Senior Fellow for Ethics and Political Economy
Center for Financial Stability
Cet article se propose de montrer combien les modèles utilitaristes qui inspirent la politique de la banque fédérale américaine, la FED, constituent une source de conflit dans l’ordre monétaire international. A la suite de cette critique, il invite à développer une analyse résolument anti-utilitariste qui, à partir de la théorie de la reconnaissance, permet d’étudier tout autrement (voire de surmonter) de tels conflits.
Conflicts in the monetary sphere create instabilities in the world economic order. Yet, tense relations and unresolved conflict have persisted since the unconventional policy response by the Federal Reserve to the financial crisis of 2007-2012. Emerging Market (EME) countries - led by Brazil, India – have presented evidence of harmful monetary practices, corroborated by a growing body of research. We argue that the origins and persistence of this conflict can be traced to the non-recognition and self-misrecognition patterns inherent in the perspective and methods and by which the Fed conducts monetary policy.
This essay sets two tasks. The first is to demonstrate how the Fed’s model-abstracted, economic utilitarian perspective is both a source of the monetary conflict and a barrier to its resolution. The second is to present a recognition theory analysis that demonstrates a more comprehensive framework for understanding monetary system conflicts. The analysis and constructive proposal rely on the work of several recognition theorists, including Pierre Allan, James Tully and Thomas Lindemann.
The central argument of this essay, the critique of the maximizing rational actor and of mathematical abstraction in economics, are familiar to MAUSS readers, as captured by Alain Caille in “Anti-utilitarianism, economics and the gift exchange” and Jean-Louis Laville in the “Pour un dialogue Maussien.” The contribution of the present analysis is a sustained application of this anti-utilitarian critique - as it takes form in recognition theory - to an exclusive domain of economic practice - the central bank led global monetary system.
In 2010 the Brazilian finance minister Guido Mantega lodged his “currency war” criticisms of US Federal Reserve policies, implicitly directed at Ben Bernanke, then Chairman. (Wheatley and Graham, 2010) Mantega later amplified his critique, calling out the Fed for a “selfish policy” that “reignites the currency wars with potentially drastic consequences for the rest of the world.” (Zhang, 2012 12)
These accusations and the ensuing monetary conflict were a reaction to the unprecedented Quantitative Easing (QE) and Zero Interest Rate Policy (ZIRP) employed by the Fed in responding to the 2007 -2012 financial crisis. Although the actions of the Fed were initially seen as beneficial and helpful by many, evidence soon emerged that the continuation of QE and ZIRP was creating harmful international spillovers. (Eichengreen, 2011)
In addition to the public charges against Fed policies, Mantega made formal criticisms of the Fed in his annual IMF Statements from 2011-2014, speaking on behalf of a number other EM countries.
Major reserve currency issuing countries [the US] continue to resort to ultra-expansionary monetary policies, the primary trigger of many of today’s economic woes. 
Domestic political constraints have been too easily invoked by reserve currency issuing countries … but this does not change the fact that these policies generate spillovers that have made life difficult for other countries. (Mantega 2011)
The recent monetary conflict has been fueled by this widespread EME view that Fed monetary policy dominates global monetary affairs but the Fed formulates its policies only on the basis of US domestic political considerations. The Fed was (and is) thus seen as creating destabilizing effects in the periphery countries without seeming to have noticed that it has done so.
Given the role of the US dollar as the dominant global currency, the Fed’s expansionary monetary policy generates significant externalities for the rest of the world – effects that the Fed is certainly not taking into account. (Ocampo, 2012)
The EME central bank and finance ministers were soon joined by the monetary research community in seeing a dominant Fed creating - yet giving no attention to - the negative effects of its policies. A number of papers documented these transmission channels between Fed policy and other negative effects in EME and reached similar conclusions. 
There is not really an issue as to whether the US dollar and Fed dominate the monetary system. According to the Bank for International Settlements (BIS), “ [t]he role of the US dollar as the world’s dominant vehicle currency remains unchallenged.“ (BIS 2015b, 3) The countries in the rest of the world now hold almost $4.2 trillion in US Treasury securities as currency reserves, constituting 64% of global reserves. (US Treasury, 2015) The challenges raised by the EME and the research community – though ignored by the Fed – go to the question of whether this position of dominance entails mutual recognition and acknowledgement of collective responsibilities ? 
