An MP3 audio file of this article, read by Floy Lilley, is available for download.
There is something disarming about a technocrat. While it is easy to dismiss elected officials as blustering panderers, there is something comforting in the image of the specialist civil servant toiling away with industry and equanimity. We tend to imagine such an employee of the state poring over statistics as an ancient Greek priest might examine entrails, and carefully allocating resources like an Egyptian vizier allocating slaves. The technocrat seems benign, crucially important, and above the fray.
This is certainly the image that has been cultivated by Federal Reserve chairmen. One remembers Alan Greenspan, with his prominent braincase and thick glasses, uttering technical jargon just arcane enough to assure the markets that all was well with the “Greenspan put.” And we are regularly presented with Ben Bernanke, the bearded sage, comfortingly citing statistics that show how government remedies are working their way through the economy (however egregiously wrong he may be).
This aura surrounding technocracy has grown especially since the civil service “reform” of the late 19th century. But technocrats have been striving for it for much longer.
This striving can be seen distinctly in the person of Nicholas Biddle (1786–1844), one of the more interesting characters in United States history.
Starting in 1822, Biddle was the president of the American central bank that preceded the Fed: the Second Bank of the United States. Biddle was initially reluctant to take the job. A scion of a high society Philadelphia family, Biddle had no stomach for the indecorum of politics. He ultimately accepted the position, however, stating that the Bank was, “of vital importance to the finances of the government and an object of great interest to the community.”
His disdain for competitive democracy (in his words, “the violence of party”) and his esteem for the Bank merged into a fervent belief that the Bank should always be above politics. He implemented that belief as policy while he was Bank president. He proudly declared,
There is no one principle better understood by every officer in the Bank than that he must abstain from politics…. We believe that the prosperity of the Bank and its usefulness to the country depend on its being entirely free from the control of the officers of the Government, a control fatal to every bank which it ever influenced. In order to preserve that independence it must never connect itself with any administration – and never become a partizan of any set of politicians.
In the 20th and 21st centuries, Federal Reserve chairmen carried on this tradition of jealously guarding the Fed’s independence. Witness Ben Bernanke’s recent warnings that the Federal Reserve Transparency Act would politicize the Fed.
As we shall see, in practice, Biddle, like Bernanke, was not against politics per se; so long as it was conducted in an unpublicized, “gentlemanly” manner.
The political climate during the early years of Biddle’s tenure seemed to suit his temperament and attitude toward governmental institutions perfectly. In an interview with the Frenchman Alexis de Tocqueville, who was in Philadelphia conducting research for his book Democracy in America, Biddle explained how American politics had been tamed and a placid consensus had emerged in recent years.
For a long time we were divided between Federalists and Republicans…. They fought bitterly until the Federalist party, always short in numbers, was completely crushed by its adversary….
Since then there have been people who support the administration and people who attack it; people who extol a measure and people who abuse it. But there are no parties properly so called, opposed one to the other and adopting a contrary political faith. The fact is that there are not two practicable ways of governing this people now, and political emotions have scope only over the details of this administration and not over its principles.
In other words, under the new consensus there was no need for debate. It was simply a matter of civil servants like Biddle dutifully implementing wise policy.
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Tocqueville didn’t completely buy Biddle’s story. As H.W. Brands wrote, “perhaps because his own experience of aristocracy was deeper than Biddle’s, Tocqueville detected a continuing struggle between the few and the many in America.” Tocqueville believed that “aristocratic [and] democratic passions” were always present, and “though they may slip out of sight there, they are, as it were, the nerve and soul of the matter.”
Tocqueville was right, and the democratic passions he spoke of found their embodiment in the person of Andrew Jackson, who became president of the United States in the 7th year of Biddle’s tenure. In many ways, Jackson was Biddle’s opposite. While Biddle was the quintessential apolitical civil servant, Jackson was a volatile populist who considered himself the champion of democracy.
Jackson hated the prevalent political atmosphere as much as Biddle loved it. Where Biddle saw consensus and benign paternalism, Jackson saw an entrenched establishment ridden with corruption. He had first-hand experience with the cozy, back-scratching ways of the Republican political monopoly throughout his public career, and especially during his first, failed attempt at the presidency, in 1824.
Of the three chief candidates of that election, Jackson was clearly the most popular. But there was an electoral deadlock, so the race had to be decided by the House of Representatives. Through a backroom quid pro quo with rival candidate Henry Clay, John Quincy Adams ended up winning the House vote and, as a result, the presidency.
After finally defeating Adams in 1828, Jackson came into office with a large chip on his shoulder against the Republican establishment. He also had a distinct disliking for Biddle’s Bank in particular, for he was an ardent hard-money advocate. His monetary opinions were informed by contemporary hard-money theorists and his own readings concerning the South Sea Bubble of 1720. He rightly blamed the Bank for the Panic of 1819 and had been a leader in the fight against inconvertible paper money in Tennessee.
September 7, 2009
