Like any other sector of bourgeois capitalist societies, the political class can and often does develop its own discrete interests and evolutionary path. At times these political sectors can depart from the interests of the capitalist system as a whole, but ultimately they are dependent upon capital. The same is true of the military sector, the judiciary, the intelligentsia and the state bureaucracy. These sectors, together with the political class, are component parts of the capitalist mode of production’s ruling elite.
However, in times of crisis, whether this is caused by severe economic, military, diplomatic, legal or ideological transformations, the elites in these separate sectors can begin to fall-out or in extreme cases collaborate to save the system. Alternatively, as now, one powerful sector can further exert their sectional domination over the others – to the detriment of the system as a whole.
Since the dawn of the 20th century, one particular sector of the capitalist mode of production has, apart from brief periods, consistently managed to exert its particular interests over all the others. That sector is best described by the term ‘finance-capital’. Finance-capital is a term which covers all those activities which involve – in one way or another – the investment of the money form of capital (or its paper equivalents) directly for interest or added monetary-value return of that investment.
The largest parts of this now dominant sector include banking, trading in shares, currencies, bond-buying and selling, loan creation, hedge-funds, investment banking and the more recently expanded trading of derivatives of various forms. The most recent example of the detrimental domination of this sector over all others was the financial crash of 2008 and the monetary policy decisions implemented afterwards.
The deficient media narrative.
Although the 2008 financial crash was covered extensively everywhere, its connection with the economic and political system was not fully explored or sufficiently understood by the dominant media outlets. Not surprisingly therefore, what is still missing in many of the mainstream narratives is a full understanding of the economic and financial motives which are driving the current crisis deeper and increasing radicalisation of both left and right political tendencies.
In the popular media, finance and economics have been separated from politics and shunted to the periphery of commentary, whilst politics is given prominence and occupies centre stage. Yet it is the economic and financial crisis which continues to underpin the major developments currently taking place and it is the needs of ‘finance-capital’ around which all else now orbits. The fact that there continues to be a massive over-production of finance-capital in the USA , UK and Europe does not explain everything which is currently happening politically but it does explain many things.
As noted, finance-capital is the form of interest-bearing capital which for much of its time exists outside of the main processes of capitalist production. It exists in the forms of vast amounts of money in various forms, the owners of which are constantly seeking profitable places to successfully invest it. Even after the destruction of the Second World War, for example, industrial production outlets only sufficed to satisfy this insatiable demand for a short period of time, before further opportunities were sought.
With the collapse and break-up of the state-capitalist countries of the former Soviet Union, late 20th century finance-capital had a new part of the world to exploit. Finance-capital surged into many of these countries buying resources, making deals and setting up businesses, until this source dried up. With a few exceptions this ‘investment’ sooner or later, produced vast profits and thus only added extra digits (from billions to trillions) to the pool of finance-capital seeking new outlets and opportunities.
Apart from other problems, this excess of finance-capital in the past has caused ‘bubbles’ in one sector after another, as the owners of it competed with each other to purchase and sell favoured commodities, equities, bonds, and businesses. The last such speculative ‘bubble’ burst in 2008 and yet the size of this pool of finance-capital has not only recovered since then, but has continued to grow and is now fuelling new ones as well as global interference.
The magnitude of this sector is therefore even larger than before and is increasing rapidly – with all this it implies – including the inflation of new bubbles and further deflationary collapses in the future. It is important to understand that the finance-capital elite are powerful and ever restless in pursuing new ‘investment’ avenues. New financial ‘vehicles’ and potential sectors are constantly being sought – legal or otherwise – as the banking crisis revealed.
Finance; The power behind politics.
It is also important to recognise that the elites who control this restless and needy finance-capital sector are able to exert exceptional power over the political classes. They do this by means of donations, stipends, consultancies, board-room appointments, promises, threats and of course persuasion. Anyone who doubts the power financial elite exert over the political and governmental elite has not researched the amount of ‘lobbying’ money which is utilised to persuade or pressurise those governing to adopt policies and practices advantageous or favourable to their pursuit of profit. In this objective they are able to ally themselves from time to time with other sectors of big-business and of course powerful military elites – when and where their interests overlap – which they often do.
It cannot have escaped most peoples notice that one of the more favourite sectors for finance-capital to ‘take-over’ has been via the privatisation of public sector resources. Huge profits have been generated from this source within many countries. However, this opportunity has now been almost fully exploited in most of the advanced countries of Europe and North America. There is very little else left except health and education to privatise in the modern welfare-state nations. Hence the pressure is on from this most financially powerful section of the capitalist class in the USA, the UK and Europe to move into other countries, buy up their public and private companies and services on the cheap, reduce costs and make extra profits.
So if anyone is puzzled by the seemingly blind rage the dominant elites in west have routinely got into over having their acquisitive aspirations frustrated in Iraq, Afghanistan, Libya, Syria and now Ukraine, one only need bear this in mind. It must be exceptionally frustrating for these elites if money has been spent in anticipation of getting hold of valuable assets at a knock-down price, only to have the prizes slip out of their grasp.
If one adds to the pressing needs and desires of the finance-capital sector for such investment opportunities, the satisfaction accruing to the military-industrial complex the pressure to interfere in other countries can also be considerable. The military elite themselves can rarely resist a political prompting to invade a country or supply an indigenous regime with weapons of social control, such as in Afghanistan, Pakistan, Iraq, Egypt and now Ukraine.
The pressure exerted by the financial sector and the convergence of its ‘special’ interests with those of the military and big-business, would be hard to resist if the political class were not so inter-dependent upon the finance, industry and military sectors. However, they are so inter-dependent and it would take a revolutionary transformation of the mode of production to prevent further political and military interference in other countries. Since that is not an immediate possibility, we can expect even more of the same. Bearing in mind all the above, it becomes obvious what socio-economic and powerful financial force is really behind what is ‘politically’ and militarily going on in many parts of this now dystopian world.
Nor can it be surprising that this decades old aggressive interference by western pro-capitalists and their ‘puppet’ proxies has produced armed resistance. What may be surprising to some, however, is the current form of this armed resistance – religious fundamentalism. The relative successes of religious fundamentalism, previously in Iran, then in Afghanistan under the Taliban, later in Syria and now in Iraq with the Isis (Islamic State of Iraq and Syria) may also seem shocking.
However, what should not come as a surprise is that these armed sectarian religious zealots would have been able to recruit radicalised young active participants from the heartlands of the advanced countries whose elites have been behind the various invasions, incursions and interference. That latter reactionary development however, is a subject for a further article. [Meanwhile see ‘Fundamentalism’ and ‘The Importance of Theory’.]
Roy Ratcliffe (June 2013.)