The research of monetary theorist, Helene Rey has been prominent in presenting the case for Fed dominance and acceptance of responsibility for negative spillover effects.. She has put forth a comprehensive theory of Fed policy as the “important determinant of the global financial cycle” (Rey 2013, 17), finally concluding that Fed policies were so determinative that the EME countries were left no room to formulate alternative policies. (2013, 22) Rey received early and increasing support from many respected monetary scholars (Eichengreen, 2011, 2013). 
Yet despite the mounting criticism and research findings, Fed Chair Ben Bernanke consistently resisted the charges and criticisms simply on the grounds of his own economic analysis. “Fed Chief Ben Bernanke Denies US Policy Behind Record Global Food Prices.’’ (Blackden and Wilson, 2011) The refusal to accept responsibility for spillovers due to (in his view insufficient linkage : “[T]he linkage between advanced-economy monetary policies and international capital flows is looser than is sometimes asserted.” (Bernanke 2012 ; Zhang 2012) Seemingly ignoring the research, he took into account only his own views : “My reading of the recent research makes me skeptical that these policy differences are the dominant force behind capital flows to emerging market economies.” (Bernanke 2013) Further, he denies that the Fed is necessarily the determinant cause, “…emerging markets have all the tools they need to address excess demand in those countries. They can, for example, use monetary policy of their own.” (Harding and Rappeport 2011 and also Blackden and Wilson 2011) Examples of Bernanke’s consistent utilitarian perspective are his collective welfare claims : “An unconventional monetary policy was necessary to keep the U.S. economy growing and effective. In that respect, it’s in everyone’s interest to have the U.S. economy growing faster” (Anand and Bellman 2014) And “…by boosting U.S. spending and growth, it has the effect of helping support the global economy as well.” (Bernanke 2012) ; and the aggregate policy defenses : “It is not at all clear that accommodative policies in advanced economies impose net costs on emerging market economies.” (Bernanke 2012)
Bernanke’s tenure as Fed Chairman ended in January 2014 but the dispute continued on, as did Bernanke’s defense of his actions. During the International Monetary Fund meetings in Washington DC in April 2014, Raghuram Rajan, who had recently become Governor of the Royal Bank of India, gave a speech at the Brookings Institute providing a detailed narrative to support the case made by Mantega. Rajan cited again the spillover effects, but he described the transmission mechanisms, establishing the “linkages” that Bernanke had denied. (Rajan, 2014a) Rajan charged that the Fed approach was “overlooking the elephant in the post-crisis room.” (Rajan 2014a, 6)
In a paper delivered shortly afterward, Rajan specifically took on the utilitarian ‘net cost’ argument of Bernanke. insisting that negative spillover effects need to be individually estimated for all the countries and cannot be dismissed as being offset by positive spillovers elsewhere. (Rajan, 2014b, 7)
Bernanke, who had become a Senior Brookings Institute Fellow and was sitting in the audience, sharply challenged Rajan’s account. It was described as “a surprising face-off” and made international news - “ Banker showdown : Bernanke tells off India’s Rajan” (Michelle Caruso-Cabrera, 2014) and “Bernanke, Rajan face-off over US QE spillover” (ENS Economic Bureau, 2014). There was little substantive exchange, Bernanke basically dismissed Rajan’s empirical assessment with an allegation of a “skeptical” bias against Fed unconventional policies.
Bernanke presented a more complete response ready to his critics in November 2015, almost 18 months after the confrontation with Rajan and 5 years from the initial criticisms. The occasion was the prestigious 2015 Mundell-Fleming Lecture in Washington DC.
There is not space to review the entire Mundell-Fleming speech. Rather we briefly consider a few points to illustrate how Bernanke continued to use economic argumentation to defend his constricted account of the Fed’s responsibilities.
Leading off his lecture referring to Rajan and Mantega as his leading critics, Bernanke begins refuting Mantega’s charges, by going into a classical economic definition of currency war – “a specific intention of the Fed to depreciate its currency to increase exports.” However, Mantega’s criticisms were not only that the Fed was trying to increase exports ; rather that unprecedented Fed policies had caused widespread spillover effects and economic woes in the EME countries. Nevertheless, dodging Mantega’s main points Bernanke dismisses his criticisms, finding “…no basis empirically or theoretically for use of the term currency war.“ (Bernanke 2015b, 27)
Another example is when Bernanke addresses the question of whether the EME was actually benefiting from QE policies. as he had been claiming. Instead of conceding that Fed policies are not benefitting all countries, he introduces a set of economic terms, “demand augmenting” and “demand diverting,” to explain away why QE policies have not yet provided benefits to many EME countries and why some are experiencing negative effects. (Bernanke 2015a,) . This argument by Bernanke serves to further illustrate how abstraction and aggregation facilitate the ability to persistently disregard the actual harms to specific populations.
