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Who Elected the Bankers?
Capital and resistance in an era of transnational technocratic politics
What follows is an interview with Dr Iraklis Oikonomou on neo-liberal politics, capital and resistance in the context of the current sovereign debt and political crisis in Greece, Italy and Europe, also with reference to the role of the Trilateral Commission.
It was published in Iskra, 18 December 2011 (ed. and transl. in Greek by Iraklis Oikonomou). Iskra (www.iskra.gr) is one of Greece’s leading online platforms for radical political thought. The Greek version can be found at:
Iraklis Oikonomou: Your seminal work American Hegemony and the Trilateral Commission remains one of the most significant contributions to a historical materialist theory of international relations. What were the main impulses that led you to engage with the Trilateral Commission as a field – or an object – of study?
Stephen Gill: It was not so much the Trilateral Commission that was my field of study – rather it was the nature of global power and its use in shaping world order. My study combined sociology, political theory, political economy and international relations and it invoked what C. Wright Mills called a “sociological perspective” on the world. My study built, at the global level on books such as The Power Elite, which focused on the USA. My work is a form of social theory that addresses how such national power structures relate to, shape and are shaped by global power relations. What I study is simply another way of addressing, in a contemporary context, the question of how human beings make history but do not necessarily do so under conditions of their own choosing. I was therefore specifically interested in identifying those conditions and the potentials for social transformation in a progressive way, inscribed by the nature of politics towards the end of the Cold War. I looked for a method to analyse it realistically. Thus my work uses a much more self-consciously historical materialist perspective than did Wright Mills, influenced by the thinking of Gramsci, Marx, Braudel and Polanyi. This approach allowed me to include questions of class consciousness and how transnational forces were reshaping global politics.
Studying the Trilateral Commission was in that sense, simply a means to an end – ruling class forces use many different institutional frameworks, some of them public and many of them private in seeking to influence global politics. What the study of the Trilateral Commission did reveal to me however was the way in which national power structures were interwoven in a very complex manner on a transnational basis, rooted in what was in effect a transatlantic ruling class which was extending its reach globally, and in the case of the Trilateral Commission in the 1970s and 1980s, incorporating Japan.
Why are the two EU member-states most threatened by the financial crisis (Greece and Italy) currently undergoing such a change in political leadership, from party politics to technocratic “bankers’ politics”?
Certainly it is true that both the new Prime Minister’s of Italy and Greece are bankers, both with links to private and central banking institutions, as well as, not least, to Goldman Sachs. Mario Monti held a position as a senior adviser at Goldman Sachs, and Loukas Papademos, the former vice president of the European Central Bank, was at the Central Bank of Greece when Goldman helped Greece to manage the transition into the Eurozone. We now know that Goldman – perhaps the world’s most powerful private bank – helped Greece to camouflage its true fiscal position prior to entering the Euro by means of complex financial derivatives. Both Monti and Papademos are part of a network of private and central bankers – the late political economist Susan Strange used to call them an ‘international freemasonry’ – bankers that know each other well and that have been intimately involved in, and often profited directly from, the neoliberal era of financialized capitalism. Incidentally the new President of the European Central Bank, Mario Draghi has also held significant positions at Goldman Sachs, as well as running the Italian Treasury and Italian Central Bank. It is also well known that Goldman typically provides the Treasury Secretary and other key financial officials in US administrations.
So in one sense you are partly correct that there has been a shift from party politics to bankers’ politics in the two countries. However, the more significant questions in my view are what kinds of bankers and what kind of policies that are being implemented in response to the crisis?
Nevertheless and for the record, as far as I understand it in Greece, three of the main political parties, including the far right (now in government for the first time since the right-wing military dictatorship) have provided members of the new 2011 Cabinet. The Greek left and Communist Party have refused to cooperate and are outside of the government. So therefore it is not a “national unity” government in the sense of the types of coalitions that responded to the crisis of the 1930s in many parts of Europe. However, we should remember that in the 1930s these governments also sought to do so by implementing the financial orthodoxy at the time, which involved sacrificing the interests of workers to the defence of the international gold standard – the equivalent of the defence of the Euro today.
On the other hand, in Italy, Mario Monti has managed to do something which the forces of the Italian left have been unable to do for years, which is to oust Berlusconi and his supporters (which included neo-fascists in his Cabinet). In their place Monti has put together a cabinet of so-called independents. I have not heard of all of them, but several have academic links (including to a university founded by the Italian Confederation of Industrialists), and like many so-called technocrats (such as Prime Minister Papademos) generally have training in neoliberal economics. The new Italian Cabinet mainly reflects the interests of business, entrepreneurship and banking (both private banks and the World Bank) as well as including the Catholic Church, whose influence will be felt in the ministries of health and education. The latter can be seen as acknowledging the role of the Church in criticising Berlusconi’s morality and behaviour as well as forging links between Christian Democracy and neo-liberal restructuring.
