There was so much talk about revolving doors between Wall Street and regulators. Mervyn King who wrote so eloquently about banks in ‘End of Alchemy’ ended up an advisor to Citigroup. Willem Buiter who was in the MPC in BoE did the same. Former Heads of Government do the same. Robert Zoellick and Robert Rubin come to mind. Former as Goldman Sachs advisor and the latter in Citigroup.
It is not for nothing that financial firms pay huge sums to have these people in their rolls. The latest is Blackrock that has agreed to pay a very generous sum to George Osborne, former British Chancellor, for very little work. The story is here.
So, the dominance of Finance has not really ended. The fight still has to be made and the road ahead remains long.
This blogger makes some good comments:
What are they buying? It’s not his economic expertise – he’d struggle to get a minimum wage job on that account – nor even his contacts. Instead, BlackRock is offering an incentive to the world’s finance ministers. It’s telling them that they too can get big money if they behave themselves in office*.
Such behaviour consists of giving the industry a favourable tax regime, lightish regulation, and ensuring a good flow of easy money. Osborne’s policy of fiscal conservatism and monetary activism had the effect of boosting asset prices (pdf), to the benefit of firms like BlackRock**.
It’s through mechanisms like this that capitalists gain undue influence over the state: there of course several other mechanisms, not all of which are exercised consciously or deliberately.
This influence isn’t perfect – we’d probably not have had Brexit if it were – but it exists. The idea that democracy means equality of political power is a fiction in capitalism.
You might think this is a Marxist point. I prefer, however, to think of it as a Cohenist one:
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
Except that not everybody does know the fight is fixed, because the question of how capitalist power is exercised – like other questions such as whether capitalism impedes productivity or whether hierarchy is justifiable – is not on the agenda. But then, the issue of what gets to be a prominent political question and what doesn’t is another way in which power operates to favour capitalists.
I like this blog. Just ‘stumbled’ upon it. Don’t remember how. Even this post is a simple one and it makes sense.