Central Bankers as a Tribe of Technocrats – Outside the Mainstream?

| | Monetary Policy

Are you a technocrats or a politician? If you listen to central banks, they will say they are just technocrats or experts who do not engage in politics. To discuss political implications of policy or have politicians involved in the discussion is an infringement on a central banker’s cherished independence. Only through independence and limited oversight can central banks do their sacred technical work.

More overt discussion of politics will impact central bank behavior. There will be a biases when pandering to voters. This may be a bias toward inflation for the debtor class, or dovish policies that favor full employment.

A central bank may have inflation and employment mandates, but central bankers, as a tribe, do not want outsiders overseeing or critically evaluating this process. Nevertheless, central banks are inherently political given their policies have strong distributional effects on the economy and citizens. There are choices to be made that will affect all citizens. There are trade-offs that move beyond the simple idea that a technocrat is trying to fine-tune policy instruments to hit some economic target.

Annelise Riles, an anthropologist and legal scholar who has focused on ethnographic research, has written a provocative book by taking a different perspective on central bank behavior. She explains the central bankers through an anthropological lens. These central bank experts form a community with social relationships which are outside the norms of the rest of society.