Lenin in Imperialism had talked about
a financial oligarchy presiding over vast amounts of money capital through
its control over banks and using this capital for diverse purposes, such
as industry; speculation; real estate business; and buying bonds, including
of foreign governments. The finance capital that Lenin was talking about
belonged to particular powerful nations; correspondingly, the oligarchies
he was referring to were national financial oligarchies. He talked for
instance of French, German, British and American financial oligarchies.
But in the current epoch of ''globalization'' when finance capital itself
is international in character, the controllers of this international finance
capital constitute a global financial oligarchy. This global financial
oligarchy requires for its functioning an army of spokesmen, mediapersons,
professors, bureaucrats, technocrats and politicians located in different
countries.
The creation of this army is a complex enterprise, in which one can discern
at least three distinct processes. Two are fairly straightforward. If
a country has got drawn into the vortex of globalized finance by opening
its doors to the free movement of finance capital, then willy-nilly even
well-meaning bureaucrats, politicians, and professors will demand, in
the national interest, a bowing to the caprices of the global financial
oligarchy, since not doing so will cost the country dear through debilitating
and destabilizing capital flights. The task in short is automatically
accomplished to a large extent once a country has got trapped into opening
its doors to financial flows.
The second process is the exercise of peer pressure. Finance Ministers,
Governors of Central Banks, top financial bureaucrats belonging to different
countries, when they meet, tend increasingly to constitute what the distinguished
Argentine economist Arturo O'Connell has described as an ''epistemic community''.
They begin increasingly to speak the same language, share the same world
view, and subscribe to the same prejudices, the same ''humbug of finance''
(to use Joan Robinson's telling phrase). Those who do not are under tremendous
peer pressure to fall in line; and most eventually do. Peer pressure may
be buttressed by the more mundane temptations that Lenin had described,
ranging from straightforward bribes to lucrative offers of post-retirement
employment, but, whatever the method used, conformism to the ''humbug''
that globalized finance dishes out as true economics becomes a mark of
''respectability''.
But even peer pressure requires that there should be a group of core ideologues
of finance capital who exert and manipulate this pressure. The ''peers''
themselves are not free-floating individuals but have to be goaded into
sharing a belief-system. There has to be therefore a set of key intellectuals,
ideologues, thinkers and strategists that promote this belief system,
shape and broadcast the ideology of finance capital, and generally look
after the interests of globalized finance. They are not necessarily capitalists
or magnates; but they are close to the financial magnates, and usually
share the ''spoils''. The financial oligarchy proper, consisting of these
magnates, together with these key ideologues and publicists of finance
capital, can be called the ''global financial community''. The function
of this global financial community is to promote and perpetuate the hegemony
of international finance capital. And here the most critical issue concerns
the relationship of this global financial community to the politics of
particular countries.
To say that the World Bank and the IMF are the main breeding ground for
these key figures who are part of the global financial community and mediate
the relation between particular countries and globalized finance is to
state the obvious. True, the Fund and the Bank are not the only institutions;
there are sundry business schools and departments of economics, of business
administration, and of finance in prestigious Anglo-Saxon universities.
But even for the products of the latter institutions, the Fund and the
Bank often act as ''finishing schools''.
The relation between the key ideologues of finance capital and the governments
of the various countries has itself undergone a major transformation in
the more recent period. Earlier these ideologues were transplanted from
the Fund and the Bank, as part of an implicit conditionality, to the Ministries
of Finance in different countries, and the whole effort was to ensure
that they functioned to promote the interests of international finance
capital while remaining free from political intervention. They operated
in short as career bureaucrats; governments might come and go, elections
might make people throw off ''neo-liberal'' rulers and replace them with
the critics of ''neo-liberalism'' who had hitherto occupied oppositional
space. But ''neo-liberalism'' persisted notwithstanding such changes in
government, because key bureaucratic positions continues to be occupied
by members of the ''global financial community'', either the same ones
serving ever new governments, or new ones that came with government change
but from the same flock. And there were various instruments devised to
ensure that the new governments could not interfere in their functioning,
such as the Fiscal Responsibility legislation that tied the hands of governments,
or the so-called independence of the Central Bank that took a whole range
of economic policies outside the purview of elected governments, or the
sheer hard-sell of something called ''development'' that was just a euphemism
for the neo-liberal agenda.
