This piece first appeared in the Toronto Star.
The striking appointment of Mark Carney as the new governor of the Bank of England can be interpreted in a wide number of ways — from a view that highlights the global governance dimension to British and Canadian-specific aspects of the story.
From a transnational perspective, Carney’s appointment is another sign of the rise of free-agent technocracy in an age of crisis. Mario Draghi is another illustration of this phenomenon as witnessed by his move from the position as governor of the Bank of Italy and the chairmanship of the Financial Stability Board, to the presidency of the European Central Bank. However, Carney’s move from the Bank of Canada to the Bank of England is more dramatic. Although Draghi was described by the mass-circulation German newspaper Bild as being the “most German of all remaining candidates” for the ECB presidency, Carney has moved across national jurisdictions in a much more explicit fashion.
Some critics of course will point to another shared characteristic of Carney and Draghi, their connection to Goldman Sachs, the formidable and often controversial investment bank. Akin to Draghi, who served as vice-chairman and managing director of Goldman Sachs International and a member of the firm-wide management committee (2002-2005), Carney moved in a 13-year career to a series of senior jobs: co-head of sovereign risk; executive director, emerging debt capital markets; and managing director, investment banking. Yet, if this is a common career path that fits with the notion of the dominance of a hegemonic transnational elite, it is also one that illuminates the triumph of meritocracy as Carney — who was born in Fort Smith, N.W.T., to a high-school principal father and elementary school teacher mother — is hardly a product of a privileged background.
Indeed, it was precisely meritocracy (Harvard and Oxford education before his Goldman Sachs years) — and outsider (Canadian) status — that won Carney his appointment as governor of the Bank of England. Over the last month, the Financial Times has put out a series of articles attacking the embedded culture of the bank that made it ill-prepared to deal with the financial crisis when it hit hard in November 2008. Building on a number of independent reports, one former member of the court of directors and Monetary Policy Committee declared that drastic reform was necessary, including the appointment of “new people from the outside.”
From a national perspective, the story can be interpreted as another example of a Canadian rushing off to the bright lights of London and the centrality of the United Kingdom — a move up the hierarchy of nations. Although there are many questions to be asked about this transition (does Carney have to give up his Canadian citizenship, in a similar manner to Stanley Fischer giving up his U.S. citizenship when he took over as governor of the Bank of Israel in 2005?), it is unlikely that Carney took the job because of the prospect of more money — why leave Goldman Sachs to become senior associate deputy minister, and G7 deputy as Carney did in 2004 — or even a knighthood (as many governors of the Bank of England have so been honoured). It is more likely instead that Carney choose to leave because the position was more attractive for a free-agent technocrat.
If there is a danger to the Harper government, it concerns symbolic risk: the image of Canada being increasingly wrapped up again with the anglo world — with shared embassies and now with the movement of a key individual who was able to talk directly to Canadians about financial questions leaving for the Bank of England.
There will be those preferring to believe Carney jumped jobs due to pessimism about the Canadian financial situation (the end of the housing market and resource boom), but a jump to the U.K., which is mired in austerity and a stalled economy, does not seem the easy option. If the job is attractive for a high flyer such as Carney, it is precisely because of the tougher level of difficulty he will have in his new position.