Turning to research community criticisms, Bernanke was somewhat obliged in the Mundell-Fleming lecture to acknowledge the arguments contained in the research of Helene Rey and others.  .This was because Rey had delivered the 2014 Mundell-Fleming lecture where she once again made her arguments on the Fed induced global financial cycle, the adverse effects of Fed policy and the de facto inability of the EME to do anything about it. (Rey, 2014 ; 2015) In the 2014 speech Rey had essentially corroborated the Rajan arguments, describing how US monetary policy “changes the net worth of economic actors worldwide and enhances their ability to leverage ” thus, affecting … “global financial stability.” (Rey 2014, 26) Perhaps most importantly, her findings challenged the whole Mundell Fleming thesis, showing how with US dollar and Fed dominance and foreign debt denominated in dollars that the EME have no real monetary autonomy and that the EME cannot counter the effects of Fed policies even if their central banks were to try. (Rey 2014, 26)
In the face of Rey’s arguments one would suppose that Bernanke would finally concede or provide some specific substantive response. However, although Bernanke made nodding mention of the merit of the Rey et al. research, he ultimately went on to dismiss any findings that put the Fed and US monetary policy at fault, citing technical methodological objections to Rey’s findings and asserting that the real cause of the problem was the lack of macro-prudential supervision, not Fed monetary policy. (Bernanke 2015) So the essential substantive findings of Rey’s research were again largely ignored.
This rebuff of Rey can be seen as yet another example of the license of economic abstraction - the utilitarian operator is able to manage the data and calculus by which it measures and justifies its own actions, refusing to confront the full realities and downplaying any negative consequences.
We turn now to the discussion of recognition theory to try to understand why the Fed misunderstands and dismisses the charges of its critics.,
We begin with a brief discussion of general recognition principles drawing from the work of Pierre Allan, Alexis Keller, Jade Schiff and James Tully. The recognition concepts developed by these theorists offer contrast with the abstract and depersonalized perspective of Bernanke and help frame the EME criticisms. Following the discussion of general principles, we examine theories of subjective explanations of conflict, connecting non-recognition to the formalist rationality of utilitarian anthropology and self-misrecognition. Relying on the work of Thomas Lindemann, we show how the self-misrecognition of the Fed helps explain the misunderstanding and conflict in the monetary system.
Under recognition theory, the monetary system would be seen not as a currency arrangement but instead as countries striving toward a stable political/social construct for the global economic sphere. The current monetary conflict would be seen then as one episode in the struggle over the rules of the monetary system social construct and the standards for mutual recognition that apply (i.e., who has a say in setting such rules.) (Tully, 2007, 86) Consider in this light Rajan’s plea for updated rules.
The reality is that the rules of the game were framed in a different era … They have not been updated for today’s world of more varied competitive easing practices. (Rajan, 2014, 8)
Rajan’s plea for recognition as new economic circumstances emerge (Fed’s QE and ZIRP) might be seen in the larger context as part of the ongoing struggle to maintain legitimate norms of recognition among countries generally. (Tully, 2007)
In considering general recognition principles, the distinction between a “thin” and a “thick” recognition is especially important to understanding the disagreement between Bernanke and the EME critics.
Under a thin theory, which is what seems to be Bernanke’s view, each member of the monetary system is seen only in abstract form as a unit of the monetary regime and expected to look out after its own particular interests and problems. Recall the Bernanke quote in the face of critics’ complaints - “…emerging markets have all the tools they need to address excess demand in those countries.” (This assertion is not true in light of Rey’s findings that the periphery countries have no monetary autonomy – no tools of their own, in other words.)
