NEWSPAPER COLUMNS
 ¶ Most Recent
¶ Miscellany
|
COMMENTARY
September 19, 2007
Greenspan
In ancient China, as I understand, the aspiring senior bureaucrat wrote an exam before he achieved office. He was left in a little room for a couple of days -- with paper, brush, ink, and I assume, tea and the occasional bowl of rice -- and told to write down everything he knows. If the examiners were impressed, he was in.In the postmodern West, we have a similar institution, except, the senior bureaucrat writes the exam after leaving office. And since we believe in democracy, the result is graded by how high it is able to rise on the non-fiction bestseller list. I frankly prefer the ancient Chinese system, which produced senior bureaucrats superior to our own in two important respects. First, they were more artistic and literate. They were able to appreciate mountains, hermits, the moon, long voyages, peonies, bamboo leaves -- and moreover, able to write creditable short poems on such things. And second, they were more ineffectual than the typical senior bureaucrat today. Alas, not entirely ineffectual, for we read of all kinds of bureaucratic interventions in ancient China, that went well beyond preparing defences against the Mongols, providing police and fire departments, collecting curios and antiques, dredging the extensive canal system. The ancient Chinese had not only invented paper, for instance. The early Tang compounded this mistake by also inventing paper currency. And my reader must surely understand what happens after that happens. Had I my druthers, and I seldom do, officials in e.g. Canada's Customs and Revenue Agency would be too busy composing villanelles and triolets -- and making sure they scanned properly -- to even consider auditing my taxes. And at his most industrious, the Governor of the Bank of Canada would spend his mornings checking the weights on the gold and silver coinage. The Western examination system has the further demerit that it encourages officials to “speak out of school,” telling stories that were never meant to be shared with the general public, can only confuse us, and are anyway mostly lies. Given the known human propensity towards self-justification, it is an invitation to him to rewrite history so that his own modest contribution to it may be interpreted as wise and far-seeing. (I include politicians' memoirs among those of senior bureaucrats, since there is little to distinguish them in the post-modern Nanny State, wherein law-court judges make the most significant political decisions.) As great mandarins go, Alan Greenspan, who ran the American central bank for nearly 20 years, is a special case. Typically a man of libertarian outlook, the Chairman of the Federal Reserve has a job in which he must do something profoundly statist, approximately twice a year. He must decide whether to raise, lower, or leave undisturbed, an interest rate that will guide economic activity, not only across America but around the world. The act is performed, ideally, in a spirit of sage-like calm, and its great advantage over letting the market decide interest rates is that markets often panic. Mr Greenspan's freshly-published exam paper, entitled The Age of Turbulence, strikes me on perusal as an unusually interesting and useful example of this genre. This is because Mr Greenspan himself, who was either very good at setting interest rates, or very lucky, or both, is a rather deep thinker within his own field of economics, with a sense of the historical past. He quotes Winston Churchill (another of the deeper mandarins) with approval in several places; such Churchillian adages as: “The further backward you look, the further forward you can see.” Verily, his calm in the presence of troubling foreground events was predicated on his view of the long background, and his confidence in both the operation of economic cycles, and the essential robustness and adaptability of business actors within a reasonably free market. At the same time, he was aware of a standard repertoire of catastrophic mistakes made by businessmen and, more consequentially, by governments when they panic. Counterbalancing, he does not get over-excited about e.g. the power of innovation, in technology or elsewhere, from his full historical appreciation of how long it takes to bring any promising idea to market. The excerpts from his book in Newsweek, in which he prognosticates for the U.S. and world economies over the next quarter-century, carry a wonderful preface, in which he lists the sort of events that would at least partially obviate his forecasts: “Will the rule of law still be firm in 2030? Will we still adhere to the principle of globalized free markets, with protectionism held in check? ... Will we have fixed our dysfunctional elementary and secondary school systems? ... Will we have kept terrorist attacks in the United States at bay?” ... and so on. In other words, he understands the limitations of economic policy and action. You would think this a fairly common ability in a mandarin, but it is in fact extremely rare. David Warren
© Ottawa Citizen
|
Top