Financial Markets Are Not Faceless

ORIGINAL FRENCH ARTICLE: Geoffrey Geuens : "Les marchés fianciers ont un visage, celui de l’oligarchie"

by Thomas Lemahieu

Geoffrey Geuens: « Financial Markets Are Not Faceless. Their Face Is That of the Oligarchy »

Translated Wednesday 7 March 2012, by Isabelle Métral and reviewed by Henry Crapo

L’Humanité interviews the author of la Finance imaginaire, anatomie du capitalisme: des “marchés financiers” à l’oligarchie, Arden publishers (Fantasizing about Finance - an Anatomy of Capitalism: “Financial Markets” or Oligarchy?). The Belgian academic dissects the intricate logic of political discourse based on facile but factitious "opposing positions" that actually hides the structural links between finance and the State.

http://www.humaniteinenglish.com/spip.php?article1989

HUMA: In this book you demolish a number of commonplaces everywhere to be found in the public sphere: finance is elusive, beyond the reach of political governance... It is “faceless”, as François Hollande said in his famous speech in the Bourget [1], for it “never stands for election”… What do you think of that kind of political statement?

GEUENS: That speech of François Hollande’s is truly extraordinary because it sums up the dominant ideology, the doxa, in a most striking way. It is indeed difficult to have a critical approach to the trite concepts that the most ossified political science keeps harping upon and to the interpretative perspectives that go unchallenged in the public debate like the opposition between the State and the markets, the public and the private spheres, politics and the economy….The opposition between those contrasting entities holds only as long as you keep to generalities, but if you move closer to the ground these academic concepts eventually hamper reflection. At ground-level, these air-tight partitions become far more porous. When you look from a sociological perspective into the working of the State and the market, you realize that biographical narratives show those at the top crossing borders from one professional sphere to another. Statesmen turn businessmen, businessmen turn statesmen. As a consequence, their common objective is to consolidate the ruling class. Behind the "conflict" between the “financial markets” and the State I myself perceive the unity of a class whose members skip effortlessly from one sphere to another…

HUMA: What makes you describe as fictive those “financial markets”, which you place in quotes?

GEUENS: I actually don’t know what “the market” is …. I know what companies are, and the great families, or investment funds, or shareholders, or pressure groups and so on. All those do exist. But markets-that- rule-the-world, as anti-globalization movements claim, I am not clear what the phrase really designates... Now the idea, they say, is to enable the State to “regain control over those markets”. What the “State” itself is, is no clearer to me: I know what institutions are, and central banks, Parliaments, executives, politicians… On looking closer into those two groups of disembodied and distant abstract entities you find extremely tight connections between them.

For ten years at least the critique of capitalism has in the main been limited to the denunciation of “financial markets” or “neo-liberalism”. Now these two notions are irrelevant. “Neo-liberalism” does not exist outside its legitimizing function as an ideological discourse. For it to exist, the market and the State should be separate entities, and unbridled competition the absolute paradigm in a totally deregulated world. Now, as a matter of fact, the system does not function like this at all: capitalism remains centred around the States, with a lot of cartels, and interpenetration between the two. The resulting confusion between, say, “capitalism” and “neo-liberalism” seems to me to have quite a detrimental effect at a time when, in such a critical period as this, our main task is to identify and create social groups, to sharpen political awareness, to identify our enemies and to do battle.

“Finance, my enemy, has no face and does not stand for election,” the Socialist presidential candidate said. It is easier to denounce finance than to take on the real actors in the banking sectors and the big industries. If that was his aim François Hollande would be obliged to attack the privileges of some of his own counsellors and former European colleagues who have crossed over into the business world.

HUMA: So you think that spotlighting those “markets” leaves the real enemy, the oligarchy, under cover?

GEUENS: Well the basic principle in a democracy is the head-on confrontation of conflicting interests, but when the targeted enemy is so distant as “financial markets” are, what ever is to be done? I personally adhere to the critical sociology that has come in a direct line both from Bourdieu and from Marx. And like Monique Pinçot-Charlot and Michel Pinçon, whose works I hold in great esteem, I use the notion of “oligarchy” to designate the hegemonic fraction of the dominant class.

Try and convince the steel-industry worker of Arcelor Mittal in Liège or in Florange that he must fight against finance! This talk about “financial markets” can prove quite discouraging for mobilization because it hides the social groups that rule over the common people and a major part of the middle classes…That may sound old hat, but if the aim is to be heard by all those to whose struggles we owe all the social breakthroughs in our countries, you’ve got to start from the real facts and persons and not allow yourself to be carried up and away into the ether of financial globalization, and you’ve got first to put up a good fight within the limits of the Nation-State, because capitalism still structures itself at this particular level, not on a global scale!

HUMA: You mentioned the Pinçon-Charlots right now….How useful are the concepts of their sociology of the dominant class in the opaque world of investment funds for instance?

GEUENS: Investment funds and hedge funds constitute a kind of terra incognita: they are presented as some kind of digital money that circulates in the dark all over the world, but in fact they are companies with managers. And in that world too, managers and CEOs cross over from one world into the next. ..There is not on one side an aggressive capitalism – the capitalism of hedge funds – and another civilized brand of capitalism on the other: it’s one and the same world. The greatest hedge-funds manager in the US is J.P.Morgan, the American trust par excellence.

In Europe the logic is the same: here too we have families, and connections between rulers. A good example of those old industrial families that change in order that nothing should change is the Wendels, who passed from ironworks to capital-investment. In the world of financial capitalism, everything has a political dimension, very close to the State, and it is neither more nor less savage than traditional capitalism nor less intricately connected with political rulers. .. In a branch that seems typically Anglo-Saxon when seen from the outside, what you also find there is the most classical reproduction of the French oligarchy.

