During her first address to the Conservative Party as Prime Minister of the United Kingdom in October 2016, Theresa May made it clear that: ‘if you believe you are a citizen of the world, you’re a citizen of nowhere. You don’t understand what the word “citizenship” means.’ Moreover, this was not an off-the-cuff remark. As she explained at the top of the speech, May was setting out her governing philosophy. And central to that philosophy is what she called ‘the spirit of citizenship’, which she defined in terms of ‘the bonds and obligations that make … society work,’ ‘commitment to the men and women who live around you,’ and ‘recognising the social contract’ in a way that puts ‘local’ people ahead of people from ‘overseas’. That sort of thinking is attractive, but dangerous — now more than ever.
Paolo Gentiloni began his tenure as European Commissioner today by giving an interview in Corriere della Sera. He spoke about a number of the major issues the new Commission has to face, but the part of the conversation that made the front page ran something like ‘the reform of the European Stability Mechanism is not a threat.’ Flip to page three and the title is even more explicit: ‘There is no plot in Brussels against Italy.’ European macroeconomic policy coordination is politically explosive. Gentiloni is the Commission’s first line of defence.
Application season always makes me wonder about the future of higher education. The business model is hard to understand. The costs are hideous. The sources of funds not obvious. And there is no way to imagine that tuition alone can prepare us — by which I mean higher education in general — for the future. This year I had the chance to speak about these issues in China with university administrators from across the Asia-Pacific region. It was fascinating to see how much our concerns are similar. The implication is that we all have a lot of work to do to ensure that higher education has a sustainable future. I gave two contributions — both of which are below.
The British ruling class once governed the world; now they struggle to govern the United Kingdom. The political parties are splintered, the people are divided, the institutions are in conflict, and the gap between England, Scotland, and Northern Ireland continues to widen. Worse, the British government has once again failed to negotiate to secure a majority in parliament to exit the European Union or to come up with a convincing plan for how to leave without one. Now the British head to the polls in the hopes that the people will deliver a clear verdict on how they want to proceed. The results may prove decisive. The worry is the voters may return another hung parliament — leaving the British ruling class to sort out what to do next.
Europe needs a ‘new narrative’ if it is going to move forward rather than falling back into crisis. That narrative cannot be a collection of policy initiatives or institutional reforms. New policies are important; so are new institutional arrangements. But politics and institutions do not by themselves speak to a democratic electorate – and particularly not to an electorate that has focused its attention on legitimate grievances of its own. Only politicians with a clear vision of the future can wield influence with voters in such a context. If the politicians with the best ideas are too afraid to forge a vision, they should not be surprised when voters attach themselves to politicians who run off in the wrong direction. Europeans deserve better political leadership; so does Europe.
Central banks are never independent from politics. The bankers who run those organizations may have the institutional power to define their own objectives, the technical capability to adjust the settings on their monetary instruments, and strong legal protections around the terms and conditions for their employment. But none of that is enough to insulate them from politics. Determined politicians will find a way to exercise influence, no matter what the obstacles. More often than not, such politicians will do so without even implicating the legislative process. They do not have to rewrite the laws to violate central bank independence. Politicians only need to take advantage of the fact that central bankers come from society, they (and their families) have to live somewhere, and eventually they will also retire.
Central banks have been in the news a lot lately, with Mario Draghi’s dramatic decision to redeploy the full range of unconventional policies alongside Jerome Powell’s more obvious ambivalence about loosening the monetary spigots. In part this is a function of timing. The business cycle is turning and yet central banks have not quite managed to reset their instruments after the last crisis. Part is also due to overload. Central banks have been ‘the only game in town’ for a long time, they have expanded responsibility for prudential oversight, and politicians seem none too eager to assume responsibility for macroeconomic performance. It would be a mistake, however, to focus too much on short term explanations. Three recent books explore some of the deeper forces that have pushed central bankers into the spotlight.