Under a “thick” recognition, the Fed as dominant party would not simply acknowledge the existence of others in the abstract but rather come to understand the particularities and plight of other members in terms of their “cultural, political and economic essentials.” (Allan and Keller, 2011, 72 et seq.) In addition, the thick theory analysis would be essential in evoking the necessary empathy on the part of the dominant party, the “inter-subjective consensus of what each side profoundly needs,“ (Lindemann 2012) to ensure that economic and cultural “redlines” would not be threatened. (Allan and Keller, 2011, 77) The “thick” empirical assessment would not allow the neutralization of empathy by abstraction, such as by the use of technical definitions of currency war or terms like “demand augmenting” and “demand diverting.” With a thick theory of recognition it would be far more difficult for the policy maker to ignore its negative effects, “…to see suffering as having nothing to do with us – indeed, not to see it at all.” (Schiff, 118)
Consider Rajan’s own country of India as an example of the importance of a detailed knowledge. Under a thick theory of recognition the Fed would have understood the potential harms of Fed policies in the explosive increase in the costs of essential foodstuffs - a crushing hardship for the hundreds of millions of Indian agricultural laborers for whom food is already 67% of the household budget. (Dasgupta, 2013) In this connection, recall the warning of Mantega “Rises in commodity prices increase the cost of living, especially for the poorest.” (Mantega 2011) Yet Bernanke’s abstract aggregated approach allowed the Fed to remain formally unaware and disengaged from the harsh realities on the ground. “Fed Chief Ben Bernanke Denies US Policy Behind Record Global Food Prices.’’ (Blackden and Wilson, 2011)
One other recognition principle – renouncement - merits mention as a key element of Bernanke’s failure to understand. (Allan, 2011) Lindemann captures this same idea in his concept of “conciliatory recognition.” (Lindemann 2013, 86) Under the renouncement or conciliatory recognition principles the dominant policy maker must not only understand but also be ready to make concessions and be willing to sacrifice what it considers its priorities in order to achieve a solution that minimizes negative effects on others.
The EME critics of the Fed were essentially asking for just this sort of renouncement or conciliatory recognition in the request for an internalization of spillovers and the call for the dominant central banks to absorb more of the economic pain of crisis adjustments. (Rajan 2014, 4) However, in the Mundell-Fleming speech, Bernanke uses a simple abstract model to demonstrate why it would never be in the US interest to internalize such costs, thus totally rejecting a renouncement posture. Bernanke concluded with the dismissive comment on internalizing costs, “Now I hope all of this strikes you the way it strikes me as being pretty much pie in the sky” and “not very realistic.” (Bernanke 2015a, 14)
As can be seen in the discussion above of Bernanke’s perspective – in the insistence on his abstract aggregative methods, in the rejection of renouncement as “pie in the sky” – the Fed posture is at the bottom of the conflict. 
We turn to Thomas Lindemann’s recognition theories to gain insight into the subjective elements of a posture of dismissal like Bernanke’s and to understand how such a subjective posture contributes to misconceptions of reality, self-misrecognition and potentially to conflict.
Recognition theory can play an important role in understanding the subjective causes of conflict, offering a framework of investigation whereby true motivations are revealed. (Allan and Keller, 2011, 74, 77)
The recognition frameworks of Lindemann in particular, can be used to offer socio- psychological explanations for Bernanke’s dismissal of the EME evidence and argument. In identifying the subjective causes of conflict, the dismissals by Bernanke can be explained by a “self-misrecognition” made possible by utilitarian logics, aggregative methods and distanciation. (Lindemann, 2011) Adding to Lindemann, we see this misrecognition to be rooted in what we describe elsewhere as a “formalist economic rationality,” (Feldmann and Kelsay, 1996) which is comprised in the “rational actor” model criticized by Alain Caille. (Caille 2007) To summarize a formulation based in the work of Max Weber, in “formalist rationality” normative values are replaced by analytical techniques employed in means-end calculations, where pragmatic and egoistic interests prevail, and where calculations are depersonalized and resistant to “substantive rationalities.” (Kalberg 1980, 1159, 1162 ; 1165 ; 1174)(Feldmann and Kelsay 1996, 1997) The analytical techniques of modern economics — its “body of technical tools and analysis” such as the rational actor theories and permutations of the current econometric models (e.g., the Fed’s DSGE model) - constitute the entirety of the ethical standards/ rational commitment. (Elliot and Clark 1989, 45) (Kalberg, 1980)(Feldmann and Kelsay 1996) The formalist rationality is such a thoroughgoing depersonalization that the economist does not see himself/herself as a person either - hence the self-misrecognition. With a formalist rationality reducing peoples and whole countries to statistics in aggregate calculations, the Fed’s model based quantitative assessment is able to minimize the other and negate emotional involvement. (Lindemann, 2014, 10)
According to Weber, this egoistic, impersonal instrumentalism transforms rationality into a “housing hard as steel.” (Feldmann and Kelsay 1996, 388 ; Cohen 1989, xxvi) In this steel housing, the idea of the global monetary system as a social construct sustained by mutual recognition and renouncement would be seen as simply “pie in the sky.” This conception of formalist rationality parallels quite closely the rationality of homo oeconomicus described and criticized by Alain Caille.” (Caille 2008) Caille’s critical point —that homo oeconomicus as rational maximizer must not be considered the natural metaphysical anthropology of humankind - is essential in understanding why the models constructed on that premise must not be the exclusive basis of monetary policy formation
The rational maximization goal is often couched in terms of “greater good” arguments so an implicit moral warrant is imported into the policy decision calculus. In this way the calculated aggregate maximization can be argued to be the natural and moral goal of individual human activity – its anthropology if you will. But again, per Caille, this maximization must not be considered natural or legitimate. This must rather be seen as a hidden self-deception that allows for a seemingly morally justified non-recognition of specific others in the aggregation process.
