Oligarchs and Oligopolies: New Formations of Global Power 9780857458599

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Oligarchs and Oligopolies

Critical Interventions: A Forum for Social Analysis General Editor: Bruce Kapferer Volume 1

THE WORLD TRADE CENTER AND GLOBAL CRISIS Critical Perspectives Edited by Bruce Kapferer Volume 2

GLOBALIZATION Critical Issues Edited by Allen Chun Volume 3

CORPORATE SCANDAL Global Corporatism against Society Edited by John Gledhill Volume 4

EXPERT KNOWLEDGE First World Peoples, Consultancy, and Anthropology Edited by Barry Morris and Rohan Bastin Volume 5

STATE, SOVEREIGNTY, WAR Civil Violence in Emerging Global Realities Edited by Bruce Kapferer Volume 6

THE RETREAT OF THE SOCIAL The Rise and Rise of Reductionism Edited by Bruce Kapferer Volume 7

OLIGARCHS AND OLIGOPOLIES New Formations of Global Power Edited by Bruce Kapferer

Oligarchs and Oligopolies New Formations of Global Power

 Edited by Bruce Kapferer

Berghahn Books NEW YORK • OXFORD

www.berghahnbooks.com

Paperback edition published in 2005 by Berghahn Books www.berghahnbooks.com © 2005, 2008, 2012 Berghahn Books Reprinted in 2008, 2012 All rights reserved. Except for the quotation of short passages for the purposes of criticism and review, no part of this book may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage and retrieval system now known or to be invented, without written permission of the publisher.

Library of Congress Cataloging-in-Publication Data A C.I.P. catalogue record for this book is available from the Library of Congress. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library. ISBN 978-1-84545-174-5 (pbk.) Printed in the United States on acid-free paper.

This volume of Critical Interventions was originally published in Social Analysis, vol. 49

Contents

 Introduction: Oligarchic Corporations and New State Formations Bruce Kapferer 1

Making the Case for Kleptocratic Oligarchy: (as the Dominant Form of Rule in the United States) Donald M. Nonini 24

“We Exist to Fight”: The Killing Elite and Bush II’s Iraq War Steve Reyna 44

State and Big Capital in Russia Jakob Rigi 57

Analyzing African Formations: Multi-national Corporations, Non-capitalist Relations, and ‘Mothers of the Community’ Caroline Ifeka 70

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Contents

“Everyone Has Done Very Well”: Going through the Motions at the News Corporation AGM Roland Kapferer 102

Notes on Contributors 114

INTRODUCTION Oligarchic Corporations and New State Formations

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Bruce Kapferer

Current configurations of global, imperial, and state power relate to formations of oligarchic control. A major feature of this is the command of political organizations and institutions by close-knit social groups (families or familial dynasties, groups of kin, closed associations, or tightly controlled interlinked networks of persons) for the purpose of the relatively exclusive control of economic resources and their distribution, these resources being vital to the existence of larger populations. For many theorists, the state, throughout history and in its numerous manifestations, was born in such processes and continues to be so. Moreover, the oppressive powers of state systems (e.g., the denial or constraining of human freedoms, the production of poverty and class inequalities) and the expansion of these in imperial form are a consequence of oligarchic forces. A diversity of political theorists of different persuasions (from anarchists and Marxists to liberals) have developed such themes. This essay continues their argument

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but is concerned to show that the oligarchic formation of political processes and, indeed, the character of the state itself are undergoing significant transformation(s) or transmutation(s) in the current historical moment. The state takes multiple forms and defies most attempts to arrive at an adequate definition of long-standing worth. The once broadly accepted Weberian definition of the state as that authority with the legitimate monopoly of violence over defined territory seems to be undergoing challenge in many global regions. Difficult to define, it is nonetheless a hard, if often different, shifting and uncertain, imagined and felt reality in the experience of most. Rather than define the state in some absolutist sense, what I intend to do is to explore its formation as a commanding and differential organizational complex of power in relation to oligarchic processes. What is broadly referred to as globalization (a catch-all term that is conceptually problematic, despite its trendy appeal) is widely conceived of as subversive of the state, particularly in its modern, territorially defined nation-state form. But the concept of globalization disguises the emergence to unchallenged (if momentary) global imperial dominance of the US, whose own claims to international sovereignty reduce the sovereignty of many nation-states. Globalization, in other words, is both the cause and the effect of the emergence to political and economic dominance of a relatively new political formation (with many historical antecedents) that I will refer to as the oligarchic-corporate state formation. Although they do not describe it in the same terms, Hardt and Negri in Empire (2000) essentially recognize this fact and point to many of the key distinctions of this formation from other kinds of state orderings that continue in the environment of what I call oligarchic-corporate political emergence. I am well aware that the particular contemporary rise of oligarchic-corporate power might be

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better described as having state effects (see Trouillot 2001) rather than being the development of a relatively original state formation.1 But writing of state effects might reduce an understanding of the force and implications of what is taking form, which, while not reducible to what is often conventionally assumed to be state orders (frequently conceived in historical realities once dominated by the still far from defunct nation-state), are indeed state formations, though of a relatively original kind. Anthropologists have been recently struggling anew with the concept of the state, and this often appears to have a political agenda of its own, relevant to debate within the subject. The state—specifically, the European and North American nation-state—is conceived of as being the context in which a static, totalized, hierarchical, deterministic, overhomogenized understanding of power and society took shape. The critique of the state and the attempt to reconceptualize it by some anthropologists (see Ferguson and Gupta 2002; Geertz 2004) are also a critique of anthropology and, by implication, the participation of its proponents (even if unintentionally) in the institution of the humanly destructive and oppressive orders of the state at home and abroad. Many of the points are well taken and reflect an attempt to forge a new, more openended anthropology that stresses the hybrid, flexible, contested, and negotiated aspects of human realities that an earlier anthropology is held to have neglected. Contemporary globalization became of intense interest for many anthropologists (mainly post-modern and oriented within the North American intellectual frame) because it highlighted the limitations of a previous anthropology and attacked the state orders that gave rise to such an anthropology. Despite ambivalence about the effects of globalization, there is a sense that some of the disasters that have come in its train have something to do with the dying struggles of the nationstate in the context of globalization. While undoubtedly

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there is much truth in this, these anthropologists have overlooked the emergence of what I regard as new kinds of state formations and political orders, their structural processes, and original forms of sovereignty or “wild sovereignty” (Kapferer 2004a, 2004b; see also Aretxaga 2003). There has been a tendency to oppose globalization to the state rather than concentrating on the new state formations that are emerging within globalizing processes and, indeed, are integral to it. A re-energized economic determinism and related rationalism have sometimes burst onto the anthropological scene (see, e.g., Comaroff and Comaroff 2001, 2003), though usually with an insufficient attention to the kinds of sociopolitical processes that are taking shape (and within which the economic itself becomes conditioned). Perhaps more problematic, some of the anthropological writing against the state—for example, right down to new methodological recommendations as part of the overhauling of anthropology—is organic to new forms of political-economic formations and processes. The virtual business-management-speak of some anthropology inspired within contemporary globalization insufficiently recognizes that it manifests some of the ideology that is vital in the coming to dominance of new oligarchic-corporate forms (e.g., Comaroff and Comaroff 2003; Marcus 1998, 1999). By so doing, anthropologists run the risk of blunting their critical edge by becoming blind to important dimensions of the political context (the often new state formation in which they are participant) for the production of their own innovative discourse. A broad argument I develop is that contemporary globalization and what are deemed to be its effects (the failure of the regulative function of post-colonial states, the porosity of borders, the privatization of erstwhile state-controlled institutions of redistribution) are features of oligarchic processes coming into new internal and external relations with the political-bureaucratic

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machinery of nation-states (orders, I add, that are far from defunct). More importantly, I explore the engagement of these processes in the generation of critical shifts in the orders of state power and the formation of new kinds of state structure. A note of caution before I start. I often use the concepts of oligarchy and corporation together. This is to indicate not only a connection but also the social dynamics of the connection. Broadly, in my usage oligarchy refers to a particular organization of power usually founded in dynastic processes tied to family and kinship. Corporation refers to a body that routinely comes together, undifferentiatedly, to pursue a common interest, which, in the contemporary context, is the unmitigated search for economic profit. The corporation in some legal definitions has all the rights of a person; although it may be internally complex and differentiated, it acts and responds as a singular entity (Micklethwait and Wooldridge 2003). As anthropologists (Peters 1991; Smith 1960) have noted, there is a similarity between modern notions of the corporation and powerful kin-based structures that act in concert to protect their political and economic resources. Such kin-based orders are described as corporations, their unitary, self-directed interest overcoming any propensity of individuals within them to act independently. Modern corporate power indeed can have a similar overwhelming sense and is in ironic contradiction of the very contemporary individualism that is often the environment of corporate action and an ideological support for its corporate pursuits.2 Describing corporations as oligarchies refers to their internal system of autocratic power (frequently closed and exclusive), based in principles of personal association, patterns of patronal distribution, and ideals of loyalty often oriented in the real or fictive idiom of family, kinship, and lineage (see Roland Kapferer this volume). The oligarchic power in corporations

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(sometimes the basis for their foundation or else emergent within them) is a source both of their potency and often of their vulnerability.

Oligarchic Formations Oligarchic formations are present throughout recorded history and themselves took a state form that was apparent in ancient systems (e.g., Mesopotamia, Athens, Carthage) and feudal Europe, and was especially evidenced in Italian city-states, Venice and Florence being both outstanding examples. Political strife in ancient systems was repeatedly expressed in rivalries between and within oligarchies, which also embroiled loose and shifting alliances of dependents or ordinary citizenry within the wider population (e.g., the conflicts between factions relating to populist reforms involving the Gracchi in imperial Rome, or the much later struggles between the Guelphs and Ghibellines throughout Europe.) However, I suggest that in the modernist period (in Europe with the formation of centralized, territorially bounded nation-states in Europe and later in North America), oligarchic forces defined their economic interests and power through varying kinds of alliances with mass populist movements and sentiment through which they gained control of the machinery of state, developing it away from absolutist monarchical domination. Indeed, revolutionary movements (increasingly of left/right designation) over the last couple of centuries centered their struggles in relation both to entrenched oligarchic interests and to newly forming oligarchies developing from the expansion of trading ventures (as a result of Old and New World exploration and colonial settlement). This gathered pace from the Protestant Reformation on, coming to a head in the seventeenth century through to recent times.

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The kind of state that came into being was, of course, highly various, often depending on the degree of popular involvement in its formation or the degree to which already entrenched political and economic interests took a part or controlling direction in the creation of their state-political circumstances of existence (e.g., the Cromwellian vis-àvis the French Revolution). Broadly, the modern nationstate in its variety of forms—nationalist elite, egalitarian democracy, fascist, socialist, or class (oligarchic) dictatorship (frequently military)—took shape each with its particular compact with previous or newly created oligarchic interests. These interests were by and large pursued through the order of the state (or subordinated to state concerns); its machinery was either captured by oligarchic groups, or else such groups themselves were captured by populist forces in control of state apparatuses who were external to the social orders of local oligarchies. This latter aspect was the extreme feature of the fascist nationalisms of Nazi Germany and Mussolini’s Italy, whereby family corporate-industrial concerns either formed willing and beneficial compacts with political interests or were forced into compliance or simply stolen through policies of racial terror and extermination, as in Germany. Not only was mass populism a critical element in the formation of most modern nation-states (both dictatorships and democracies), it was also a vital factor in the creation of state-regulated systems for the distribution of wealth. Oligarchic interests were constrained within national orders even as they were oriented to the control of the political machinery of these states (by a diversity of means, from dictatorial coups to democratic elections). The regulation of oligarchic practice (with or without the approval of oligarchs) operated in the interests of oligarchic-industrial and other economic ventures, both in controlling competition (e.g., through anti-monopoly legislation) and in maintaining, as Marx argued in Capital,

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a reserve army of labor. (The close connection between advertising, consumerism, and nationalism has been widely noted and is a factor in the influence of oligarchic interests in nation-state control.) The nation-state system permitted the expansion and further development of capital and simultaneously operated to order the mass of nationally defined populations in expansive capitalist interest (see Arrighi 1994; Harvey 2003). The current moment indicates both continuities with the relatively recent past and also new developments. One major shift is the breaking of oligarchic power away from the containing and regulative political order of the state. The development of the modern corporation has been of importance in this, further facilitated by the development of new technologies, especially relating to cyberspace, and new kinds of productive labor use. As summarized by Hardt and Negri (2000), production is now decentered and widely distributed (across different productive systems, such as tribal, peasant, etc.) in a post-modern ‘puttingout’ system articulated via computer technology—what Hardt and Negri label as ‘post-Taylorist Toyotaism’. The state has become, in many instances, a hindrance to oligarchic-corporate expansion. The rhizomic mushrooming of corporations, interlocking directorships, and shadow companies has been met with state constraints, but corporations have found creative ways of escaping them and the revenues that states had been able to command. Organized extra- and trans-state oligarchic and corporate orders have garnered an increasing political significance (as a function of their economic power and other influences)—their organizations operating as independent political structures without a dependent population (apart from shareholders whose interests are thoroughly in accord with oligarchic and corporate self-interest). This key difference from state polities (who must enter into some kind of social contract with their populations, an

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essential aspect of state-promulgated nationalist ideologies), as these have hitherto developed, results in a relative lack of concern for populations except as consumers. Corporations are more or less immune from populist social demands and are likely to be little interested in long-term programs of social development that do not serve oligarchic and corporate self-interest. Rather, their approach is more in the direction of charitable assistance. The US is an example. In many ways, it can be described as an oligarchic state par excellence, whose charitable foundations are the key institutions of public support but whose focus is intensely tuned to oligarchic-corporate concerns. In the contemporary era of corporate dominance over the state or release from state constraint, the privatization of public-state programs is not merely a means of opening avenues for capital expansion but a way of increasing the indebtedness of populations (which, of course, is a major form of political and social control). In addition, it removes the capacity of populations to politically challenge corporations (especially in contexts where there are either no unions or weak ones); indeed, the democratic possibility of the mass (or multitude, as Hardt and Negri 2004, following Marx, would say) is dramatically reduced. While oligarchies and corporations may have some interest in controlling populations, their capacity to move outside the state (and effect shifts in state orders, to corporatize them), paradoxically can—at least in the short term—be an effective means of subordinating the mass to oligarchic and corporate control. Thus, I am arguing that the growing independence of oligarchies and corporations from state control is producing a change in the state form. I am also suggesting that the nature of oligarchic and corporate orders is also changing. Corporations and oligarchies are assuming increasingly state-like potencies but without the obligations of states. They are the global state form—states without borders

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that are, in many ways, not reducible to notions of the state born in a history of nation-state formation.3

Corporate and Oligarchic State Effects: The Present in the Past and Contemporary Mutations The modern transnational corporation and aspects of a global oligarchic power were prefigured in the trading companies of the largely northern European colonial and imperial expansions from the sixteenth century on. They acted like predatory states with virtually no moral obligation except to make money. In this, they were much like modern corporations (see Bakan 2004). But brought within state regulative control, they assumed a clear state, often bureaucratic, form; effectively, they became parallel states.4 This is evident in the British East India Company, the British West Africa Company, and, of course, the British South Africa Company, which in southern Africa was virtually the state (or a state within a state) right through to the end of colonial rule and after. The mining companies of southern Africa operated in a socially constitutive way, creating a society within the society of the encompassing colonial state. Contemporary corporate-oligarchic activities continue patterns evident in the colonial era (as Ho 2004 stresses in the context of the World Trade Center attacks). They are involved in the creation simultaneously of mobile global elites and of what could be called a global working class. Perhaps Marx is more relevant today than ever before, as far as the creation of class relations is concerned—a point that Hardt and Negri (2004) optimistically elaborate upon and indicate in their development of the concept of the multitude. My own view is that this multitude, relatively powerless before the coherent, organized, and often socially cocooned elites sponsored by company oligarchies, is weaker than in earlier eras, highly fragmented, and much more vulnerable (see Kapferer 2002).

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A major distinction of the past from the present is that corporations and trading oligarchies were largely based in the nation-state, empowered by it as they were ultimately regulated by it. Fundamentally, they were formations of the state or nation-state (the freebooting extension of the state that acted as if it was independent) that operated a state-like bureaucratic system, which continued through into post-colonial state orders. Apparently independent of the state, they were not bound by state legitimating moralities but were nevertheless under the cover of the state, acting in its interests. In the current context, the situation is almost reversed. Nation-states are becoming the instrumentality of oligarchic empires and corporations. (The influence of News Corp and Fox is one example, but there are many others less publicly visible.) These, as I have said, are not only independent of states (are deterritorialized states) but have a state form all their own, managerial rather than bureaucratic, with a tension to person-centered autocracy stressing flexibility rather than rule-driven impersonality (Sennett 2000). Moreover, the modern state (the nationstate) is transforming in the corporate direction rather than the other way around, as in the past. Corporate forms and practices are being fused with state processes so that the state itself is taking a corporate shape, as well as a more overt oligarchic political form. The Hobbesian idea of the state (as mediating and in a contractual relation to society) is in retreat. The Singapore model is becoming more evident in the sense that state forms and practice are becoming modeled after corporate organizational/management ideals. This was the potential in the very beginnings of the US and was integral to its distinction from the monarchical, bureaucratic, centralized states of Europe. The individualist and oligarchic tendencies of the US, which were explored early by de Tocqueville, provoked the excitement of the anarchist

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Kropotkin ([1898] 1993), who appreciated these trends (and what he recognized as innovative and creative flexibility) and the country’s effectively anti-nation-state direction. The US might be considered the modern and post-modern exemplar of the oligarchic state, though territorialized. Another example of contemporary oligarchic state formation is the European Union. It is a transitional form sharing some of the territorializing dimensions of the nation-state with the deterritorializing, encompassing shape of the corporate state form. Its much commented upon bureaucracy, I suggest, is a hybrid elaborating around new managerial practices (Shore 2000). Overall, the newly emergent corporate state recognizes far more thoroughly than in the past the economic as the political. The market is its transcendent ideal and gives it ontological direction. This direction has minimal interest in either control over persons (except through the dictates of the market) or control over territory (other than that ‘territory’ defined by consumption). I should add that the imperialism generated from Hobbesian state processes is distinct from what could be described as the imperialism of the corporate state. The imperialism of the former involves an expansion of the boundaries of sovereign territory (Queen Victoria becomes the Empress of India). The imperialism of the corporate state respects no boundaries, is transterritorial, and denies sovereignty of any territorial kind, operating primarily a logic of control (of the market) rather than a logic of rule (of power over persons and populations). The discourse of globalization is, I suggest, imbued with the logic of corporate control and can be conceived of as unfolding an ideology related to the emergence of the imperialism of corporate state forms. The fledgling organizations of control (e.g., the World Economic Forum at Davos, the G8) of the new corporate imperialism are located in politically neutral state territorial zones (Davos

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as a site is qualitatively distinct from Geneva) or else are shifted between different urban centers of economic articulation, so that none is given political pre-eminence over that defined in economic terms. It is worthwhile contemplating the symbolism of Davos as distinct from Geneva and also Brussels. As the center of the European Union, Brussels betrayed its birth within a state-political imagination, the European Union being transitional between the political and corporate state forms. Davos eschews completely the image of the bureaucratic nation-state. It is located in a veritable oligarchic skiing playground for the families of the rich. Not only is this an expanded version of modern, largely corporate, gated communities, but also it is potent with the images of sport and play, key metaphors of corporate managerial logics.