These individuals have been represented as independent technocrats with no ties to the main political forces in the country.
As a point of background to the above, it is worth underlining the fact that one of the key developments over the past 30 years is the so-called emergence of “independent central banks”, which are supposedly free of the influence of elected governments and popular-democratic political forces. However, in practice, as Monti and Papademos clearly reflect, private financial capital has very significant representation in the key matters of monetary and financial policy, whilst by statute, wider democratic accountability is largely locked out. This is one of the “technocratic” consequences of the Maastricht Agreements and of the Lisbon Accords, consequences that will be intensified if recent measures to strengthen the role of the European Community with respect to fiscal policy are accepted by the member states. This will transfer sovereignty over fiscal policy to the European institutions to unelected figures and to institutions that are not accountable to the people.
What both the new Greek and Italian cabinets seem to have in common is their willingness to attempt to implement the orthodox neoliberal financial policies that have been agreed at the European level, and to a certain extent, with the International Monetary Fund (and therefore with its key members such as the United States, and key creditor countries such as Japan and increasingly China). What that means as the Greek people know all too well, is commitments on the part of the new government to implement austerity measures in the form of particularly savage public sector expenditure reductions, reductions in pension entitlements, privatisation, and regressive tax increases (and better tax collection). This is supposedly in exchange for a write-down of some of the debts (e.g. perhaps 50% of what is owed to Greek bondholders). This is so that Greece does not trigger off more significant pan-European problems when the solvency of many banks in various European countries is at issue, and might be caused by a complete default on Greece’s debts.
What does not seem to be on the table is the possibility of Greece leaving the Eurozone and resorting to its previous currency the drachma, engaging in depreciation in order to regain competitiveness and cushion the deep recession which the orthodox policies will undoubtedly intensify. In fact, all of the measures that have been proposed are framed by precisely the mindset which has governed most of the responses to the global debt crisis since 2008. Real alternative policies have never been debated actively, either at the national or indeed at the European level, such as the creation of a European Monetary Fund, that would force social and ecological as well as democratic criteria into the making of financial policies and bailouts, and onto crisis management mechanisms, in ways that would challenge the undemocratic rule of the international freemasonry of bankers, who see crisis as an opportunity to deepen neoliberal restructuring and to protect financial interests. One of the big questions is therefore just how far the strategy used for much of the past 30 years can continue to succeed since resistance is bound to intensify.
Is Monti’s and Papademos’ membership in the Trilateral Commission a sheer coincidence, or would you say that this is still an organisation with a strong political clout in the countries of developed capitalism?
When I did my research for my book on the Trilateral Commission, one of its initial principal funders, the Ford Foundation, noted in a report on its activities that the Commission served as an institution for grooming future leaders. So their membership is probably no coincidence since the political forces that they are connected to want to see particular solutions emerge from the respective crises that surround the sovereign debt of Italy and Greece in ways that protect the interests of capital. It is important to remember that the Trilateral Commission is a private organisation which is chartered as a charity in the United States. However in many respects it is a kind of transnational political party of dominant capitalist interests, and many of its members are drawn from the leading institutions in political and civil society in the various member nations. When it was formed it was very controversial and it gained a lot of publicity and criticisms from left and right of the political spectrum, as well as from nationalists, but it has continued to operate. If you look at its membership list (available on Wikipedia) you will see that many of the world’s most influential politicians have been members (e.g. US President Clinton, Vice-President Cheney), and it certainly continues to reflect a very powerful set of overlapping networks of influence. I would say that its influence is not necessarily direct in the sense of “political clout” on particular issues, more in terms of framing the strategic responses that are deemed to be politically permissible or possible for example in situations of crisis.
Its initial membership when it was founded in 1973 was drawn from the so-called “trilateral” countries – the US and Canada, members of the European Union (prior to its eastern enlargement) and Japan. This membership has now grown to include all of the major poles of accumulation in global capitalism. Of course it is also important to underline that the Trilateral Commission is not a democratic institution since its members are involved on a private basis and they are selected rather than elected on the basis of their wealth, political significance and institutional and cultural influence. Their considerations are particularly connected to the governance of national, regional and global economic activities and questions of geopolitics and security. More broadly they are fostering a particular kind of world order that is congenial to dominant corporate interests. Of course there are many disagreements and differences of view in the ranks of its membership, based upon the different sets of geographical, sectoral, and to a certain degree the liberal, conservative or social democratic political interests “of the centre” that they represent. Nevertheless there is a broad consensus in favour of policies that broadly speaking seek to sustain the “centrist” projects of a neoliberal world order, growth based on the free enterprise system, and not least, the forces of the world market as the principal shapers of governance in world society. What Susan Strange called the international freemasonry of the banking fraternity is therefore a subset of the above set of networks of power and influence.
