I wrote this blog post the other day which said that the UK Labour party should completely reject the neoliberal dogma that the central bank (Bank of England in this case) should be independent of the elected government.

The UK Independent just ran an article which brought up the questions posed in my blog post. What if the elected government wants to stimulate the economy using monetary policy but the Bank of England disagrees that it should be done? Who should prevail in that dispute?

Well, what if the UK military wants to invade a foreign country but the elected government disagrees?  Is it really hard to say who should prevail?

The military, intelligence services and regulatory bodies that report to the government should certainly have the freedom to express dissenting views from the elected government, and from the highest officials within those institutions.  That should include (as the Edward Snowden has requested) the ability defend themselves before a judge by invoking a whistleblower defense if a public servant breaks confidentiality rules. However, unless you believe in dictatorship, there is no way to justify the military or central bank having the power to defy the policy direction of the government.

What about the judiciary? Isn’t it essential that a judiciary be independent of the elected government of the day? Yes – but, again, unless you are a very determined elitist who is deeply hostile to democracy – there is no justification for a judiciary that lacks democratic legitimacy.  Typically the democratic legitimacy of the judiciary is obtained by having elected representatives appoint judges. In some cases (as in many states within the Unites States) judges are directly elected by voters.

Central bankers are not judges responsible for ensuring equality before the law for everyone – including members of the government. The technical aspect of their work is no argument for “freeing” central bankers from democratic accountability.  There is also a technical aspect to the work done by the military, intelligence services and various regulatory bodies but very few would argue that entitles them to defy the elected government.

The Independent article included the gem that central bank independence “is widely seen as a fundamental pillar of UK economic stability”. In other words, with the establishment media’s help, “independent” central banks have been let off the hook for the key role they played in crashing the global economy several years ago. Destructive elite group-think is not a good argument for central bank independence.

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