The Nationalism of the Oligarchic-Corporate State Oligarchies (contemporary ones that create the social on the basis of economic organization in relation to the market) have an associated mythos that is increasingly delocalized. They might be described as alienated, dislocated forms. Superficially, they bear some similarity to nation-states, with the critical difference that they are not territorialized. They have kinship, religious, and communitarian aspects but are generalized in an open space without borders. Their character is akin to product loyalty. The territory that they define marks out a space of consumption as a way of existence or life that can be shared across great differences in actual social and cultural practice. Religion, the community, the family—everything becomes a product for consumption (e.g., evangelist preaching, new Pentecostalist movements such as Hillsong in Australia and in Europe) and exists chiefly as a product, virtually a fantasy, that can be truly lived only in the space of the product.5 The US as the wellspring of

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oligarchic nationalism provides numerous examples. The well-known discussions on ‘Disneyfication’ and ‘McDonaldization’ provide some illustration. The ideological development of the family in the US was a conscious, state-supported effort to forge national unity among an extraordinarily diverse immigrant population. Corporations were at the forefront, advertising agencies being strongly influenced by Freudian subliminal theories (see Adam Curtis’s BBC documentary, The Century of the Self). The national ideology of the family (iconic with one definitional aspect of oligarchic power) is an alienated virtual fantasy space lived perhaps most concretely in the roadside diner or the larger company chains (McDonald’s, Cracker Barrel, etc.). Peter Weir’s film, The Truman Show, gives a marvelous sense of a global, all-encompassing, family-centered, oligarchic-controlled cosmic possibility. Whereas state nationalism centered and opposed populations on the basis of a territorialized, national cultural difference, oligarchic nationalism decenters, deterritorializes, and yet unifies populations in relation to corporate-generated totalities and values. In the latter, culture is created through consumption, labile and movable, whereas in the former, culture is embedded, essential, and grounded. It might be added here that in the emergence of corporate state forms, what was once public space, held in the larger public interest, is now made into corporate space. Paradoxically, that which was common (the commons) is transmuted into corporate territory and given back to the public as part of corporate largesse. The nation-state— even if only ideologically—protected the public interest, the commons as public right. The corporations capture or create ‘public space’ (often making it internal to the corporation, a right of the corporation) and link it with what I have already referred to as the charitable practice of binding populations in the moral economy of the gift.

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The ideologies and practices of oligarchic state forces not only contribute to what some might identify as a growing tide of popular conservatism (intensifying processes of alienation) but also constitute a new structuring of power, bolstering the capacity of corporations to define the society of populations and to simultaneously politically tighten their grip over them. The corporate and oligarchic invasion of the once public sphere is everywhere in evidence, from attacks on institutions concerned with the redistribution of social justice (education, health, social security) to the privatization of a vast array of public services. The oligarchic state as an alternative to the nation-state (and certainly subversive of it) was implicitly expressed in a recent interview on Fox News (10 April 2005) with Shimon Peres concerning the transfer of Gaza to Palestinian control. Peres recommended (echoing US policy in Iraq) that corporations should take over the task of development and socio-economic reconstruction in Gaza. In other words, the Palestinian state should not be a nation-state but an oligarchic state in which corporations should appropriate the key roles. This idea is undoubtedly fostered by the view that Palestinians are fragmented by kinship and lineage (the Palestinian failure to achieve unity often being assigned to this factor, ignoring the fragmenting, overweening power of the Israel state) and thus suited to oligarchic-corporate political forms. These, as I have said, are by and large antithetical to the nation-state as an institution of regulation and distribution (factors that might provide for the social-political unity of a future Palestinian state against Israel).

A New State Form What I have described as an oligarchic-corporate state is a comparatively new state form, as, too, are emerging corporate orders powerful enough to work independently

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of state regulations and controls. The nation-state may be in decline, but it is giving way to a relatively original state order or political-economic formation that has multiple state-like effects and is able to act in ways systemic with deterritorializing global processes. What I have labeled the corporate state has developed in the context of nationstates, along with the emergence of corporations with state-like effects. In breaking free of state constraints, or by assuming control of state apparatuses, new exploitative possibilities are opening up for these corporate orders. The corporate apotheosis is already registering effects reflected in growing poverty, failures in public facilities, and an increased sense of insecurity—dimensions of Ulrich Beck’s (1992) “risk society.” The issue of public order, the Hobbesian legitimation behind the nation-state, has been transformed into the problem of security. This is increasingly a private matter and has been corporatized. Security and surveillance have become a major concern for the corporate state; in many ways, they are a means for protecting ruling interests against the public. If the nation-state frequently abused the rights of its citizens, this is now a strong potential of the corporate state, which both privatizes the means for violence and turns the greater violent power of economically dominant groups against the general citizenry. State violence takes a new oligarchic and corporate form. In guarding against the public, corporations project a vision of the mass that accords with the most abject view of the essential baseness of humankind (sometimes attributed to Hobbes but vital in the most dismal economist thinking). If we are in a ‘risk society’, it is now also a society of intense suspicion. I suggest that this is not so much a consequence of the so-called War on Terror but rather has been generated in the very dynamic of the growth of the corporate state, whose logic is founded in a dialectic of competition, control, and self-protection. Corporatization and, of course, the capitalist ethos that it further impels and

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transmutes are founded in a discourse of desire and envy. The current stress in some scholarly circles on the larger political relevance of a psychoanalysis of desire, insightful as it undoubtedly is, is also organic to a contemporary rise of oligarchic and corporate power. The War on Terror is to a great extent fueled in the formation of the corporate state, whose participants present themselves as objects of desire and of envy and who must be protected—such protection, of course, becoming itself a product for consumption and profit. The nation-state was incorporative (often oppressively so), creating public order in a society of the state. The corporate state is oriented differently. It is not concerned to totalize society or to provide uniform regimes of order. The problem of order is resolved not by ordering the mass into a relatively static whole but rather by retreating from it, enclaving, and guarding against the dangers of the mass at large. The corporate state is oriented to the creation of micro social orders of total control, highly adapted to a social world premised on movement and displacement in which the social is always in the process of being reconstituted, often as a direct result of oligarchic and corporate action. If the nation-state has given rise to the impossible paradox of society against the state, the corporate state escapes such a paradox by sealing off spaces where persons must submit to control as a condition of access and participation in them from other spaces in which control is more open. Human beings are made to choose continually between relatively open and closed social, political, and economic worlds. As in nation-states, but motivated by different ideological commitments (which often accentuate individual freedom and which are antagonistic to government or ‘big government’), populations are being made complicit in their own domination, engaged in the acts of making choices between personal freedom and control—choices that they have little opportunity to avoid and which are oriented in the direction of willing submission.

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A somewhat stark example is Iraq. This is becoming a corporate state par excellence, certainly distinct from the totalitarianism of Saddam Hussein. In distributed totalitarian enclaves, the citizenry is routinely given the choice—a choice that is more or less impossible to refuse—to forgo personal freedoms in order to gain access to the means of survival. Moreover, the public is engaged in its own control and surveillance: the BBC reports that Iraqis engaged in security work, now the main employment, outnumber the occupying troops. This self-policing is a feature that scholars following Foucault describe as governmentality. Developed as part of nation-state systems, it is at least as crucial to what I am calling the corporate state and its rather distinct processes of ordering. The post-imperial or post-colonial peripheries have become regions where the violence of the state against society as a function of oligarchic and corporatizing processes is apparent. West Africa is conceived of as a region where the nation-state appears to be in collapse (see Bayart, Ellis, and Hibou 1999; Chabal and Daloz 1999). This is often seen as a consequence of traditionalizing forces—the ‘big man’ complex, clientalism, etc. (see Ifeka this volume). If so, these forces were conditioned and made anew in the context of the ‘indirect rule’ of colonialism, as I have described a kind of corporate state in the making that encouraged self-rule through corporatelike groups based in kinship, ethnicity, and religion and focused around key patrons. The nation-state that took form had an intense oligarchic and corporate possibility already locked into it (a fact that is evident across a great number of states formed in the wake of colonialism). The unequal encounter with new corporate expansion from Europe and North America especially has exacerbated the situation, accelerating the corporate enclaving (often along kinship, religious, and ethnic lines) and resulting in protectionist actions and extortion. The point is that the

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violence at the periphery is due neither to the failure of state orders nor to traditionalism, but rather to the appearance of new forms of ordering practice that are part of the modern emergence of the corporate state. The entire direction of this introduction is to indicate that new forms of state power are emerging that are not reducible to the past. What I have presented are a few thoughts that might be relevant to further discussion. * * * The essays in this forum, which involve several lines of analysis in different concrete locations (North America, Russia, West Africa, and Australia), constitute a beginning. Nonini tackles directly the oligarchic corporatism of the US and the contradiction of democracy that is contained in it. His discussion contributes to an understanding of the distinction of the US as a corporate state that reproduces within its own order the changes that it may be effecting in larger global realities. Reyna in a way continues this analysis, concentrating on the relation of oligarchic forms to violence and the perpetration of war. In what is perhaps an amazing aspect of contemporary state formation, war itself is being revalued. The state, once legitimated as an organization for the perpetration of peace, is now conceived of as an order that enables peace through acts of war. Its legitimacy is tied to its warring capacity, a feature, incidentally, of corporate manuals of managerial practice. One of my current favorites is Wess Roberts’s Leadership Secrets of Attila the Hun. The advertising promotion on the Amazon.com Web site states that the author “draws from the imagined thoughts of one of history’s most effective and least beloved leaders, Attila the Hun, to discover leadership principles you can apply to your own situation.” Such a manual might apply to the new breed of oligarchs in Russia that Rigi’s essay explores. Rigi outlines the struggle between the bureaucratic order of the nation-state and the mafia-like

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tactics of Russia’s oligarchs. The violence that is produced is a dimension of the forces that have developed to protect new and old oligarchic interests. Ifeka examines the different situation of West Africa, but here too oligarchic and corporate power is shown to engage with other well-established customs and practices, creating new forms of inclusion and exclusion. She describes how this is exacerbated by global forces of corporate intervention. Roland Kapferer’s description of the transitional meeting of Murdoch’s News Corporation, whereby this global media organization announces the relocation of its capital from peripheral Adelaide to metropolitan America, is a demonstration of some of the central arguments of this volume. The account draws attention to the autocracy of corporate power as displayed in a key corporate political performance, the annual general meeting—an elaborate ceremonial of corporate power and state.

Acknowledgments I wish to thank Terry Evens, Tony Day, Don Nonini, and Kingsley Garbett, with whom I have discussed aspects of this argument.

Notes 1. Clearly, corporations are not states in the conventional sense of a complex of governing institutions who hold sway over territorially defined populations. However, many have state effects in the senses that Trouillot has outlined. But I am also suggesting that there are developments in corporate control and organization that are taking on a more firm state dimension. This is so in corporations’ appropriation of domains of public space and service, previously in control of states, through which state-governing institutions exercised control and regulation of populations. I

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3.

4.

5.

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also am pointing to the increasing determination of state policies by corporations and, as well, the formation of transnational or transterritorial organizational structures in which corporate alliances (often involving governments) are beginning to have major force over populations. The development of modernity, especially in Europe and North America, is frequently described in terms of a growth in individualism often associated with a coming to dominance of an egalitarian and increasingly secular ethos. The development of the modern corporation—which seems to feed on an ideology of individualism and free choice—is a major contradiction of such ideological value, enjoining a disciplinary conformity of its members and a subordination of their will to the project of the corporate whole. This whole is not the sum of its collective parts but a totality in itself that is defined by its capacity to generate profit. During a reflective moment regarding corporate practice, the character played by Dennis Quaid in the 2004 film In Good Company (Universal Pictures) actually describes corporations as states “without borders.” They were, in effect, incorporated within the state. Their often dramatic fiscal failures enabled states to take them over. Of course, the agents of the trading companies had heavily engaged the political interests of the state in their operations, and the take-overs were largely a formalization of the state-political controls that were already integral in operations that had the appearance of being independent. Two articles in Harper’s (May 2005) fill out a good deal of what I am referring to here. Gordon Bigelow (2005) describes the religious fundamentalist origins of modern economic theory (especially that which refers to the self-regulative properties of the market), which underpin so much current neo-liberal and neo-conservative political economy. In other words, the market as virtually synonymous with corporate power has the same fetishized and overdetermined quality of the nation-state form that it is replacing. Jeff Sharlet’s (2005) account of New Life Church at Colorado Springs, organized by Pastor Ted Haggard, who presides over the National Association of Evangelicals in the US, is highly informative regarding the corporate nature of the new evangelism in the US. This is not so much a return to an earlier fundamentalism but a new fundamentalism born within corporatist transformations of modern America. There

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are numerous parallels between the internal political orders of present resurgent evangelism (including its ideological message), on the one hand, and the consumer-oriented economic and political policies of corporations and agents of the state, on the other hand.

References Aretxaga, Begona. 2003. “Maddening States.” Annual Reviews of Anthropology 32: 393–410. Arrighi, Giovanni. 1994. The Long Twentieth Century: Money, Power and the Origins of Our Times. London: Verso. Bakan, Joel. 2004. The Corporation: The Pathological Pursuit of Power. New York: Penguin Books. Bayart, Jean-Francois, Stephen Ellis, and Beatrice Hibou. 1999. The Criminalization of the State in Africa. Oxford: The International African Institute in Association with James Currey. Beck, Ulrich. 1992. Risk Society: Towards a New Modernity. New York: Sage. Bigelow, Gordon. 2005. “Let There Be Markets.” Harper’s (May): 33–38. Chabal, P., and J. P. Daloz. 1999. Africa Works: Disorder as Political Instrument. Oxford: James Currey. Comaroff, Jean, and John L. Comaroff. 2001. Millennial Capitalism and the Culture of Neo-Liberalism. Durham, NC, and London: Duke University Press. ———. 2003. “Ethnography on an Awkward Scale: Postcolonial Anthropology and the Violence of Abstraction.” Ethnography 4: 147–179. Ferguson, James, and Akhil Gupta. 2002. “Spatializing States: Toward an Ethnography of Neoliberal Governmentality.” American Ethnologist 29, no. 4: 981–1002. Geertz, Clifford. 2004. “What Is a State If It Is Not a Sovereign? Reflections on Politics in Complicated Places.” Current Anthropology 45, no. 5: 577–593. Hardt, Michael, and Antonio Negri. 2000. Empire. Cambridge, MA: Harvard University Press.

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———. 2004. Multitude: War and Democracy in the Age of Empire. New York: Penguin Press. Harvey, David. 2003. The New Imperialism. Oxford: Oxford University Press. Ho, Engseng. 2004. “Empire through Diasporic Eyes: A View from the Other Boat.” Comparative Studies in Society and History 46, no. 2: 210–246. Kapferer, Bruce. 2002. “Foundation and Empire (with apologies to Isaac Asimov): A Consideration of Hardt and Negri’s Empire.” Social Analysis 46, no. 1: 167–179. ———, ed. 2004a. State, Sovereignty, War: Civil Violence in Emerging Realities. Oxford and New York: Berghahn Books. ———. 2004b. “Democracy, Wild Sovereignties and the New Leviathan.” Plenary Lecture. Vienna: European Association of Social Anthropologists. Kropotkin, Petr A. [1898] 1993. Fields, Factories and Workshops. New York: Transaction. Marcus, George E. 1998. Corporate Futures: The Difference of the Culturally Sensitive Corporate Form. Chicago: Chicago University Press. ———. 1999. Ethnography Through Thick and Thin. Princeton: Princeton University Press. Micklethwait, John, and Adrian Wooldridge. 2003. The Company: A Short History of a Revolutionary Idea. New York: The Modern Library. Peters, Emrys. 1991. The Bedouin of Cyrenaica: Studies in Personal and Corporate Power. Cambridge: Cambridge University Press. Sennett, Richard. 2000. The Corrosion of Character: Personal Consequences of Work in the New Capitalism. New York: W.W. Norton and Company. Sharlet, Jeff. 2005. “Soldiers of Christ.” Harper’s (May): 41–54. Shore, Cris. 2000. Building Europe: The Cultural Politics of European Integration. London: Routledge. Smith, M. G. 1960. Government in Zazzau. Oxford: Oxford University Press. Trouillot, Michel-Rolphe. 2001. “The Anthropology of the State in the Age of Globalization: Close Encounters of the Deceptive Kind.” Current Anthropology 42, no. 1: 125–138.

MAKING THE CASE FOR KLEPTOCRATIC OLIGARCHY (as the Dominant Form of Rule in the United States)

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Donald M. Nonini

The Law doth punish the Man or Woman Who Steals the Goose from off the Common, But lets the greater Felon loose That steals the Common from the Goose — Anonymous eighteenth-century English proverb

How Stealing from the Public Treasury Becomes Civic Virtue: A Conundrum Mainstream pundits, the media, and many academics represent the United States of America’s political system as a democracy, and the vast majority of its middle- and uppermiddle-class citizens certainly think it is. I would like to argue against this idea, to propose instead that the US form of rule at present is not a democracy but instead an emergent kleptocratic oligarchy. According to the Webster’s

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Third International Dictionary (1976), this is “despotic power exercised by a privileged clique,” one moreover devoted at the most mundane level to kleptocracy, or rule while engaged in plunder of the public treasury. This emergent oligarchy is the undeclared alternative base of rule to the demos or ‘people’, whose organized governance constitutes a democracy. Although kleptocratic oligarchical rule is not entirely new to the US—the ‘Gilded Age’ from the 1880s to 1910, marked by corporate ascendancy and control of the US Senate, was very similar in many respects (Phillips 2004: 236–242)—I would argue that the contemporary American oligarchy has new strategies, organization, and objectives. What is perhaps most interesting about the current US oligarchy is that large numbers of those who describe themselves as belonging to the ‘American middle class’ subscribe to the ideological premises of neo-liberalism used by the oligarchy to justify its plundering of public wealth and of the global commons.1 These were the people who provided the electoral base of support in 2000 and again in 2004 for the election of the Boss of the clique, George W. Bush. What made the victories possible was that this plurality of the American electorate consented to the doctrine of neoliberalism that called for markets ‘free’ from governmental regulation and other social restraints, even as the population was held captive by their post-9/11 fears about foreign ‘terrorists’, ‘criminals’, and ‘aliens’, particularly those with certain racial characteristics and religious affiliations.2 This created a curious conundrum: neo-liberal thinking led this segment of the electorate to withdraw legitimacy from government’s relationship to markets (and to despise ‘government’ in general) during the very same period that their fears drove certain markets toward a closer functional interconnection with expanded government powers. Although the Polanyian fantasy of a ‘disembedded market’ never makes sense, it is a particularly extravagant

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fiction when certain markets are ‘deregulated’ through privatization and desurveilled, even though they are still necessarily and intimately connected to the functioning of the state. These are markets in weapons, military training and logistics, aerospace, surveillance and intelligence services, and health care—markets whose commodities are deemed essential to national security and to the health of the population. That the actors in these markets included the state itself—which could be subject to predation by members of the oligarchy inside it, who would simultaneously assert their state privileges to protect the security and health of the nation while claiming the ‘freedom’ of these ‘markets’, i.e., of themselves and their cronies, from ‘regulation’—has been one of the great ironies that has promoted the emergence of the kleptocratic oligarchy. It is through this particular irony and the conundrum that makes it possible that the new oligarchy has succeeded in simultaneously plundering public wealth while engaging in its own ghastly cultural work of equating patriotism with incessant, industrialized warfare against the Middle East and Islam, and of deploying high-tech police surveillance and violence against those stigmatized by these prevailing ‘middle-class’ fears.

