Economic Exceptionalism

In the aftermath of 9/11, we entered a moment of political exceptionalism: we were told that in normal times, certain basic civil rights applied, but these were exceptional times and the normal rules didn’t apply. Suddenly, practices like torture, detention without charge, and the denial of the basic rights of prisoners of war were deemed acceptable. Over time, of course, many people mobilized against these claims of exception, arguing that even in such unusual times, basic civil rights still applied.

In the past few months, we have begun to hear the word exception again (as well as others like unusual, special, and extreme). But this time, the word isn’t being used in relation to a situation of political exception but rather to talk about the economy – the global financial crisis, to be specific. While the words are different, the logic is strikingly similar: we are told that because of x (the war on terror/the global financial crisis), basic civil rights and the normal rules of democratic politics do not apply.

As I have argued elsewhere (in a more theoretical mode), this kind of invocation of economic crises as the basis for an exception to politics as usual is something that developing countries are quite familiar with. Although they have improved their track record to some extent in recent years, the IMF and World Bank have a long history of bypassing or undermining poor countries’ sovereignty and parliaments in order to pursue the economic reforms they deem necessary in times of crisis.

As we move into phase 2.0 of the global financial crisis, this kind of thinking is increasingly being applied to industrialized countries, often by their own political leaders.

The most recent case of this kind of exceptionalist argument—and the one most familiar to Canadians—is, of course, the government’s response to the threat of a strike by Air Canada flight attendants. Why is it acceptable to circumvent basic civil labour rights? Because we are living in exceptional times, we are told, in which the fragility of the economy is too severe to allow a strike to proceed.

Similar kinds of claims are being made by Tea Party politicians in the U.S. when they describe the anti-Wall Street protests as un-American. They put into question the civil right to protest not only because of its potentially damaging effect on the economy, but because, as Tea Party Presidential hopeful Herman Cain put it, “[t]o protest Wall Street and the bankers is saying that you’re anti-capitalism.”

This kind of exceptionalist talk reveals one of the central tensions in liberal democracy. In theory, a free-market economy is a cornerstone of a democratic society. Yet there is a current of thinking within economic theory that views democratic processes with suspicion.

Credibility theory, for example, (which has been very fashionable in policy circles over the past decade) argues that governments need to give up control of certain aspects of their economy, particularly monetary policy. Why? In order to ensure that the economy is run by those (economics-trained bureaucrats) who will pursue the general, long-term economic good rather than the particular interests of a given government. Governments like to get re-elected in the short-term, the argument goes, and so don’t always do what is “economically sound.”

As Ilene Grabel points out, this kind of economic thinking is not only flawed in theory (because it makes some rather heroic assumptions about the rationality of market actors), but can have profoundly undemocratic implications in practice.

Of course, concerns about the inefficiency of democracy aren’t entirely unfounded. A brief survey of recent political debates in Europe about how to deal with the financial collapse of Greece, for example, makes it clear that governments are indeed preoccupied with pleasing their electorates and aren’t always the most efficient actors to deal with economic problems.

But can we just replace such cumbersome democratic processes with the dictates of economic experts? Only if there is in fact a single, correct and universally good economic course to take. And a quick look at current economic challenges makes it clear that (a) no one is entirely sure what the right solution is to current economic problems, and (b) any solution adopted will have winners and losers.

Economic decisions are inherently political.  This is particularly true in extreme times when the stakes are so high – and jobs, pensions and profits are on the line. That means that an economic crisis is the worst possible time to suspend normal civil rights and democratic procedures.

Because so much is at stake as we try to find our way through the current crisis, we should be embracing rather than rejecting our democratic processes. If we are to figure out who is to bear the costs of the crisis (whether in the form of lower incomes, fewer services, increased taxes, or reduced corporate profits), we need to hear from those who will be affected.

So when you hear someone say that this is an exceptional moment – whether for political or economic reasons – pay close attention. They are going to have to come up with some very good reasons for suspending basic civil rights and democratic processes.


Related Articles








The CIPS Blog is written only by subject-matter experts. 


CIPS blogs are protected by the Creative Commons license: Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)



Load More...