A BRIEF COMMENT ON A POINT RAISED BY FRED ...

AM

During the brief discussion of inflation expectations and central bank independence (April 8), Fred wondered whether a strict adherence to that principle might not lead to a "democratic deficit". Good point! The issue was first raised (to the best of my knowledge) by Werner Bonefeld in his paper on "Europe, the Market and the Transformation of Democracy" (*). According to Mr. Bonefeld, the European Central Bank's independence introduces an element of "mixed government" in Europe. He is of course referring to the Greek notion of mikté — the combined government of the one (monarchy), the few (aristocracy) and the many (democracy) [see Polybius's Histories, Book VI]. Presumably, an independent ECB will act like an aristocratic body. I'm not sure I would agree with such a characterization. And I would ask Mr. Bonefeld: is not inflation an even higher risk? Is not inflation the equivalent of a tax on the poor?

(*) Journal of Contemporary European Studies, Volume 13, Issue 1, April 2005 , pages 93 - 106.