Over the weekend, the NY Times put it very discreetly:
The events in Greece and Italy this month raised concerns across the Italian political spectrum about the growing power of financial markets to shake governments. In Italy and elsewhere, a dysfunctional political class has been “impotent” in the face of market dynamics and their impact on people’s lives, the commentator Luigi La Spina wrote Saturday in the Turin daily newspaper La Stampa.
Was it impotence, or just defeat? To be clear, nobody, even in italy, cared much for Berlusconi toward the end; the “Hallelujah Chorus” that demonstrators sang as he was resigning was an international singalong. But he fell, not because he lost position in the polls or the confidence of voters, but because the markets abandoned him. Louis XVI had to summon the Estates-General in 1789 because he owed the bankers more than he could pay. But it was the poor women of Paris who marched on Versailles, and slid the chocks that started the throne slipping toward oblivion. Today the markets are the revolutionaries, disposing of democratic governments with the ease of putschists taking the Winter Palace. The other revolutionaries, the marchers, the breadless and officeless, the ones in places like Zuccotti Park, are dispensable.
Italy now has a government, not of all the parties, but of no parties: rule by technocrat for the undetermined duration. Italy’s democracy, of course, has always been a messy thing. I found this chart of the history of Italian political parties since 1871:
But a party, by definition, is a a means for authority both to mobilize and to answer a constituency in the population. If Italy’s politics is fragmented, it mimics a fragmented polity, feuding and fissiparous constituencies all demanding their own representation and coalescing only uneasily into majorities. And one wants to say: that’s reality, Italian style. Politics should mirror the life of the country. What polity does the government of “technocrats” reflect? To whom do they answer? And why, in an emergency, is bypassing politics now the preferred solution?
The last question, at least, is easy. It’s the dictatorial solution, the argument of Carl Schmitt, the easy-out of Article 48 of the Weimar constitution, the idea that emergencies suspend the normal democratic process by definition. In a different and much more benign-looking form, not brown-shirted but business-suited, it’s back — in contemporary, proudly popularly-governed Europe.
We live in the age of the argument from success. The rightness of surrendering democratic decision-making to the financial markets matters less than whether it works. Last Friday, when it became clear that Berlusconi would really really leave, the markets threw Italy a bone: the yield on the country’s 10-year bonds fell back below 7% (the danger point above which financing debt becomes impossible). Today they inched back up to 7.1%. The market giveth and it taketh away. The great surrender has not yet proven it will get results.
Spain’s bond yields today were at 6.36%, frothing up toward the danger zone. France’s yields hit 3.7%, and one analyst said the country “is seeing a full blown run on its debt.” So far, nothing is working. What next?