A new breed of influence elites has emerged in recent years, spawned by a sea change over the past several decades. As a social anthropologist, I have been mapping these elites’ modus operandi and organisation and the vehicles they set up to help organize their influence.
A new breed of influence elites has emerged in recent years, spawned by a sea change over the past several decades. As a social anthropologist, I have been mapping these elites’ modus operandi and organisation and the vehicles they set up to help organize their influence. These novel elites follow a twenty-first-century playbook, holding sway through flexible and often informal means; they are less stable, more mobile, more global and less visible than their forebears of living memory. And, as I demonstrate in Unaccountable: How the Establishment Corrupted Our Finances, Freedom and Politics and Created an Outsider Class, they largely defy democratic oversight. Yet these players and their practices are systemic in the United States, in arenas ranging from finance and military policy to energy and health care.
Understanding how American influence elites operate is crucial because their practices are far-reaching and they influence decisions that affect the entire world. Because these elites appear to have played a role in widening inequality and also because they have morphed beyond conventional concepts that explain their influence—lobbies, revolving doors, interest groups, and ‘kitchen cabinets’—it is all the more urgent to explicate their modus operandi, organisation and impact.
The way elites organize influence today—their modus operandi and organisation—differs from the methods of ‘power elites’ as described by sociologist C. Wright Mills sixty years ago (Mills 1956). Mills famously coined the term power elite to describe the interlocking constellation of government officials, military leaders and corporate executives, which, he contended, effectively controlled major domestic political and social decision making. The strength of Mills’s power elite rests on command and control, in which hierarchical structures are distinct and bureaucrats wield executive power (see also Domhoff 1967).
However, contemporary influence elites have moved away from these structural positions. Hierarchies co-exist with forms of power grounded in networks. Network-based power derives from players’ positions in informal social networks and links to organisations and venues that, much more than in the past, connect elites across a global plane. Elites serve as connectors (see Savage and Williams 2008; Wedel 2009).
What created the space that this new breed of elites now controls? In short, the sea change—an unprecedented confluence of transformational developments over the past few decades: financialisation, which multiplies lucrative intermediary positions in finance while at the same time weakening the role of managerial elites; the privatisation, deregulation and governmental ‘reform’ fervour that began to take hold in the United States and the United Kingdom in the early 1980s; the Cold War’s end a decade later, dispersing global authority and opening up sparsely governed arenas; and the rise of the Internet soon after (see Wedel 2009, 2014; Davis and Williams, forthcoming).
These developments have reconfigured the organisational ecosystem. They have created opportunities for all manner of players—from transnational networks laundering money or promoting human rights to consultants doing work previously performed by government employees and international organisations. In the United States, three-quarters of the people working for the federal government are employed through private companies, sometimes with a lot of influence and often with little oversight. Contractors run intelligence operations, control crucial databases, screen airport security and law-enforcement officials, choose and oversee other contractors and draft official documents (see Wedel 2009). The developments have spawned vehicles of influence that are set up or mobilized by elites: consulting, think tank, nongovernmental, and ‘grassroots’ organisations, ad hoc advisory groups and PR/lobbying firms. The sway of elites substantially resides in social networks that operate in and around these entities and venues. Thus, in contrast to C. Wright Mills’s idea of institutions as pillars of power, today influence elites themselves can be seen as pillars of power.
A look at elite practices today provides a window into why traditional, still-dominant frameworks fall short. The four characteristics outlined ahead suggest ways to revise our understanding of how influence works in modern democracies.
