Neoliberalism And Revolving Doors: Why European Leaders Play Second Fiddle To The US

The beginnings of the decline of the power of the European tentacles of the imperialist system can easily be traced back to the crisis of capitalism at the beginning of the 20th century

Neoliberalism And Revolving Doors: Why European Leaders Play Second Fiddle To The US

Over a year ago, Professor Prabhat Patnaik wrote the article "Europe's Economic Hara–Kiri," in which he included a paragraph that greatly fascinated me: 

"[…] The lack of independence of the current crop of European leaders has been variously explained. While some attribute it to the sheer mediocrity of these leaders, others see the close nexus between them and the corporates involved in activities directly benefiting from war, such as armament manufacturing, including even American corporates. (The leader of the CDU in Germany for instance, which is the largest opposition party today and to which former Chancellor Angela Merkel had belonged, Frederick Merz, is a former employee of BlackRock, the American financial giant) […]"

I think that many people around the world (not only in Europe) are asking themselves: why are European politicians so dependent on the USA? 

It is difficult to imagine that the political staff of the ‘old continent,’ which colonised almost the entire world a few centuries ago and became rich at the expense of the rest of the world – and the British Empire was the largest in the history of the world – today are completely toothless towards Washington. Europe today can only be referred to by the term used by Samir Amin, ie "subaltern allies" of the imperialist system, and not its main driving force – because the core of the empire is across the Atlantic, not in London, Paris, Brussels or Amsterdam.

The beginnings of the decline of the power of the European tentacles of the imperialist system can easily be traced back to the crisis of capitalism at the beginning of the 20th century, the world wars, and, ultimately, the Marshall Plan. The Marshall Plan was not only an American aid package (basically a long–term loan) for European countries during World War II, but a well–thought–out political project. As Vijay Prashad rightly notes:

"The two instruments to shape the new Europe were the funds from the Marshall Plan or the European Recovery Program (1948–1952) and the North Atlantic Treaty Organisation (established in 1949); later, the US would establish two more platforms both to craft the European project and to hold it close to Washington: the Organisation for Economic Co–operation and Development (OECD, 1961) and the Group of Seven (G–7, 1973–74) […]"

Europe’s limited ambition was partly due to the self–suffocation of the ambition of its ruling classes, who sheltered under the hegemony of the United States. This self–suffocation manifests itself in Europe’s continued desire to yoke itself to the aspirations of the United States to dominate world affairs. Europe built its own institutions, but these remained shells, unwilling to go outside what was permitted by Washington. Security measures had to be surrendered to NATO, controlled effectively by the United States; financial arrangements could be shaped by the European Central Bank, but its leadership had one eye on the capitals of the European states and one eye focused on the US treasury department. From its origins, the European project has suffered from excessive dependence on the programmes of the United States.

An extremely important conclusion follows from this (and at the same time it seems extremely trivial to those who have even heard of Marx): material conditions, or to put it simply, money, put the political class of the West in such a pathetic situation as it is now. This is visible at every step. Just a few weeks ago, the President of Ukraine, in one of his speeches, frustrated that the eyes of the West began to ignore Ukraine and focused on a new conflict initiated by Operation Al–Aqsa Flood – another stage of the heroic national liberation struggle of the Palestinians – said: “If you can’t support us financially, please give us a loan and we’ll pay you back.”

What is so pathetic about these words of Zelensky? Well, actually, it is tragicomic, not just pathetic. He is perfectly aware that without constant help – financial and military, intelligence and propaganda – from the West, especially the US (which is running out of money to help Ukraine due to the failure to adopt the budget), Ukraine will lose and will have to accept territorial concessions to Russia, which means Zelensky will lose power. What is more, by asking for a loan, he tightens the rope around his neck even more, because under no circumstances will Ukraine be able to repay it without introducing savings and mass privatisation of state assets that are unacceptable to the Ukrainian society and even the oligarchs (to whom every president of Ukraine is also subordinated). This shows that not only Zelensky but in fact, the entire current Ukrainian political class is playing (oh irony!) Russian Roulette with itself – it is only a matter of time before the gun fires. And the desperate actions of the president of Ukraine only aim to postpone the inevitable, although perhaps he still hopes to save his own skin, as was the case with former Afghan President Ashraf Ghani.

Nevertheless, there is a much broader problem – visible not only in Europe but in all capitalist countries. This problem is the ‘revolving door.’ It involves politicians subordinating themselves to the interests of capital. As a result, political elites of countries around the world fall into a paradoxical spiral of dependence – because they have been defending capitalism and the interests of capital for many decades. But when these politicians start taking part in the mentioned ‘revolving door’ process, i.e. they start working in business, finance, etc, then they move into politics (they are often sent there by their bosses to arrange legislation in favour of these capitalists), and then when they leave, they go back to business or lobbying.

This is a paradoxical situation because it completely disarms politicians of capitalist countries and binds them to the whims of their business 'principals' –  but as it turns out, it makes politicians slaves of capital as such, and not of Western capital, as Western elites wanted it. This, in turn, is increasingly leading to the erosion of the current imperialist system. This is because the interests of core imperialist capital are contrary to the interests of Third World capital. Moreover, the interests of capital within the imperialist core itself are often contradictory, and not only in terms of the interests of national capitals – for example, the interests of German and English capital are contradictory – but the interests within industries are also contradictory.

The most visible alienation of the interests of capital is the example of the interests of the US high-tech industry, which wants to continue to dominate global markets and sell its high-tech products around the world; and the interests of the military-industrial complex, which wants to pursue further wars of the US with other countries. The destabilization of the international situation caused by war harms the interests of the powerful, multi-billion high-tech industry.

