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Gatecrashing Democracy: The Role of Elite Corruption in Today’s Illiberalism (Janine Wedel)

The present era of democratic fragility has been decades in the making. Establishment corruption, I contend, has led to the weakening of democracies from the United States and United Kingdom to Poland and Hungary to Greece and Italy. Pundits and scholars have looked largely to “populism” to explain the current state of affairs, with intense scrutiny devoted to the subject since the vote to “Brexit” and the election of Donald Trump.

Yet this punditry sometimes neglects the fact that anti-system movements (aka populism) that decry a “rigged system” did not suddenly erupt from nothing. Instead, certain transformational developments over recent decades, some facilitated by establishment players making self-serving policy decisions, helped create a precarious ecosystem that fueled the movements. They are substantially a reaction to new forms of power and influence—indeed even “corruption,” legal and systemic—on the part of elites that have become business as usual across the political spectrum. And, while analysts (belatedly) have taken notice of discontent among the populace, research on elites and their part in fostering it has been largely, if not willfully, disconnected.  The survival of democracy as we know it may depend on grappling not only with the anti-system rage from below. What’s urgently needed is a full-fledged, inward-looking examination of the monumental evolution—and corruption—of those from above.  

The threat that systemic elite corruption poses to stability is not new. Hannah Arendt examined its role in fomenting the movements that brought about the twin calamities of Nazism and Stalinism. She warned that establishment corruption can help mobilize action to get rid of it, and with it, the system.

Today, 70 years hence, that mobilization has reshaped the political terrain across Western democracies. The “populist” radical right now has double digit support in 22 European countries; twenty years ago, that share was just 5 percent. Two years after Trump’s election, his base and the Republic Party remain largely faithful. Uniting these movements from both the right and the left is a contempt for elites deemed to be working on behalf of their own ends andunresponsive to the needs of regular citizens. Corruption has been a pressing concern for many people,a sentiment upon which anti-system candidates have capitalized.

Concern with elite corruption has grown alongside two crucial societal developments that have unfolded over the past 40 years: income inequality of a magnitude not seen since the Great Depression, and declining trust in civic institutions. With regard to inequality, Transparency International, summarizing worldwide evidence, concludes that inequality and corruption are “closely related and provide a source for popular discontent.” Political scientist Jonathan Hopkin, who studies anti-systemic movements, both left and right, agrees, noting that “political entrepreneurs latch onto voter dissatisfaction” leading to all-out “upheaval.”

Across Western democracies and beyond, trust in civic institutionshas plummetedover the past several decades. Today people have a lot less confidence in a wide array of institutions that permeate virtually all aspects of life and society—from governments, parliaments, and courts to corporations and banks, to the media. The firm Edelman, which measures trust in government, business, media, and nongovernmental organizations, has called the situation an “implosion of trust” worldwide. Fully two-thirds of the countries surveyed were deemed “distrusters,” with less than half their citizens trusting in mainstream institutions.

It should not be surprising, then, that many people have felt left behind, become alienated, or see themselves as outsiders. Meanwhile, Russian president Vladimir Putin, correctly diagnosing the fragile state of liberal democracies, has directed propaganda efforts to provoke unrest

Propaganda can be powerful when there is some truth to exploit. And it is true that a new breed of power brokers, while not engaging in a conspiracy, have indeed gamed the systemin novel ways. As I write in Shadow Elite, over the past roughly four decades, these players have found openings in a world reshaped by the combined effects of 1980s deregulation and privatization, diffusion of global authority after the Cold War, financialization, and the rise of digital technology. These transformative changes have upended the stable hierarchies of the “power elite” documented a half century ago by sociologist C. Wright Mills. They have created new spaces of policy and governance and new opportunities for influence-wielding elites to fashion the rules of the game to their own advantage, in fields from finance to foreign and social policy. In short, they have created new opportunities for unaccountable power.

These powerbrokers may be current and former legislators or regulators, top staff members in parliamentary offices, consultants, academics, and even former statesmen who blur official and private boundaries, branding themselves, and choosing whichever role best serves their agenda at a particular time. Influence-wielding elites have set up myriad think tank, media, philanthropic, “grassroots,” nonprofit, and consulting entities to appeartransparent andpublic-interest serving,while in fact operating asvehicles of influence to achieve undisclosed agendas. Their power resides substantially in their roles as connectors across informal networks. These players, who defy accurate characterization as registered lobbyists, interest groups, and other familiar forms of political influence, are more informal, flexible, mobile, and global in reach than their forebears of living memory.