What’s the Big Deal? Upper-Class Rule as Public Business The historically normal form of rule in the US is not democracy but plutocratic oligarchy, as is clearly demonstrated by the classic research of G. William Domhoff (1967, 2002) in his book Who Rules America? A corporate community consisting of business directors and owners, socially interconnected with an upper class defined by its unearned accumulation of wealth (in stocks, bonds, real estate, currency, works of art), dominates the American electoral process. Members of the policy-oriented corporate

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community help selected candidates to become elected through campaign financing; lobby these officials to follow a corporate agenda; make sure that they are appointed by these officials to high government positions; influence policy-formation networks by funding and serving as directors of foundations, universities, conservative think tanks, and policy discussion groups (e.g., Business Roundtable, Council on Foreign Relations); and work to popularize their procorporate policies through private control of the electronic and written media. Corporate control of labor markets—by weakening or destroying labor union power and by reducing claims made by the working population on public wealth for support (e.g., Social Security, Medicare, unemployment insurance), which would otherwise strengthen labor and impede the corporate appropriation of the public treasury through legal means—has long been central to the conservative corporate agenda (and supported as well by small business and local growth coalitions) (Domhoff 2002: 178–179). Those national political leaders coming out of the corporate community or selected by it have consistently become the oligarchs of the US over the last century. At the best of times, then, plutocratic oligarchy is normal. Suppression of the power of the working class, minorities, the poor, women, and immigrants has been historically prevalent—despite exceptional progressive interludes such as the Great Depression of the 1930s and the Civil Rights/Vietnam period of the 1960s. Constitutionally mandated features of the American political system—‘winner take all’ elections, the Electoral College, the presidency as a paramount executive, gross inequalities in representation in the US Senate, etc.—place fundamental legal limits on American democracy (Domhoff 2002; Lazare 1998). The dominant American political rhythm is therefore one of reversion to the mean of meanness. But what then leads from ‘normal’ plutocratic rule to a hypermean oligarchy engaged in outright plunder?

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Some of the following convergent preconditions can be implicated: • a historic nadir in popular, especially workingclass, power; • a hegemonic, popular exaltation of the ‘market’ and prevailing dislike of ‘big government’; • a quantum jump in techno-managerial power held by corporations vis-à-vis the working population due to globalization, i.e., the politics of: • increased corporate mobility and new technologies of co-ordination, control, and surveillance over space; • the hypertrophy of financial over productive sectors of the economy; and • an expanding American imperialism that denies that it is imperialist and faces no countervailing international coalition of nation-states.3 Lack of working-class power leads to an absence of checks on corporate power. Disgust with ‘government’ leads to corrosion of the rule of law, and market adoration fosters an apotheosis of ‘greed-is-good’ discourses and practices. Expanding techno-managerial powers increase corporate capacities of surveillance, the control of people, and the management of information (‘PR’ or ‘spin’). Increased financial power, combined with global markets, leads to hidden and unaccountable speculation in licit and illicit commodities. Major imperial projects require military adventures that put presidential executive powers ‘on steroids’ and provide economic benefits to major elements of the corporate community, while engendering a xenophobic ideology of ‘patriotism’ and fear toward a global enemy (e.g., ‘terrorists’). What results when these factors all come together in a transition toward kleptocratic rule is the emergence of deep ambiguities and mystifications:

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What is public, and what is private? What is to be made known, and what is to be kept hidden? Where does private power end and government power begin?

Meet the Carlyle Group: Accumulation Arm of the Oligarchy We are in the territory of the “Iron Triangle,” defined by Briody (2003: xxvi) as “the place where the world’s mightiest military intersects with high-powered politics and big business.” This is the special territory occupied by the new oligarchic clique, one whose capital accumulates through systematic plundering of the state’s treasury. The central financial arm of the clique is the Carlyle Group, one of the largest private equity investment firms in the country, with $13.5 billion reportedly under its management in 2002 (ibid.: 161). The Carlyle Group provides the institutional means by which the highestranking members of the clique engage in ‘access capitalism’ even when they are not in formal political power. Carlyle has been called by Time Magazine (22 March 1993) “the Republican administration in exile”—a label that, as I show below, is a bit off the mark. It is hardly in exile; its headquarters are located within a few blocks walking distance to the White House. To make the ‘big score’, Carlyle executives and advisers, such as (ex-president #41) George H. W. Bush and James Baker III, engage in political arbitrage by risking that they can influence future US foreign and domestic policies to shift in directions that will hugely profit the state-subsidized corporations they manage, own, and control. So far, the evidence suggests that the risk entailed is very low. As Briody puts it: “It is Carlyle’s particular style of investing that has raised eyebrows. Concentrating on heavily regulated industries like defense, telecommunications, energy, and health care, Carlyle is betting that it can predict

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future trends in government spending and policy, or influence them outright. And by hiring former secretaries of defense, ex-presidents, the former head of the Securities and Exchange Commission, and the former chairman of the Federal Communications Commission, they are in a position to do either” (2003: xxviii). In a certain respect, the Carlyle Group only appears to do ‘business as usual’, since the corporate management of private wealth and public labor markets, combined with cronyism and corruption of lawmakers and political officials in order to extract benefits from government expenditures, is a routine aspect of class rule, as Domhoff’s (2002) research indicates. It is just that Carlyle does it to the ne plus ultra by specializing in highest-level access as its competitive advantage. However, it is the articulation of the Carlyle Group as the financial arm for other groups within the clique and the networks it commands that is unique, that makes the clique an oligarchy—despotic rule by the few.

The Top Oligarch and His Networks Basically, the structure of the US oligarchy centers on the oligarchs, on those very few who rule, and derivatively on the vast networks they and their close followers, clients, and powerful friends mobilize. Central to oligarchic rule is the concentration of financial, military, policing/surveillance, and political power within the ‘iron triangle’ in the hands of the top oligarch, in the present case, George W. Bush. He is a top oligarch rather than a monarch for two principal reasons. First, despite its occasional attraction to dynasties of wealth and privilege (Phillips 2004), the American public would ultimately find monarchy inconsistent with the American Dream, based as it is on the illusion of individual upward mobility across caste and class landscapes of inequality (plus, a monarchy

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is constitutionally impossible in any event). Second, although George W. Bush is the Boss of this clique, he is the first among equals. The mechanisms of oligarchic rule derive from the networks he balances and co-ordinates through trusted cronies and proxies, and thus there is rule by a clique—not by a single individual. Contrary to pop analyses that put the brains of the oligarchy in the person of Dick Cheney, I would argue that its rationality lies within the person of George W. Bush and in his retinue of close friends and advisers, including Cheney, precisely in a dispersal of a division of functions of different kinds of power among the members of his retinue. Loyal retainers in addition to Cheney include James Baker III, Frank Carlucci, Karl Rove, and Richard Darman, previously officials in either the Reagan or Bush I administrations. But there is no question that the person who embodies the highest level of financial, military, policing/surveillance, and political power is the current Boss. His father, George H. W. Bush, himself a past Boss, not only controls the majority of the Bush dynasty’s wealth but also occupies a paramount place in the ‘private’ Carlyle Group, playing a vital advisory role. Stewardship of wealth by a family member or close friends is, after all, essential to the aggrandizement of oligarchic wealth and power, precisely because of the cyclic and ambiguous character of the political arbitraging and access capitalism that makes kleptocracy possible: now in government, now in private power; now you see him, now you don’t; first he appears as an elected or appointment official, then as a civic-minded corporate citizen, and later as an old family acquaintance or business associate seeking ‘a little help’ from his friends in government office to feed copiously from the trough of public wealth. The current Boss of the clique, President Bush, brings all these connections together by virtue of the concentrated power he holds—but the power in question is not

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all executive or political. Yes, the Boss is commander in chief of the military. Through his friends in the Cabinet, the CIA, the FBI, the Justice Department, and the Homeland Security Administration, he is situated at the apex of national policing and surveillance power. In the name of national security under the Patriot Act, he has the power to authorize surveillance of and initiate official harassment or even imprisonment (without benefit of habeas corpus) of any US citizen, not to speak of bothersome ‘alien’ residents, while his delegated war powers allow him to kill any number of citizens of small countries he does not like. We could say that he also has strong ties to the Carlyle Group—but to put it thus would be an understatement, for he is part of the Carlyle Group through his financial interest in it as a major investor and previous director, while his father acts as its principal deal maker, and as holder of the family equity in it, during the period that George W. performs being in ‘public office’. The Boss is, of course, the figure whose artful performances, replete with spin and dyslexic pseudo-folksiness before the media and before pre-vetted receptive publics of conservatives, have allowed him to win presidential power. That is, of course, with more than a little help from his corporate campaign financiers, particularly those in ‘semi-outcast’ polluting industries such as oil, coal, and timber (Tiefer 2004), and logistic support from his retainers in the Republican Party and their clients among the leaders of the Christian Coalition, the National Rifle Association, and the Right to Life coalition. All these Republican Party men (and women) and their supporters helped ‘get out of the vote’. Oh, yes, then there were those who worked to ‘keep the vote in’: one must not forget the assistance of Cuban musclemen and petty municipal officials who served in Florida as the foot soldiers of the oligarchy on Election Day in 2000 to suppress

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the African American voter turnout for Democrat Al Gore (Smith 2004: 117–147). It is therefore within this oligarchic clique, organized around networks and fed by patronage, that Dick Cheney can be placed, while acting under the same penumbra of ‘reducing government’ so as to gain control of it and to obtain power through it. His career cycle exemplifies the artful and ambiguous play of movement back and forth by the first-order cronies of the top oligarch between government and corporate sector, public and private: • first, ultraconservative Republican congressman; • then rising to become Bush I’s secretary of defense, presiding over the Pentagon’s plans to privatize its logistics and supply functions; • then becoming a Halliburton Corporation CEO in the early 1990s during a period when this corporation and its subsidiary Brown & Root just happened to receive the Pentagon’s massive no-bid contract for these functions; and • finally cycling back into government office as Bush II’s vice-president, just in time to work with his Boss to initiate wars against Afghanistan and Iraq that required huge Pentagon expenditures that puffed up the bottom line of his corporate ex-employer (from which he was still receiving ‘deferred compensation’) (Briody 2004: 181–237). Well, over the last decade, he has been busy, hasn’t he? As of 2005, we can only ask: Are Dick’s days of tricky movement over yet?

Oligarchical Networks and Access Capitalism What are the characteristics of the oligarchy? First, it represents a clique consisting of an exclusive group of at

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most several hundred powerful men (and a few women) who have spent their careers alternating between high elected and appointed government offices (serving as Cabinet officers and White House security and economic advisers) and high-level corporate positions, particularly in the Carlyle Group itself and in the defense, aerospace, and other state-connected industries it owns. The group’s members have also often served in various capacities in the policy-formation network that Domhoff (2002) describes—as directors and officers (and even occasionally as scholars) in conservative foundations, think tanks, and policy-discussion groups.4 More peripheral members of the oligarchic clique serve outside the White House or Cabinet as higher-level political appointees in the Pentagon, CIA, FBI, Homeland Security, and the Departments of Commerce and Treasury. These several hundred individuals are in turn in positions to mobilize their networks of supporters and clients in corporations, the judiciary, foundations, think tanks, and conservative political organizations and social movements over specific issues and goals of vital importance to the oligarchy’s kleptocratic projects. They are connected to one another not only by common political party ties—the vast majority are leaders in the national Republican Party—but also by shared personal and institutional experiences. First, the core of the clique are men who have known each other on a face-to-face or informal basis for more than two decades, have gone to the same exclusive prep schools (e.g., Andover) and private universities (Princeton and Yale, especially), and have joined the same few private clubs. This pattern of shared social experience is evident in the careers of the current Boss, George W. Bush, and his cohorts, Cheney, Rumsfeld, Baker, and Bush I (Briody 2003, 2004; Phillips 2004). Second, among its peripheral figures the oligarchic clique includes individual elites who are not American citizens but are members of the Saudi royal family, ex-presidents

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of South Korea and the Philippines, ex-prime ministers of the United Kingdom (John Major) and of Thailand, and, until 9/11, members of the Bin Laden family (Briody 2003). The convergent political, financial, military, and business reaches of the clique are thus transnational in scope; no doubt, the group can be said to belong to the “transnational capitalist class” (Sklair 2001). Third, although the clique does have a Republican slant to it, its members’ quest for wealth in the Carlyle Group through access to power has been resolutely bipartisan. The currency trader, billionaire philanthropist, and recent financial backer of MoveOn.org’s campaign against the Boss’s (re-)election, George Soros, was a prominent investor to the tune of $100 million in the Carlyle Group in the early to mid-1990s, while Clinton’s SEC chair Arthur Levitt and FCC chair William Kennard, both now employed as senior advisers at Carlyle, are clearly aligned with the Democratic Party (Briody 2003). Capital accumulation by ex-politicians and ex-government bureaucrats through the strategic exploitation of their prior connections to the public sector in order to benefit the corporations that now employ them (and that they partly own through stock options) appears to be part of a broader bipartisan effort in the service of individual greed, which clearly bridges many ideological differences. It is unlikely that the ‘advice’ that ‘senior advisers’ Levitt and Kennard have been giving to their Republican partners in the Carlyle Group is purely academic. It is highly likely that it takes the form of access to their old acquaintances still serving in the SEC and securities industries, for Levitt, and in the FCC and the media industries, for Kennard, in order to further Carlyle’s political arbitrage as a wealth-accumulation strategy. In addition to the influence of the Carlyle Group, the clique gains its despotic power through control over the formal, legal institutions of the state, but in the peculiar hybrid form of the US neo-liberal state. Yes,

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the highest-ranking members of the clique are clearly in charge of the official military, policing, and surveillance organs of the state—the Pentagon, FBI, CIA, and Homeland Security Administration. Still, it should be noted, for instance, that civilian control over the Pentagon, which is seen as a constitutional virtue, also facilitates a continual circulation of high-level members of the clique into and out of the Pentagon. While in office, they have worked to privatize its functions, as is the case with Rumsfeld, Cheney, and Carlucci, who served as high-level Pentagon officials during the Reagan and Bush I periods to privatize the military’s logistics and support branches. Once out of office, working for the Carlyle Group or as congressmen, they sought to lobby for Halliburton and other firms to obtain new no-bid contracts from their successors for the recently privatized components of the Pentagon—with all the numerous cost overruns and kickbacks arising from the vastly increased funding for war-making made possible through the political leveraging by the current Boss of congressional spending on the invasion and occupation of Afghanistan and Iraq (Briody 2003, 2004; Tiefer 2004). And what is one to make of the US Investigation Services? Is it state fish or corporate fowl? Or is it a hybrid, both fishy and foul? According to Briody (2003: 150–151): One of Carlyle’s most important investments [made in 1999, through Carlyle Partners Fund II] is US Investigations Services. USIS, as it is known, is a classic example of privatization, and a classic Carlyle investment. Once known as the U.S. Civil Service Commission, then the U.S. Office of Personnel Management (OPM), and finally the Office of Federal Investigations (OFI), the organization was a staple of the U.S. government’s ability to gather information on any individual applying for a job with the government. Its charter … was to investigate the backgrounds of government employees, and provide them with varying levels of national security clearance.

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Through their equity position in USIS, Carlyle Group executives placed pressure on its management to apply cost-cutting measures, forcing it to lay off senior security analysts just in time for 11 September 2001. Since 9/11, as one anonymous USIS employee put it: USIS’s acquisition of contracts has exploded … All the new FAA, Department of Transportation, Transportation Security Administration, INS, Customs … all of those employees being hired are being investigated by USIS. They also have contracts with all the major airlines, and the contract companies who provide airport security. I do not exaggerate when I say that Carlyle is taking over the world in government contract work, particularly defense work. Carlyle is a one-world shadow government. (Briody 2004: 152)

The wealth generated for the clique by governmentsubsidized contracts, profits, and kickbacks accruing to it from the semi-privatized Pentagon and USIS—as well as its numerous investments in defense, intelligence, logistics, and aerospace corporations owned by the Carlyle Group— provides strong support for the supply-side argument that increased war-making, imperial military and covert intelligence adventurism and intervention, and vastly expanded internal surveillance and policing—especially when the current Boss of the clique is the head instigator of these— come about because there are big bucks to be made from them. The Boss’s diversion of public attention away from Saudi Arabia—where both his (and Carlyle’s) old business partners (members of the Saudi royal family) and the vast majority of the 9/11 hijackers and their Al-Qaeda supporters are from—through targeting Afghanistan and Iraq as official national enemies in these wars was a real bonus, despite the secret quid pro quo the Boss had to give the Saudi crown prince, that is, the withdrawal of American military forces from the Arabian peninsula, in return for Saudi approval of the US invasion of Iraq.5

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Modus Operandi of the Oligarchy In the peculiar, twilight hybrid world of the Carlyle Group and access capitalism, where socialism for the wealthy prevails,6 there are certain operational practices that allow the emergent kleptocratic oligarchy to consolidate its power. There are several such practices, but I will mention only two. First is the obsessive secrecy that members of the oligarchic clique and their followers practice. This is a remarkably disciplined network whose operation can best be seen in public when things go awry, as in the unlawful outing by the White House of Valerie Plame as a CIA operative when her husband Joseph Wilson revealed the Boss’s prevarication about enriched uranium being sought by Saddam Hussein from Niger for nuclear WMDs, and the subsequent failure of investigators (almost two years later) to find those responsible for this felony. Among the political office holders within the clique, there is what Tiefer (2004: 237) calls a “structure of information confinement.” Members of the clique in the Bush administration use several kinds of strategies to enable its covert actions: secrecy policies, concealment measures, invocations of privileges, strategies to fend off lawsuits for information and stall congressional probes. Moreover, in addition to these legal measures, the ‘Bush administration’ chooses subordinates who can be trusted not to reveal the conservative ideological drift of policy efforts; directs subordinates to maintain such secrecy; takes measures to make sure any information released to the public conforms to the approved “message”; minimizes the ordinary governmental response to queries; leads the press corps to stay within the favored spin, even when there are revelations to the contrary; and of course, simply implements its own plans with care, especially as to timing. (Tiefer 2004: 237–238)

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Another practice marking the clique’s modus operandi is its use of direct lines of control and co-ordination among network members to exert power within and across government agencies, transgressing formal structures of power and accountability. As an example of exploiting direct lines of control, the Pentagon’s Office of Special Plans made sure that ‘intelligence’ supporting the supposed Iraq-Al Qaeda connection, and thus an invasion of Iraq, made its way to the Boss (i.e., the ‘highest levels of the administration’) unimpeded by pesky skeptical analysis. This group of neo-cons around Douglas Feith and Paul Wolfowitz, among others, ginned up dubious intelligence from Iraqi expatriates and CIA informants, circumvented the formal lines of reporting from the Defense Intelligence Agency to the secretary of defense in the Pentagon, and indeed passed completely over intelligence analysts in the State Department and CIA to provide George W., Cheney, Rumsfeld, and company with the pseudo-factoids that the clique’s Boss needed to justify the coming invasion to the American public. As Unger sees it: “What was taking place was the creation of what the New Yorker’s Seymour Hersh dubbed ‘the stovepipe’—an institutionalized means for funneling upward selectively chosen intelligence to serve ideological ends” (2004: 276).

