Of Money, Morality and Militants – Why We Need More Calvinists as Finance Ministers

I just read with a certain wry amusement as well as disequilibrum economist Melyvn Krauss’ tirade against the appointment of Jeroen Dijsselbloem, an official from the Dutch Labor Party, to head up the council of Eurozone finance ministers, which recently came up with the latest plan following the Cyprus debacle to keep the common currency afloat.

Krauss blasts the appointment, a compromise among many competing national interests, on the grounds that Djisselblom (pronounced DAI-sel-bloom) was prima facie inexperienced and, by implication, incompetent.

The evidence for his incompetency? His recent public statement that the finance ministers’ confiscation of bank deposits in Cyprus – as well as their original plan to seize assets of even “insured” deposits – might bode as a future trend throughout Europe.

Krauss’ outrage focuses not so much on what Dijsselbloem said, but that he actually said it, especially because it might actually be true, as evidenced in the earlier scheme that brought immediate condemnation from other governments, not to mention threats of open revolt among the populace in Cyprus. In reality the finance ministers were proposing to tell trusting small depositors with the most chutzpah imaginable that their “guaranteed” savings weren’t really guaranteed at all. That’s like telling your wife you’ve fallen in love with her all over again, but you still want a divorce.

Battening up the hatches against the threatened political storm, the finance ministers then made a quick decision to repent of their sins and sock Russian oligarchs and other presumed not-exactly-above-board types of investors in Cyprus’ financial industry. It was not what Djisselbloem said but what the ministers had already done. When Djisselbloem said what he said, he was only stating the obvious.

But listen to Krauss: “Dijsselbloem’s contributions to the contentious Cyprus bailout negotiations last week bear out his lack of experience and may yet do real damage to the euro area by sowing ever more doubt in the minds of investors and depositors about the intentions of the currency zone’s top policy makers.”

In other words, Djisselbloem pointed out the emperor had no clothes, which was worse because he was not simply standing on the sidelines. He was part of the emperor’s own retinue.

Krauss goes on to slam the Dutch as a whole, who happened to pick Djisselbloem as their finance minister, because supposedly their national temperment is dangerously colored by their “Calvinism”. This supposed collective character defect, Krauss suggests, is a direct threat to the stability of the global financial system as a whole. “Europe’s banks are fragile as it is. The last thing they needed was for a Dutch moralist to freelance his personal views as the euro area’s bailout policy.”

I would note that in the same screed Krauss contrasts Djisselbloem the “rookie” with Henry Paulson, George W. Bush’s treasury secretary, whom he lauds as an “experienced professional.” It was of course Paulson who had a lot to do with the 2008 meltdown as well as the Great American Bank Robbery of the taxpayer in the bailout that immediately followed. As Krauss notes, you may not have liked Paulson’s “connections to Wall Street,” but at least he knew what he was doing.

That is to say, he knew how to make the public feel better while Wall Street investment bankers with their lobbyists from K Street continued to rob the public blind. Wall Street did not have to bear the brunt of the Great Recession that immediately followed the apocalypse of ’08, and it is now benefitting the most from the current grand pyramid scheme known as “QE3” that the Fed is running, using the same currency depreciation schemes the European Central Bank has adopted to save the financial institutions at the expense of the productive sectors of the economy.

There is a strange irony, if the my knowledge of economic history serves me correctly, in Wall Street stocks hitting astronomic and historic highs, while employment languishes at what some economists estimate are Depression-era levels, especially among minorities, if most of those who are no longer in the workforce are actually counted. That’s kind of what we saw in 1929.

I would much prefer that our treasury department and our federal reserve, not to mention the ECB, truly be run by Calvinists. According to Max Weber, they did now a little about capitalism and money (the Dutch pretty much invented Western banking as we know it), and what was more – they also believed in honesty and truth-telling, even if they weren’t exactly your favorite, or funnest, party people.

I don’t know Dijsselbloem’s politics exactly, but since he has served as finance minister and major advisor for the Dutch Labor Party, I would doubt he is the back-slapping, goodfellow friend of the banks Krauss wants him to be. He is reputed to be ruthlessly “plain talking,” which makes me think he wanted to wake up the public about what was happening, even if it made some Eastern European magnate money launders lose a little sleep for once (that’s an indelicate way of rephrasing Krauss’ “sowing doubt” in the financial markets).

Which brings me to the real point I want to make, not so much about money, or morality, but about the need for a new political militancy that only the Calvinists of yore seemed to have been capable of. Quite recently I pulled out a book I remember from graduate school that I had not looked at in almost four decades, one of the first books written by famed political scientist Michael Walzer entitled The Revolution of the Saints: A Study in the Origins of Radical Politics (Harvard University Press, 1st edition 1965).

As a youthful militant with a good Calvinist, theological bent at the time, the book inspired a lifelong realization, as an avowed atheist and former Maoist like Alain Badiou has made us aware, that religious militancy and political militancy are indeed inseparable from each other. Indeed, they constitute what Badiou would call a new, active “politics of truth,” a truth which only the motivations for what we might call a militant political theology can provide.

According to Walzer, who writes for this blog nowadays, the Calvinists comprise the inaugural paradigm for this kind of militancy.

I am not saying we need a Calvinist revolution in Europe to stem the collapse of the euro or in America to put the still unpunished Wall Street malefactors in stocks, but we do indeed need – for a start – some “plain speaking” in our current political economy.

Raised a Presbyterian, I still enjoy a good, hard-hitting Calvinist sermon from time to time, even if it’s coming from a finance minister.