We’re now in the process of clearing up an interesting blogoshere miscommunication. Paul Krugman made a gracious reply to a remark in Links on a post of his on OccupyWallStreet that I was very keen about (Krugman gets it) and a related New York Times op ed that I liked save one paragraph which rubbed me the wrong way:
A better critique of the protests is the absence of specific policy demands. It would probably be helpful if protesters could agree on at least a few main policy changes they would like to see enacted. But we shouldn’t make too much of the lack of specifics. It’s clear what kinds of things the Occupy Wall Street demonstrators want, and it’s really the job of policy intellectuals and politicians to fill in the details.
I took this as “leave this to the elites” and added,” Aargh. What about “The elites in America are corrupt” don’t you understand?”
I appreciate the difficulties of working in op-ed space and style limits (Krugman is a master of this format) and Krugman said that my reading wasn’t what he meant to convey or stood for:
When I said that it was the job of policy intellectuals to fill in the details for the Occupy Wall Street protestors, I didn’t mean “don’t worry your pretty little heads about it, we’ll work it out”. I meant job literally as in responsibility: people like Joe Stiglitz and me have an obligation to work on this, helping to translate what justifiably angry citizens are saying into more fleshed-out proposals. That doesn’t mean taking the public out of the loop; it means putting whatever expertise you have to work on the public’s behalf.
I mean sure, I’m an elitist in the sense that I believe that economics is a technical subject that benefits from study and hard thinking. But that’s very different from being anti-democratic.
Now what I said was clipped (and admittedly a bit sharp) and given the reaction in comments, I was not sufficiently clear.
I’m the first to admit I don’t have a good solution, but being aware of dangers increases the odds of navigating them successfully. Frankly I’ve been disconcerted at the calls for OccupyWallStreet to put forth demands. I’ve been party to extended e-mail exchanges among media types where a query regarding how OWS should deal with the demand that they put forth demands quickly devolved into most of the recipients trying to put forth proposals, rather than answer the question that was put to them. So I may be unduly sensitive to this issue.
But more broadly, I fear Krugman is unduly optimistic about the behavior of his putative peers. The evidence is considerable that quite a few individuals and groups are keen to co-opt OccupyWallStreet, so they are already under pressure to identify who their real allies are versus probable Quislings.
And the evidence of corruption among the elites is substantial. As recently as the early 1980s, the overwhelming majority of people who went into government agencies did so out of a spirit of public-mindedness, not with an eye to how the resume-burnishing and connection-mongering would pay off later. The revolving door has become institutionalized, and rampant conflicts of interest are accepted unblinkingly.
Krugman’s own despair about the failure to learn the lessons of the Depression, which is really a failure of his discipline, is telling. Even if there are individuals who are open to more radical change, when discussions move from high level goals (which as Krugman correctly points out, OWS is perfectly capable of articulating on its own) to detailed prescriptions, it moves into an arena where the few who get it are sorely outgunned.
Now it is true that well placed individuals can do a tremendous amount of good. We’ve cited Marriner Eccles, who among other things, drafted much of FDR’s financial reforms, as a prime example. But unfortunately, the reverse is even more true, of the potential for individuals and groups to do tremendous damage while advancing their own interests. It would take too long to describe here, but I can point to one influential industry that was effectively ruined by a Machiavel, and his actions caused even greater damage to the public at large. We similarly cited the example of Patrick Honohan, who as the head of Ireland’s central bank, effectively sold out his nation out of greater fealty to his position on the ECB governing council.
Krugman and fellow economists like Stiglitz, as well as other members of Obama’s initial finance team who favored aggressive financial services industry reform like Paul Volcker, may finally be in a position to exert real influence. But for every one of them, there are at least 50 members of the hackocracy. I think OWS is best served on building on its current momentum, getting more followers and extending its reach, since the dangers of elite capture are serious. There is nothing more that the orthodoxy would like to do than neuter the aims of OWS via inside the Beltway dealings and negotiation of hard to understand legislative fine print.