How Long-Lived Will This Beast Be? I have argued in this essay that there is an emergent kleptocratic oligarchy that governs the United States at present. Are American political arrangements moving to a new, long-lasting ‘system state’, or will there be a reversion to the normal mean of corporate meanness, which would be, given the current and immediately foreseeable situations, an ‘improvement’? The matter is highly contingent on two possibilities. First, if another attack by Al-Qaeda or its associates (perhaps

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spin-offs seeking vendetta vengeance on Americans for the current bloodbaths in Iraq) of the same order of magnitude of suffering as 9/11 should occur, the probability that the manifold policing and military powers of the current oligarchy would be strengthened—and the population’s residual democratic rights further corroded—drastically increases.7 Second, if to this were added the far more probable and anticipated ‘reforms’ in the direction of the National Security State (e.g., the passage of Patriot Act II and its successors—instigated by the oligarchic clique, undertaken by the new Republican majorities in Congress, and cemented by future conservative control of the Supreme Court and lower federal courts), there could be an epoch-shaping transformation that might fully institutionalize the currently unstable kleptocratic oligarchy and transform it into a semi-permanent regime. This would have to be done with the compliance, of course, of the majority of the “corporate community” (Domhoff 2002), whose members believe that they would benefit by the Boss’s further inroads on public wealth, as long as it is shared more broadly beyond the members of the clique, in the form of permanent corporate and wealth tax reductions, ‘tax simplification’, and the elimination, or at least severe reduction, of Social Security funding. Alternatively, the propensity toward short-sighted plunder and prevarication by the current kleptocratic oligarchy, and by its Boss in particular, may well be its undoing visà-vis the collective might of the corporate community and the upper class from which most of its members come. The Boss’s so-called ‘policies’ of ‘no new taxes’—while playing at vanity wars and providing large outflows of corporate welfare—signify more than the systematic theft of wealth from the public treasury. The upper class might be willing to tolerate the Carlyle syndrome indefinitely if the wealth were more broadly shared among those willing to collude.

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However, the Boss’s policies also represent a fiscal disaster-in-the-making, which might well be catalyzed by the unforgiving ‘traders’—the currency speculators and bond arbitragers et al.—given the immense debt of the US government created by its failure to raise revenues (uh, ‘taxes’) or to restrain the enormous expenditures entailed by the Boss’s elective war-making (which indeed feathers the nests of the Boss and his cronies at Carlyle). The Boss’s current illusion of being able to ‘privatize’, i.e., eliminate, the Social Security program without a huge increase in government debt is, to say the least, worth attending to in this respect. These ‘policies’ have already converted the US Treasury since 2000 into an open hole that sucks in capital in euros, yen, and Chinese renminbi, but throws out in return an increasingly high risk of an enormous burden of debt-bondage imposed on the US corporate community by the rest of the global transnational class. Were there to be a ‘run on the dollar’ brought on by panicked sales of US Treasury notes by foreign creditors, even members of the corporate community and upper class would lose much of their capital catastrophically, while the general US population would be put through a general depression, mass layoffs, horrifying suffering, and the Mother of all Structural Adjustments in order to satisfy the US’s international creditors. Moreover, the many savvy men and women in the corporate community are well aware of the Boss’s propensity to bend, shift, and actually break the truth when he does not like what he sees, or, worse yet, when he seeks to convince the American public of the wisdom of doing something it does not want to do. The fanciful dressing up of ‘intelligence’ linking Iraq to Al-Qaeda by the Office of Special Plans, described above, not only illustrates the robustness of the clique’s direct lines of control, but also its creative, collective, convincing, construction of

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untruths that have real and appalling consequences for the US as a society. That some of these consequences might even be seriously adverse for the upper class itself cannot have fully escaped the notice of at least some of its members. The question at issue is whether or not their time horizons are sufficiently drawn out for them to fully appreciate the serious threat to their material interests that the fanciful untruths of the Boss represents. Let us hope—in the absence of a popular democracy—that the elite soon comes to its senses. Better yet, let us hope for an upsurge in popular democracy itself.

Notes 1. ‘Commons’ include water (e.g., oceans and their biota), energy sources, high-frequency band width, human and non-human genomes, scientific innovations, public universities, and much more—increasingly commoditized as private property for the global and US upper classes. 2. These fears were amplified and compounded by media arms of the oligarchy and their followers—Fox Cable News and Clear Channel conservative radio ‘talk shows’—most notably in the months following 9/11, after the invasion of Afghanistan, and throughout the course of the US invasion and occupation of Iraq. However, generalized fears among the conservative electorate about ‘terror’ and ‘aliens’ and ‘crime’ long pre-dated 9/11 and were promoted throughout the 1990s by media sources that played on a generalized insecurity associated with corporate globalization and an impetus to scapegoat marginal, vulnerable minorities. 3. To this list, Kevin Phillips (2004: 51–72) would add the emergence of a period in which the American propensity to exalt and romanticize family dynasties of wealth and privilege—like that of the Bushes—resurfaces. 4. For evidence, see Domhoff (2002: 152–157). 5. See Tiefer (2004: 246–252) for a cogent account of this hidden and sordid deal-making between the Boss’s personal lawyer and the crown prince.

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6. “From each according to his powerlessness, to each according to his means”? 7. Both the use of private corporate mercenaries in Iraq—people who have tortured and killed civilian detainees but are currently beyond US jurisdiction (Hersh 2004)—and the clique’s present capacity to declare a US citizen an ‘enemy combatant’ and deny him or her basic constitutional rights set troubling precedents.

References Briody, Dan. 2003. The Iron Triangle: Inside the Secret World of the Carlyle Group. Hoboken, NJ: John Wiley & Sons. ———. 2004. The Halliburton Agenda: The Politics of Oil and Money. Hoboken, NJ: John Wiley & Sons. Domhoff, G. William. 1967. Who Rules America? 1st ed. Englewood Cliffs, NJ: Prentice-Hall. ———. 2002. Who Rules America? Power and Politics. Boston: McGraw-Hill. Hersh, Seymour M. 2004. Chain of Command: The Road from 9/11 to Abu Ghraib. New York: HarperCollins. Lazare, Daniel. 1998. “America the Undemocratic.” New Left Review 232 (November/December): 3–40. Phillips, Kevin. 2004. American Dynasty: Aristocracy, Fortune, and the Politics of Deceit in the House of Bush. New York: Viking Press. Sklair, Leslie. 2001. The Transnational Capitalist Class. Oxford: Blackwell. Smith, Glenn W. 2004. The Politics of Deceit: Saving Freedom and Democracy from Extinction. Hoboken, NJ: John Wiley & Sons. Tiefer, Charles. 2004. Veering Right: How the Bush Administration Subverts the Law for Conservative Causes. Berkeley: University of California Press. Unger, Craig. 2004. House of Bush, House of Saud: The Secret Relationship between the World’s Two Most Powerful Dynasties. New York: Scribner.

“WE EXIST TO FIGHT” The Killing Elite and Bush II’s Iraq War

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Steve Reyna

We exist to fight … We exist to kick someone’s butt, if necessary. — Colin Powell (1990), US Secretary of State

Speaking with unusual candor, Powell reminds people that the US exists “to fight.” The secretary of state is revealing something usually kept secret. The US is an empire, and one of the things empires do is fight to create, maintain, or enlarge themselves. This essay investigates a category of oligarchs or elites—those responsible for the overall management of imperial violence—who in Bush II’s regime came to be known as the Vulcans. In the next section the Vulcans are presented. In the following section, a ‘deadly sirens’ framework is developed for explaining their actions. Then in the third section, this framework is applied to the Vulcans’ activities, showing how they contributed to Gulf War II.1

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Vulcans In Birmingham, Alabama, there is a 56-foot statue of Vulcan—the Roman god of fire, the forge, and metalwork—to honor the city’s steel industry. Condoleezza Rice’s hometown is Birmingham, and during the first presidential campaign, when she was a member of Bush II’s foreign policy advisory team, she joked that the team members were a bunch of Vulcans (J. Mann 2004). The joke resonated. Members began referring to themselves as Vulcans. They prized the tough-guy image. There were six Vulcans who went on to the highest positions involving military and foreign affairs in Bush II’s first administration: Rice herself, as national security advisor; Dick Cheney, as vice-president (reputed to be the strongest in US history); Donald Rumsfeld, as secretary of defense; Paul Wolfowitz, as deputy defense secretary (the second position in the Defense Department); Colin Powell, as secretary of state; and Richard Armitage, as deputy secretary of state (the second position in the State Department). Because the Vulcans were at the highest levels of the Bush administration, they were an elite. Because their authority was in military/security matters—which, after all, is about who, when, how, and how many to kill—they were a killing elite. All Vulcans were ‘hawks’ in the sense that they tended to favor military solutions. Some of the Vulcans shared with their president close ties to the oil industry. All were ideologically conservative, with neo-conservative ideas influential among them (Dorrien 2004). Most importantly, they composed Bush’s ‘war cabinet’ and were the officials most responsible for initiating Gulf War II. Below I explore the ‘deadly sirens’ as an analytical tool for investigating the Vulcans’ role in this conflict.

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Deadly Sirens The Vulcans were agents in an imperial system that operated according to certain ‘deadly sirens’. These sirens are generalizations that signal what happens when empires are threatened. Empires are organizations of state structures of domination characterized by flows of economic force from the dominated in the periphery to the dominators in the core. Linking core with periphery are strings of events in complexes of articulated institutions that bring in economic force. Two basic logics make empires work. The first logic is one of economic force accumulation. Capitalist accumulation is of course the most important such logic in the American empire (Reyna 2005, n.d.). The second basic logic is one of economic force constitution or reconstitution, which can be broken down into two major types: non-violent and violent. A non-violent logic of economic force constitution or reconstitution is any logic operating to create or reconstitute existing economic force accumulation that does not utilize strings of violent events. A violent logic of economic force constitution or reconstitution is any logic operating to create or reconstitute existing economic force accumulation that does utilize strings of violent events. Exercising violence and abstaining from it are neurohermeneutic events, that is, events resulting from operations in the brain structures of agents who control violent force. A set of related concepts—‘public’ and ‘private’ desires and délires—is useful for analyzing the neurohermeneutics of war. Desire constitutes the intentions and emotions of procedural culture and/or authority stored in agents’ neural networks. Desire tells you how you should feel about an antecedent event and what to do about it. Normally, you feel good about doing what your culture and authority intend for you to do and feel bad about

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doing what is culturally or authoritatively taboo. Délires are elites’ desires. Private desires and délires are stored in actors’ brains. Public desires and délires are procedural culture and/or authority, plus emotions associated with these, outside of agents. Elites, those with the highest authority, make public délires, which include constitutions, decrees, laws, policies, authorizations, and administrative ordinances. Public délires might be thought of as hermeneutic flares illuminating the way in murky, confusing realities. Once created, they are learned and become part of agents’ private délires specifying what is, what to do about it, and how to feel about what is done. It is time to explain the circumstances under which elites such as the Vulcans would have the délires for violence. Three deadly sirens are introduced to perform this explanatory chore. The first deadly siren specifies one hazard to capital accumulation: 1. As capitalist accumulation increases, finite raw material supply eventually decreases, driving production toward systemic crisis, threatening logics of capital accumulation. The second deadly siren specifies one response to the threat posed in the first siren: 2. When logics of accumulation are threatened and non-violent logics to alleviate these threats are unworkable, then elites will initiate public délires that specify when violent logics may be exercised. The third deadly siren accounts for when public délires will actually produce violence:

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3. Elites will exercise violent logics when the conditions specified in public délires for the use of violent force have been met. These generalizations are, indeed, deadly sirens because they announce murder and mayhem. The next section explores whether the deadly sirens help in the investigation of the Vulcans’ role in Gulf War II.

Crisis, Délires, and War Let us begin with crisis. Wallerstein (1997) has written of a “systemic crisis” that he believes will produce transformation of the existing world system within 25 to 50 years. Since capitalism is acknowledged to be a volatile economic system, why should one think that the present “long down turn” (Brenner 2002) is anything other than this normal volatility? This brings us to oil. Oil is the key scarce, strategic resource needed for almost all capitalist production—and it is not renewable (Homer-Dixon 2001; Klare 2002; Yergin 1993). One concern of those studying oil has been how to conceptualize its supply. M. King Hubbert suggested in the 1950s that it might be imagined as a bell curve. This meant it would have an ascending slope as output increased, a highest point before decrease set in, and a descending slope as output decreased. The high point has come to be known as Hubbert’s Peak. Hubbert’s work allowed yearly projections of what the oil supply bell curve would look like. In 1956, he correctly predicted that US oil production would peak around 1970 and decline thereafter. His simulation methods have been improved upon and found to be reliable (Campbell 1997; Deffeyes 2001; Heinberg 2003). This approach helps answer two questions: What years will be those of Hubbert’s Peak? And, thereafter, how quickly will

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production subside? According to some estimates, Hubbert’s Peak will occur between 2004 and 2008 (Duncan and Youngquist 1998). There is more speculation concerning the rate of decline of oil output. However, conservative projections indicate that the end of the oil era will occur between the twenty-first and the twenty-second century. Oil will be gone, and very soon. Its replacements are theoretically possible, though not currently economically or technically feasible. Thus, the force resource energy necessary for capital accumulation will be increasingly scarce, making more problematic the stringing together of events that are part and parcel of capitalist accumulation, the logic at the heart of the American empire. This is a looming systemic crisis. Under such conditions, “[i]f the US controls the sources of energy of its rivals—Europe, Japan, China and other nations aspiring to be more independent—they win” (Dayaneni and Wing 2002: 2). Dick Cheney, the Vulcan with the closest ties to oil, has been aware of the approaching crisis. At the London Institute of Petroleum in late 1999, he stated: “Energy is truly fundamental to the world’s economy … Well, the end of the oil era is not here yet, but changes are afoot, and the industry must be ready to adapt’ (in Ruppert 2004: 48). Two years later, Cheney, as vice-president, would commission an analysis of US energy policy by the US Council on Foreign Relations and the Baker Institute of Public Policy—an analysis that centered upon oil. The findings were issued in Strategic Energy Policy Challenges for the 21st Century (SEPC 2001). This report singled out “spare capacity,” the amount of oil available at any time above that needed for consumption, as a key concern. It noted that OPEC’s spare capacity, which stood at 25 percent of global demand in 1985 and 8 percent in 1990, was projected at only 2 percent in 2001. The report interpreted this rapid decline as follows: “[T]he world is currently precariously close to

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utilizing all of its available global oil production capacity, raising the chances of an oil supply crisis with more substantial consequences than seen in three decades” (in Everest 2004). Consequently, “the United States remains a prisoner of its energy dilemma, suffering on a recurring basis from the negative consequences of sporadic energy shortages. These consequences can include recession, social dislocation of the poorest Americans, and at the extremes, a need for military intervention” (SEPC 2001: 34). Decline in spare capacity is an indicator of Hubbert’s Peak. Note the language here. There is a “crisis.” The US is a “prisoner.” There is “a need for military intervention.” Cheney’s energy policy report might be read as a public délire, which asserts that “at the extremes” there will be “need” for “military intervention” in the approaching oil “crisis.” Wolfowitz would be a key agent in making public délires that lowered the constraints upon going to war and expanded the rationale for doing so. During the Cold War, the US was guided in its military affairs by a public délire, National Security Council 68 (NSC 68), which committed the US to maintaining a military force capable of challenging Soviet expansionism (Ambrose 1974). Associated with NSC 68 was a further policy of containment. Because the Soviet Union was roughly on a par militarily with the US, this policy sought not military confrontation but rather the penning (i.e., containment) of the Soviets within particular regions (Gaddis 1982). The collapse of the Soviet Union in 1990 meant that the US now had no military equal. NSC 68 was obsolete. In the early 1990s, Wolfowitz worked in Bush I’s Defense Department for then Secretary of Defense Cheney, who delegated to Wolfowitz the production of the Defense Planning Guidance (DPG) document. The 1992 edition of this document, which states US military policy, was the

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first since the collapse of the Soviet Union. Wolfowitz, in turn, delegated its writing to Zalmay Khalilzad, whose bellicose draft was leaked to the press. It stated that henceforth the US would use military force to “endeavor to prevent any hostile power from dominating a region whose resources would … be sufficient to generate global power” (DPG 1992, in Everest 2004: 214). Critically, the DPG “abandoned any pretense of reluctance of being a superpower” (Bacevitch 2002: 45). Further, it tied, though in an oblique fashion, oil with the exercise of military force. This is because oil is a resource that can “generate global power.” So the DPG was stating that the US would employ military force to prevent domination of a region with oil resources by a power other than itself. This was too blunt. Traditionally, US foreign policy had been expressed in terms of bringing ‘freedom’ to a country or some other generally accepted good, such as democracy. The draft was withdrawn, and Wolfowitz worried for his career. He need not have. His boss, Cheney, was delighted with the original DPG draft position. Just prior to Bush II’s inauguration, Wolfowitz and Cheney would see their draft DPG become a public délire. In 1997, William Kristol, began a neo-con foreign policy think tank called the Project for the New American Century (PNAC), which included Wolfowitz, Cheney, and Rumsfeld. It issued Rebuilding America’s Defenses (RAD 2000), which was intended to influence Bush II’s foreign policy in a manner similar to Wolfowitz’s 1992 DPG. RAD’s fundamental point was that “[t]he United States is the world’s only superpower” with “preeminent military power” (Donnelly 2000: i). Thus, “America’s grand strategy should be to preserve and extend this advantageous position as far into the future as possible” (ibid.: 1). RAD was largely accepted by the Bush II administration and became the basis of Bush II’s military strategy, also called

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the Bush Doctrine, as presented in the National Security Strategy of 2002 (NSS 2002). This states that “our best defense is a good offense,” which means that “[w]hile the United States will constantly strive to enlist the support of the international community, we will not hesitate to act alone, if necessary by acting preemptively” (ibid.: 6). The US would fight for “economic openness in both nations … and international order” (ibid.: 2), with “economic openness” meaning “free trade and free markets” (ibid.: 3), i.e., capitalism with its capital accumulation. Remember, the US was to have an “advantageous position” in this capitalism, which is to acknowledge that it would use its military force to maintain or expand its empire of capital. The intention of this genealogy of public délires, from the DPG to RAD to NSS 2002, is to announce that violence will be used—pre-emptively, if necessary—“to preserve and extend” the American empire’s “advantageous position.” No more cautious Cold War containment. Violence will be used “to kick someone’s butt,” as Powell would have it, in the forging of US empire. As a final point, the RAD spoke of the need for “a new Pearl Harbor” to get Americans to acquiesce to this imperial public délire (RAD 2000: iv). The preceding begs the question, just whose butt did the Vulcans have the délires for? Increasingly, this would appear to be the Persian Gulf States, and for two reasons. First, roughly 65 percent of the world’s oil reserves are there. Second, starting in the early 1970s, US oil companies began to lose control over this oil. This was the result of a number of factors: the formation of OPEC and its 1973 oil embargo, the nationalization of the oil industry in the area starting in the early 1970s, the overthrow of the Shah of Iran in 1979 and his replacement by a theocratic regime opposed to US interests, and the increasing political instability of the Saudi royal family (Aburish 1996).

