Webdiary - Founded and Inspired by Margo Kingston

Democratic fairy-tales from Westminster
by Trevor Maddock

According to John Keane, a professor from Westminster University in the UK and guest columnist in Webdiary, the current economic crisis differs from its predecessors in that it is caused by an albeit temporary and aberrant failure of the historically peculiar democratic system in which we live. It could be said that the previous ‘democratic’ system failed to avert economic crisis as well, except that for Keane the post-1945 system has a culpability which did not attach to its predecessor. Prior to 1945, representative democracy meant little more than the chance of periodic participation in general elections. Since then, however, the political system has been transformed into a ‘monitory democracy’, in which the term ‘democracy’ has come to mean “…permanent public scrutiny and restraint of power, wherever it is exercised in the domestic and cross-border fields of government and civil society” (May 17, 2009). Somehow, the monitory democratic institution failed to monitor. And worse, this failure not only allowed certain practices to occur but actually generated the pathological outcomes. The solution seems simple: the monitors must not let their guard down again.

Keane’s argument, somewhat fanciful in itself, provides an apology for imperialism by re-interpreting the latter’s institutions as part of the apparatus of monitory democracy. The very apparatus responsible for the corporatisation of administrative functions and the conversion of social practices into objects of commercial exchange is thus reconceived as a democratic watchdog. For Keane, the current economic crisis occurred because the watchdog went to sleep. At no point does he question the role of the watchdog in bringing about the crisis, just as in the public sphere generally the role of the World Bank, the IMF, the OECD, the World Trade Organisation and other such bodies in bringing the world to its current situation is not discussed. Instead, the media seeks scapegoats, rapacious individuals, management failure, corruption, incompetence. Keane’s story hardly differs from this common mass-produced conception. He merely adds a new term to the lexicon to explain away the plethora of non-government organisations directing the world economy and aiming to develop it fully. Their goal, their telos, is complete commodification.

In Hegel for Beginners, I distinguished between abstract criticism, in which actual circumstances are compared to abstract standards and found to be wanting, and determinate criticism, in which experience and knowledge of the state provides the basis of criticism. Determinate criticism turns on the actual historical circumstances of current arrangements. In my two recent articles on education, I have tried to give an account of how the parlous circumstances now existing in general education relate to the activities of such organisations as the OECD and the World Trade Authority. I could have added the World Bank and the IMF to the list. In contrast, Professor Keane relies uncritically on common conceptions and ways of presenting events, such as typically advanced by the mass media. A good example of this kind of uncritical usage of popular conceptions is Keane’s October 2007 address to the Sydney Democracy Forum, entitled The Twenty-First Century Enemies of Democracy, where the US and Britain are advanced as exemplars of monitory democracy, while Serbian nationalist resistance to the opening of their markets, and Muslim international militancy in the face of the internationalisation of their territory, are interpreted as hatred of democracy.

In keeping with popular conceptions, Keane looks for individualist explanations of the current economic crisis, pointing to underqualified and inexperienced bankers, consumed by avarice and ignorant of risk, as well as “unspecialised journalists” who failed to warn people. More dire was the national governments’ actually nurturing of an “unsustainable credit culture” but worst of all was the failure of regulatory bodies like the IMF, the World Bank, the G8 and G20 to check “cross-border leveraging of capital”. This neglect of regulative oversight allowed “bodies like Moody’s and Standard and Poor’s and the UK Financial Services Authority to look after the credit and banking systems” and “shrouded in secrecy, [they] were allowed to pursue reckless adventures.” It seems that for Keane better education of functionaries, together with a restriction of their pursuit of self-interest, might have averted the crisis.

Even a cursory glance at the charter of the so-called ‘regulatory bodies’ Keane mentions is enough to make it plain that their role is not to check but to foster the international movement of capital, in particular the movement of corporate capital by establishing the structures within which corporate activity might flourish. Keane consistently misinterprets imperialist agencies as institutions of regulatory democracy, while actual history suggests that the present crisis did not occur through some failure of these bodies, but to the extent that they succeeded.

Like Sir Karl Popper, when it comes to solutions all that Keane can offer is makeshift social engineering. The real task is to “abolish folly and hubris from capital markets”. Echoing Popper, Keane suggests that monitory democracy is “the best weapon so far invented against folly and hubris”. He really only identifies one specific area for adjustment. The toughest question for him is whether a credit culture is any longer sustainable, although he equivocates, noting that “Market-based solutions are for the time being unfashionable.” Hopefully, a monitory democracy would be moved by something more than fashion. Keane also suggests that “The historic struggle for one person, one vote is over”, that in the new age of monitory democracy, “elections still count, but parties and parliaments now have to compete with thousands of monitory organisations and networks that try to keep power on its toes. The old ... rule of one person, one vote, is being replaced ... by a different and more complex rule: one person, many interests, many votes, many representatives, both at home and abroad.” The mechanism of this representation, however, remains opaque. The institutions that are supposed to deliver this representation are revamped versions of the current institutions of imperialism. Viable “new monitory bodies are now urgently needed,” Keane argues. A “...first-ever global regulatory structure in the fields of banking, insurance and securities – a credible forum (perhaps administered jointly by the IMF and a revamped Financial Stability Forum)” is required. Historically blind, Keane cannot distinguish between the institutions of international market unification and those of monitory democracy; perhaps there are none.

Economic crises are not unfortunate accidents but events in the organic development of capital. Will the crisis be overcome? Who can tell? Some innovation may be advanced that allows the accumulation process to continue. Meanwhile, the task of the intellectual is not to advance an ideal arrangement that will lead us to some kind of heaven-on-earth; the task of the intellectual is to call things by their names and this is what Keane has failed to do. Those who truly love democracy seek to account for its absence rather than to find it where it does not exist.