First, influence elites often operate off the grid. On the world stage, crucial policies ranging from finance to media to technology are framed, sometimes even forged, outside the bureaucracies of governments, international organisations and companies. A case in point is the Group of Thirty (G-30), the Consultative Group on International Economic and Monetary Affairs. Its member list is a Who’s Who of global economic policy influencers, including many Americans. Eleni Tsingou, who studied the group, describes it as ‘part think tank, part interest group, and part club’ (Seabrooke and Tsingou 2009, 20) formed of ‘actors who write the rules’ (Tsingou 2012, 4, 249). Its executive director told me, ‘We don’t make policy . . . but you can see our recommendations ending up in policy’ (Wedel 2014, 20–23). One example of this is the hugely consequential issue of derivatives trading. In the 1990s, big banks didn’t welcome increased regulation over their fast-emerging profit centres. Here, the G-30’s study group and report on derivatives in the early 1990s, run by senior investment bankers such as then J. P. Morgan’s CEO Dennis Weatherstone, helped solidify the standards for ‘best practices’. This laissez-faire approach, made informally and then enshrined as policy, allowed derivatives to lay dynamite throughout the global financial system.
With regard to individual influence elites, much lobbying in the United States has gone underground as well. Although registered lobbyists and interest groups remain powerful, they are joined by less visible power brokers—I call them shadow lobbyists—who choose not to register as lobbyists (see Wedel 2014). Where once a former high official might have sought the title of lobbyist to display influence, today he may choose to call himself a strategist, adviser or government affairs specialist and not register at all. The business of influencing has changed so much that the main trade association for lobbyists, the American League of Lobbyists, decided in 2013 to adopt a more innocuous name: Association of Government Relations Professionals. The number of registered lobbyists declined by nearly 23 percent from 2007 to 2015 (OpenSecrets.org 2016)—but who would argue that this means a decline in lobbying per se as unregistered shadow lobbyists take their place?
The second characteristic of modern influencing is that players perform a plethora of professional roles, some of which overlap, and it’s difficult to tell where one ends and another begins. Players assume more roles, in more venues of influence, with more flexibility and movement and within a far shorter time frame than their predecessors.
Take, for instance, retired generals and admirals. As recently as twenty years ago, the majority of them retired to, say, play golf. Now, when these powerful men (and the occasional woman) retire, the majority remain in the defense arena. They embark on sprawling, post-military careers that mix advisory roles with private sector work (Bender 2010). Such trajectories were highlighted by a New York Times account of General Barry McCaffrey’s career entitled ‘One Man’s Military-Industrial-Media Complex’ (Barstow 2008).
Generals like McCaffrey often consult with defense companies or even set up their own (eponymous) firms. At the same time, a retired general might serve on government advisory boards, shaping policy or procurement directions. In the process, he likely gains access to proprietary information. He can then employ information he gleans from his advisory board roles to benefit his defense clients. The general can plausibly deny that the advice he offers his clients is related to the information and access he garners in his government role, and we, the public, have little means of knowing what is actually the case. Further, some retired generals and admirals add a think tank or university affiliation to their resume, building an image of gravitas and incorruptibility. And some include media commentator appearances, in which they are nearly always identified as retired generals, not as in their more current and lucrative consultancy roles.
Clearly, the system has moved beyond the proverbial ‘revolving door’. That model has only one exit point: The regulator or congressman joins a lobbying firm. The revolving door now features multiple entry and exit points. A player exits to a business, think tank, consultancy firm, university or media outlet and straddles two or more roles at the same time. Although the conventional revolving door player passing from point A to B and back again remains an important staple, his avant-garde counterpart is more elusive. He may wield more influence—and is less accountable.
Think tanks, consulting firms, non-profits, and grassroots organisations have proliferated in recent years. Many are empowered or even established by influence elites to sway policy and public opinion. Thus, a third characteristic of today’s influence elites is that they create their own organisational vehicles. Although they help shape important policy decisions, they are not registered lobbyists, interest groups or other conventional influencers.
Think tanks lend an impartial, scholarly imprimatur, through which influence can be laundered. By at least one estimate, the United States has upwards of 1,830 such organisations today, a figure that’s more than doubled since 1980 (McGann 2015, 10, 54) and actually may be far higher (Bender 2013).