The self-misrecognition leads to a minimization of others and monetary system tensions. The culprit is the current Fed decision process itself, with the reliance on economic models relentlessly carrying out the aggregative assessments and maximizing calculations, endemically bereft of any recognition of the broader negative effects. The empirical assessments of the sort described by Rajan - where actual facts and on the ground factors are directly observed –would alleviate this myopia of abstractification. The Fed rejects these sorts of empirical assessment - we would argue - because of their need to limit and maintain control of the facts and preserve emotional distance.
This is not to argue that the lack of emotional involvement of the Fed or Bernanke necessarily involves a personal callousness. Rather the point is that the embedded pragmatism and impersonalism of rational maximization within in the theory and practice of monetary institutions inhibits any normal emotional response. The narrowly configured models prevent economic practitioners from “acknowledging and experiencing our concrete and practical connections to others’ suffering and the burdens of responsibility that those connections entail.” (Schiff 2011, 127) This abstractification and distanciation of the other (Lindemann 2014a, 4 ; 2014b, 12) is a concealed feature of the economic models, programmatically barring expression of natural sentiments of empathy. The Fed officials thus misunderstand and misrecognize. Recognition theory serves to reveal this formalized lack of awareness and epistemological insularity of the economists who are trapped in these mathematical models and aggregated abstract assessments.
There is another subjective element in the minimization of other, a misrecognition that occurs due to the dominant actor’s need to maintain a confidence in its superior position and perspective. The minimization of others is a byproduct of a self-deception that is “instrumental to the preservation of dominant actor’s positive image and status.” (Lindemann 2014b, 10)
Schiff well describes how this misrecognition serves to “naturalize and conceal” domination and exploitation, allowing the dominant actor to fail to see the sufferings of others and preserve the positive image of itself.
Misrecognition, we will see, is a kind of collective bad faith. But whereas in bad faith we deny the practical weight of our connection to the suffering of others, through misrecognition we fail from the start to see their suffering as having anything to do with us – indeed, we fail to see it at all. (Schiff 2014, 118)
This misrecognition is also observable in the dominant actor’s use of formal, aggregative calculus to manipulate descriptions of reality in protection of self-image and symbolic capital. Lindemann sees the manipulated description of reality as a form of non-recognition in order (employed) “not to lose their self-esteem with regard to themselves and others” (Lindemann and Giacomelli, 2014b 10) and “to preserve their symbolic capital.” (Lindemann and Giacomelli, 2014b, 9) Normally, it might be thought that a manipulation of reality to preserve one’s reputation mainly has to do with ensuring dominant actors are perceived as superior by others. However, Lindemann brings out a subtler facet of the socio-psychology of dominant actors. It is a manipulation of objective reality of the other’s condition in order to preserve the dominant actors’ subjective framings of themselves. It has to do with preserving the dominant actor’s own moral self-esteem. The manipulation of objective reality facilitates moving the other “to the background of one’s considerations” to justify an action that might not otherwise stand up under ones own moral scrutiny, (Lindemann 2014b, 10,11) This simple act of self-deception thereby supports a self-misrecognition that contributes to the non-recognition of others.
Misrecognition of the Self and self-deception occur then as a dominant actor unreflectively and incompletely represents reality and thereby is able to misrepresent to himself what he is really about. The use of abstract economic terminology and models facilitates such a misrepresentation.
