Oligarchs, Toward a Working Definition inside the Deep State

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Steve Bannon recently referred to Michael Bloomberg as an “oligarch”, which I believe is a fair extension of the term, since it has been used selectively in the media to a more narrow club membership, as if Russian political greed is unique.

This is CNN so note how Margaret Hoover argues with Bannon’s definition….on the basis that Bloomberg is a “capitalist” while the Russian oligarchs are not.

(This is a position CNN will probably defend until they eventually go out of business in the next few years.)

Steve Bannon is giving an interview here, not a seminar, so didn’t expand his point. An in this forum, why bother? So I’ll try to provide a little more scope, for with a broader understanding of “oligarch” we can better distinguish modern authoritarianism (versus totalitarianism) as its has evolved since the 1980s, when no one was really looking past Latin American or the Middle Eastern versions, into either the Russias (all of them), as well as our own corporatist backyard.

Birds of a feather are usually driven by similar underlying impulses.

Background:

I was in manufacturing (a Fortune 500 company) all during the Reagan 80s, and what I learned of the then-modern corporate front office did not comport with what I had learned in college in the 60s, law school in the 70s, or from that 20+ volume set of Alexander Hamilton Institute books a retired businessman had given me.

Called “Modern Business”, my retired donor considered it to be “received wisdom” from the 50’s-60’s, and in like manner I passed it onto that member of the Soviet Central Committee I came to know in 1992 and wrote about here in 2017, just as their empire was coming apart. An engineer himself, and also an “oligarch in waiting”, overseeing the natural gas half of GazProm in the Russian Federation, before the ownership of Soviet state properties would shake out, he seemed to be the only one of the soon to-be oligarchs who cared about the mechanics of American modern business that might benefit Russia.

I spent 15 years all over the region, and while the hunger for how to run a “modern business the American way” was unquenchable at the small business level, he is the only person I ever met from the government class, an apparatchik, in all those years to seem to care.

Since it’s available in the under $75 range, I recommend this set to anyone truly interested in the changes that American business has gone through in the past 30 years. To prove its antiquity in thought, there is even a volume on “Business Ethics”. I also recommend William Whyte’s “The Organization Man” from 1955, who defined in an apolitical way the structure toward which American business was trending in the 50s, leaving it up to my generation to figure out how it would all turn out, which I dutifully began doing 65 years later.

The Hamilton Institute went belly up in the Reagan years, since, I suspect modern corporations were no longer buying what it was selling, a fact I didn’t learn until I quit the corporate world for the consulting world with the specific purpose of showing Asian companies and American entrepreneurs how they could compete with China. (The Chinese had come to my company and made an open offer to become our “factory floor”, putting 60,000 people out of work. That would eventually happen anyway, just not in China.) There were all sorts of chinks in the Chinese book-keeping-cost armor, but it was difficult to find American entrepreneurs who wanted to create relationships with what were little more than sweatshops in various SE Asian states.

Then in 1991-92 I was able to spend a few months in the old Soviet Union, even getting to watch the Hammer & Sickle come down in Ukraine, thus leaving Asia altogether for a 15 year sojourn in the Balkans and old USSR; Bulgaria, Macedonia, Kosovo, Moldova, Estonia, each with their own mafia, organized just like Disney, Inc, plus their own wannabe and real oligarchs.

In Ukraine I was invited to meet all types of mafia (just to give my hosts “face”, I think, as nothing of substance was ever discussed) but it was a great thrill to sit in the backseat of a Lada between two “colleagues” in mid-winter, then drive across a narrow levy, while the headlights of another car from the other direction came toward us. Then all of a sudden I heard the click of four automatics being chambered, we stopped, and I and my interpreter stepped out, and moved toward the headlights where a dapper man in heavy coat and fur oshanka stepped out, and we met in the middle, under their lights. In 10 degree weather and snow, we were introduced, shook hands and I accepted his offer of vodka, and we spoke of silly things, such as you would do in the parking lot after leaving church on Sunday morning.

In various ways I also met Jewish mafia, who it seemed had certain “product territories” consigned to them (inferring there was a controlling mafia above them that both limited them and protected them) plus other “biznezmen” of unknown status, along with dozens of Director Generals of various state industries and institutes (political universities). The best business in the “new” countries was that of a middleman, and each of these people paid by bank-hosts to be able to meet me. I recall after a 20 minute exchange of pleasantries with the director of the main tank factory in Kharkov, Ukraine, as we wrapped up, he said “Moment”, reach inside his desk drawer and brought out a toy cap pistol, similar to this toy from the 50s:

…and asked me if I could sell such a thing in America. And for how much?