Former European Commission President Jose Manuel Barroso became president of Goldman Sachs International. As such, Goldman Sachs International has a keen interest in influencing EU policy, and Barroso led the Commission throughout the post-financial crisis period, during which he oversaw a flurry of discussions and proposals for the new Financial Regulation. Goldman Sachs had and has a direct interest in these proposals, as revealed by the bank's correspondence with the former president, made available as part of access to documents requests. So – as Margarida Silva rightly notes – it is easy to see why former President Barroso would be such a great candidate for the bank.

One in three ex–commissioners from the Barroso II mandate (2009–2014) accepted roles in companies or other organisations linked to big business within just 18 months of leaving office. We also saw how ex-MEPs leave office directly for lobbying consultancies, a trend confirmed by Transparency International EU’s recent report showing that 30% of the 161 MEPs that left politics after the 2014 elections are now working for an organisation in the EU lobby register.

Another interesting example is Robert Rubin, US Secretary of Treasury from 1995 to 1999. Rubin’s reign was mainly characterised by ample deregulation in the banking sector paired with the rapid development of new financial products, such as collateralised debt obligations and mortgage-backed securities – policies that are widely known as ‘Rubinomics.’ One of his most important achievements was the repeal of the Glass-Steagall Act, a Depression-era legislation which separated commercial and investment banking in the United States. This law and its 25% revenue limit from underwriting and dealing in securities posed a significant barrier for banks seeking to expand into investment banking territories. Rubin finally succeeded in 1999 when Congress passed the Gramm-Leach-Bliley Act, giving retrospective clearance to the merger of Citigroup. Less than a week after the Clinton Administration and Congress had agreed on the bill, Rubin became board member and later chairman at Citigroup.

Former UK Prime Minister and now new Secretary of State for Foreign Affairs David Cameron lobbied the UK government after leaving the Prime Minister's office to increase his client Greensill Capital's access to state-backed COVID-19 emergency lending schemes. Paradoxically, as leader of the opposition in 2010, he warned that lobbying was "the next big scandal waiting to happen" and promised to reform the "too cozy relations between politics, government, business and money." As prime minister, he introduced the first official register of lobbyists and consultants in Great Britain, although anti-corruption advocates complain that it contains serious loopholes.

Cameron is not the only former British prime minister to have turned to lobbying – Tony Blair says the lobbying system is "pretty clean". He probably says so because he has been involved in lobbying since he left office.

There are more examples in Europe. Former ‘social democratic’ Prime Minister of Denmark Helle Thorning-Schmidt co-chaired the World Economic Forum (WEF) meeting in Davos in 2017 and sits on the board of the Schwab Foundation for Social Entrepreneurship, and today she is involved in lobbying.

Another ‘social democratic’ prime minister, this time from Finland, Sanna Marin, after losing the elections (although the media called her "the most popular Finnish prime minister", which makes the situation even more comical), left politics and became a member of the Tony Blair Institute.

In the USA, over 80% of four-star-general retirees are employed in the defence industry. In Australia, there is even a special website that lists public officials who have moved to the private sector.

Clear examples of the influence of the 'revolving door' on politics can also be seen outside the Western world. Consider Mexico and Pedro Aspe, the country’s finance minister from 1988–1994. Together with the deputy minister of finance, Guillermo Ortiz, Aspe pushed for significant deregulations of banking operations in 1989, including the elimination of interest rate ceilings and selective credit controls (Santin Quiroz, 2001). His motivation seemed to at least partly stem from career concerns and reputational gains in the financial sector. As Santin Quiroz (2001, p.103) puts it: “Aspe and Ortiz advocated financial liberalisation because it was consistent with their own beliefs, but also because the reform appealed to international capital and to the domestic financial elite.” Indeed, shortly after leaving the ministry of finance, Aspe became chairman at Vector Casa de Bolsas, a major capital markets company.

However, not all examples of the "revolving door" are so beneficial for the capital of imperialist countries, which generates the contradictions I mentioned. This situation, however, is condemned by Western media and politicians. Regardless, of course, it is ineffective because to limit this practice they would also have to prohibit themselves from joining Western companies and defending their interests!

The latest example of the scandal is in Estonia. There, it turned out to be around the husband of the Russophobic and fanatically pro-Western Prime Minister Kaja Kallas, who owned shares in a logistics company that continued to operate in Russia despite the sanctions that Estonia imposed on Moscow.

After the conflict in Ukraine began, Western media concluded that the ‘revolving door’ policy had caused "Europe's dependence on Russian gas," citing the examples of former French Prime Minister Francois Fillon, who was a board member of two Russian energy companies, and the former Chancellor of Germany Gerhard Schroeder, who is employed by companies linked to Gazprom.

Former Australian trade minister Andrew Robb, the architect of the China-Australia Free Trade Agreement, began consulting to Ye Cheng – owned by a Chinese billionaire close to the Communist Party of China. 

In Saudi Arabia, 15 retired US generals and admirals have worked as paid consultants for the Defense Ministry since 2016. Most of the retired US personnel have worked as civilian contractors for Saudi Arabia, the United Arab Emirates and other Persian Gulf monarchies, playing a critical, though largely invisible, role in upgrading their militaries.

As we can see, the thesis promoted by neoliberals to promote their globalisation system, that "capital has no nationality," is slowly becoming the nail in the coffin of the very same imperialist system which neoliberalism was supposed to defend and support. It not only turns the political elites into complete mediocrities who are unable to make rational decisions beyond defending particular interests instead of defending the entire system or at least their country’s economy, but also pushes some of the elites into the arms of capital. Total subservience to such interests could spell the collapse of the Western imperialist system.

The author is a student of law in Poland