Neither think tanks nor think tanks with ideological bents are new. Yet although they have traditionally conducted serious, even multiyear studies, today many have become partisan fighters, armed with media-friendly reports and minute-to-minute messaging. They prize ‘impact’ and metrics to show donors, sometimes sole benefactors. They are often populated by former journalists. Their stars create buzz on social media and TV and organize invitation-only conferences of power brokers. The time horizon of this new-style outfit is shorter than its older-style counterpart; many have only been around for only a few years. A new species has been born that, though it might still be called a think tank, is enmeshed in a new ecosystem (McGann 2015).
With a scholarly veneer and journalists at the ready, think tanks are perfect vehicles through which influence elites can drive consensus in a certain direction. Take, for instance, the COINdinistas ( COIN stands for counterinsurgency) and their influence on the conduct of US wars in Afghanistan and Iraq. To pursue their strategy of engagement with local populations to counteract insurgencies, a collection of generals (including David Petraeus), influential military reporters, scholars, defense contractors and policy makers coalesced around COIN. At times, they circumvented the bureaucracy, using as their vehicle of influence a new Washington think tank, the Center for a New American Security (CNAS), which was substantially funded by defense companies. With CNAS as a mouthpiece and site of power, the COINdinistas played a key role in making and justifying the military policy for recent years of the Afghanistan war. Deploying CNAS-affiliated reporters across the media, they swayed public and policymaker opinion to their side. By effectively sidelining the bureaucracy and enlisting the media to help, they won the fight and left their colleagues with little choice but to walk with them.
In the past, consulting firms engaged primarily in private sector work. Today, they sometimes stand in for government to perform core government functions, often with little or no oversight from actual government employees. Contractors run intelligence operations, control crucial databases, choose and oversee other contractors and draft official documents (Wedel 2010).
Ambiguity is an important quality that grants deniability to consulting firms that perform government work—or serve as an interface between government and companies. Take, for instance, Promontory Financial Group. Shrouded in ambiguity, Promontory performs multiple, potentially overlapping roles. An American Banker profile used these phrases to describe Promontory: ‘sort of ex-regulator omnibus’; ‘shadow network between banks and regulators’; and ‘an auxiliary . . . private-sector regulator’. Or, even more category-defying: ‘a kind of arbitrage and interlocution between regulators and banks’ (see Horwitz and Aspan 2013).
With nineteen offices from Toronto to Tokyo, Washington, DC, and beyond, Promontory has served as a private consultant to Bank of America, Morgan Stanley, Wells Fargo, PNC, Allied Irish, and the Vatican bank. Promontory is hired for crisis management or to navigate new regulations meant to rein in some of the banks’ forays into exotic derivatives and proprietary trading. Almost two-thirds of Promontory’s approximately 170 senior executives have been employed by regulatory agencies (see Protess and Silver-Greenberg 2013).
One of Promontory’s potentially overlapping roles is that of ersatz regulator. The US government has dispersed and diluted its own authority by enlisting Promontory and similar firms. The most common variant of this, an informal one, appears to be that when banks hire Promontory, that act carries informal weight, which they can use to suggest that they are in compliance. In another variant, the formal outsourcing of authority, sometimes from the government itself, mandates that banks use Promontory or a similar firm to perform financial oversight, which in the past the government handled itself (Douglas 2013).
Among Promontory’s other roles is that of ‘shadow [unregistered] lobbyist’ on behalf of its banker clients. With very recent government experience with regulations under consideration (by virtue of its ex-regulator employees), the firm has worked to defang the implementation of the Dodd-Frank legislation passed after the 2008 financial crisis and (shadow-)lobbied former regulatory colleagues to do so (Calabrese 2013). When the Dodd-Frank legislation eventually passed in 2010, after Wall Street poured huge amounts of money into blocking financial reform, the new game became impeding its implementation using the dense fine print of Dodd-Frank to achieve this.
