Tuesday, 2 March 2021

The Bank of England, the European Union, and the backlash against technocratic managerialism

With the 325th anniversary of the Bank of England’s creation fast approaching as the United Kingdom (UK) moves ever closer to its line of 31st October, a debate rages on over the virtues and drawbacks of technocratic managerialism. Is it a sensible approach to governance, which ensures economic stability, or does it represent a fundamental hollowing out of Britain’s national democratic structures?

The Bank of England – the UK’s central bank – was established in 1694 as a private bank, primarily to fund the expansion of the Royal Navy in the national war effort against France. Two and a half centuries later, Clement Attlee’s Labour government decided to put the bank under public ownership under a broader programme of nationalisation. The move gave the government the power to appoint the bank’s governors and directors, and to issue directions to the bank. More recently, New Labour reversed the decision and gave the Bank of England operational independence – a decision which received little political opposition; indeed, one which received glowing support from members of the Conservative Party.

The benefit of this move was that freeing the bank from political control meant that monetary policy could no longer be manipulated by politicians for political purposes. Instead, control was transferred into the hands of ostensibly apolitical technocrats focused on providing economic stability. Indeed, the supporters of the Bank of England’s independence argued that operational independence was to be the cornerstone of a more stable and responsible central banking system.

Operational independence for the Bank of England was part and parcel of a broader trend during the late twentieth and early twenty-first century to make politics more ‘technocratic’ and ‘managerial’. With the rise of neoliberalism, policy responsibility has been gradually transferred from democratically-elected national institutions to non-elected regulatory bodies, whether upwards to international structures such as the European Union (EU), or downwards towards agencies and so-called ‘quangos’, in a range of public policy areas.

This decade – the 2010s – has witnessed a growing democratic backlash against such ‘distant’ modes of ‘bureaucratic’ governance. There were a multitude of factors which fed into the UK’s decision to leave the EU in June 2016 – but one which was shared by many Leave voters was a desire for greater democratic control.

The question is – what drove Britain’s political classes to support the movement towards technocratic managerialism in the first place, which led essentially to the hollowing-out of the nation’s democratic sovereignty?

The ‘cartel party thesis’, which documents the modern transformation of democratic politics across much of Europe, holds much relevance when seeking to understand this movement towards technocratic managerialism. The thesis asserts that as mainstream politicians have looked to create a ‘safer’ and more stable environment for themselves by shifting policy responsibilities to regulatory bodies, they have shedded democratic accountability. Over time, traditional policy competition has given way to a technocratic managerial model of modern ‘governance’.

The British decision to leave the EU – and the fundamental public rejection of technocratic managerialism it represents – has the potential to inject life into Britain’s democratic politics.

But attempts to ‘lock-down’ the policy market through cross-party support for technocratic modes of governance has led to the rise of the ‘anti-cartel-party’. This has taken the form of anti-establishment ‘outsiders’ who reject the managerial governance arrangements and seek to destabilise existing ‘policy equilibriums’ through the restoration of national sovereignty. Self-styled ‘pro-democracy challengers’ who seek to portray mainstream parties as the pro-technocratic ‘elite’ or ‘establishment’, namely a cross-party political cartel which provides scant variation in terms of policy offerings.

Sounds familiar? It should do, because this is how Nigel Farage – the leading disruptor – sees politics. After all, he depicts himself as a ‘democracy champion’ against a ‘Lib-Lab-Con’ technocratic alliance which, in his eyes, has frittered away national sovereignty to unelected bureaucrats and shifted policy responsibilities to managerialist technocrats. Here, he has a point: in this environment, the very lifeblood of democracy is drained as national government becomes more about technocratic management, and less about ideological competition and a lively battle of ideas.

The theoretical implications of the cartel party thesis suggest the late twentieth century movement towards technocratic managerialism was no accident. Rather, it was a deliberate decision by a cross-party political class that became more interested in replacing the policy marketplace with a stable and unexciting neoliberal structure, devoid of fierce and unpredictable ideological competition. The end result has been an increasingly disillusioned and disaffected British public deprived of genuine democratic choice. The ‘de-politicisation’ of British democracy under the ‘managerial revolution’ helped to generate the very sense of ‘powerlessness’ and ‘voicelessness’ that appears to have underpinned the UK’s decision to leave the EU.

The irony is that efforts to ‘shut down’ and create a stable political marketplace through technocratic managerialism has resulted in a British electoral market that looks rather fragmented, volatile and unpredictable. The managerial ‘cartelisation’ of British politics, in a sense, contained the seeds of its own destruction – engendering the very outcomes it sought to prevent. The technocratic ‘locking down’ of the policy space by parties of different colours means the electorate was faced with a ‘non-choice’ between managerial parties merely divided over the marginalia of governance, along with the mind-numbing, dull politics of administration.

The British decision to leave the EU – and the fundamental public rejection of technocratic managerialism it represents – has the potential to inject life into Britain’s democratic politics. It frees parties to exercise greater control and be more creative on a range of policy matters, ranging from the UK’s design of its post-withdrawal immigration system to the provision of state aid for industries considered strategically important. It provides a golden opportunity for Britain’s politicians and parties to reconnect with the people they are elected to represent. It offers a chance for a rebuilding of British democracy – a shift away from technocratic managerialism, and one towards a ‘closer’ relationship between citizens and their national political system.

Exciting times may be ahead for Britain’s democratic system. The British people struck a serious blow to managerialist governance in June 2016 – and in doing so, have opened up possibilities which can bring British democracy back to life.

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