At the top of the food chain are “shadow elites” whobreak both democracy’s rules of accountability and the free market’s principle of competition with their insidious and elusive activities, while assuming a tangle of roles across state and private spheres. Their organization and modus operandi—as they coordinate influence from multiple, moving perches, both in and outside official structures—render them more effective than their “power elite” predecessors of recent memory, while also less transparent and less accountable. As a case in point, consider American retired generals and admirals who sit on government defense advisory boards, gaining inside access and information, while at the same time owning consulting firms that benefit from this access as they seek military contracts. Also at the same time, many build brands as media regulars, think tank or academic fellows, and “thought leaders.” When these players help shape the priorities of government and, as a result, are in a position to profit financially from these decisions, state and private power merge. The public has little way of knowing whether the players are operating in their own interest—or in the public (and national) interest. The public can hardly know whether its trust has been violated, an age-old definition of corruption.    

Shadow elites working in tight-knit networks and based in the United States and Europehave flexed their network powerwell beyond the reach of transparency and accountability in many of the most important global policy decisions of recent decades as they helped shape crucial policy outcomes—from war policy to the regulation of risky financial instruments.A prime example iswhat I call the Neocon Core, a tiny circle of longtime ideological allies, some of whom have worked together since the 1970s to change U.S. policy towards the Middle East, always coming up in different roles and capacities vis-à-vis each other to press their mutual agenda. Theyused their interlocking relationships across government, think tanks, business, media, and national borders to push for the 2003 invasion of Iraq, an epic disaster in blood,treasure, and human displacement, helping create today’s refugee crisis.   

Then there is the (Robert) Rubin circle, “free market” devotees in the 1990’s U.S. Treasury Department, as well as the Group of 30 gathering of elite financiers and academics who ensured exotic derivatives remained unregulated so that big banks could continue exploiting this highly profitable and ultimately toxic market.To do this, they at times operated informally and excluded dissenting officials, even preventing them from exercising formal authority. The boundary between business (the banks) and the state (the U.S. Treasury, regulators, and Group of 30 experts) was nearly nonexistent.  The Rubin Circle instead allowed the priorities of the banks to reign supreme, and worked the media, academy, and think tanks to argue that what was good for Wall Street was good for the world. It wasn’t.

Across the Atlantic we encounter other shadow elite networks. One such network, dubbed the Locomotives, brought Iceland’s economy to its knees as the 2008 economic crisis was unfolding. This interlocking political, banking, and media elite succeeded in turning the tiny fishing country into an improbable banking powerhouse. With the largest banking collapse in history relative to the size of a country’s economy, the Locomotives brought about sustained devastation from which the country is still reeling.

There are also players I call “shadow lobbyists,” unregistered influencers who fail to disclose their true agendas on behalf of corporations or even foreign governments. Such players, especially those working for governments with anti-democratic agendas, have very belatedly come to public attention. Among those associated with the Trump administration are national security adviser-for-24-days Michael Flynn who also had business ties with Russia and direct lobbying contracts with Turkey, and Paul Manafort, a former Trump campaign manager who worked for Viktor Yanukovich’s Russian-puppet government in Ukraine. Manafort is believed to havehelped Russia meddle in the 2016 U.S. election and promoted Russian goals vis-à-vis U.S. policy in Ukraine and sanctions toward Russia. Among other strategies, Manafort enlisted shadow lobbyists: a handful of senior former European legislators dubbed the “Hapsburg group” to sway policy makers in the United States on behalf of Russian interests in Ukraine.

These modes of elite influence perfected by shadow elites and shadow lobbyists—establishment corruption, if you will—serve not only to further consolidate elite power, but also to weaken the institutions intended as checks and balances on the accumulation of power.As we have seen, such corruption in the form of violation of public trusthas inflamed the voting public against elites, at times choosing untested and volatile leaders to take their place.  

Perhaps most troubling is that so far the anti-system leaders, once in power, seem to be doing little to counter corruption and in fact may be allowing establishment misdeeds to become even more entrenched while also engaging in blatant violations like nepotism, cronyism, and abuse of office.

This is the case not only with Trump, but also in Hungary under Prime Minister Viktor Orbán and in Poland under the ruling party leader Jarosław Kaczyński. In these countries, supposed transformative leaders, surrounding themselves with devoted loyalists wielding informal power, attack the institutions and norms of democratic government and reshape government (both by design and de facto) to consolidate power. Practicesof corruptionare aided by system-smashing, in part because those who might provide a check against them find themselves unwelcome in government. The culture of impunity that is created, along with the violation of longstanding norms, make it harder to hold anyone to account.

Citizens have correctly intuited that democratic institutions are no longer serving the public good, and have been staging revolts far and wide. Yet the “saviors” voters are turning to are often strongmen, easily as corrupt as anyone who came before, and dangerously authoritarian.  Instead of a world that looks forward to the 2020s, it is one that harkens back to a far darker time: the 1930s.  

Janine R. Wedel, anthropologist and University Professor in the Schar School of Policy and Government at George Mason University, is the author of UNACCOUNTABLE: How the Establishment Corrupted Our Finances, Freedom, and Politics and Created an Outsider Class.