In addition to shadow lobbying on behalf of specific clients, Promontory weighed in on the Volcker Rule, which holds that banks should be barred from investing depositors’ dollars for institutional profit. This was part of the Dodd-Frank legislation, designed to rein in risky trading by US banks. Evidence indicates that Promontory was indeed at least somewhat involved when financial firms and regulators were hashing over the much-disputed rule (Calabresi 2013). Moreover, the New York Times, while analysing data from a non-profit that studied the issue, found in 2013 that although Promontory hadn’t been a registered lobbyist for four years, ‘the firm’s executives have met with regulators at least 10 times in the last two years on thorny issues like the . . . Volcker Rule’ (Protess and Silver-Greenberg 2013). Of course, Promontory insisted to the New York Times that meetings do not necessarily constitute ‘lobbying’.
Promontory exemplifies entangled allegiances and shifting roles as the firm bends with the whims of its clients (at times even standing in for regulators as overseers and auditors). It has served as a sort of proxy for government auditors, paid by those it audits. The firm also acts as an unconventional lobbying outfit, intervening with regulators on behalf of its clients and buffering clients from regulation through shadow lobbying.
The issues highlighted by Promontory are emblematic of new-style entities used by influence elites. It is not a registered lobbyist, accounting firm, or government regulator. With no fixed identity, it can flex to suit the occasion. The enigma that is Promontory serves its own and its clients’ purposes well; but can the same be said for public accountability?
Many ‘grassroots’ and non-profit entities are equally steeped in ambiguity and lack accountability. Some campaign fundraising groups pose as non-profits or grassroots organisations, promoting the cause of an unseen backer in ways that make it appear to be a grassroots movement (Wedel 2014). The phrase dark money conjures up untraceable campaign financing, but elections aren’t the only way to influence policy. Donors and corporate interests fund purported grassroots organisations or non-profits, which lend the veneer of civic action, often in nearly untraceable ways. These entities range from ‘patient advocacy’ groups funded by pharmaceutical companies to ‘safe energy’ organisations supported by the nuclear industry. What in common parlance are called front groups and astroturfing are not new, but the digital age has made it infinitely easier to mimic a grassroots campaign for a wide audience.
The advent of the Internet and social media, as well as the near gutting of investigative journalism, have also nurtured simulacra—things that look or feel like the real thing but aren’t. Big donors and corporations are creating the simulacrum of a real, organically created movement that just happens to serve their interests. For example, the Facebook page of the Koch Industries–supported group Americans for Prosperity boasts a more than one-million-strong ‘standing army’ of anti-tax activists, but no mention of its billionaire sponsors.
The giveaway signposts include the following:
Innocuous-sounding names, evoking citizens’ advocacy or genuine do-it-yourself efforts
Organisations and efforts staged from the top—be they by a handful of billionaires or a cadre around a charismatic leader (for example, Barack Obama’s 501c4 group Organizing for Action)
Entities that morph their purposes in ways convenient for their unseen sponsors
Organisations to create an echo chamber and make it appear that there’s a larger movement than there actually is
The use of big names or former top officials to give organisations heft
Sponsorship and funding sources that are indirect and almost impossible to track
In short, these are enterprises with influence steeped in obscurity, lending themselves deniability.
Although these new-style think tanks, consulting firms, non-profits and grassroots organisations are not typically included in the framework of political influence, they should be. They have become a crucial part of the repertoire of influence elites.
These novel means of wielding influence—and more—are on full display when it comes to high-profile elites such as former US President Bill Clinton (former British Prime Minister Tony Blair exhibits a similar pattern). Clinton’s player status has called into question policy decisions made by Hillary Clinton while she was secretary of state and guaranteed further questions. Bill Clinton’s playbook consists of several boundary-blurring strategies employed together.
