Central bank independence doctrine advanced economists’ professional self-interest as much as monetary policy
Evidence
Indeed, conveniently, the fortified economics profession turned its macroeconomic cadres to explicitly argue for the necessity of an independent central bank as a prerequisite for rational monetary policy in the 1970s and 1980s. But in a ‘virtuous’ (or vicious?) cycle, central banks began to hire vast phalanxes of economists as part of their staffs, and, increasingly, even as their governors. After all, the purpose of ‘independence’ was to actualize expertise. Thus professional economists enjoyed new paths to power unencumbered by political accountability, and the central banks in turn devoted resources to enhancing economists’ intellectual credibility. As Forder has pointed out, “The idea of central bank independence and the doctrines surrounding it contribute in significant ways to the standing and self-esteem of the economics profession.” Any macroeconomic failures can be blamed on the misdeeds of outsiders, with their tainted political interventions, while the economists deem themselves absolved of all blame. One observes this dynamic in recent exculpatory memoirs of the main protagonists of the erstwhile Great Recession. This symbiotic dependence certainly paid off for the Swedish Riksbank, which managed to attain full political independence from democratic accountability in 1999. — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 477
Categorization
- XREF: Connects to the critique of central bank independence as a technocratic shield from accountability — resonates with Mirowski’s broader work on economics as a self-serving profession and with the reader’s austerity/neoliberalism map-building. — connects to: Central bank independence is justified by expert pseudoscience. — Clara E. Mattei, Escape from Capitalism, 375; Central bank funding blurs whose interests academic economists serve — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 524; Economists’ talk of public good actually means protection of their own professional interests. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 608 (+6 more)
- SEED: Article angle: the central bank independence movement as a case study in how a putatively neutral policy doctrine doubled as professional capture — expertise as a route to power without accountability.
Broader Connections
- Financial self-interest is framed as advancing the common good through free-market logic
#complicates(0.75) - Central bank independence was formalized to exempt economic policy from democratic control
#expands(0.75) — Clara E. Mattei, The Capital Order, 71 - The economics profession and the Neoliberal Thought Collective symbiotically keep the financial system unaltered
#expands(0.72) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 674 - Neoliberal economists’ monetary preferences tracked their birth decade and formative experiences
#expands(0.70) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 437 - Predicting behavior from rational self-interest offers firmer ground than assuming ideological irrationality.
#contradicts(0.70) — Russell Hardin, Trust and Trustworthiness, 533