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In 1977, the Democrats took control of the White House under Jimmy Carter. Wolfowitz nevertheless decided to work in a Democratic Defense Department. When Secretary of Defense Harold Brown asked him to examine the threats that the US military might face beyond Europe, Wolfowitz responded with a document titled Limited Contingency Study (LCS), which for the first time explicitly identified the Persian Gulf as a place of strategic interest worth fighting over. After all, the report stated, “[t]he importance of Gulf oil cannot be exaggerated” (LCS, in J. Mann 2004: 80). The LCS should be seen as a precursor of what would become known as the Carter Doctrine. Two years later, as a response to the Shah’s fall, a warning was issued: “Any attempt … to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary including military force” (in Everest 2004: 88). Here, then, were public délires that committed the US to repel “by any means necessary” an attempt by another power to gain control in the Persian Gulf. However, attention in the Gulf soon narrowed to a particular country. The US’s attempt to use Saddam Hussein in Iraq to look after its interests in the Gulf had been a failure. Saddam had his own imperial ambitions—first in Iran, then in Kuwait. When Saddam invaded Kuwait in 1990, it appeared that he was aiming to control Person Gulf oil reserves. Bush I essentially invoked the Carter Doctrine. Saddam was beaten but was left in power. This angered the Vulcans, leading them specifically to target Iraq militarily. In January 1998, the PNAC sent a letter to Clinton signed by Armitage, Rumsfeld, Wolfowitz, and Cheney advising that “[t]he policy of ‘containment’ of Saddam Hussein has been steadily eroding,” which puts at risk “a significant portion of the world’s supply of oil,”

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and which meant that “the only acceptable strategy” was “removing Saddam Hussein … from power” (PNAC 1998, in Everest 2004: 211). This letter was influential. Ten months after the PNAC letter, Congress passed the Iraq Liberation Act of 1998, which asserted: “It should be the policy of the United States to support efforts to remove the regime headed by Saddam Hussein” (ibid.: 212). A month later, President Clinton made regime change his administration’s policy.

Conclusion The Pearl Harbor of the 21st century took place today. — Bush II diary, 11 September 2001

Let us draw the strands of the argument together, considering three pieces of evidence. First, the evidence concerning Hubbert’s Peak suggests a looming systemic crisis that threatens logics of capitalist accumulation. Second, other evidence suggests that the Vulcans, most especially Wolfowitz, Cheney, and Rumsfeld, have created public délires advising the use of violence in general if capital accumulation was threatened and in particular if this was the case in the Persian Gulf, especially in Iraq. Third, the attack on the Twin Towers is evidence that one of those ‘extreme’ conditions that should trigger war had been achieved. For Wolfowitz, “September 11 was a transforming event” (J. Mann 2004: 363). For the Vulcans’ president, it was Pearl Harbor. The point here is that the killing elite exercised a violent logic (Gulf War II) when the conditions in the public délires specifying violence had been met. These three pieces of evidence are consistent with the deadly sirens. In this instance, they warned of murder and mayhem, and the Vulcans’ public délires were true hermeneutic flares, lighting the way from threats to capital accumulation to war with Iraq.

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Note 1. Recent left approaches to the present imperial moment can be found in Harvey (2003) and M. Mann (2003); center approaches can be found in Kurtz (2003); right approaches in Ferguson (2004).

References Aburish, Said K. 1996. The Rise, Corruption and Coming Fall of the House of Saud. New York: St. Martin’s Press. Ambrose, Stephen. 1974. “The Military Dimension: Berlin, NATO, and NSC-68.” P. 178 in The Origins of the Cold War, ed. Thomas Paterson. Lexington, MA: D.C. Heath. Bacevitch, Andrew. 2002. American Empire. Cambridge, MA: Harvard University Press. Brenner, Robert. 2002. The Boom and the Bubble: The US in the World Economy. London: Verso. Campbell, Colin J. 1997. The Coming Oil Crisis. Brentwood, UK: Multi-Science Publishing Co. Dayaneni, Gopal, and Bob Wing. 2002. “Oil and War.” War Times. June. http://www. globalpolicy.org/wtc/terrorism/2002/062002oil.htm. Deffeyes, Kenneth. 2001. Hubbert’s Peak: The Impending World Oil Shortage. Princeton: Princeton University Press. Donnelly, Thomas. 2000. Rebuilding America’s Defenses. Washington, DC: The Project for the New American Century. Dorrien, Gary. 2004. Imperial Designs: Neconservatism and the New Pax Americana. New York: Routledge. Duncan, Richard, and Walter Youngquist. 1998. “The World Petroleum Life-Cycle.” Los Angeles: Petroleum Engineering Program, University of Southern California. http://www.dieoff.com/ page133.pdf. Everest, Larry. 2004. Oil, Power, and Empire: Iraq and the US Global Agenda. Monroe, ME: Common Courage Press. Ferguson, Nial. 2004. Colossus: The Price of America’s Empire. Hammondsworth, UK: Penguin. Gaddis, John. 1982. Strategies of Containment: A Critical Appraisal of Postwar American National Security Policy. New York: Oxford University Press. Harvey, David. 2003. The New Imperialism. Oxford: Oxford University Press.

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Heinberg, Richard. 2003. The Party’s Over: Oil, War and the Fate of Industrial Societies. Minneapolis, MN: Sagebrush Education Resources. Homer-Dixon, Thomas. 2001. Environment, Scarcity, and Violence. Princeton: Princeton University Press. Klare, Michael. 2002. Resource Wars: The New Landscape of Global Conflict. New York: Owl Books. Kurtz, Stanley. 2003. “Democratic Imperialism: A Blueprint.” Policy Review (April–May): 3–20. Mann, James. 2004. The Rise of the Vulcans: The History of Bush’s War Cabinet. New York: Viking. Mann, Michael. 2003. Incoherent Empire. London: Verso. NSS. 2002. The National Security Strategy of the United States of America. September. Washington, DC: The White House. Powell, Colin. 1990. Hearing of the Senate Armed Services Committee on Defense Authorization. 1 February, 6–8. RAD. 2000. Rebuilding America’s Defenses: Strategies, Forces, and Resources for a New Century. Washington, DC: Project for the New American Century. Reyna, Steve. 2005. “American Imperialism? ‘The Current Runs Swiftly.’” Focaal 45: 129–151. ———. n.d. Waiting: Sorcery, Oil and Terrorism in Chad. Halle/ Saale: Max Planck Institute for Social Anthropology. Ruppert, Michael. 2004. Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil. Garbriola Island, Canada: New Society Publishers. SEPC. 2001. Strategic Energy Policy Challenges for the 21st Century. http://www.rice.edu/ projects/baker/Pubs/workingpapers/cfrbipp_energy/energy. Wallerstein, Immanuel. 1997. “States? Sovereignty? The Dilemmas of Capitalism in an Age of Transition.” Paper delivered at the “State, Sovereignty in the World Economy” conference, 21–23 February. Irvine: University of California, Irvine. Yergin, Daniel. 1993. The Prize: The Epic Quest for Oil, Money, and Power. New York: Touchstone Books.

STATE AND BIG CAPITAL IN RUSSIA

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Jakob Rigi

On 22 October 2003, Michael Khodorkovsky, the richest man in Russia and the director of Yukos, one of the largest Russian companies, was arrested at gunpoint in Novosibirsk airport and transferred to Moscow. A few months earlier, one of his deputies, Platon Lebedev, had been arrested on 3 July 2003. In the months that followed the arrest of Lebedev, the general prosecutor raided the offices of Yukos and Menatep, a major shareholder of Yukos.1 On 17 October 2003, Vasily Shakhnovsky, a Yukos shareholder, was detained for tax evasion. Another major shareholder, Leonid Nevzlin, was accused of conspiracy to commit murder and fled to Israel. One of Yukos’s security guards was also accused as a culprit in this conspiracy and was imprisoned. The general prosecutor subjected the company to a series of raids and restrictions that led to the decline of the value of its shares and brought it to the verge of bankruptcy by the middle of August 2004. Officially, all of these actions occurred because of Yukos’s illegal economic dealings and tax frauds, but the real reasons were that Khodorkovsky had dared to criticize publicly the president of the Russian Federation, Vladimir

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Putin; that he had funded rival political parties; and that he had also toyed with the idea of entering politics himself and becoming a presidential candidate. Since the conflict between Yukos and the state is a good illustration of the contradictory relation between state and capital in Russia, let me give a brief description of Yukos’s history.

The Case of Khodorkovsky In 1986, the year perestroika started, Khodorkovsky was a deputy chief of the Komsomol2 at Mendeleev Institute in Moscow. He started his business career by establishing the Center for Scientific-Technical Creativity of Youth. These types of centers were proposed by the Soviet authorities in 1987 to encourage the youth to give scientific and technical advice to managers of enterprises. The centers could apply for funds from enterprises that were allocated for such purposes. Using his contacts, Khodorkovsky, received 170,000 roubles, then a big sum, from Shneidlin, the director of the Institute of High Temperature in Moscow (Hoffman 2002: 108). Using the center as a base of operations, Khodorkovsky earned a huge amount of money by manipulating the Soviet monetary system. In the Soviet system, there were two types of money: nalichnye (cash) and beznalichnye (non-cash). Non-cash was virtual money, which was used only by the directors of state enterprises as an accounting device. Starting in 1987, the Komsomol was allowed to convert its non-cash into cash. Khodorkovsky, using his contacts with Komsomol, became a broker for directors of enterprises who wanted to transfer their non-cash to cash. Undoubtedly, these were illegal dealings, but Khodorkovsky had his own patrons in the system (ibid.: 112). Then Khodorkovsky found a way to exchange non-cash for hard currency—by exchanging non-cash with export companies at a very favorable rate for the companies. In

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1987, the Soviet Union permitted the establishment of cooperatives, which were owned collectively by shareholders but could work on the basis of making profits. These co-operatives, which suddenly mushroomed, were used to launder money that had been made illegally. Khodorkovsky established his own co-operative and laundered his illegal money. In the next step, he began to import computers and cognac illegally and semi-legally. Khodorkovsky then took advantage of changes in the Soviet banking system and used his contacts to establish his own bank, Menatep. In 1996, Menatep and other banks divided the cream of the Russian industry among themselves for the loans they had previously lent to the state. In this way, Khodorkovsky got hold of a good share of Russian oil and established the Yukos Oil Company, which developed into one of the largest oil companies worldwide, with the result that Khodorkovsky became one of the major Russian oligarchs. During the Yeltsin era, Khodorkovsky, like other oligarchs, enjoyed a personal influence in politics. Using his close contact with state officials, as well as illegal methods and violence, he saw his wealth and empire continue to grow until he challenged Putin—a challenge that cost him dearly.3 During the Putin era, while the collective influence— and particularly the economic power—of the oligarchs increased, Putin subjugated individual oligarchs to his own rule. Those few who resisted his policies were either forced into exile, like Berozovsky and Guizensky, or put in jail, like Khodorkovsky and Lebedev. However, from this we should not conclude that the Putin government is anti-oligarch or anti-capitalist. Indeed, its actions have benefited the oligarchs in two senses: first, neo-liberal policies have been ruthlessly implemented without any obstacle; second, a process of recentralization has begun, reducing the power of regional governors. The oligarchs

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have profited directly from these policies (Pappe 2002; Zubarevich 2002), and a very interesting relationship between state and capital, i.e., between the top bureaucrat and the top businessmen, has thereby emerged. The state represents the oligarchs but not directly and immediately. It is not a state of oligarchs but rather a state for oligarchs, organized for them by the political elite. While the state stands above oligarchy, it provides the optimum political conditions for a ‘plunder economy’. This has created a particular tension between the top bureaucrats of the central government and oligarchs. State officials can bully and humiliate any oligarch publicly, can create serious problems for them, and can squeeze them for money. The latter hate the former, complaining about unreasonable taxation and arbitrary government policies. Moreover, oligarchs dream of having their own state rather than a state that has been organized for them. Nevertheless, this same bullying and corrupt state affords the oligarchs a monopoly right over major resources. Although Putin curtailed the influence of oligarchs in the business of the government in Moscow, his recentralization policy provided an opportunity for them to increase their political clout vis-à-vis the regional political elites (Zubarevich 2002). I will return to this point below.

Coercion and Market In order to understand this complex relation between state and big capital (and state and capital in general), we need to go back to the 1990s, the formative decade of Russian capital. Politically, the main characteristic of this decade was the emergence of a “chaotic mode of domination” (Rigi 2004, forthcoming; see also Nazpary 2002). In this mode of domination, which was a decentered form of sovereignty, power was exercised through a chaotic interaction between the networks of state officials, businessmen,

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and the mafia, by means of which the assets inherited from the Soviet state were divided among them. However, this division was mainly an extra-legal, corrupt, and violent process. In their greed to grab the assets, these networks negotiated their relations with one another by using three major means: connections, money, and force. In privatizing state property, officials of the ministry allowed those closely connected to them to buy the property for nominal prices; others got property by offering substantial bribes. Once property was acquired, the enforcement of property rights and the protection of business were provided by state officials or the mafia. Indeed, Moscow, St. Petersburg, and other parts of the Russia were divided into spheres of influence of the various networks who wielded violent power. They taxed businesses, enforced contracts, and solved conflicts among businessmen (Volkov 2002). Money, contacts, and coercion were also pivotal in customs and in the expansion and redivision of markets. As I have suggested elsewhere (in Nazpary 2002; Rigi forthcoming), the sum of violent networks constituted a particular form of state. While these networks performed functions that would be otherwise fulfilled by the state, they were also business enterprises selling coercion and investing the acquired money in other branches of the economy (Nazpary 2002; Volkov 2002). According to Weber, Western capitalism separated the political sphere from the economic one, and both spheres were rationalized, purging the personal from the economic and political life. Whether this is true of Western capitalism is an open question. Russian capitalism, however, offers a counter-example to the Weberian model. First of all, networking on a personal level was involved from the beginning. Business deals, property rights, and protection were secured to a great extent by the use of personal contacts. When personal relations failed, bribery or violence was resorted to. Second, Russian capitalism was a politicized capitalism. Coercion was directly

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involved in the accumulation of capital, establishing an interesting and contradictory relation between market and coercion exercised by both mafia and state officials. On the one hand, coercion became a commodity and thereby an element of market; on the other hand, coercion was an extra-economic instrument that controlled the division, redivision, and expansion of markets. Coercion was at the same time inside and outside the market. The tension between the law of supply and demand and that of coercion was a source of chaos. In the games of market and coercion, i.e., state and capital, a particular relation emerged. In each individual case, coercion had the final word, but in aggregate, capital had subjugated coercion to its logic of making profit. This tension between the part and the whole was and still is a major aspect of postSoviet capitalism. In summary, while the state officials had the upper hand in micro-processes of power relations, the totalities of networks of state officials and capitalists were encompassed by the logic of capital. Viewed from the vantage of a single oligopoly, the state appears as strong, coercive, and arbitrary. However, viewed from the point of view of the “total social capital” (Marx [1894] 1991), the state represents capital and is subordinated to the logic of profit-making.

From Yeltsin to Putin While what I have said is true of both the Yeltsin and Putin eras, there are radical differences between the two. The Yeltsin era (1991–1999) was characterized by the division of state assets and the carving up of spheres of influence. This was also the era of an extreme decentralization of state power, which occurred alongside two axes: networks of influence in Moscow and various regional networks, which enjoyed a high level of autonomy. Putin has tried, with some degree of success, to curb the power

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of these two types of networks and to subjugate them to his own rule. From the point of view of big capital, this move was necessary. By the end of Yeltsin’s presidency, the networks of oligarchs, having ruthlessly used violence and corruption, had completed the division of major resources among themselves. Reduction of violence and the regulation of business transactions were required to provide a more secure environment and to prevent the emergence of new violent claimants. For this purpose, the previous mafia structures were transformed into legal security enterprises, the main duty of which was to collect sensitive business information (Volkov 2002). At the same time, bribery was institutionalized through the commercialization of state services. In Russia, state services can be accessed through two ways: by following the traditional bureaucratic procedures, in which claimants pay a visit to a particular authority, or by paying money to a brokerage private enterprise, who gets the service done on behalf of the claimant. In the first case, the procedure usually takes a long time, and the person is not treated with respect. In the second case, the service is done efficiently and quickly. Brokerage in Russia has become a particular branch of economy and has legal status; business people manage their dealings with bureaucrats through brokers. The businessmen whom I interviewed evaluated the brokerage system in terms of transaction cost theory, arguing that the brokers reduced such a cost by reducing time spent, which was measured in terms of money. The curbing of the power of regional elites allowed the oligarchs to access those assets that had previously been guarded jealously for regional businesses by the governors. While Putin’s centralization policy limited the direct intervention of the oligarchs in the business of central government, it enabled them to intervene more effectively in regional politics. Until December 2004, by

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financing election campaigns, the big companies usually tried to help their favorite candidates get elected, though not always with success. Due to new legislation, the governors are no longer elected but will be appointed by the president. While this may curb the influence of some oligarchs, it will promote the interests of those who are on good terms with the Kremlin. Another radical difference between these two eras is that in the Yeltsin era, oligarchs intervened in politics directly, while Putin has deprived them of this privilege. The Yeltsin government was a government of oligarchs, while the Putin government is a government for oligarchs. The oligarchs’ ability to intervene had been primarily due to their control of the most powerful television channels. As I have discussed elsewhere (Rigi 2004), staging spectacles through television was a main lever of political power.4 Oligarchs such as Berezovsky, who controlled the first channel (ORT), or Gusinsky, who controlled NTV, exerted enormous influence in election campaigns. Putin’s first measure was to attack both Gusinsky and Berezovsky and to bring the major television channels under strict state control.5 In Putin’s era, the state monopolization of the means of staging spectacles has made the state immune to being blackmailed by oligarchs. After being elected president, Putin invited oligarchs to the Kremlin and told them that in economic terms he would promote them, but politically the oligarchs must recognize him as the boss and should not intervene in his business. State officials usually have the upper hand in encounters with businessmen. As a rule, businessmen agree to their demands because officials can invoke the authority of law. Even if a state official interprets the law arbitrarily, there is no point in taking him to court because the official in question could close down a business until the trial is held, which usually takes a while. And since time is money, the business would thus endure losses. Moreover,

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a private person usually loses a dispute with state officials. There are two ways out of this situation: either the businessman finds a contact with another state official who is even more powerful, or he pays the requested bribe. Actually, businessmen benefit from bribery as well, since they pay lower official dues such as taxes and customs fees. As a result, the state loses money, and the schools and hospitals remain underfunded. A huge part of the Russian economy is black in that the businessmen under-report their turnover by both manipulating accounts and bribing tax inspectors. However, all of the businessmen I talked with regard the state as a big bully. In order to avoid state intervention, they do business through networks, i.e., they do business with people they know. Any new person who wants to do business with them must have a guarantor among the people they already know. They said that the businessmen have established an informal rule of trust and sanctions in order to enforce mutual obligations in business transactions. And they forge friendships by vacationing at holiday resorts in a group and by attending one another’s birthday parties. The businessmen I interviewed attested that this is a general rule in the Russian business world. The typical business is started by a core of friends and is then expanded through the forging of personal contacts with others. This, among other things, helps businessmen to falsify the real value of transactions and thus cheat the state. So far, I have been abstracting from the global dimension and discussing the relation between the state and capital in Russia. The Russian government implemented neo-liberal reforms, which basically integrated Russia, a country producing raw materials, into the global division of labor and ruined a huge part of the Russian economy. This resulted in unprecedented economic and demographic unevenness. However, this did not give the Western companies greater power over the Russian

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government than that held by the Russian oligarchs. In Kazakhstan and Azarbaejan, and in Russia as well, the Russian government promoted the interests of Russian energy companies in competition with Western ones. Undoubtedly, Western banks benefited not only from the movement toward neo-liberalism but also from the whole process of post-Soviet change, because each year billions of dollars worth of Russian money was siphoned into these banks.