HUMA: Another glaring example of that interpenetration between markets and States is that of rating agencies…

GEUENS: When you scrutinize their share-holders and the profile of their rulers, you find a close mix of politicians, businessmen, whether Leftist or Rightist… Those agencies are not disembodied either, they are private companies that make the most of inside information. Whereas, before the crisis, as economist Jacques Généreux observes, nobody cared what they were doing, rating agencies have become key actors because they provide alibis to impose austerity. This does not mean there is a plot, but it is simply the expression of structural affinities within the dominant class.

HUMA: To judge by your critique of the intricate links between the State and the markets, what should we make of the rise of “technical governments” following the public debt crisis?

GEUENS: Mario Monti’s government is presented by the media as the government of “experts”, of “civil society”, of “sages” (wise men). Now this is magnificent! It is composed of one banker, the CEO of a financial establishment, then of a bunch of Economics professors. And those are the “sages”! But on studying their careers you find that they all sit on the banks’ boards of directors… So instead of government by civil society, it is government by the bankers! Those tags are only used to sugar-coat the pill. Business is in office. And it’s the same movement in Greece with Lucas Papademos… Masks come off in times of crisis: in Greece it’s blatant enough, Social Democrats govern with the Right and only a short time ago with the Far-Right, and impose austerity. Under cover of expertise and government by the “sages”, democracy itself is confiscated to the immediate and exclusive benefit of the ruling class…

HUMA: What’s most interesting about your book is the rich information it gives on all oligarchies worldwide… If you were to name but a few, which ones would you mention?

GEUENS: Jacques de Larosière is a good example. He was chosen by the European Commission to write a report on the 2008 crisis. In the current situation European institutions do as in the US: they pick a member of the politico-financial establishment that has all the outward signs of public, political, institutional respectability. And Jacques de Larosière is a statesman, being a former governor of the Banque de France and boss of the IMF. He is a “sage”. He has presided over other committees that were already in charge of market surveillance – even if this obviously had little effect! But what they will not say is that at the time he drafted the report for the European Commission he was also the BNP-Paribas president’s counsellor, and counsellor of the BMB financial trust as well– BMB is controled by some of the Gulf petro-monarchies – and former counsellor of AIG, the insurance world leader that was rescued on the brink of bankruptcy by the Federal Reserve Bank [2].

That shows the real dimension of the oligarchy: a Frenchman defending the interests of French financial groups whose foothold and share capital are international.

In Great Britain Paul Myners who under Gordon Brown’s government had been appointed State Secretary for Financial Services came under attack when it became known that he sat on the boards of hedge funds that had their headquarters in fiscal havens (the Bermudas, Jersey…) That’s extraordinary. It just can’t be a trivial incident, no more than a misguided appointment: you just can’t believe that! That blows the gaff on what all the talk about regulation really is: rubbish! In times of crisis, it’s the minimum ideological platform the oligarchies’ syndicate will sell; but scratch the surface ever so little and the knavery appears.

As for those that appear to be real politicians rather than technicians, it’s one surprise after another. All of the last twenty years’ former leaders who embodied the “third way” and social-liberalism, all those people who dismantled the Welfare State in their own countries, and targeted social rights one after another, men like Tony Blair, Gerhard Scrhöder (Rotschild, TNK-BP), Wim Kok (Shell, ING), Göran Persson (JKL/Publicis) crossed over into the business community for services rendered.

With his friendly grand-dad’s face, Romano Prodi, the technician par excellence, a centre-Left figure and former Italian prime minister, is a member of the BP oil company’s international committee, where he sits next to Javier Solana and George W. Bush’s former principal private secretary. Koffi Annan, the former UNO general secretary, has just joined JPMorgan Chase’s international Committee, which is chaired by Tony Blair, after marrying besides a Wallensberg, heiress to one of Sweden’s greatest business dynasties.

HUMA: Let’s come back to France. A few weeks after his resounding declaration in the Bourget [3], François Hollande declared to the Anglo-Saxon press that it needn’t worry since the French Socialists had liberalized the markets… Is this a sudden turnabout?

GEUENS: François Hollande declared on several occasions that he would also stand for “fair rigour” ; now everyone knows what that means…

Today, what we should do is stand united against austerity: point-blank. Austerity policies have not been implemented by ”financial markets” but clearly, they’ve been implemented by governments, including Social Democratic governments…To denounce “financial markets” during the campaign, the better to sugar-coat the austerity pill afterward, is an age-old trick. And yet, once more, some will fall into the trap…

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Where are those who dominate?

As Instructor in the Department of Arts and Sciences of Communication at the University of Liège, in Belgium, Geoffrey Geuens takes seriously, or at least "as serious", the public discourse of a left-wing banker, Jean Peyrelevade. "To break with capitalism is to break with whom?", Peyrelevade asked in 2005. "To put an end to the dictatorship of the market, which is fluid, worldwide, and anonymous, is to attack which institutions? (...) Marx is powerless, since the enemy has not been identified."

In his fascinating study [4] of the boards of the great financial institutions, their composition, the tangled career paths mixing the politics and financial affairs of their directors, the marriages that create links between the different national oligarchies, the university researcher relies on the tools of sociology in order to draw up a precious map of the dominant classes in Europe and in the world, with the chosen objective to no longer "leave any doubt as to the true beneficiaries of the system and of the crisis of public debt".

[1] at the Socialist presidential candidate’s first major meeting, on January 22nd, 2012.
[2] On September 26, 2008.
[3] In that speech François Hollande said that his enemy was “finance”.
[4] La Finance imaginaire. Anatomie du capitalisme: des "marchés financiers" à l’oligarchie, by Geoffrey Geuens. Éditions Aden, Bruxelles, 368 pages, 25€.