These barriers to a proper recognition of self arise out of the need for a self-justification of the position of dominance that is essential to legitimating and preserving the dominant actor’s symbolic capital and strategic advantages. It should be noted that the dominant actor is not necessarily aware that its acts constitute a manipulation of interest and reality.
This process of self-deception and misrecognition described can be seen to support the dominant actor’s search for moral assuredness, the process by which, for example, a dominant central bank like the Fed can simply presume that it holds the moral high ground in its decisions on behalf of the global monetary regime. This self-deception allows the dominant actor, now morally self justified, to assimilate others into a policy practice that is purportedly designed to further legitimate collective purposes but actually serves the unrevealed (even unconscious) purposes of the dominant actor - albeit on invalid premises.
As another element in preserving a presumption of moral justification, Lindemann’s work shows how a dominant actor’s need to preserve reputational capital and symbolic imperative is seen in a related phenomenon, the manipulation of collective interest in support of a hero-protector narrative.
This hero-protector manipulation of interest explains how the interests of the dominant actor can be unreflectively translated into a higher order collective interest through the control of the rhetoric and calculus of justification. (Lindemann 2014b, 10) The claim for collective interest can be seen in the Bernanke quotes.
This policy not only helps strengthen the U.S. economic recovery, but by boosting U.S. spending and growth, it has the effect of helping support the global economy. An unconventional monetary policy was necessary to keep the U.S. economy growing and effective. In that respect, it’s in everyone’s interest to have the U.S. economy growing faster. (Anand and Bellman, 2014)
However, as we have seen, backed up by research, Mantega and Rajan claim grounds to question the facticity of Bernanke’s claims as they assert “the benefits are largely (US) domestic,” “while the costs fall largely abroad” (Mantega 2011) (Rajan, 2014b, 4) The Bernanke claim of collective benefit is thus rejected by the EME simply as a way the Fed can pursue its own domestic interests as the dominant actor while actually ignoring the collective interest.
Upon considering the negative moral assessment of his motivation and increasingly aware of the growing evidence that disputed his claims of benefitting the collective interest, there would be a felt need by Bernanke to provide additional moral grounds to reinforce his moral self assuredness and symbolic imperative. (Lindemann 2014b, 7) So in order to justify a morally ambiguous action that helps fulfill a plan for his own strategic and economic advantage, the dominant actor casts himself as the hero-protector of the system as a whole. He sees himself claiming to understand better than anyone the system’s collective best interests, and thus the true best interests of the other members as well.
This hero-protector status thus justifies an implicit reduction in status of periphery members, who are essentially being cast as unaware of their own interests. This instrumental framing, especially for affectively distant peoples with respect to the dominant actor’s structure, further facilitates the elimination of emotional involvement in the existence of the other. Thus, operating from his own perspective, a dominant actor like Bernanke can stand on the superiority of his personal empirical assessment, and rest on “my own reading” of the situation.
Offering an explanation for this hero perspective is a recent essay with the title “The Superiority of Economists.” (Fourcade et al., 2015) The authors observe a certain self-perceived hero narrative in the economic discipline. “Economists also distinguish themselves …[through] their confidence in their discipline’s ability to fix the world’s problems.” This social superiority “is characterized by far-reaching scientific claims linked to the use of formal method, … allowing the discipline to retain its relative epistemological insularity over time ….” (91) Although perhaps strong in tone, this description captures the socialization of the “managerial hero” of the central bank economist. This hero-protector “problem fixer” mantle assumed by economists - and especially central bankers at the pinnacle of the profession inhibits subjective self-awareness and self-recognition and allows the minimization and misrecognition of the EME members.
It is important to point out that at least in the early days of the financial crisis and first stage of QE, the Fed may have had grounds to claim general benefits and implicitly hero-status. Jaime Caruana, General Manager of the Bank for International Settlements acknowledged the willingness of the Federal Reserve to act quickly and avert what could have been a meltdown. (Caruana 2012, 4) This endorsement of initial Fed actions is even echoed in the comments of Rajan who actually references the word “hero.”