Conclusion In the 1990s, Russian big capital emerged rapidly and spectacularly. Over the course of a decade, the stratum of the ‘new oligarchs’, who came to wield enormous economic and political power, was formed. The transformation of the state’s structures and the networking of the would-be oligarchs with state officials played decisive roles in the formation of the new oligarch class. Two major and inter-related systemic changes underpinned the formation of big capital in Russia: (1) the emergence of a ‘chaotic mode of domination’, a new form of sovereignty, which I have analyzed elsewhere (in Nazpary 2002; Rigi 2004, forthcoming); and (2) the implementation of neoliberal reforms and the reconfiguration of Russia in the global division of labor. The relation between state and capital is very contradictory. On the one hand, the state’s coercive power was the midwife of Russian capital and has enormous power over individual capital; on the other hand, the state has no choice but to yield to the total social capital. Moreover, a whole range of state functions have become commoditized both formally and informally. In sum, while political coercion has become a commodity to a great extent, and thereby an element of the market, it plays an enormous role in controlling the market.

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An important issue in the interaction between state officials and Russian businessmen is the ambiguity of laws, which allows state officials to interpret laws arbitrarily to justify the use of coercive power. While businessmen complain about this ambiguity and arbitrariness, they also benefit from their interactions with state officials; through their dealings with individual bureaucrats, they avoid paying full taxes. In the parlance of businessmen, circumvention of the law by bribing bureaucrats incurs lower transaction costs. It has become a received wisdom that flows of capital have transcended and circumvented the state, that the operations of capital are deterritorialized, and so forth. The case of Russia shows that we need to qualify this argument. Although the state has no control over the total flow of capital, it has enormous power vis-à-vis individual corporations, regardless of their size. In Russia, oligarchs as a social stratum are subjugated to the political elite, and state officials can treat oligarchs in arbitrary ways. However, the state is at the service of the economic interests of oligarchs. One can say that the Russian state is a state for oligarchs, but oligarchs are not happy with this. They want a state of their own, and this has created tensions between the two. For the moment, the capitalists try to circumvent the state by networking among themselves, in networks that have both national and transnational links. The arbitrariness of state officials stems from the personalization of power relations and the fact that the state is not integrated vertically by a legal-normative system. They can sacrifice the interests of the state for their own personal interests, preferring to extract bribes from businessmen, who subsequently avoid paying taxes that would benefit the state. While the state official and the businessman can be distinguished analytically from one another, in practice their networks overlap.

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Acknowledgments I am grateful to Alexei Bessudonov for his assistance in collecting materials for this essay and for very useful discussions with him. I am also grateful to Tekla Babyak for her editorial help. Naturally, neither of them is responsible for the shortcomings of this essay.

Notes 1. In this essay I will analyze the relation between state and capital by referring to the case of Yukos. For Yukos I refer to secondary material, but with regard to other issues, I use material collected through fieldwork, mainly in interviews with businessmen, in the summer of 2004. 2. The Komsomol was a youth organization of the Communist Party that had branches in most social institutions. 3. On 19 December 2004, the state sold in auction the Yukos’s main subsidiary, Yuganskneftgas, to Baikalfinans group, which allegedly has close links with the Russian government. 4. This is also evidenced in recent American imperial policies. The US elite used the media to full effect in staging spectacles to justify its actions in Afghanistan and Iraq. 5. The strict state control over television channels is well illustrated by the fact that the Russian channels reporting on the kidnapping of schoolchildren and their parents in Beslan switched the news to other items and avoided showing live images while the tragedy was unfolding.

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References Hoffman, David E. 2002. The Oligarchs: Wealth and Power in the New Russia. New York: Public Affairs. Marx, Karl. [1894] 1991. Capital. Vol. 3. Ed. Friedrich Engels. London: Penguin Books. Nazpary, Joma. 2002. Post-Soviet Chaos: Violence and Dispossession in Kazakhstan. London: Pluto Press. Pappe, Iakov S. 2002. Oligarkhi. http://www.libertarium.ru/libertaruim/liblib_oligarches (accessed August 2004). Rigi, Jacob. 2004. “Chaos, Conspiracy, and Spectacle: The Russian War against Chechnya.” Social Analysis 48, no. 1: 143–148. ———. Forthcoming. “The Russian State and the War in Chechenya: From the Chaotic Mode of Domination to a New Authoritarianism?” Journal of Vital Matters 1, no. 1. Volkov, Vadim. 2002. Violent Entrepreneurs. Ithaca: Cornell University Press. Zubarevich, Natalia. 2002. “Prishol, Uvidel, Pobeddil.” Pro et Contra 7, no. 1: 107–119.

ANALYZING AFRICAN FORMATIONS Multi-national Corporations, Non-capitalist Relations, and ‘Mothers of the Community’

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A Radical Approach The West gazes hard at the continent it is has exploited for so long. Reflecting Western discourses of Africa as that ‘dark other’, texts use epithets immersed in preconceptions of Africa’s inequality: differences of race and religion, with Western ‘civilization’ standing for, and justifying, unequal power relations of apparent antiquity. Nineteenth-century Royal Geographical Society audiences, enthusiastic supporters of Britain’s growing empire and overseas Christian missions, learned from distinguished travelers about ‘the slave trade’, ‘ju-ju’, ‘paganism and devil worship’, ‘Mecca’, ‘the import-export trade’, ‘white traders’, and ‘black middlemen’. Favorite twentiethcentury discourses included ‘black nationalism’, ‘weak states’ and ‘African indebtedness’, ‘corrupt government’,

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‘ruthless multi-national oil companies’, ‘environmental pollution’, and ‘poverty’. Twenty-first-century researchers write of ‘endemic violence’ coalescing around inter-state international borders or intra-state ethnic boundaries; ethnic militants fight for ‘ethnic sovereignties’, jostling to wrest from the nation-state customary rights of ownership and control over ‘our god-given’ oil, clashing with giant multi-national corporations that lease from nation-state governments—not oil-producing communities claiming customary ownership—vast blocks of swamp, desert, and sea under which lies ‘black gold’ (Ifeka 2000: 452; cf. Hertz 2001: 194ff.). As Rodney (1981: 261ff.) once wrote, African scholars think that “the West” has consigned ‘the rest of us’ to political insignificance, dependents suffering from, yet resisting, the power of the rich world’s capital. Acolytes of capitalism’s expansionist imperialism; architects with worldwide financial institutions; the African political class, complicit in forging the continent’s renewed dependency; metropolitan corporations—all embody market forces that are embedded in African political economies at resource extraction sites, points where militant youth and mothers, who identify with ethnic identities reproduced in the non-capitalist, kin-based economy, resist the inequality of class relations that structure underdeveloped (and developed) political economies. Researchers’ analyses, largely honed in liberal Western discourses, do not address systemic relations of advantage or disadvantage that structure ties between African and Western political economies. Rather, they focus on segmenting complex, differentiated, and changing totalities into manageable parts, such as ‘the transnational corporation’ (economy), ‘the state’ (power), ‘the community’ (society). Most, if not all, studies of mercantile and industrial corporations faithfully follow the ‘disaggregate’ rule, divorcing companies from their socio-political historical

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and cultural context. Thus, some writers document founders’ personalities, the processes of company organization, mergers and takeovers by competitors striving to enlarge by monopolistic behavior company market share, research and development (Doremus et al. 1998; Grayson 1981). Other writers address the growth in the pre-colonial era of chartered merchant adventurers, who dominated the Guinea trade in slaves, ivory, and palm oil. From the midnineteenth century, the monopolistic British-chartered Royal Niger Company fought with African states and rival merchant companies to increase its control over the palm oil trade and profits. Its policies were bitterly contested by still powerful West African coastal sovereignties, themselves practicing various monopolies (price fixing, trust, combines) at stages in the purchase and transportation from inland producer markets to the coast of palm oil bartered by African middlemen for European goods, e.g., arms, alcohol, cloth (‘Manchester’), and other manufactured commodities (Alagoa 1964: 91–92; Griffiths 1974; Hopkins 1973; Jones 1963: 72–77). Liberal writers assume that multi-national, industrial capitalist corporations differed merely in scale and size from the national chartered companies that operated in the pre-colonial mercantile phase of imperialism, during which industrializing nations sent out ships to harvest from far shores raw materials for fledgling domestic industries protected from foreign competition by high tariff walls (cf. Gilpin 2001: 278; Litvin 2003: 5–6). Some researchers believe that chartered companies such as the Royal Niger Company in the 1880s, which helped to trigger Britain’s conquest of native territories subsequently called Nigeria, were little different from multi-national companies, like those of Cecil Rhodes, that undertook territorial subjugation in southern Africa as a means to secure profits (Litvin 2003: 255). For these writers, merchant companies represent just one phase in the long, historical development

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of capitalism dominated by the West, which, through commodity exchange, siphons resources out of Africa for Western industrial and post-industrial use. Ho (2004) adds that oppressed peoples may use these very structures of capitalism in retaliation against the West.1 Whether national chartered or contemporary multinational, companies operate equally in a global system of commodity exchange, with events determined by supply and demand and mediated by price symbolized in universal, fully convertible currencies. In this regard, liberal market-oriented writers are close to circulationist Marxists—those following Frank (1967) and Wallerstein (1979) define capital in terms of exchange rather than mode of production—who argue that long-distance commerce and the development of world markets sustain a worldwide division of labor, not necessarily the growth of free labor. This pro-market stance shares some similarities with another (circulationist) neo-Marxist theory—that competition between industrial capitalist corporations is superseded by monopolistic alliances (combines, cartels, trusts). These fuel transnational networks of information, values, and accumulation through which bio-power— global surveillance by hegemonic capitalist and military interests of minds and bodies—is asserted, which, in turn, generates new circuits of commodity capitalism and consumer fetishism (cf. Cooper 2004).2 Yet anti-globalization writers, in defiance of neo-liberalism’s market perspectives, situate the ‘silent’ power of the largest multi-national corporations—in 2000, 51 of the world’s biggest economies were multi-nationals (Hertz 2001: 8)—and international cartels (e.g., the Organization of Petroleum Export Countries, OPEC) in terms of their known influence over, for example, European government decision-making on in-country retail petroleum prices. Some political scientists studying oil multi-nationals in situ detect their influence in Nigerian government’s

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decision-making, especially as regards litigation between oil communities and the state. Frynas (1999: 80–99) details how court decisions often favor companies or the state and the bourgeoisie rather than the peasant class claiming the right, as customary owners of the soil or off-shore waters from which crude is pumped, to receive rents (revenue) (cf. Sampson 1975: 32; Yergin 1993: 13). Another Marxist approach to multi-nationals—their place within capitalist relations of production and their relationship with non-capitalist modes of production in African formations—is developed here. Laclau (1977: 15– 23), following Dobb (1963: 7) and Marx (1970: 9), prefers a definition of capitalism as a mode of production based on the existence of free labor. The worldwide system of exchange is dominated by capitalist modes of production that incorporate non-capitalist modes of production. Circulation of commodities exchanged at equal value obscures relationships of exploitation based on the extraction of surplus value through the sale of commodity labor power and its use as labor (Laclau 1977: 30ff.). Articulation of modes and relations of production through commodity exchange powers a social formation dominated by capital—a social relation that separates labor from the means of labor and the institutions through which that relation is expressed—and sustained by non-capital, a type of union of labor with commonly owned means of labor and institutions of kinship through which that union is expressed (cf. Roseberry 1994: 159–162). In this brief essay, I develop a Marxist framework for analyzing corporations’ influence on African formations, especially economic, legal, and fiscal policies that favor the bourgeoisie and disadvantage subaltern classes who resist. I demonstrate why these multi-national institutions of the global capitalist economy are very different from their mercantile predecessors. More importantly, perhaps, I explore the role these multi-national corporations play in

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deepening economic and political violence in neo-imperialist contexts, reproduced, first, by contradictions between dominant capitalist and dependent non-capitalist relations and, second, by conflict fetishized in images of commodities, power, and gender and thus mystified (Ifeka forthcoming; cf. Taussig 1980). My analysis is indicative rather than definitive, owing to editorial restrictions on length, but the space allowed is sufficient to enable me to sketch a radical holistic approach to multi-national corporations in neo-imperialist African formations.

Imperialism Cain and Hopkins (1993: 42) define imperialism conservatively as “a species of the genus expansion,” a branch of international relations but not its totality: “[I]t involves an incursion, or an attempted incursion, into the sovereignty of another state”—a point with which neo-Marxists Hardt and Negri (2000: xii) are in agreement. A single political power with one territorial center (metropole) and fixed territorial boundaries can shape the affairs of another by imposing upon it. Relations established by imperialism are based upon inequality, not upon mutual compromises of the kind that characterize states of interdependence (Cain and Hopkins 1993: 43). Though some writers argue that interdependence typifies state-corporate relations under globalization, they analyze the multi-national corporation virtually in isolation from the political economies in which it operates. Focusing on the corporation sui generis, as if it were similar to its mercantile predecessors, writers such as Gilpin (2001) and Litvin (2003) mimic corporate discourses of the company as a vigorous, virile competitor against market rivals, strategizing for domination. Corporate features in common include shareholders, private enterprise, and property acquisition for capital accumulation—inequality is barely considered.

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Right-of-center historian Philip Bobbitt argues that following the 1990 Charter of Paris for a new constitutional order in Europe that would bring lasting peace, corporations and ‘borderless’ market states sharing global interests in enhancing other than nation-state means of co-operation developed international political consortia modeled more on multi-national corporations or cartels (e.g., OPEC) than on nation-states, partly because these institutions are non-territorial and can protect today’s non-territorial (electronic, financial, trade) infra-structure of states (Bobbitt 2003: 776). The emerging empire is constituted of ‘societies of states’ linked by markets and global corporations’ strategic interests (e.g., the corporate European Union, the inter-regional Economic Commission of West African States), which may constitute multi-cultural umbrellas sheltering lesser states—‘provinces’—claiming the right to use legitimate violence approved by a global consortium led by the current world hegemon, the United States. Writes Bobbitt, multi-nationals “can either be a force for consensus and harmony—because they effectively aid the efficient functioning of the global market, human rights, and the information that links the two—or they can harden into competing alliances with limitless capacity for conflict. Corporations, after all, are designed to compete” (ibid.: 800), implying inequality between larger and smaller corporate ‘beasts’. Yet some liberal writers believe that these behemoths perform more ‘equitably’ today, because they think that the overall framework of world finance, production, exchange, and distribution is now increasingly integrated (Doremus et al. 1998; Dunning 1993; Gilpin 2001). Others are less certain (Dore 2004). Likewise, neo-Marxists Hardt and Negri (2000: xii) emphasize that in contrast to (territorial) imperialism, empire “is a de-centred and de-territorializing apparatus of rule that progressively incorporates the entire global

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realm within its open, expanding frontiers … (blending national colours) in the imperial global rainbow” in the interests of peaceful market development (ibid.: xiii). In the early twentieth century, Lenin relied on Marx’s theory of surplus value to validate his contention that Euro-American (territorial) imperialism represented a new stage in capitalism’s unfolding to the march of white and black soldiers’ boots (Lenin 1939: 68ff.), presaged by the concentration of production and monopolies arising through, in part, the merging of banking with industry, thus giving rise to finance capital and its oligarchies (ibid.: 47).3 The rise of cartels enabled companies to agree on the conditions of sale, terms of payment, and division of profits. Lenin wrote: “They divide the market among themselves” (1939: 22). Imperialism is a necessarily violent process, forcibly pulling people engaged in noncapitalist modes of production into laboring for a wage for capital, which draws off surplus value (congealed labor) by paying labor power a wage whose exchange value is less than the use value provided by non-capitalist relations to secure workers’ social and physical reproduction (Marx 1970: 14–15). Whereas a liberal approach analyzes corporations as institutions imbued with their own ‘national cultures’ that are largely independent of the social formations in which they operate, the Marxist in situ approach adopted here focuses on companies’ impacts on African non-capitalist relations and the latter’s responses to capitalist production. A Marxist analysis can show why and how corporations operating in the colonial and post-colonial eras are not the same as their pre-colonial merchant adventurer predecessors. Importantly, the latter lacked the power to separate labor from its unity with the means of labor, owned in common, because in purchasing the good offices of coastal kings and middlemen, they relied on circulation alone to procure the raw materials and slaves they needed.

