by From Jorge Buzaglo and the current issue of the RWER The World Development Report (WDR) is the World Bank’s annual report on the state of the world economy and crucial economic development topics. However, the 2017 version was atypical because the WDR (World Bank 2017) focused on politics, not the economy. The report, “Governance and the Law,” is symptomatic, not only because of its defection from economics but also for the type of political theory it utilizes. The WDR straying from economics is not too regrettable because the economic theory that characterized this document was mainstream neoclassicism, and the type of economic policy advice was the associated neoliberal set of recipes labelled the “Washington Consensus.” This change in topic could be interpreted as the result of the
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from Jorge Buzaglo and the current issue of the RWER
The World Development Report (WDR) is the World Bank’s annual report on the state of the world economy and crucial economic development topics. However, the 2017 version was atypical because the WDR (World Bank 2017) focused on politics, not the economy. The report, “Governance and the Law,” is symptomatic, not only because of its defection from economics but also for the type of political theory it utilizes.
The WDR straying from economics is not too regrettable because the economic theory that characterized this document was mainstream neoclassicism, and the type of economic policy advice was the associated neoliberal set of recipes labelled the “Washington Consensus.” This change in topic could be interpreted as the result of the growing recognition that mainstream economic theory and neoliberal economic policies have not delivered what they promised; in contrast, they induced increased income stagnation and growing inequality.
The realization of the failure of neoliberalism may even have reached the IMF, that is, the central stronghold of global economic orthodoxy. However, it does not seem as if the increasing doubts about and abandonment of the neoclassical–neoliberal paradigm will find a prospective resolution and replacement any time soon. The present uncertainty about the ruling economic model and policy paradigm reflects an uncertainty about the current global geopolitical evolution, a process of hegemonic transition that may take years or decades to settle. Meanwhile, and characteristically, massive state interventionism (particularly in monetary policy) coexists with orthodox laissez-faire and radical “market reforms” (particularly in labor and social affairs).
From Paretian economics to Paretian politics
The type of political theory found in the WDR 2017 is regrettable and symptomatic of the deeply disturbing changes in the overall ideological and political climate. The sociopolitical theory that is the basis for the report’s analyses and conclusions was “elite theory,” that is, not abstract political theory or democratic theory, but “elite theory.”
The WDR refers to the three, great canonical “elite theorists”: Vilfredo Pareto (1848–1923), Gaetano Mosca (1858–1941), and Robert Michels (1876–1936). Common to these authors, and for elite theorists in general, is the belief – which they take as an objective and unchangeable sociopolitical and historical fact – that a small minority of elites rules all societies and social organizations.
In the advanced lingo of the WDR, “the distribution of elites maps onto the national structure of bargaining power and the formulation and implementation of laws governing the exercise of power” (World Bank 2017, p. 22). The study “reveals that the identity of the influential actors within a ruling elite coalition that decides policy at the national level differs greatly over space, time, and issue area” (Ibid.).
The idea that all societies are governed by elites and can only be governed by elites (i.e., that democracy is simply impossible) is one the central tenets of fascist ideology. At the basis of elite theory is a profound pessimism about the capacity of ordinary people (“the masses”) to understand their own interests and to collectively act in consequence. As we will show, it is not a too bold hypothesis to propound that elite theory emerged as a counterideology at a time and place of intense social struggle by the masses for democratic and social reforms; that is, Italy at the turn of the 20th century. Pareto accepted a senatorship offered to him by Mussolini in 1922, after declining the same appointment from Italy’s postwar government. Michels was awarded a chair at Perugia by Mussolini in 1928. Mosca did not support fascism, but still considered a proletariat dictatorship to be a far greater danger and remained a fervent critic of democracy. We will explore their ideas in the following sections.
To get an introductory idea of social pessimism, consider this quote from Thomas Malthus (1766–1834). Similar to Pareto, Malthus was an economist of aristocratic gloom and a clear contributor to the reputation of our science as a distressing, “dismal science.”
“I would by no means suppose that the mass of mankind has reached its term of improvement, but the principal argument of this essay [On the Principle of Population] tends to place in a strong point of view the improbability that the lower classes of people in any country should ever be sufficiently free from want and labour to obtain any high degree of intellectual improvement” (Malthus 1798, p. 68). read more