[M]uch of what they [the Fed] did immediately after the fall of Lehman was exactly right, … In this matter, central bankers are deservedly heroes. (Rajan 2014b, 4)
However, it is likewise important to note that Caruana and Rajan both later questioned the continued use of these Fed policies – and implicitly the honorific title of hero - after the crisis had passed. “The key question is what happens when these policies are prolonged long beyond repairing markets…” (Rajan 2014b 2)
There were other central bankers who seemingly recognized the allure of the mantle of the hero – and the moral ambiguity it entailed. Mervyn King, Chairman of the Bank of England during the financial crisis, acknowledged in a recent memoir that, “Central Banks were seen as heroes for delivering the decade of Great Stability and for preventing a relapse into a second Great Depression after 2008.” (King 2016) However, reflecting either a skepticism of unprecedented policies or an awareness of the moral quandaries, this statement is included in a chapter that King titles “Heroes and Villains : the Role of Central Bankers.” And the name of the memoir is The End of Alchemy.
This hero-protector narrative is perhaps especially tempting for central bankers as they are a dedicated group of professionals of high moral caliber and benign intent. And they are, as we saw in both the quotes of Mervyn King and Rajan, called upon to play the “hero-protector” role at times. However, this perhaps also makes them susceptible to overdoing it and falling into the role of villain - as former Chairman King suggests in entitling his chapter “Heroes and Villains.” (King 2016)
This analysis of the general principles and subjective elements of recognition theory reveals how abstract economic framing of monetary policy licenses an obfuscation of, reality, a negation of emotional connections, manipulation of interest and self-misrecognition.
Recognition theory and the underlying Maussien premises of anti-utilitarian critique offer a promising framework for countering the utilitarian anthropology, emphasizing the relational aspects among regime members, and generally broadening the perspective of monetary policy analysis. Thick descriptions, renouncement and misrecognition analyses would reveal incomplete quantitative assessments and any concealment of motivations that are enabled by the formalist rationality and aggregative utilitarian calculus. The initial crucial factor, however, is that economists’ recognize and admit their entrapment in this steel cage of depersonalized formalist rationality.
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 Mantega notably made specific reference in this Statement to how the spillovers hurt the poor, “Excessive liquidity contributes to rapid credit expansion and asset price booms, as well as oil and other commodity price bubbles. Rises in oil and commodity prices increase the cost of living, especially for the poorest.”
 An early paper by Nouredine Krichene of the IMF Africa Department found evidence that the expansionary monetary policies of the developed countries, mainly the Fed, set commodity prices soaring. (Krichene 2008, 1, 17, 24) Sean Roache of the IMF Research Department concluded that US monetary policy factors explain a large part of the rise in global food price volatility. (Roache 2011, 24) Hausman and Wongswan (2011) demonstrated the connection between Fed-induced capital flows and harms. An internal Fed paper from the St. Louis Federal Reserve by Christopher Neely (2011) entitled “Large Scale Asset Purchases Have Large International Effects,” argued that central banks should coordinate their asset purchase policies to avoid contradictory or overly stimulative effects.
 In the categories developed from Alex Honneth in a Mauss Review article (Vanderberge 2007), the EME are claiming that their moral/juridical “equal and autonomous” standing and the social collective purpose of the monetary system combine to establish a recognition status that the Fed has systematically failed to acknowledge.
 A considerable body of critical research supports the Rey argument for Fed policy responsibility for negative effects in the EME. Rey and a colleague, Miranda-Agrippino (2012), showed how Fed-induced low interest rates encourage leverage, which then fuel capital and credit flows. Fratzscher, Lo Duca, and Straub (2013) concluded “there are indeed global spillovers and externalities from monetary policy decisions in advanced economies.” (3) Ahmed and Zlate (2014) showed that both conventional and unconventional US monetary expansion have driven capital flows into EMEs. Rogers, Scotti, and Wright (2014) and Bowman, Londono, and Sapriza (2014) support the case that the Fed is indeed a causative factor in the negative effects from spillovers. Bruno and Shin (2015) demonstrate how “banking sector leverage is the linchpin” between the loosening of US monetary policy and the risk taking that leads to cross border capital flows, spillovers and exchange rate volatility.
 In the written version of the speech Bernanke used different economic terms “expenditure switching” and “expenditure augmenting” – but his argument and our criticism remain the same. (Bernanke 2015 b)
 See articles cited in note iv above.
 It is important to note that there perhaps have been glimmers of a recognition perspective emerging at the Fed since the Vice Chairman Stanley Fischer joined the Board. His comments “financial stability responsibilities do not stop at our borders” (Fischer, 2014) and “changes in the policy rate have also been found to have significant spillovers to asset prices in other countries” (Fischer, 2015) hold out hope of a broader perspective.