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Capital Articulates with Non-capitalist Relations: Circulation Early European capital accumulation was based on trade and money-lending, not on landed property or guilds, such as those protecting the interests of wool and cloth producers (Baran 1957: 270). In the build-up of capital in the seventeenth and eighteenth centuries, European capitalists were forced by the internal logic of their competitive system to expand in a big way outside their national economies, “to seek abroad in less developed countries opportunities to control raw material supplies, to find markets, and to find profitable fields of investment” (Rodney 1981: 136). At this time, European merchants, flying their countries’ national flags, related through circulation (trade, barter, exchange) alone from hulks stationed off shore in Gulf of Guinea coastal waters to West African economies, to African middlemen based in coastal entrepôts and in control of inland produce suppliers. From their hulks merchants exchanged or bartered European manufactured goods such as alcohol and arms for slaves, ivory, gold, rubber, and other “raw materials of the forest” (Dike 1956: 5). At this time, “[c]ommodities produced through non-capitalist relations enter into capitalist circuits of exchange, but the basic unity of labour with the means of labour in the non-capitalist mode is not necessarily threatened” (Roseberry 1994: 163; cf. Rey 1975: 29). So most Africans remained in isolation from European trading ships, laboring within kin-based noncapitalist relations of production for subsistence, owing allegiance to the family head or ‘king’ of several extended families, which in coastal areas usually formed ‘houses’ equipped with war canoes and owning many slaves for the ‘carrying’ trade in slaves and then palm oil, from hinterland markets to coastal entrepôt centers dominated by kings, leading African middlemen, responsible for nego-

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tiating the terms of ‘breaking the trade’ with European ship captains. By the 1870s, African and European trading monopolies, each flying their own flags, confronted one another— the former supplying the latter with the oil, rubber, and cocoa required for European industrial lubricants, animal feed, domestic detergents, and cooking ingredients—each fighting rivals within their ranks and at times combining forces to outwit outsiders (Ikime 1968: 3, 19; Jones 1963: 75ff.). The system of trade had its own African rules, dues, and currencies such as the iron bar and manilla, but the Europeans imposed their system of fixed prices in place of the indigenous one of bargaining (Jones 1963: 96–101). Though Jones stresses that only in specific circumstances did European traders combine together to gain monopolistic control of trade along the Old Calabar River in the eastern Niger Delta (ibid.: 75ff.), Ikime notes that treaties drawn up from the 1830s between chartered companies operating on the Benin River in the western Niger Delta invariably protected whites against black middlemen, not vice versa, while Alagoa writes that in the 1880s the Royal Niger Company blocked Brass in the central Niger Delta from trading in oil in its territories (Alagoa 1964: 91–92; Ikime 1968: 59ff.). Historians are agreed that by the 1870s, some African trading houses were wealthy by the standards of the 1830s and, putting their wealth to aggressive use, were engaging in ‘armaments races’. African trading houses could be monopolistic as well; in the 1870s, powerful Jaja of Opobo continued to swallow up many other African trading houses (Dike 1956: 185; Ikime 1968: 59ff.). Britain’s ‘gun boat’ diplomacy and imposition of ‘courts of equity’ meant that from the 1850s to the 1880s in the western Niger Delta—through the good offices of Nana, the greatest and last African ‘Governor of the River’, and the British Consul—a good many disputes among

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black middlemen, inland oil producers, and white buyers were resolved (Dike 1956: 140–150; Ikime 1968: 184ff.). Elsewhere, though, in the Niger River valley during the 1870s—where there were four British trading companies operating and several small firms, as well as individual merchants moving northwards up the Niger River into Igbo and Hausa country—the political unrest associated with fighting among the companies in quest of larger supplies of palm oil, pillaging of factory stores, and destruction of settlements (e.g., Onitsha in 1879) “made trade not only insecure but at times impossible” (Dike 1956: 208). In 1886, Sir George Goldie welded together British trading companies into the monopolistic Royal Niger Company, after Britain—fearful of growing warfare as competition between white and black traders became fiercer—had declared itself in 1885 sovereign over all African polities encompassed by treaties in the newly proclaimed Niger Coast Protectorate. Yet in 1823, King Opubu of Bonny had raged against British slave ships for entering Bonny waters without his permission: “I declare emphatically that I can never compromise my sovereign powers … Considering my kingdom, this land which I hold in trust for the Bonny country and the spirits of my ancestors” (Dike 1956: 17).

Capital Articulates with Non-capitalist Relations: Production The colonial phase of imperialism enabled Western capital to penetrate African economies. Capital entered by the ‘back door’ through non-wage, kin-based forms of production, separating labor from the means of production (Rey 1975: 42ff.). Colonial governments announced that all adult males and females were required to pay taxes; peasants were compelled to sell their labor as a commodity quantified by the amount of time worked in exchange for an equivalent wage paid in a universal (European)

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currency (Meillassoux 1971, 1981; cf. Marx and Engels 1970). Consequently, the difference between the cost of reproduction and the wage meant that surplus value (congealed labor, use values) was siphoned out of Africa into global banks and, from there, into global finance capital and/or transformed into fixed capital. For example, armaments, industrial technology, machinery, and installations such as palm oil processing factories, which Ibo women marched against in 1929 (Ifeka 1975), or, since the 1950s, oil pipelines operated by European and African wage labor (cf. Rodney 1981: 161ff.). Imperialism—and capitalism—have many forms, but all involve to a greater or lesser extent domination of local wages, rents, and interest by international finance capital and/or national institutions such as the African state and global organizations such as the World Trade Organisation. Unilever, an Anglo-Dutch conglomerate, demonstrates how metropolitan finance and industrial capital, burgeoning in the pre-colonial and then consolidating during the colonial (territorial) phase of capital’s expansion, went on imperialistically to expand across many nation-state borders in capital’s post-colonial phase. In the mid-1880s, W. H. Lever of Liverpool, England, started making soap, sourcing palm oil, palm-kernel oil, groundnut oil, and copra from West Africa and the Congo. By the century’s close, Lever had helped end some African economies’ selfsufficiency—forcing a shift from non-capitalist relations to production for export crops, which developed commodity circulation (Baran 1957: 275)—and was selling 60,000 tons of soap in Britain alone. The company had factories producing and selling in the Dominions, the US, South Africa, and Europe (Rodney 1981: 180–185). By the 1920s, Lever was buying up British trading companies in West Africa. In 1929, Lever’s multi-national merger was called the United Africa Company (UAC), and in 1930 it was divided into Unilever Ltd (registered in Britain) and Unilever NV

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(registered in the Netherlands). Unilever thus comprised two holding companies with the same governing boards and with arrangements to transfer and equalize profits; it also increased headquarters’ control over local managers. Being a multi-national, the company did not fly a national flag. The firm inherited and perfected the techniques of mass production and advertising so as to achieve mass consumption, primarily in Western markets. From a national company relying in the 1890s on doing business with Africa through circulation alone, Lever had become by 1929 a massive conglomerate, establishing palm oil mills in West Africa and employing labor in many countries with a sophisticated system of international accounting (which chartered and private companies had lacked). Even in the worst financial years, the subsidiaries composing the UAC were invaluable because they allowed Unilever manufacturing to have control over guaranteed sources of semi-skilled labor and essential raw materials such as glycerine, which was used in making explosives (Rodney 1981: 180–185). This conglomerate helped establish in West Africa major institutions of the market economy, including a free labor market. The growth of Unilever tells the story of how the colonial phase of imperialism was necessary to separate labor from non-capitalist relations so that Africans could sell their labor time for wages to capitalist employers, including the colonial state. They labored on government-owned and privately owned rubber and oil palm plantations, in coal and diamond mines, on poultry farms, as well as in courts, in government and company offices, and on railways. Royal Dutch Shell’s development from a British venture known as Shell D’Arcy, which had in 1937 been granted by the colonial government an oil exploration license covering the entire expanse of Nigeria, is highly informative about the variable role of foreign-owned, multi-national corporations in African national economic

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‘development’ policy and state decision-making in general, which was very different from that of pre-colonial merchant adventurer companies perched off shore. Since the mid-1980s, when Nigeria and Africa were impoverished further through ‘structural adjustment’ packages ‘facilitated’ by the World Bank and the International Monetary Fund, the national political bourgeoisie, in cooperation with oil multi-nationals, has tailored policies to suit the requirements of international capital. Neo-liberalism promotes open markets and foreign direct investment (FDI)—in 2002, $1.3 billion was invested in Nigeria’s oil and gas sector with little impact elsewhere—that thus far have helped perpetuate Africa’s exploitation through wages and salaries that are low relative to international rates. So in collaboration with the nation’s middlemen and contractors, international and national capital is probably increasing the surplus value (profits) deposited in metropolitan banks, leaving behind deepening inequality and underdevelopment (Ifeka 2004b: 100–101; Karl 1997: 40–43). That the depredatory impact of Africa’s integration in world markets is increasing, difficult though it is to quantify, is indicated by a late 1990s estimate that over 36,000 multi-nationals, including global giants such as ExxonMobil and Royal Dutch Shell, were based in developing countries (Litvin 2003: 219). Meanwhile, 66 percent of Nigerians were living on less than $1 per day in 1996 compared to 27 percent in 1980 (ROAPE 2003).

Capital Articulates with Non-capitalist Relations: Reproduction Much has been written about Shell—in 2003 thought to be the world’s third most profitable multi-national company (This Day 22.09.03)—its origins in 1929 in a British private company, Shell D’Arcy; its massive contribution to Nigeria’s oil revenues through its thousand plus on-

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shore and deep-ocean fields, some of which the company operates as part of its joint venture with the Nigerian state and four leading multi-national corporations; its daily pumping of over 50 percent of the country’s crude in the mid-1970s falling in the 2000s to 33 percent (Vanguard 14.02.04). Later commentators have focused on Shell’s documented human rights offenses (Detheridge and Pepple 1998; Human Rights Watch 1999; Okonta and Douglas 2001). Here I will focus on the crux of the matter—aspects of power relations between multi-nationals, the Nigerian state, and oil-producing communities. Massive political and economic inequality, I argue, perpetuates structures of advantage/disadvantage—involving other companies, the colonial-derived capitalist state, and communities—through capital’s domination, with the state’s compliance, of surplus value appropriation by paying labor less than the cost of reproduction, which is performed in general by women within non-capitalist, kin-based relations of production and reproduction (Ifeka 2004c). Yet with a few exceptions such as Reno (1999), many studies give minimal or no attention to corporations in their analyses of ‘the politics of the belly’, ’weak’, or ‘instrumental’ African states (Bayart 1993; Chabal and Daloz 1999), other than noting multi-nationals’ interest in exploiting minerals and at times funding proxy armies, the better to control diamonds or oil (Ifeka 2004b; Singer 2003). I contend that unlike their merchant predecessors, multi-national corporations are institutionalized in the African social formation through their dominant linkages with non-capitalist relations of reproduction based in representations and practices of birth and place. Whether or not they are visibly present on national territory, these industrial organizations play an integral part in triggering violence over ‘resource control’, which informs recurrent struggles and civil wars by pro-ethnic-sovereignty oil-producing communities against corporations and the

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nation-state so as to increase their share of oil revenues. Similar ethnic sovereignty struggles over ‘resource control’ (e.g., water in dry states, minerals, fertile lands, forests)— expressed in the communal, kin-based idioms of ethnicity or religion that reproduce labor—are embedded in the contested power relations of other West-Central African social formations. First, with regard to modes of interaction, some result in privileging certain players, while some disadvantage and exploit others. Merchant companies privileged WestCentral African coastal states in their trading relations with inland producing states, increasing coastal-inland economic inequality (Balandier 1970: 72–73, 473ff.; MacGaffey 1986). Later, oil multi-nationals privileged relations with colonial and post-colonial African states, members of whose largely, but not exclusively, inland dwelling bourgeoisie/political class functioned as compradors or ‘gatekeepers’ (Ifeka 2001: 462–464; Karl 1997: 189ff.). In so doing, multi-nationals operating in Nigeria inverted nineteenth-century merchant company activities that had temporarily advantaged coastal polities, and so helped disadvantage about eight million inhabitants of the oilproducing Niger Delta. A structure of advantage/disadvantage has persisted for over a century, but the positions are reversed between middlemen who formerly benefited from merchant companies (coastal chiefs) and those presently benefiting from multi-national corporations (the African nation-state bourgeoisie, the central government political class). Class relations of advantage/disadvantage, inscribed on the landscape, have extended far inland in northern dry-land/semi-desert regions to encompass Muslims and animists, whose subaltern youth currently engage with multi-national corporate and state potency, spearheading Islamic resistance to perceived cultural colonization by predominantly Christianizing, though constitutionally secular, political classes.

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Nigerian structures of disadvantage/advantage owe much, firstly, to ongoing interaction between oil majors, political rulers, and the commercial bourgeoisie. After the turmoil of the Biafran civil war, which Shell probably helped last longer by ‘sitting on the fence’ between the Biafran and federal Nigerian armies, the company decided to ‘re-embed itself’ in Nigerian society, to get on good terms with rulers and dictators (Litvin 2003: 224). Multi-nationals cultivate close relations with certain members of the political bourgeoisie so that both parties can access markets directly, unconstrained by the state’s ‘red tape’ or institutional regulations; some writers argue that this strategy reduces instability and pre-empts the rise of “war lord” politics (Reno 1999: 8). Whatever the case, Shell’s Nigerian workforce is pro-Nigeria and pro-Shell. Its members benefit from relatively well-paid work through Shell for Nigeria’s rentier economy; therefore, they want Nigeria’s economy to continue depending on income from rent (oil revenues) that the oil majors pay to the state. (For example, Shell admitted it paid $1.2 billion in ‘fees’ and ‘dues’ to the Nigerian government in 2002 [Mail & Guardian 23.06.03]; in 2004 Shell conceded it paid $210 million in a legitimate signature bonus to the Nigerian government to acquire the deep off-shore block OPL [oil prospecting license] 245 [This Day 13.01.04].) Secondly, multi-national companies compete with others for ‘quality’ Nigerian workers in the country’s labor markets, and so, indirectly, come up against African predominantly non-capitalist political, gender, and work values. Though multi-nationals believe they make appointments according to merit so as to promote civic values such as equality, Shell certainly sees itself as advocating to the federal government the need to treat the Niger Delta more equitably by increasing its share of oil revenues (Litvin 2003: 271). In general, African non-capitalist communities are organized in terms of asymmetrical

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forms of interaction, including interpersonal vertical ties of patron-clientship, gender, and social age differentiation. Symmetrical bonds (e.g., age mates, village ‘brothers’, workers of the same rank in the workplace) play their part in constituting multiplex ties structuring social relations and power. However, like other West-Central Africans, Nigerians of all status levels emphasize the importance in their daily lives of asymmetrical bonds (Ifeka 2001). Asymmetrical relations inflect in physical and social space—e.g., the largely impoverished Niger Delta compared to the more prosperous coastal city of Port Harcourt, equipped with a basic infra-structure of electricity, piped water, and telephone lines—as well as shanty settlements. Persons working for wages or salaries in the capitalist sector are advantaged relatively by producer-peasant communities producing low-cost farm and artisan goods for their own reproduction and that of urban capitalist and non-capitalist producers; the latter categories occupy different social spaces in the formations that they link through interaction between advantaged capitalist labor and disadvantaged non-capitalist reproducers (women). If they can afford to, people buy or, if lacking money, solicit home-produced rice, for example, disdaining (tasteless) imported Thai rice. Thus, capital relies for its workers’ social and physical reproduction on the labor of local rice producers, women and youth, in non-capitalist relations. Though peasant farmers or fisher folk are structured in asymmetrical relations with multi-nationals and the state political class, their social reproduction through the non-capitalist “economy of affection” means that they tend not to rely for sustenance on capitalist companies or their off-sider, the bourgeois state (Hyden 1980: 18–19). Nevertheless, when a company or government offers construction projects involving sand or gravel collection for wages, many women and youth rush opportunistically to earn cash.

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At the heart of asymmetrical relations are non-capitalist relations of production and reproduction. Deemed dependent, they are actually dominant, though not determinant, in constituting social formations. In the wake of the Abacha regime’s execution in 1995 of Ken Saro Wiwa, the Ogoni activist, these non-capitalist relations are being addressed by Shell, which has progressed from ‘being independent’ and ‘doing its business’ to acknowledging its involvement in community life. Shell claims to have spent $30 million in 2002 and then $60 million in 2003 on the things that women consistently call for—health centers, potable water, schools, and water transport, that is, the means of modern social reproduction (Litvin 2003: 251; Shell 2002: 18–34). Since capital depends on non-capitalist relations for its workers’ reproduction, women are pivotal, though unacknowledged, actors in the reproduction of the dominant capitalist sector in the social formation. Women’s social insignificance, which is reflected in their exclusion from village/settlement decision-making—even today many Niger Delta village councils exclude women (Ifeka 2004d)—is countered by periodic eruptions over resource control and demands for community development. For example, in 2003 across the Niger Delta, but especially in the western delta close to the oil city Warri, subaltern women massed together, donning the ‘traditional’ attire of protest—tying lappas around their waists and creepers and palm leaves around their heads and bare chests (Ifeka 1975). Entering local and state government compounds, as well as TexacoChevron oil terminals, they protested their people’s poverty and suffering and demanded that oil companies “make development” (Vanguard 08.05.03). Youth came out at the same time, warriors going to war on behalf of their communities, equipped with Egbesu (juju, god of war) leaves on their foreheads and medicinal containers around their necks to protect them against

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bullets (Ifeka 2003–2004). Some women were beheaded, along with others (allAfrica.com 2004; cf. Human Rights Watch 2004: 9). Women’s secret societies parallel those of men, and these, too, are still extant. Through their societies women protect the community against witchcraft and other evils, including epidemic disease. They consistently adopt a pro-social reproduction stance in participatory rapidappraisal surveys, requesting health centers, clinics, clean water, and schools (Ifeka 2004c). Women are the key to the formation’s renewal, either in its current ‘schizoid’ mode, which disadvantages the majority—subalternity cuts across ethnic and religious differences, though people are often more conscious of the differences than of shared identity as members of an African underclass—or in regard to many people’s dream of sovereign ethnic states committed to pro-poor policies and programs. Women will always be, people believe, ‘mothers of the community’, and in this position they articulate the ongoing contradiction between denigrated (backward) non-capitalist relations and capital’s dependence for reproduction on peasants, farmers, fisher folk, gatherers, hawkers, and millions of others struggling for ‘bare life’, for survival (cf. Agamben 1998). Thirdly, the matrix of social power under multinational capitalism consistently favors one category of actors—the bourgeoisie—and results in the systemic exploitation of others. Multi-nationals attract the ‘best’ of many nationals competing to join the capitalist labor force; this consolidates capital’s power over the formation through its growing interaction with the political class and the state. For example, oil companies such as ExxonMobil, Shell, and TexacoChevron, called ‘big fish’ by smaller firms because they have massive capital investments in off-shore production—Shell alone plans to invest $5 to $7 billion in new, deep, off-shore fields in 2004 to 2007

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(Litvin 2003: 272; This Day 24.08.04)—periodically press the federal government to quit the producing countries’ cartel, OPEC. This is so Nigeria can produce in excess of 1.2 million barrels per day, allowing the oil majors and the government to realize greater profits. Instead, Nigeria pressured OPEC to raise the country’s daily crude output quota, which eventually happened. But the stronger the power-holders become, the more their power seems to be challenged, especially under current international dispensations in which international actors, fearful of ‘African terrorism’, intervene in support of ‘civil society’, ‘human rights’, and ‘democracy-strengthening’ programs. On the one hand, some oil majors are going out of their way to provide community development funding for ‘peace’ and ‘security’ in the Niger Delta. For instance, the managing director of Shell Petroleum Development Corporation of Nigeria Ltd (SPDC) told the Nigerian Violation of Human Rights Commission in 2001 that although Shell does not actually hold a monopoly over oil production, the Ogoni people continue to believe that it does. They therefore continue to fight Shell and the federal government by violent and peaceful means to end that monopoly. This is sad, he said, because SPDC is a private company; government has the major responsibility for community development, not Shell, but “we play a caring role” (Vanguard 24.12.03). On the other hand, in Nigerian society at large, labor now has the constitutional right to strike (challenged by the ruling classes of many African states, including Nigeria), so a bipolar class struggle between working and bourgeois classes is underway, reflecting the fact that market interaction between capital and labor is a relationship of power. However, actors also engage in non-class forms of conflict, with some appearing to be more powerful than outright struggles organized by labor unions against capital. For instance, there are campaigns by subaltern classes, manifesting as emergent

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ethnic sovereignties led by Ijaw and Igbo ‘war lords’, for full juridical control over their own ‘god-given’ oil, waterways, and soil (Ifeka 2000). Both forms of contest produce primary and secondary dispersions of power. Finally, there is a multi-polar and complex pattern of cleavages, collectivities, and conflicts constituted by prevailing modes of social interaction, production, reproduction, and exchange. Although there are clearly bipolar forms of conflict reflecting disadvantage—e.g., labor contests against bourgeois employers, ethnic sovereignties fighting the nation-state for ‘independence’, women struggling for more recognition of their crucial position as reproducers—the multi-national corporation and lesser companies generate powerful forces structuring the African formation in conflict between dominant and determinant forces (capital) and dominant but not determinant (non-capitalist) relations. For instance, the federal government is currently selling off 51 percent of its interest in the nation’s five oil refineries to three oil majors—Shell, TexacoChevron, ExxonMobil. These three conglomerates will thereby strengthen their vertical integration of upstream and downstream operations within the country and overseas, as well as increase their potency in the Nigerian government’s decision-making and the domination of petro interests over other kinds of capital and the social formation (This Day 20.05.03). At the same time, Chevron and Shell are jointly carrying out the development of contiguous off-shore fields; these are Bonga SouthWest and Chevron’s OPL Aparo 213, 147 (Vanguard 27.01.04). The African colonial-derived state ideally secures peace. Its legitimate authority notionally restricts the exercise of patriarchal authority, and it is identified with private property relations of multi-national and other capitals. The state fails consistently to carve a role for itself in organized mediation that could soften the harsh impact of competitive market forces by distributing resources more equita-

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bly. Conflict continues, expressing itself in demands for constitutional revision that, when not addressed in acceptable ways, erode the legitimacy-conferring capacity of the African state’s institutions. The state’s political authority therefore dwindles. As Offe argues (1985: 9), such trends amplify the matrix of (contested) social power.