Of the two individuals Mario Monti would seem to be clearly much more influential since he is the European Chairman of the Trilateral Commission, which means that he is one of the most significant politicians in Europe if not the world and that he is extremely well-connected with his counterparts in Europe and the Pacific. He also would have been the consensus selection of a majority of the European membership of the Trilateral Commission in order to become one of its three Regional Chairmen. Monti is also a regular participant at the annual and much more secretive and much more selective Bilderberg Meetings, so he is a member of the inner circle of the global ruling classes. The Bilderberg Meetings began in 1954 and were initially chaired by Prince Bernhardt of the Netherlands and they have been connected to the furtherance of the European project in the light of the Cold War and to the deepening of transatlantic relations as a means of sustaining Western dominance in world order under American leadership. The stance of Bilderberg was, of course, premised on consistent opposition to communism since its creation.
Lucas Papademos has been a member of the Trilateral Commission since 1998, so that has given him plenty of time to extend his networks and gain some influence in that particular forum. All of these forums – the most open and largest is the World Economic Forum in Davos, Switzerland – bring together selected leaders from corporations, the media, academia, culture and the world of celebrities from different countries – to seek to try to generate a consensus on common projects such as economic integration on a European, transatlantic an increasingly global scale, as well as to participate in a collective strategies for crisis management. Of course the national political leaders that are involved may or may not be able to translate such a strategic consensus directly into their own policies. However one of the features of the recent phase of neoliberalism is the very commonality of policies that have characterised responses to crises.
What national or transnational social forces are represented by the respective political figures? In other words, does the appointment of Monti and Papademos reflect a “trilateral” attempt to resolve the crisis of legitimacy, a European attempt, or simply a choice of the national bourgeoisies?
I think both of these two individuals reflect the dominant forms of financial capital which have profited most from the neoliberal restructuring of national and global economies since the Third World Debt Crises of the early 1980s. In that sense they are simultaneously operating at all three levels you note, although they need to have a base in the politics of their own countries to be able to do so. Again, in each of the debt and financial crises, including the so-called Asian financial crisis of the late 1990s, these dominant forces have used the crisis as an opportunity to deepen and extend neoliberal reforms, and to roll back the power of labour and the left. And throughout that period, the forces of the so-called Washington Consensus that represents the neoliberal orthodoxy have seen it implemented in Pinochet’s Chile, Yeltsin’s Russia, and throughout the Third World and Eastern Europe, involving so-called technocrats who have usually been trained in Anglo-American schools of macroeconomics and policy sciences at Ivy League or Oxbridge universities.
On the question of legitimacy, the strategy is to consistently deal with contestation over such political questions by separating the “economic” and the “political”, the “public” and “private” so that in neoliberal discourse key public institutions such as central banks are represented as non-political or beyond politics, and as only operating in the economic sphere. In practice of course these policies involve a combination of public and private power and have deep implications for questions of social justice, distribution and economic performance, all of which are deeply political questions.
More generally, how do you assess this trend towards the removal of the “political” in today’s times of crisis? Is this a sign of weakness on behalf of the bourgeoisie, denoting its lack of trust to mainstream political personnel, or is this a sign of strength, securing its interests more closely?
[As I noted in my previous post on Red October] “In responding to financial and debt crises since the 1980s, G8 political leaders have (a) frequently drawn on their unholy alliances with authoritarian and dictatorial forces, particularly in much of the Third World; (b) sought to maintain a condition of de-politicization and political apathy, and, where necessary (c) to channel and incorporate forms of resistance”. The removal of the political as you put it has been central to the ascendancy of neoliberalism – reflected in former UK Prime Minister Thatcher’s favourite expression There Is No Alternative (TINA) to the policies that she represented, in her quest to eradicate socialism; the wider discourse was Francis Fukuyama’s famous dictum that with the collapse of the Soviet Union we had reached the end of history, and the only viable politics in future would be a liberal politics.
