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Issue #1803      November 15, 2017

Imperialism Part 3

State monopoly capitalism

In Parts 1 and 2 of this series on Lenin’s Imperialism, the Highest Stage of Capitalism, Anna Pha looked at the questions of monopoly capital and finance capital as defined by Lenin 100 years ago and examined their validity in the 21st century. This week she looks at what is commonly referred to as state monopoly capitalism.

Lenin did not use the term “state monopoly capitalism” in Imperialism: the Highest Stage of Capitalism, but does describe the process and uses the term elsewhere.

The “personal link-up” between the banks and industry that was covered in Part 2 is supplemented by the “personal link-up” and organisational links between both of them and the government. “Seats on Supervisory Boards,” writes [the economist] Jeidels, “are freely offered to persons of title, also to ex-civil servants, who are able to do a great deal to facilitate (!!) relations with the authorities.” (Lenin, Imperialism: the Highest Stage of Capitalism, Progress Publishers, Moscow, 1986 p40)

Revolving doors

Today the process continues, a two-way relationship between corporations and financial institutions and the government. Goldman Sachs, one of the largest and most powerful financial institutions, has “revolving doors” with the Whitehouse. A list of personnel drawn up by of Goldman Sachs personnel working in the Whitehouse under the Obama administration contained 35 names.

The Trump administration has taken in at least five former Goldman Sach employees, although not all have made the distance! The influence of corporations over the European Commission, which draws up legislation for the European Parliament, is immense.

Corporate Europe Observatory (CEO) has built up a database, Revolving Door Watch, of lobbyists in Brussels since February 2012, attempting to influence decision-makers. In the section on Lobbyfacts ( there is a list of European Commissioners, Members of European Parliament (MEPs) and officials who have gone through the revolving doors into lobbying or industry jobs or through the same doors in the reverse direction.

To take a couple of examples of how the doors revolve:

José Manuel Barroso was President of the European Commission for 10 years and on his exit took up posts as an advisor and non-executive chairman at the US investment bank Goldman Sachs, the steering group of the highly secretive Bilderberg Conferences and the European Business Summit amongst others.

Shortly after leaving the Commission, Charlie McCreevy joined the trading unit of global investments company BNY Mellon. McCreevy had been responsible for deregulating derivatives markets whilst commissioner.

Barbara Gallani was the policy and sustainability director and chief scientist at the Food and Drink Federation. The FDF is the industry’s lobby group and fights government on such issues as regulations versus voluntary codes and labelling of products. She now works for the European Food Safety and Authority and is Head of the External Relations Department.

In July 2012, the top 50 biggest spenders on EU lobbying declared a total of €76.2 million but by 2016, the top 50 declared spending €106.4 million, a 40 per cent overall increase. In Australian dollars, the increase is from $115.8 million to $161.7 million. (Current exchange rate €1 is AU$1.52.)

One of the largest lobbying firms Fleishman Hillard (FH) has a declared annual lobbying budget of €6.25 – AU$9.5 million. It does advocacy work for some of the largest global corporations including Chevrolet, General Motors, American Petroleum Institute, Phillips, Citi, Procter & Gamble, Aviva USA.

FH is directly involved in politics. Board member Sara Fagen of FH’s subsidiary DDCA, a leading issue advocacy firm based in the Washington, served as White House political director for President George W Bush and was a top strategist on his 2004 re-election campaign.

“When it comes to being heard within the political arena, it’s important to have many voices speaking on your behalf. That’s why corporations, associations, and non-profit institutions – large and small – call on FleishmanHillard to help them achieve their public policy goals,” FH states on its EU website.

A study by CEO found that 98 percent of appointments to the European Central Bank’s advisory groups were from global financial corporations. These included some of the most influential – the German Deutsche Bank, French BNP Paribas, Societé Générale, BNY Mellon, US Citibank, and so on.

Australia’s revolving doors

There are far too many examples to cover in this article but one recent one which illustrates how these doors swing is the employment of food industry lobbyist and former employee of Cadbury, Alastair Furnival, as chief of staff to Senator Fiona Nash. At the time Nash was the Assistant Minister for Health.

Furnival was forced to resign when Fairfax media revealed that he still owned a lobbying company. This was after the Minister’s office had decided to take down a healthy food website which did not please the snack food industry.

Furnival had also lobbied the Tasmanian government on behalf of Cadbury to fund a visitor centre, seeking $400,000. During the 2013 federal election campaign Coalition leader Tony Abbott pledged $16 million for Cadbury!

There are a number of former trade union leaders that revealed their true class allegiance when quitting the movement to take up lucrative private sector appointments, in some instances to even work with a boss who had previously been on the other side of the table. Some work in the industry, others become well-connected lobbyists.

Anyone who is interested in following up more revolving doors just Google the curriculum vitae of former Liberal and Labor politicians. Names you might like to start with include Nick Greiner, Paul Howes, Martin Ferguson, David Murray, Ian Macfarlane, Michael Wooldridge and Peter Costello.

See how many former Goldman Sachs employees you can track down and where they were before and after working for the financial conglomerate.

Or can you identify high-flying corporate representatives who have been head hunted into the upper echelons of the Australian Taxation Office as it prepares for the largest corporations to self-assess or be assessed by private auditors? For starters there is ex-KPMG partner Chris Jordan and Andrew Mills, a former director of the national tax advisory firm Greenwoods & Freehills who successfully fought the ATO on behalf of the CBA.

You might like to send in the results of your research the Guardian to share with other readers.


Sackings and the closure of whole government departments saw the replacement of teams with expertise and years of experience by private sector consultants and advisers, often lacking the necessary skills and experience, on highly lucrative packages.

The distinction between lobbyists and advisers or consultants is blurred to say the least, the latter being a far more effective and deceptive way of directing government policy.

Corporate dictatorship

Marx wrote about the dictatorship of capital. Today it is the corporate dictatorship, a dictatorship that spans the globe.

Lenin used the term “state monopoly capital” to describe this process that is international and conducted by the most powerful and well-resourced corporations.

A Resolution on the Current Situation adopted at the Seventh (April) All-Russia Conference of the RSDLP (B) April 24–29, 1917, said, “The concentration and internationalisation of capital are making gigantic strides; monopoly capitalism is developing into state monopoly capitalism.”

“... Small and middle enterprises are being squeezed out and ruined at a faster rate than ever. The concentration and internationalisation of capital are making gigantic strides; monopoly capitalism is developing into state monopoly capitalism. In a number of countries regulation of production and distribution by society is being introduced by force of circumstances,” the Resolution said.

One of the most profound changes that we are seeing is a change in the role of the state. The state is pulling back from many of its responsibilities to society and undoing many of the progressive social gains of the post-War period.

Privatisation and deregulation are giving more power to the monopolies including finance capital through its loans and partnerships with corporations.

At the same time it is surrendering its sovereignty and undermining bourgeois democracy, in particular the judicial and parliamentary institutions, to the naked power of transnational corporations.

Next week: Free trade agreements, globalisation and carving up the world.

Next article – Night of the Long Knives

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