Financial Oligarchy

Financial Oligarchy

 

the elite of the monopolistic bourgeoisie (major owners of capital; the most influential representatives of commercial, industrial, and financial monopolies), embodying the dominance of finance capital in the economic and political life of capitalist countries in the imperialist stage. The financial oligarchy arises from the coalescence of industrial and banking capital that results from the concentration and centralization of production and capital. Financial monopolistic groups —amalgamations of industrial, banking, and commercial monopolies with the largest monopoly in each group exercising control —are the form of the oligarchy’s dominance.

The financial oligarchy exercises control over vast amounts of social capital and wealth and over the activities of commercial and industrial corporations, credit and financial institutions, and multinational monopolies. The control derives from the oligarchy’s own capital and from the monetary resources and savings of various classes and social strata of bourgeois society that have been mobilized through a ramified network of credit and financial institutions. Dominance is ensured through holding systems, personal link-ups, and other types of long-term relationships (formation of corporations and cartels, issuance of stock). V. I. Lenin observed: “Finance capital, concentrated in a few hands and exercising a virtual monopoly, exacts enormous and ever-increasing profits from the floating of companies, issue of stock, state loans, etc., strengthens the domination of the financial oligarchy and levies tribute upon the whole of society for the benefit of monopolists” (Poln. sobr. soch., 5th ed., vol. 27, p. 350).

The financial and industrial elite controls the decision-making process in the realm of economic and social policy; it coordinates and directs the coalescence of the economic power of the monopolies and the political power of the bourgeois state into a single mechanism. The state-monopolistic regulatory programs designed to ameliorate the contradictions of capitalism ultimately serve the interests of the financial oligarchy. The internationalization of economic life, the intensification of integrative processes, and the development of multinational industrial and banking monopolies promote the emergence of financial groups that are international in composition and influence and lead to an ever closer intertwining of the interests of the financial oligarchies of different capitalist countries.

The structure of the financial oligarchy is modified with the development of state-monopoly capitalism and the evolution of various forms of capitalist ownership. In imperialism’s formative stage, the financial oligarchy developed primarily on the basis of family dynasties (Rockefellers, Morgans, Du Ponts, and Mellons in the United States; Rothschilds, Lazards, and Barings in Great Britain; Rothschilds, Michelins, and Peugeots in France).

The concentration of production, the expansion of fictitious capital, and the competitive struggle between monopolistic alliances favored regional financial oligarchies. This trend was especially pronounced after World War II, as seen in Cleveland, Chicago, California, and Boston financial groups in the United States and the Bavarian group in the Federal Republic of Germany. The family dynasty, however, continued to figure in the structure of the financial oligarchy between the 1950’s and 1970’s (the financial empires of the Gettys and Hunts in the United States and of the Oppenheims, Thurn and Taxis, and Kiihl-mann-Stumms in the Federal Republic of Germany). The entry of top-level managers into the financial oligarchy has also been typical of the postwar period.

The financial oligarchy’s dominance reflects the stagnation of capitalism and exacerbates the socioeconomic contradictions between the bourgeoisie and the proletariat and between the developed and the developing countries.

REFERENCES

Marx, K. Kapital, vol. 3, chs. 23, 25, and 27.
Marx, K., and F. Engels. Soch., 2nd ed., vol. 25, part 1.
Lenin, V. I. Imperializm, kak vysshaia stadiia kapitalizma, ch. 3. Poln. sobr. soch., 5th ed., vol. 27.
Men’shikov, S. M. Millionery i menedzhery. Moscow, 1965.
Beglov, I. I. SShA: Sobstvennost’ i vlast’. Moscow, 1971.
Politicheskaia ekonomiia sovremennogo monopolisticheskogo kapitalizma, 2nd ed., vol. 1. Moscow, 1975.
Perlo, V. Imperiia finansovykh magnatov. Moscow, 1958. (Translated from English.)
Lundberg, F. Bogachi i sverkhbogachi, 2nd ed. Moscow, 1975. (Translated from English.)

A. A. KHANDRUEV

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