But with the Fund and the Bank getting increasingly marginalized as international
lenders, and hence as the gendarme of international finance capital, owing
mainly to the paucity of funds at their disposal, this ''placing-Fund-Bank-employees-in-Finance-Ministries''
strategy, though still practiced, has needed to be supplemented by more
forthright measures whereby members of the global financial community
are directly inducted into political appointments. From occupying bureaucratic
positions within an overarching political process they have started moving
directly into political positions.
Obama's political appointees include people like Rubin, Geithner, and
Summers, who are indubitably members of the global financial community
and who collectively are in complete charge of economic matters in the
Obama administration. Bush's replacement by Obama has merely led to the
replacement of Paulson by Geithner. The Wall Street giant to which one
of them is loyal may be different from the one that commands the other's
loyalty, but each of them is loyal to some Wall Street giant, and is a
true exponent of the ideology of finance capital. Larry Summers, another
political appointee, who had occupied an important position in the Clinton
administration, has been re-inducted into the Obama administration, having
occupied the position of the President of Harvard University for a while
in between. He reportedly earned $8 million last year, $5.2 million from
a leading hedge fund D. E. Shaw, and $2.77 million from forty speaking
engagements before executives of banks and financial firms. Lecture fees
of this order, amounting to about $70 thousand per lecture, are not paid
merely for satisfying intellectual curiosity or quenching the thirst for
knowledge. They are a pay-off for preaching the ideology of finance capital,
for imparting to neophytes the belief system shared by the members of
the global financial community. It is of some interest to know that as
Clinton's Treasury Secretary, Summers had turned down all suggestions
for regulating hedge funds, claiming that those who operated such funds
were smart and sophisticated enough to invest prudently!
How people like Summers, Geithner and Rubin come to occupy such important
political positions within the U.S. system is pretty obvious. American
Presidential elections require massive amounts of money, a good chunk
of which invariably comes from Wall Street. The story doing the rounds
for a while was that Obama had got most of his funds from small donations
of $100 each garnered through the internet; but this was complete nonsense.
Obama like others before him had also tapped Wall Street and the appointment
of the trio, who had organized Wall Street finance for him, was a quid
pro quo. The elevation of members of the global financial community to
run the American economy therefore should cause no surprise.
What is more surprising is the way the financial community has insinuated
itself into political positions even in a country like India which had
a prolonged anti-imperialist struggle whose legacy still remains, and
where politics, admittedly electoral politics, is taken very seriously
by the people. The case of Manmohan Singh is too well-known to be recounted
here, but in recent years members of the financial community have been
smuggled in through the Rajya Sabha route into the nation's politics and
kept in readiness for important political positions. None of them has
ever participated in any political activity; none of them has ever won
an election on the basis of popular mandate; and none of them has ever
even been particularly loyal to the political Party which nominates them.
Nonetheless they emerge as key political figures and promote even within
a system marked by universal adult suffrage the interests of international
finance capital.
Similar examples can be cited from a host of other countries. Everywhere,
members of the global financial community are implanted upon the political
process to look after ''economic affairs'', which means to promote and
protect the interests of international finance capital by ensuring that
the neo-liberal policies are carried on. This dialectical interaction
between traditional politics on the one hand and the members of the financial
community implanted upon it on the other, constitutes one of the most
significant aspects contemporary bourgeois life.
Marxists, when they speak of ''bourgeois democracy'', are often accused
of resorting to hyperbole. ''Democracy'' after all is ''democracy''; why
talk of ''bourgeois'' democracy and ''peoples''' democracy? True, one
must never pooh-pooh bourgeois democracy, since, of all the possible forms
of bourgeois rule, it is the one that gives the people the widest possible
scope for organizing themselves into a force of resistance. But the limitations
of bourgeois democracy, the sham that the bourgeoisie is forever attempting
to reduce it to, are equally palpable. This country is at present engaged
in a remarkable electoral exercise, but once the results are out, the
jockeying to ensure that the economic levers of the country continue to
remain in the hands of the members of the global financial community,
will be equally intense. It is as if after the people have spoken the
real game will begin to ensure that their words count for nothing. Winning
elections is not enough; defeating this post-election game acquires even
greater significance.