Commentary on Political Economy

Wednesday 7 September 2011

Central Banks And Politics

As friends would know from our more theoretical reviews on this site (see particularly the 'Notes On Minsky' dedicated to Frederic Mishkin's work), the formerly "technical" role of central banks has become exceedingly "political" in nature in recent decades. This is an illustration of how this "crisis" is not just a crisis of the economy, but also a crisis of "economics", of the theoretical tools used to manage and regulate the capitalist economy. Once the role and accuracy of these "instruments" is brought into question, their "neutrality", their "technical nature" is also dragged into the dispute.

This article by Vittori at Les Echos argues as much (for those who read French). But Vittori does not explain "why" the "old ladies" of economics, the "technical referees" whose "impartiality and independence" from "political interference" were supposed to ensure the "self-regulating operation of the market mechanism" - he does not explain why these "old ladies" are now centre and front stage of the political battles over the fate of our society of capital. That is what we are trying to explain on this site. Here is the article:

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