V. I. Lenin wrote over ninety years ago that "under the general conditions of commodity production and private property, the ‘domination’ of capitalist monopolies inevitably becomes the domination of a financial oligarchy." He elaborated that "The supremacy of finance capital over all other forms of capital means the predominance of the rentier and of the financial oligarchy."
I will leave it to the curious reader to examine Imperialism: The Highest Stage of Capitalism for the persuasive argument that stands behind this prescient claim. But rest assured, it follows from a deep understanding of Marx’s exposure of the logic of capitalism and the evidence available in Lenin’s time. Ironically, this now ancient projection Â this forecast of the dominance of finance capital – speaks more to the economic crisis now raging globally than the host of Nobel laureates who pontificate about the cause of the downturn that began in 2008.
The dominance of a "financial oligarchy," as foreseen by Lenin, reached its zenith over the last twenty years with the financial sector doubling its share of US corporate profits. But "dominance" is not merely a matter of profit supremacy; it also includes the ascendance of political, social, and ideological power. The neo-liberal turn ushered in at the end of the Carter Administration and vigorously nurtured by Reagan began a process of de-regulation that ultimately removed the fetters on finance established by the New Deal.
The financial sector unleashed debt as the mechanism to enslave consumers, cities, counties, states, and sovereign nations. Pension funds were either privatized or coaxed into speculative investment pools. Credit cards, mortgages and bonds became the tools for domination by the financial oligarchy. At the same time, the huge profits accumulated allowed the financial sector to purchase a decisive influence in the two-party circus through lobbies, campaign contributions, and brazen corruption. With the notable exception of Oliver Stone’s film depiction of the evil Gordon Gekko, investment bankers were viewed as the brightest, most dynamic and most envied figures in the popular imagination.
Dominance inevitably invites tyranny and the financial sector eagerly took advantage of the opportunity. Today, the expression of this tyranny is the notion that run-amok banks are "too big to fail." We see this tyranny in the arrogance of Goldman Sachs, operating with no regard for national interests or public opinion and no effective government brake. Similarly, the timidity of legislators in devising effective banking regulation highlights this tyranny. But nothing underscores this tyranny more than the current European debt crisis.
Europe, today, is a hostage to the bond market. Because the European Union is an incomplete project rife with inequalities, imbalances, and historic contradictions, it is easy prey for the financial oligarchy. These weaknesses left the less developed economies to the vultures of finance capital. But the game was not solvency because there was really never any question – as things stood in the fall of 2009 – that Greece, Portugal, Italy, Ireland, Spain, or even Romania and Hungary could meet their debt obligations or secure new loans.
Rather, the crisis was contrived by financial predators. The full-scale speculative attack by the financial sector strangled these economies into submission, forcing them, at the moment when recovery was in the balance, to shed any stimulative programs and embrace extreme public-sector austerity. Nine months later, this debt panic has spread throughout the world, with governments racing to cut public-sector jobs, benefits and salaries, eliminating social programs and privatizing public works.
Like sheep, politicians, pundits, and policy wonks have added their voice in obeisance to the bond markets. The PASOK government in Greece bowed to the financial oligarchy, followed by the Spanish, Portuguese and Irish governments. The new UK government guaranteed deep cuts in government spending. Debt concerns have pushed aside all other issues in the Dutch elections. The French government is pressing for an increase in the retirement age. And the new government of Hungary nearly collapsed by suggesting that it might deviate from the IMF-imposed game plan of fiscal miserliness.
The US, though untouched by the financial aggression, has also succumbed to the extortion of the financial oligarchy. President Obama aims to cut Social Security and Medicare through his stealth Commission on Fiscal Responsibility and Reform.
For those who refuse to challenge the dominance of financial markets and the tyranny of bonds, there is no other way but to accept and impose deep cuts in public spending. The attack upon Greece was a demonstration of the power of the financial sector and its ruthlessness in using it. Just as the spending cuts are beginning to be felt, Greece is experiencing explosive inflation, a development ominous in its effects upon the living standards of the Greek working class.
But there is an answer to the tyranny of bonds, an answer that calls for the mass mobilization of working people against the financial oligarchy. That answer refuses to defer to a system that promises to set back for decades the security and living standards of working people while offering a bleak future.
The ubiquitous mouthpieces of the financial oligarchy call for sacrifices to restore order to the economic system. This is a calculated deception. There is no noble sacrifice in surrendering to extortion any more than there is inevitability in the domination of financial markets.
Workers in Greece, led by the Greek Communists and the all-union grouping, PAME, are in the forefront of organizing strikes and demonstrations against the financial oligarchy. Their determination and calls for unity have set an example for all European workers. On the heels of the Greek actions, Portuguese workers took to the streets. Spain’s largest union, Comisiones Obreras, went on strike on June 8, with 75% of the organization’s 2.6 million workers honoring the action and a general strike projected. Public-sector workers in Romania have organized several militant actions.
As the fightback mounts, unity is essential, but not at the expense of militancy. The rumblings from the leadership of many European unions are welcome, but must be backed up with effective organization and mass mobilization. Recently, several UK union leaders spoke angrily of the draconian cuts promised by the new government, but failed to offer more than sharp rhetoric and future electoral threats. In the US, a few leaders have spoken out against the Obama administration’s covert assault upon social programs, but nothing like a mass movement has yet to emerge. A class-based confrontation with the financial oligarchy faces many obstacles, not least of which is the post-Cold War near total domination of organized labor by class collaborationist, social democratic leadership.
And the financial oligarchs are fully aware of this weakness. Recently, the head of the European Commission, President Jose Manuel Barroso, gathered many of the social democratic trade union leaders to lecture them on the dangers of resisting the assault on living standards prompted by the predatory debt "crisis." As reported by the UK Daily Mail: "In an extraordinary briefing to trade union chiefs last week, Commission President Jose Manuel Barroso set out an ‘apocalyptic’ vision in which crisis-hit countries in southern Europe could fall victim to military coups or popular uprisings as interest rates soar and public services collapse because their governments run out of money."
It is "popular uprisings" that Barroso fears, a fear that is shared by social democratic union leaders. Moreover, he wants to enlist these leaders in shoving the austerity program down the throats of workers. John Monks, head of the European TUC, commented, "I had a discussion with Barroso last Friday about what can be done for Greece, Spain, Portugal and the rest and his message was blunt: ‘Look, if they do not carry out these austerity packages, these countries could virtually disappear in the way that we know them as democracies. They’ve got no choice, this is it."’ At the same time, "Mr. Monks yesterday warned that the new austerity measures themselves could take the continent ‘back to the 1930s’," according to the Daily Mail. Clearly, social democrats like Mr. Monks are willing to send the European working class "back to the 1930s" rather than risk popular uprisings that would challenge the financial oligarchy.
The World Federation of Trade Unions has called for an international day of action of the trade union movement on September 7, 2010. Every effort must be made to build for this action over the summer. Every effort must be made to mobilize working people against the financial oligarchy.
Popular uprisings are what we need.