It seemed until 2008, at least in Europe and North America, that this perspective had achieved dominance if not hegemony. This of course was much less the case in Latin America, where after several decades of austerity presided over by neoliberal technocrats, new forces began to create 21st Century Socialism, reflecting a much more general awakening of the left and progressive, broad-based forces combining indigenous people, the peasantry, industrial workers, intellectuals and people from all walks of life searching for a new politics. So you might say up until the 2008 global financial crisis that originated in Wall Street, as well as the continuing deepening of social and ecological crises, as well as crises of ethics – what I have been calling in recent work a global organic crisis – the removal of the political as you put it has been a sign of strength on the part of the bourgeoisie, and a sign of weakness on the part of the lefts.
In this situation, G8 leaders have continued to deny their responsibility for the crises and claim they have “expertise” to stabilize and promote economic growth and to master crises of accumulation – a claim now widely and increasingly challenged. Indeed, while they have been preoccupied with saving capitalism, their policies tend to simply worsen the fundamental crises of welfare, livelihood and social reproduction that afflict a majority of the world’s population, e.g. global health, food, energy and ecological crises. What they are seeking to stabilize is unsustainable: a particular form and pattern of capitalist development, which I call a “market civilization”: an energy intensive, consumerist, individualist form of corporate-dominated development that is found in the USA, and to a lesser or greater extent, emulated throughout the world. Such practices have served to maintain the prerogatives of a global plutocracy of billionaires, whilst inequality deepens to levels last seen just before the Great Depression of the 1930s.
What opportunities do you envision for the development of counter-hegemonic forces, given the translation of the economic crisis into a political crisis? What is the way forward for these forces?
That is a key question, and of course the struggles in Greece are symptomatic of what is at issue. The details of those struggles are known very well to your readers so I will not elaborate on them here.
Nevertheless, in several parts of the world, the neoliberal governing formula of authoritarianism and/or controlled electoral democracy/de-politicization via technocracy is increasingly coming under popular, grassroots pressure. What is emerging in response is, of course, complex and uneven, and has to be read very carefully. Many communities in both north and south experience dispossession and intensified exploitation, whereas others are still relatively protected from such oppression: workers in many countries of Europe have been relatively cushioned from the effects of the crisis of accumulation, for example in Germany, Holland, the Nordic countries. Elsewhere in Europe and North America, on the one hand there is also a rise in right-wing populism and right-wing reaction, e.g. the Tea Party movement in the US; on the other hand, as many have noted, despite mass protests and riots in Greece and Spain, there has been little from the left in the largest capitalist economies – at least until recently.
However, if we think globally, since the later 1990s we can discern the outlines of a set of shared and progressive conceptions of the world, of forms of organized resistance and differentiated but inter-linked political potentials that are developing in the plural, albeit unevenly and, in a variety of contexts. These self actualising potentials are in very important ways, showing the world variety of paths forward, and in particular it should be underlined how they are reflected in a variety of radically democratic practices. They challenge the mantra that there is no alternative to neo-liberal capitalism, and in its place offer new conceptions of society. Indeed many of these forces show that throughout the world there are millions of progressive organic intellectuals, in the sense used by Gramsci, who are forging new projects and connecting them to changing the real material and political conditions of existence that people face in their everyday lives. Other developments which had been going on now for over a decade are reflected in umbrella organisations such as the World Social Forum, which may develop into a much more action-oriented political organisation of the lefts (in the plural).
Recently the so-called Arab spring of 2011 provided an inspiration and a catalyst for the Occupy Movements that have spread rapidly throughout the world, and perhaps significantly, awakened political forces in the United States on the left for the first time in a broad-based way since the 1960s. Many people with little previous engagement in politics have begun to think and act politically. What is remarkable about these occupations and the challenge to the politics of neo-liberal capitalism that they represent, is that they have gained the support of the vast majority of people in every country where the occupations have occurred. It shows that today’s youth – and the population more generally – are not fooled by false promises and have developed a fairly radical political economy perspective on the world, appreciating its deep injustices and opposing the almost obscene levels of inequality that have developed.
I call these emergent forces a post-modern Prince (my concept builds on Machiavelli’s The Prince, and Gramsci’s The Modern Prince). The post-modern Prince should be understood as a broad, plural set of potentials and forces in formation and in movement, a process with no specific leadership structure or fixed organizational form. What it is important to emphasize however is how this process is producing innovations in thought and action which are directly linked to changing the actual practices of local, regional and global politics. Indeed the links between these forces are growing, and are connected to the globalization of new concepts of solidarity, democracy and social justice as well as ecological and economic sustainability.
