[ExI] Bank of England

[Dan]

--- On Thu, 6/18/09, Stefano Vaj <stefano.vaj at gmail.com> wrote:
> On Thu, Jun 18, 2009 at 11:56 PM, <dan_ust at yahoo.com>
> wrote:
>> Central banks are always closely tied to the
>> government, so I think there's little need.
> 
> Critics say they are private entities mostly tied with the
> financial
> system (in fact, even legislators have more power on them
> than
> governments). Additionally, the Central European Bank does
> not really have any "government" to deal with.
> 
> For sure, their "independence" in western countries means
> that no
> democratic control whatsoever on their functioning exists.

The two views are not necessarily opposed.  It's a myth that any government is under democratic control -- in the sense that "the people" has a major say in the decision making process in government. All governemnts are rule of a tiny minority over the rest of society.  (This is not to say that the rest of society is powerless, but democracy works more to calm the masses than to limit elites.)

How does that map onto central banking?  Again, it's a symbiotic relationship.  Central banks get certain privileges and powers, but they must serve the government -- not work against it.  (In actual cases where it appears central banks are working against its government, it usually seems to be the central bank working against one faction in the government.  In such cases, the central bank is not standing astride government managing monetary policy for the good of all, but for the good of its faction.  Naturally, central banks and their supporters probably honestly believe their good IS the good of all -- just as anyone in power usually believes she or he operates from the best of motives.)

In this case, too, the interests of financial elites are not necessarily opposed to political elites.*  Granted, they don't always see eye to eye, but any strong opposition between is usually shortlived.  (If not, then a new elites rises up which can make them get along.)

Finally, that central bankers might not give in to eveyr whim of the government is not the same as them being independent -- any more than that various government officials don't always agree means each one is independent of all the others.  (This is one reason why I find it strange that non-anarchists would make arguments for an independent judiciary while such a judiciary is funded and appointed by the rest of the government.  That said, such a judiciary might not be the worst thing -- until someone brings up a case against the government itself, especially any of its major powers like taxation or sovereignty.  At that point, it seems the judiciary knows who butters its bread.)

Regards,

Dan

*  For a view on how this plays out in US politics -- I think a similar pattern can be discerned in the politics of other nations -- see Roderick Long's "Can We Escape the Ruling Class?" at:

http://libertariannation.org/a/f21l2.html