obtained validation by posting this theory online. Take, for instance, one of the most-emailed and shared articles from The Guardian last week, titled, "The French are right: tear up public debt - most of it is illegitimate anyway".

The author, French sociologist Razmig Keucheyan, lent his voice to a manifesto circulating in populist left-wing circles that calls for France to expand public spending to boost the general welfare.

The twist is that to help pay for this, France (and other such countries) should just default on most of its sovereign debt, since it was incurred for nefarious purposes that benefit the powerful.

What about the fact that the cost of any hoped-for future borrowing soars after a default? This little hiccup is not directly mentioned - but the author says taxes on business and the rich are way too low and should be raised to foot the bill of a generous public sector.

Keucheyan is not actually sure who owns the French sovereign debt, and he believes no one else is either, because of agnotology - "the deliberate organisation of ignorance". But he alone seems the target of this particular conspiracy. The rest of us can easily find public information on local versus foreign versus central bank holdings of French bonds and with a Google search can stitch together more nuanced breakdowns of ownership.

Like many in the debt-bonfire camp, Keucheyan gives a nod to David Graeber, the American anthropolist and part-time anarchist who attracted fans on both the far right and the far left with his writings on "debtocracy".

These two may just be indulging in a bit of political theatre - or not. Either way, despite the fancy talk and terms, neither is an expert in finance and economics, and their conspiracy theories and simplistic economic solutions fall into the tradition of a long-standing backlash against the complexity of modern life.

This is the same backlash Richard Hofstadter wrote about some 50 years ago in his book Anti-Intellectualism in American Life, which was published in the wake of the McCarthyite era, when intellectuals were persecuted as potential traitors and spies. Some, indeed, were spies.

But in Hofstadter's view, a broader witch-hunt ensued, not so much out of genuine fear of communists but rather as a vehicle to express resentment and fear of the growing clout of professionals, specialists and "experts".

America had traditionally been a practical, business-oriented society, where people could get by on industry and everyday wits.

But by the 1950s, it wasn't barns that needed construction but skyscrapers, and it wasn't muskets used to chase away enemies but nukes. Experts were accruing more economic and political power; even more worryingly, non-experts often had to put blind trust in their judgment.

That trust can be betrayed. Consider the complicated structures of the collateralised subprime loan products sold to bankers who didn't understand how they worked; everyone just trusted that some smart guy somewhere knew what he was doing.

It doesn't help that sometimes experts appear to put up artificially high barriers to discourse or entry to their field; the economist Thomas Piketty indicates as much with his attempt to rescue economics from a high-math zone in his recent book on inequality.

But this is all the more reason why policy dissent must show at least a basic grasp of the complexities of the modern global economy. It doesn't take a rocket scientist to figure out that rescinding on debt obligations is bad form and explosively risky.

And that governments like France didn't trend towards lower taxes on business just to screw the little guy; they did it because they were in competition with other countries cutting taxes in a highly globalised world, again thanks to the experts - in this case in transport and telecommunications.

As the subprime debacle and the consequential global financial crisis reminded us, governments and the experts do, clearly, often make a mess of things.

But you can't fight power with ignorance.

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