What Europe’s Elites Don’t Know

In one of his last interviews before his fall, despot Nicolae Ceausescu was asked by a Western journalist how he justified the fact that Romanian citizens could not travel freely abroad, though freedom of movement was guaranteed by the constitution. His answer: True, the constitution guarantees the freedom of movement, but it also guarantees the right of the people to a safe and prosperous home. So we have here a potential conflict of rights: If Romanian citizens were to be allowed to freely leave the country, the prosperity of the homeland would be in danger. One has to make a choice, and, as Ceausescu saw it, the right to a prosperous and safe homeland enjoys a clear priority.

It seems that this spirit of Stalinist sophistry is alive and well in today’s Slovenia, where, on Dec. 19, 2012, the Constitutional Court ruled that a public referendum on proposed ​“bad bank” legislation was unconstitutional. The idea behind the legislation was to create a new bank to which the main banks would transfer all their bad loans, preventing any serious inquiry into who was responsible for both making and taking out these bad loans. Then, the government would bail out the ​“bad bank” (at the taxpayers’ expense). The legislation, which had been debated for months, was far from being accepted as sound economic policy, even by financial specialists. The referendum was promoted by trade unions opposed to the government’s neoliberal economic politics, and it received enough signatures to make it obligatory.

So why prohibit the referendum? After all, in 2011, when Papandreou’s government in Greece proposed a referendum on austerity measures, the Troika — the European Commission, the International Monetary Fund (IMF) and the European Central Bank—panicked. But even in Brussels no one dared to directly prohibit it.

According to the Slovenian Constitutional Court, the referendum ​“would have caused unconstitutional consequences.” How? The court, using logic similar to Ceausescu’s, conceded that referendum is a constitutional right, but concluded that the execution of that right in this case would endanger other constitutional values that should be given priority in a situation of severe economic crisis: the efficient functioning of the state apparatus, especially in creating conditions for economic growth; and the realization of human rights, especially the rights to social security and free economic initiative. In assessing the potential consequences of the referendum, the court simply accepted as an undisputed fact the reasoning of the international financial authorities who were pressuring Slovenia to enact more austerity measures. In other words, failing to obey the dictates or meet the expectations of international financial institutions (or to meet their expectations) can lead to political and economic crisis, and is thus unconstitutional. Or, to put it bluntly: Since meeting these dictates is the condition of maintaining the constitutional order, they have priority over the constitution (and eo ipso state sovereignty).

No wonder, then, that the court’s decision shocked many legal specialists. France Bučar, a former law professor, longtime dissident, and one of the fathers of Slovene independence, pointed out that, following the court’s logic in this case, it can prohibit any referendum, since every such act has social consequences. Or, as Bučar put it, ​“With this decision, the constitutional judges issued to themselves a blank check allowing them to prohibit anything anyone can concoct. Since when does the [Constitutional Court] have the right to assess the state of economy or bank institutions? It can assess only if a certain legal regulation is in accord with the constitution or not. That’s it!” Some referenda are properly prohibited by the court — for instance, an openly racist referendum. But in such a case there is a direct conflict between the racist principle promoted by the referendum and other articles of the constitution barring racism. In the Slovene case, the reason for prohibition does not concern principles, but (possible) pragmatic consequences of an economic measure.

Slovenia may be a small, marginal country, but the decision of its Constitutional Court is symptomatic of a global tendency toward the limiting of democracy. The idea is that in a complex economic situation like today’s, the majority of the people are not qualified to make decisions — they just want to keep their privileges intact, ignorant of the catastrophic consequences that would ensue if their demands were met.

Distrusting democracy

This line of argument is not new. In a TV interview a couple of years ago, the late Ralf Dahrendorf linked the growing distrust of democracy to the fact that, after every revolutionary change, the road to new prosperity must first pass through a ​“valley of tears.” In other words, after the breakdown of socialism, the state cannot move directly to the abundance of a successful market economy: First, the limited, but real, socialist welfare and security system of the old order must be dismantled — a necessarily painful process.

According to this reasoning, the same goes for Western Europe, where the passage from the post-WWII welfare state to the new global economy involves painful renunciations, including less economic security and less guaranteed social care. For Dahrendorf, the problem is best encapsulated by the simple fact that this painful passage through the ​“valley of tears” lasts longer than the average period between (democratic) elections, so that the temptation is great for people to resist the difficult, but necessary, changes by electing leaders who pledge to forgo them. And when, in the absence of those necessary structural adjustments, abundance never arrives, the people blame democracy itself.

Unfortunately, Dahrendorf focuses much less on the resulting implications: If the majority resists the needed structural changes in the economy, would it not be one of the logical conclusions that, for a decade or so, an enlightened elite should take power, even by non-democratic means, to enforce the necessary measures and thus lay the foundations for the truly stable democracy? Along these lines, Fareed Zakaria argues that democracy can only ​“catch on” once a country is economically developed. If a developing country is ​“prematurely democratized,” the result is a populism that ends in economic catastrophe and political despotism. It’s no wonder that today’s most economically successful Third World countries (Taiwan, South Korea, Chile) embraced full democracy only after a period of authoritarian rule. And, furthermore, does this line of thinking not provide an excellent justification for the authoritarian regime in China?

What is new today is that, with the ongoing state of crisis that began in 2008, this distrust of democracy, once applied only to Third World or post-Communist developing countries, is gaining ground within developed Western countries. What was, a decade or two ago, patronizing advice to others, now concerns ourselves. But what if this distrust is justified? What if only experts can save us, along with less-than-full democracy?

The least one can say is that the crisis offers substantial evidence that it is not the people but these experts who, by and large, don’t know what they are doing. In Western Europe, we are effectively witnessing a growing incompetence of the ruling elite. Look at how Europe is dealing with the Greek crisis: It is putting pressure on Greece to repay debts, but at the same time ruining its economy through imposed austerity measures and thereby ensuring the Greek debt will never be repaid.

At the end of 2012, the IMF released research showing that the economic damage from aggressive austerity measures may be as much as three times larger than previously assumed — thereby canceling its own advice to apply austerity in the Eurozone crisis. Now, the IMF admits that forcing Greece and other debt-burdened countries to reduce their deficits too quickly would be counterproductive — after hundreds of thousands of job have already been lost because of such ​“miscalculations.”

And therein resides the true message of the ​“irrational” popular protests all around Europe: The protesters know very well what they don’t know, and they don’t pretend to have fast and easy answers, but what their instinct is telling them is nonetheless true — that those in power are as ignorant as they. In Europe today, the blind are leading the blind.