Clinton employs two strategies that I’ve already introduced in spades: crafting overlapping roles and creating entities of influence. He established the sprawling Clinton Foundation and its non-profit Global Initiative while serving as a paid adviser to a private equity/consulting firm called Teneo (among other business ventures). Teneo co-founder Douglas Band reportedly recruited donors to be Teneo clients and vice versa.
Not only has Clinton set up vehicles of influence, but the criss-crossing entities are tailor-made for deniability, one (or sometimes two or three) steps removed from themselves. This former statesman enlists friends and allies. When donations come even one step removed, the recipient can distance himself when it’s expedient to do so. The Clinton Global Initiative, for instance, advises companies on philanthropy instead of doling out the money itself, providing distance should questions arise over possible conflicts of interest. When the entities are subject to different laws, even more deniability is possible. We saw that in spring 2015, when reports surfaced of more than a thousand undisclosed donors to a Clinton-affiliated charity in Canada that aimed to sign uranium-mining deals needing approval from Hillary Clinton’s State Department. The Clinton Foundation could conveniently argue that Canadian law protects donors’ anonymity to charities.
Another playbook strategy is celebrity branding. The Clinton Global Initiative’s annual meeting skilfully employs the lure of celebrity-hood. It has a five-figure entrance fee that brings the powerful together to network and hash out global issues, in the style of the annual Davos meeting. The New Republic has described it thusly: ‘For corporations, attaching Clinton’s brand to their social investments offered a major PR boost . . . There’s an undertow of transactionalism in the glittering annual dinners . . . the fixation on celebrity, and a certain contingent of donors whose charitable contributions and business interests occupy an uncomfortable proximity’ (MacGillis 2013).
Clearly, conventional notions of political influence cannot begin to chart the flexibility of roles and criss-crossing entities of today’s top players and the deniability these afford, the role of branding and celebrity status in their success and the players’ potential impact beyond accountability.
That impact beyond accountability is magnified when influence elites work together in social networks toward mutual agendas. Today’s influence elites often form tight-knit, trust-based, enduring networks.
I have chronicled the organisation and effect of several of these power cliques, including the Wall Street-Washington circle that has had a huge impact on the global economy through its decisions about the regulation of exotic derivatives trading (see Wedel 2014); the ‘Neocon core’, the members of which had been working together in various incarnations for several decades and helped take the United States to war in Iraq in 2003 (Wedel 2009); and the COINdinistas discussed earlier.
What I call flex nets are the ultimate power cliques. Flex nets are trust-based groups powered by shared ideology and noted for their members’ loyalty. They coordinate influence from multiple moving perches, inside and outside official structures. They thwart both bureaucratic and professional authority by creating network-based structures and personalized practices within government while circumventing standard ones and marginalizing officials who are not part of their network. They relax both governments’ rules of accountability and businesses’ codes of competition, thereby challenging principles that have defined both modern democratic states and free markets (Wedel 2009, 15–21).
Flex nets are a paradox in terms of political influence: more amorphous and less transparent than conventional political lobbies and interest groups, yet also more coherent and less accountable. Thus, while administrations come and go, flex nets persist. They are not the instruments of any particular administration, even when their members occupy official positions within it. As members spin overlapping roles at the nexus of official and private power, they create a virtually closed loop that challenges accountability—often far removed from public input, knowledge or potential sanction.
Today, many conditions that facilitated Mills’s power elite—stable positions at the top of enduring institutions exerting command and control—no longer prevail. These hierarchies have not vanished, but they have transmuted amid the transformational developments here outlined. Flexible, mobile and multi-positioned, influence elites serve as connectors, intermeshing hierarchies and networks in complex ways. In contrast to the greater and more predictable role of hierarchies in Mills’s day, some levers of influence have moved several steps away, rendering public input and accountability more inscrutable. The way influence elites are organized and the modus operandi they employ to wield influence enable them to evade public accountability, a hallmark of democratic society.
Today’s influence elites and the vehicles they use to help organize sway do not fit conventional notions of political influence. Clearly, we need to update our understanding.
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