Practising Stalinism and the Regulatory Paradigm March 16, 2014 at 6:17 pm

No, this isn’t a ‘call it Stalinist when you want to trash it’ post. Rather, it’s about thoughts stimulated by reading Sheila Fitzpatrick’s review of J. Arch Getty’s Practising Stalinism: Bolsheviks, Boyars and the Persistence of Tradition in the LRB.

Fitzpatrick gives us an insight into Getty’s view of how Russians in the 70s and 80s

organised their lives, using personal contacts to get things done, enmeshed in a network of reciprocal favours, contemptuous of state bureaucracy and skilled at evading its demands

That description reminded me of Italy a decade later, by the way. It suggests a state that

was nothing more than a mirage, and ‘official institutions … just collections of people whose public façade was better than most at convincing people to obey them’. Observing his friends, [Getty] concluded that ‘few people trusted or even believed in institutions; they believed in people. Everything was personal … Was the modern [Russian] state, as in Pierre Bourdieu’s suspicion, creating itself through my reading of it?’

One could suggest that there is a spectrum ranging from states where governmental (Federal) power is, predominantly, obeyed (Switzerland, the UK, perhaps much of the US?) to ones were it is systematically evaded (Italy, Russia). Note that issue here isn’t subsidiarity – a lot of power is held at the Cantonal level in Switzerland, and at the State and local level in the US – but rather what happens when the Federal (for want of a better word) government tries to do something: are they obeyed?

A number of legal theorists and political scientists are starting to view regulatory structures using the same tools they use to analyze states, prominently Julia Black at LSE and Kevin Young now at Amherst. (See also Meredith Wilf at Princeton.) One of the things these folks point out is that a totalizing narrative of regulatory power does not explain the facts: things are not just agreed by the powerful then passed down and implemented, but instead power is contested and polycentric. Policy may be agreed internationally, but it is always subject to renegotiation, diverse implementation, and interaction with the facts on the ground. Financial regulation, then, is not completely at the ‘obey’ end of the spectrum.

A particularly interesting example of this is US insurance regulation. Before the crisis, insurance in the US was state regulated, with each state having an insurance commissioner: these commissioners then collaborate through the National Association of Insurance Commissioners. The Dodd-Frank Act mandated the creation of the Federal Insurance Office to review the actions of the commissioners rather than replace them.

Needless to say there is a good deal of friction between the state commissioners and the FIO: a recent article in Risk outlining the views of Thomas Leonardi, head insurance regulator for Connecticut, is a good example. To say that Leonardi is not enamored of Federal intervention in insurance regulation is, perhaps, to under-state the case.

For these purposes at least I don’t want to take a position on whether the FIO is right or not. What’s interesting, rather, is how contested its authority is. Yes, Dodd Frank says that it has certain powers and responsibilities. No, it is not being allowed to exercise them without considerable push-back, not just from the regulated, but other regulators. Indeed, the latter seem rather more vocal than the former. It’s very much, for the moment anyway, at the Russian end of the spectrum.

One final thought. The Bourdieu point is important. As he said with the characteristic lucidity of the twentieth century French philosopher:

Official language, particularly the system of concepts by means of which the members of a given group provide themselves with a representation of their social relations … sanctions and imposes what it states, tacitly laying down the dividing line between the thinkable and the unthinkable, thereby contributing towards the maintenance of the symbolic order from which it draws its authority.

Think of that the next time you start to read the text of a new regulation…

One Response to “Practising Stalinism and the Regulatory Paradigm”

  1. Polycentric or monocentric authority makes little difference if you’re on the business end of the regulations – especially as they proliferate. It’s not like different federal agencies/authorities are any better at coordinating your obligations than the federal level is at coordinating with the local level.

    Unthinkable for some perhaps but a reality for the rest of us.