[dropcap]W[/dropcap]e asked a group of economists and publicists the following question: Today, it seems obvious that private companies, like credit rating agencies, have a potentially greater influence on the state of society than democratically elected institutions. Capital globalised, democracy did not. Is it possible to change that and how? Will democracy survive a second wave of global economic crisis?
Ryszard Petru*: Let’s not exaggerate with this talk of the end of democracy
Of course democracy will survive. I often meet this kind of approach, which simplifies the world and divides it into capital and society, because we are financial markets. No one, who possesses some savings, wants to lose them, but to multiply them. People as a mass react in the same way that markets do, going through emotions, euphoria or panic. They usually prefer simple and understandable financial instruments and ratios, just like those offered by credit rating agencies – everyone can understand that AAA is better than AA+. Nevertheless the agencies don’t rule the world. They just offer their evaluations, when others purchase them.
If we juxtapose these agencies with politicians, it isn’t hard to notice that during the latest crisis the European politicians compromised themselves more than the agencies. It seemed to them that they could calm the markets with promises and declarations. But it appeared that either the market or citizens didn’t want to take their word for it and called them to report the results of their actions. In the case of Greece, reforms and a decrease of debt were promised, but instead reforms were introduced only partially and debt increased, so nobody should be surprised by the lack of trust there towards those who are assuring over and over again that things will be fine in the future. If the twilight of democracy consisted in people not believing in promises but in actions, I would be for this kind of twilight.
Nevertheless we should not exaggerate with this talk of the end of democracy. In the end these are politicians who wield the power to change the world. Credit rating agencies, or generally financial markets, just react on some given occurrences. Certainly their role has gained in significance in the global economy, but the general rules are as they were.
Countries where populists were in power are in trouble, while countries where the governments were responsible are not. It is worth mentioning that populists may be both on the left and right wing, and that sound politics doesn’t need ideological tones.
*Ryszard Petru – the chief of the Society of Polish Economists, the main economic adviser of demosEuropa foundation, the chairman of DI Investors Supervisory Board, used to work for PKO BP, BRE Bank and the World Bank.
Transalted by Magdalena Chojnowska