No really. As I learned, almost all the heavy metal producers; steel, aluminum, tanks, aircraft, weapons, had a little doodad they thought might fit into the American consumer market. All they needed were connections.

Only my friend in Gorkiy (above) seemed to care about increasing the understanding of modern business practices of a free market economy.

Over the next 15 years I would “fire” more paying clients than I could keep simply because the small business people who needed their partnership had an ideal of an American businessman that no longer existed in the higher reaches of wealth, or even business schools, in America. Far more were closer to the Gordon Gekko view of money and power.

American capitalism had been split between “free market” capitalism and “corporate” capitalism, which I submit is not really capitalism at all.

We had our chance in Russia, but it was officially lost when Bill Clinton replaced GHW Bush, although GHW was two steps back from Reagan.

The road toward oligarchy was made much easier for countries that had already been top-down for 75 years. Clinton’s new government simply paved it, as willing partners, not jus for the Putin gang after they gained power in ’99, but for the whole notion of a wealth-based, top-down managed economic system, which had begun taking roots in the United States in the 1980s, especially on Wall Street.

Michael Bloomberg was just one of many in America and Western Europe who had an oligarchic view of government, only one not headed by barbarians such as the Russians. And certainly not Middle Easterners or Latins. But very certainly the Chinese.

In the 1990s, the American intelligence community would have known the who’s-who by name in all those countries, from Nicaragua to Ukraine, which is why I began my inquiry into modern authoritarianism with my most recent piece on the changing relationship between American intelligence agencies and America’s constitutional design over the past 30-plus years.

That’s where I intend to take this.

The oligarchical view of government is decidedly contrary to the American design. In brief, and this is as true about Michael Bloomberg as it is about Vladimir Putin…

…an oligarch(y) demands loyalty to itself and its enterprise, before all other things. That is the “prime directive” of being a member/servant of the enterprise.

(If Mr Bannon disagrees with my assessment here he can contact me. We share mutual friends.)

So, if we’re going to use that term, “oligarch” we need to broaden it to include China, whose state wealth is shared by several individuals. Much like the feudal system, vast sectors of the Chinese economy can be parceled out much like fiefs to loyal lords, who in turn can pass them down to even lower-ranking “knights”. This would be in keeping with Chinese dynasties for several centuries.

If communism fails in China it will fall into oligarchy just as Russia has, only with a better handshake with the “Oligarchs without a State” mostly found in the capitalist countries. Michael Bloomberg is just one. And several are corporate giants, true corporate oligarchies, where their true power may be in the hands of a single person, a troika, or even an entire board of directors (depending on how many lawyers sit on the board). These oligarchies have no territorial land mass, but vast amounts of space in the world of money and the information cloud, where property literally can appear or disappear with one click, and hold millions in thrall.

This is the “fascist” nature to oligarchs and oligarchies, which separates them from “mere” authoritarians. It seem fascism and totalitarianism are defined generally by David Ricardo’s “comparative advantage” axiom. An authoritarian in Central America is not socialist and not necessarily fascist, but just a big gang leader, who, if he is wise, only takes a slice of every pie and therefore lives peaceably. There is no “natural advantage” to cause him to want to expand his borders, risking all.

But if he has oil? Both the Shah and the Ayatollahs controlled the oil of Iran, but one was an easy-going authoritarian who only struck down threats to his power in the dead of night, while the added fanaticism of the same religion shared by the Pahlavi Shah turned Iran into a totalitarian state, its people held hostage. And a world crisis looms.

The American South even had its regional and local authoritarian regimes under slavery and Jim Crow. It was never able to grow to oligarchical dimensions because, well, this is America.

These are all top-down views. Where the rubber meets the road is from the peoples’ universal view at the bottom;

Oligarchs are bad, so stay out of their way. Authoritarians are not so bad unless people try to topple them. Then they become mean.

Totalitarians are not just bad, they are evil, and there is no difference between socialists and communists and fascists once they gain power

I don’t know if modern experts in diplomacy or intelligence know these differences any longer.

More to follow.

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vassarbushmills
Citizen With Bark On

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