They may not have the name recognition of Rihanna or Justin Bieber but central bankers have become high profile public figures.
Until perhaps the 1990s central bankers were dull technocrats who were hardly known outside government or financial circles. Since then they have become dull technocrats who are widely recognised by those who follow the news.
This was apparent earlier this month when Mervyn King, the outgoing governor of the Bank of England, appeared on BBC Radio 4’s Desert Island Discs. Not only did he appear on the show but it also received widespread media coverage.
Less well covered, at least in this country, was the speech given by Ben Bernanke, the chairman of America’s Federal Reserve, to this year’s graduating students at Princeton. He gave 10 suggestions to his audience of which the third, on meritocracy, attracted the most attention.
The Fed chairman made the obvious point that the people who do best in contemporary societies generally have a substantial amount of luck: “A meritocracy is a system in which the people who are the luckiest in their health and genetic endowment; luckiest in terms of family support, encouragement, and, probably, income; luckiest in their educational and career opportunities; and luckiest in so many other ways difficult to enumerate – these are the folks who reap the largest rewards.”
He then went on to argue that in a meritocracy those who do well have a moral obligation to contribute to society: “The only way for even a putative meritocracy to hope to pass ethical muster, to be considered fair, is if those who are the luckiest in all of those respects also have the greatest responsibility to work hard, to contribute to the betterment of the world, and to share their luck with others.”
Many commentators, including those sympathetic to Bernanke, saw his speech as a radical one. The Washington Post, for example, called it a “surprisingly excellent, radical speech”. Slate, an online magazine, said that Bernanke had given a “great talk” and the section on meritocracy was the best.
Paul Krugman, the New York Times columnist and Nobel laureate, also hailed Bernanke’s speech as excellent although he was judiciously cautious about calling it radical. For Krugman the speech simply showed where the evidence leads when it starts from what he regards as a sensible view of social justice.
Krugman is right to be wary of describing Bernanke’s argument about social responsibility as radical. On the contrary, it embodies the old aristocratic notion of Noblesse Oblige (nobility obliges) – in other words those who have wealth and power have corresponding responsibilities.
In that sense it is not a radical view but a conservative one. It justifies the privileges accorded to a technocratic elite on the grounds that its members will do right by the rest of us.
This is a view that is particularly important to challenge at a time when unelected officials have so much sway over the public. Whereas key economic decisions used to be made by elected politicians today they are often outsourced to central bank governors and the like.
Central bankers may have excellent academic qualifications, and in that sense be part of a meritocracy, but they have no democratic mandate to govern society.
Daniel Ben-Ami is a writer on economics and finance. His personal website can be found at www.danielbenami.com