A good example of grassroots organisations that form part of this process are the Landless Workers Movement (MST) in Brazil, which forms a part of the wider small farmer’s global political organization, Via Campesina. The motto of the latter is “small famers can feed the world and cool the planet”. They champion a localized, agro-organic and smaller scale conception of farming and the fair distribution of food, and oppose the corporate dominance of agriculture and the world market for food, or “food from nowhere”. They condemn a world food order where the capitalist world market is the new arbiter of starvation for billions of people.
There are also new configurations of interstate power emerging such as the Bolivarian Alternative for the Americas (ALBA). Such configurations reject North American and Western imperialism and interventionism, as well as neoliberal capitalism in favour of new forms of “21st century socialism” based on regional solidarity and new concepts of military defence that are linked to egalitarian concepts of development. ALBA reflects an effort to promote social justice, the recognition of the “rights of the rightless” (e.g. indigenous communities), a politics of human dignity and redistribution, and not least, the agro-ecological notions of food sovereignty associated with Via Campesina.
Can these movements combine effectively and lead to a restructuring of global power structures? This is still an open question. Nonetheless, what seems to be reflected in the Occupy and other movements is a collective effort to foster new forms of knowledge, modes of communication and culture that visually and conceptually contest the prevailing neo-liberal common sense that there is no alternative to the growth-oriented and ecologically myopic mentality of market civilization. This “common sense” is endlessly repeated and reinforced by the dominant organs of communication. But is this common sense also “good sense”? This is the question that is posed by the Occupy (99%) Movements (comprising people of all ages, backgrounds, various religious persuasions, occupations and political aspirations) and their answer is a resounding ‘no!’
A final note on theory. In 1993, you edited the book Gramsci, Historical Materialism and International Relations, providing students of international relations with a valuable set of critical notions and frameworks. How would you assess the neo-Gramscian moment in IR theory? Has it fulfilled its promise?
When I first began to read and to publish in the field of international relations, it was (and still is) a very conservative field. At least in the West, it was dominated by frameworks of thought that were consciously constructed to advise and consolidate constituted or established power as well as to exclude or to marginalise Marxism and other strands of critical thinking. So one of the aims of that edited work – building on an earlier book which I wrote with David Law called The Global Political Economy: Perspectives, Problems and Policies – was pedagogical. I believed that the pedagogy of international relations necessarily had to include the full range of theoretical perspectives, and an adequate consideration of their strengths and weaknesses. To simply marginalize an entire body of thinking seemed to me to be an unethical denial of the ability of human beings to learn from and differentiate between various forms of argumentation and theory.
Has it fulfilled its promise? I think the only way to consider this question is as a part of wider currents of change and political potentials. I think it is fair to say that the neo-Gramscian approach has been influential, and along with other critical perspectives, it has widened the theoretical scope and the explanatory depth of the field of international relations very considerably. However, in a sense, a critical perspective on the world only fulfils its promises if it is able to not only demystify and critique the actual exercise of power and set of social relations, but also to imagine new ways of thinking about the world and to connect to them organically to change the common sense of a particular period, and further the arguments that can promote a new kind of society and civilisation. More fundamentally, in so far as neo-Gramscian ideas are connected to the emergence of a post modern Prince, and new imaginaries concerning society, politics and ethics, or a new common sense about the world and its re-making, then it is in the process of developing important ways to fulfil some of its promise. If and when these changes begin to really affect and to change the extreme injustices and obscene inequalities of our world, and to help challenge the unsustainability of the present frameworks of world order, then, and only then, can we consider that it actually has fulfilled some of its promise.
Click below for the video & Powerpoint presentation of the lecture I gave in April 2009 in Helsinki to “Capitalism ’09: seeking alternatives to global capitalism.”
This lecture outlines alternative models for understanding capitalism and capitalist crises; analyzes the relationship between the global financial and economic crises and a wider organic crisis and outlines both dominant neo-liberal and alternative, progressive frameworks. It makes five sets of policy recommendations and possible steps towards a more socially just and sustainable post-capitalist world order.
It was part of a conference organized by the Finland Left Forum in April 2009. Other speakers were Isabella Bakker who specializes in feminist political economy; researcher and climate activist Tadzio Müller, a critic of Green capitalism; Hilary Wainwright, editor of Red Pepper magazine and Oras Tynkkynen, MP of the Green Party in Finland.
Here is an article that contains some of the key ideas and arguments that I will be working on during 2009-10 when I am the Erkko Professor at the Collegium for Advanced Studies at the University of Helsinki. It contains the conceptualization of two of the constitutive structures of contemporary capitalism — what I call disciplinary neo-liberalism and the new constitutionalism.
For the pdf click here