Conclusion In the foregoing indicative analysis, I explained that multi-national corporations should be studied holistically, in situ, as institutions of the world economy established since the colonial era in many African formations. Capitalist juridico-political and economic relations have long interacted with and have influenced, while being influenced by, politically and culturally disadvantaged institutions of the (non-capitalist) moral economy, which reproduce wage labor employed by capitalist companies and the bourgeois state. Peasants and pastoralists deploy labor, youth, and women in direct labor that creates use values—goods in kind that, I have argued elsewhere (2004c), reproduce wage and salaried labor working in the capitalist sector of contemporary African formations. Capitalist relations of production institutionalized in the multi-national corporation and in smaller national companies are politically and economically dominant, if not determinant, yet are dependent on non-capitalist relations—and on women peasants in particular—to reproduce labor at below social reproduction costs. The colonial and post-colonial formation is structured in a ‘schizoid’ mode that some scholars have called ‘dual’ or ‘plural’ (cf. Furnivall 1948). The formation is embedded in a pivotal contradiction between commodity and subsistence production—between, on the one hand, the commodity labor power, free of kin-based social constraints, producing exchange values, and, on the other

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hand, the peasant’s direct labor producing use values, which helps reproduce wage labor. I argued that a holistic approach that locates corporations in context, in interaction with African political economies, demonstrates why contemporary multi-national corporations everywhere really do differ from their precolonial mercantile predecessors. This difference originates—and is reproduced economically, politically, and culturally—in African social formations by the multinational capitalist company’s appropriation of surplus value created by wage labor. Contradictions at points of intersection between capital and kin-based production are articulated ideologically through commodity politics and gender fetishism, so that political and corporate leaders appear in mystified guise, while women rupture bourgeois Christian perceptions of (asymmetrical) gender roles as they don the mantle of ‘mothers of the community’ and rush with militant youth to the oil companys’ barricades. I concluded that a holistic approach—which analyzes multi-national corporations as embedded within the formations from whose territories they extract and process natural resources and from whose societies they recruit labor—highlights the corporation as different from pre-colonial mercantile companies. It also emphasizes ways in which interrelations with non-capitalist modes of production have shaped struggles for resource control between multi-national corporations, the bourgeois African state, and community youth and women’s leaders.

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Acknowledgments I wish to thank Bruce Kapferer for his encouragement, Shawn Kendrick for editorial improvements, and the Leverhulme Trust (UK) for their financial assistance during the writing of this article, though they are in no way responsible for the contents and the opinions expressed.

Notes 1. Ho (2004) writes of the Hadrami Muslim diaspora, which has created a structure of unity through experiences of difference across a network of links and gaps between ‘islands’ of Hadrami Muslim identity. 2. ‘Liberal’ studies on globalization, multi-national corporations, and economic ‘development’ either assume or argue that today’s transnational conglomerates exploiting Third World natural resources are little different from yesterday’s merchant adventurers or chartered companies engaging in import-export trade while their country applied mercantilist policies upholding high tariff walls designed to simultaneously protect domestic manufacturing industries and raise revenue (cf. Gilpin 2001). In the 1880s, advantaged by growth in the import-export trade in Asia, the Americas, and Africa, larger mercantile companies merged with smaller trading companies in finance, steamships, and mining. The emergence of ‘the large firm’—often acting as quasi-bankers in remote frontiers to indigenous traders and subsidized by the state in return for services to imperial communications, such as meeting protection costs that the treasury was unwilling to bear—paved the way for European domination of Africa’s resources through colonization, Lenin’s penultimate stage of imperialism (Cain and Hopkins 1993: 74, 356–357). Research in this genre includes, first, institution-focused studies that may assume a Euro-American, Anglo-Saxon shareholder perspective, deployed to draw comparisons with Confucian corporate business ethics and efficiency. Keeping the socio-economic and political context in which companies operate at arm’s length, writers analyze variables such as the company’s perceived market position, value orientation and discourses of corporate social responsibility, internal organization (degree of heirarchization/devolution), types of managerial

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leadership, and strategies to secure market dominance. Such strategies encompass cartels or oligopoly—that is, a market situation in which control over commodity supplies is held by a small number of producers, each of whom influences prices and therefore directly influences the relative position of competitors—as well as mergers, e-consumer consultation, cost paring, and staff shedding to develop ‘lean’ firms (Keep and Mayhew 2001). Second are studies that locate contemporary multi-nationals in regional or local contexts described negatively as “weak” or “war lord” states’ (Reno 1999). Corporate-focused studies address the conglomerate’s role in post–Cold War Africa’s ‘renewed colonization’ through ‘structural adjustment’ packages—imposed by the World Bank and International Monetary Fund—that are intended to facilitate foreign direct investment and a multi-national presence. Some writers highlight corporate involvement in reproducing corruption and institutional weakness in African states through illicit payments. A company purchases rights of exploitation in a promising off-shore oil block (Frynas 1999) and adds billions of barrels of crude to its ‘proven’ reserves, enhancing its share prices and strengthening its market advantage over competitors. Some companies hire the state’s armed forces to ‘protect’ crude oil, copper, and titanium extracting and distributing installations, while senior corporation staff and politicians ‘persuade’ the head of state to deploy the army or navy to ‘cleanse’ oil-producing communities of ‘robbers’, ‘saboteurs’, and ‘criminal’ elements that ‘disturb the peace’ by blocking production of crude oil or extraction of precious minerals (Guardian Weekly 2004). International relations researchers emphasize how the vast size, mega-turnover, and competition among multi-nationals in ‘weak’ states—for example, oil corporations in Nigeria’s Niger Delta struggling for leases on off-shore blocks with large, proven reserves—arouse profound resentment in impoverished local communities that rely on ties of kinship for survival. Thus, ‘identity’ politics and ethnic sovereignty movements for resource control are born (Ifeka 2000). Third are studies analyzing the apparently ‘borderless’ world in which today’s multi-national corporations operate. In these analyses, the significance of the state in regional and local contexts is downplayed, not only as a factor influencing the corporation’s functioning (e.g., militants siphoning off crude from pipelines and depressing corporate earnings) and

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its discourses (e.g., avoidance of/acceptance of responsibility for reducing environmental damage), but as a factor enabling international corporate exploitation of African resources. This has deepened inequality between core and periphery, fueled resistance by militant ethnic militias, and thus shaped the development in conflict of African social formations (cf. Apter 1997: 1–11). Rather, these writers emphasize how corporations are organized through a myriad of transnational connections, with the result that distinctions between local and global forms of political violence, between repression (attacks on the central government from inside the country) and aggression (attacks on the nation-state from abroad), become blurred. War in Africa and parts of Asia is no longer the exclusive monopoly of the colonial-derived nation-state (Kaldor 2001: 2–6; cf. Kapferer 2004: 64–72). 3. Marx emphasizes how the historically specific development of (industrial) capital takes place when “the means of labour is … formally determined as fixed capital … in the shape of a machine (which) is opposed to labour within the productive process” (McLellan 2000: 410). Thus, materialized labor dominates over living labor, incorporating the latter as commodity forms (e.g., labor power) belonging to, and embodied in, capital but not of it (ibid.: 429–430). Materialized labor represents congealed surplus value. Marx argues that labor is compelled to work in excess of the necessary time to produce a commodity. And that a break in the nature and impact of capitalism on the social relations within which it functions is evidenced in the rise of monopoly capital—created out of mergers between larger and smaller industrial and finance capitals—so surplus value embodied in finance capital grows ever larger and turns domestic politics and national foreign policy to its advantage. In fact, the higher the stage of capitalism, the larger the class of those living on the labor of others in relation to the total size of the laboring class (ibid.: 437). Contrariwise, the more capitalized the means of production, the smaller the percentage of the working class employed in reproducing the means of subsistence that enters into workers’ consumption. See also Marx (1964, 1970) and Marx and Engels (1970) on aspects of surplus value, profit, and reproduction; see also Rey (1975, 1976, 1979) on the role of non-capitalist relations in reproducing capital in colonial and post-colonial territories.

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———. 2001. “Playing Civil Society Tunes: Corruption and Misunderstanding Nigeria’s ‘Real’ Political Institutions.” Review of African Political Economy 28, no. 89: 461–465. ———. 2003–2004. Fieldwork notebooks. ———. 2004a. “Violence, Market Forces and Militarisation in the Niger Delta.” Review of African Political Economy 31, no. 99: 144–150. ———. 2004b. “Market Forces, Political Violence, and War: The End of Nation-States, the Rise of Ethnic and Global Sovereignties?” Social Analysis 48, no. 1: 97–107. ———. 2004c. “Final Report, Social Impact Assessment OML 115, Akwa Ibom State, February–April 2004.” Port Harcourt: ProNatura International Nigeria. ———. Forthcoming. “From Juju to Jesus? Fetishism and Violence in ‘Schizoid’ Formations.” In War and the State, ed. Bruce Kapferer. Ikime, Obaro. 1968. Merchant Prince of the Niger Delta: The Rise and Fall of Nana Olomu, Last Governor of the Benin River. London: Heinemann. Jones, Gwilliam I. 1963. The Trading States of the Oil Rivers. London: Oxford University Press for the International African Institute. Kaldor, Mary. 2001. New and Old Wars: Organised Violence in a Global Era. 2nd ed. Cambridge: Polity Press. Kapferer, Bruce. 2004. “Introduction: Old Permutations, New Formations? War, State, and Global Transgression.” Social Analysis 48, no. 1: 64–72. Karl, Terry Lynn. 1997. The Paradox of Plenty: Oil Booms and PetroStates. Berkeley: University of California Press. Keep, Ewart, and Ken Mayhew. 2001. “Globalization, Models of Competitive Advantage and Skills.” SKOPE Research Paper no. 22. University of Warwick. Laclau, Ernesto. 1977. Politics and Ideology in Marxist Theory: Capitalism—Fascism—Populism. London: New Left Books. Lenin, Vladimir I. 1939. Imperialism. The Highest Stage of Capitalism: A Popular Outline. New York: International Publishers. Litvin, Daniel. 2003. Empires of Profit: Commerce, Conquest and Corporate Responsibility. New York and London: Texere. MacGaffey, Wyatt. 1986. Religion and Society in Central Africa: The Bakongo of Lower Zaire. Chicago: University of Chicago Press.

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Marx, Karl. 1964. Economic and Philosophic Manuscripts of 1844. Ed. J. Dirk. Trans. Martin Milligan. New York: International Publishers. ———. 1970. “Preface.” Pp. 19–23 in A Contribution to the Critique of Political Economy. Ed. Maurice Dobb. Trans. S. W. Ryazanskaya. New York: International Publishers. Marx, Karl, and Friedrich Engels. 1970. The German Ideology. Ed. C. J. Arthur. New York: International Publishers. English trans., Lawrence and Wishart. McLellan, David, ed. 2000. Karl Marx: Selected Writings. 2nd ed. Oxford: Oxford University Press. Meillassoux, Claude, ed. 1971. The Development of Indigenous Trade and Markets in West Africa. Oxford: Oxford University Press. ———. 1981. Maidens, Meal and Money: Capitalism and the Domestic Community. Cambridge: Cambridge University Press. Offe, Claus. 1985. Disorganised Capitalism: Contemporary Transformations of Work and Politics. Cambridge: Polity Press. Okonta, Ike, and Oronto Douglas. 2001. Where Vultures Feast: Shell, Human Rights and Oil. San Francisco: Sierra Club Books. Reno, William. 1999. Warlord Politics and African States. Boulder, CO: Lynne Rienner Publishers Inc. Rey, Pierre-Philippe. 1975. “The Lineage Mode of Production.” Critique of Anthropology 3: 27–79. ———. 1976. Las Alianzas de Classes. Mexico City: Siglo XX1. ———. 1979. “Class Contradiction in Lineage Societies.” Critique of Anthropology 13 and 14: 41–60. Rodney, Walter. 1981. How Europe Underdeveloped Africa. Washington, DC: Howard University Press. Roseberry, William. 1994. Anthropologies and Histories: Essays in Culture, History, Political Economy. New Brunswick and London: Rutgers University Press. Sampson, Anthony. 1975. The Seven Sisters: The Great Oil Companies and the World They Shaped. London: Hodder and Stoughton. Shell (Shell Petroleum Development Company of Nigeria Ltd). 2002. People and the Environment. Annual Report. London. Singer, Peter W. 2003 Corporate Warriors: The Rise of the Privatized Military Industry. Ithaca: Cornell University Press. Taussig, Michael. 1980. The Devil and Commodity Fetishism in South America. Chapel Hill: University of North Carolina Press.

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Wallerstein, Immanuel. 1979. The Capitalist World Economy. New York: Cambridge University Press. Yergin, Daniel. 1993. The Prize: The Epic Quest for Oil, Money and Power. New York and London: Simon and Schuster.

Newspapers and Internet allAfrica.com. 2004. “Civil War and Communal Conflict.” 17 January. http://www.allafrica.com/civil war.htm. Guardian Weekly (UK). 2000. 22–28 October, 15–16. Mail & Guardian (South Africa). 2003. 23 June. ROAPE (Review of African Political Economy). 2003. Editors’ e-communication regarding Halliburton, Kellogg Brown & Root, and Nigeria. 24 May. This Day (Lagos). 2003. 22 September, 20 May. ———. 2004. 13 January, 24 August. Vanguard (Lagos). 2003. 8 May, 24 December. ———. 2004. 27 January, 14 February.

“EVERYONE HAS DONE VERY WELL” Going through the Motions at the News Corporation AGM

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Roland Kapferer

I present here an account of the incorporation of a media company hitherto part of a peripheral state within the juridical economic order of a global power —the United States of America. I concentrate on the crucial performative event in which Rupert Murdoch’s News Corporation is trans-corporated from an Australian registered business to an American one. The event I describe is in fact a rite de passage whereby a local company is legally recognized as a global power. The approach I take is in effect a situational analysis in the tradition of Max Gluckman, wherein the description is part of the analysis. * * * The 2004 News Corporation Annual General Meeting was held in Adelaide, South Australia, on 26 October. This was to be the last AGM for News Corporation as an Australian

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company. It was immediately followed by a series of four Extra General Meetings in which the proposal to re-incorporate News Corporation in the United States was to be voted on by shareholders. During the months prior to these meetings, there had been increasingly heated public debate about the move to the United States. Up until its re-incorporation in the US state of Delaware, News Corporation, with a market capitalization of AUD$70 billion, had been Australia’s second largest company—just behind mining conglomerate BHP-Billiton, whose market capitalization was AUD$75 billion at the time. Rupert Murdoch is a dominant figure in Australia, and the success of his global media business is a matter of some national pride.1 While it is not quite as wealthy as its two main American competitors—Viacom and Time-Warner—it is often credited in Australia as the “most global” media business. On 15 September, News Corporation released an ‘information memorandum’ to the Australian Stock Exchange (ASX), explaining and defending its plans to re-incorporate in Delaware. This was immediately questioned by Corporate Governance International and the Australian Council of Superannuation Investors. The laws that protect Australian shareholders do not apply in Delaware. For example, Delaware allows ‘board staggering’, which means that if some group were to take over the company, they would not immediately gain control of the board, as they would in Australia. Instead, each incumbent director would be required to complete his or her three-year term. Commonly referred to as a ‘poison pill’ provision, this makes any potential take-over much less appealing.2 From the shareholders’ point of view, this practice makes it much more difficult to get rid of directors and, by lessening the chance of a take-over, also reduces the take-over premium on share prices. Some analysts—notably, the ones not in the pay of News Corporation—argued that the move to Delaware was much

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more about maintaining the Murdoch family’s control over the company than about any of the purported benefits touted in the information memorandum. In the days leading up to the AGM, the major Australian institutional shareholders and various shareholder groups attempted to force News Corporation to maintain shareholder rights guaranteed by Australian law. Murdoch and his associates ignored this pressure until Institutional Investor Services, the dominant US proxy advisory group, stepped in and asked that the laws protecting Australian shareholders be maintained.3 As a result, on 6 October 2004, 20 days before the AGM, News Corporation agreed to reconsider its corporate constitution. A number of supplemental letters were sent out to shareholders, and Murdoch hired Georgeson Shareholder Services, a USbased proxy solicitation service, to help him get the necessary votes. By the time of the meeting, Murdoch had managed to ensure a 92 percent vote in favor of the move to Delaware. The AGM had now become a formality—a rubberstamping of a done deal. The AGM was held in the grand ballroom of the Adelaide Hilton International. The day before the meeting, Murdoch was given the key to the city, and he laid the foundation stone for the new offices of his major South Australian newspaper, The Advertiser. The Adelaide Hilton, which has a somewhat rundown appearance, overlooks Victoria Square in the central business district and is located a block away from the old Advertiser offices. In some respects, the Hilton Hotels group has had its heyday; it is possibly more famous now for the antics of the Hilton heiress Paris Hilton than much else. Indeed, the ‘International’ part of its name is reminiscent of a period before the current vogue for ‘globalization’. It is a signifier of ‘money’ and particularly the ‘old’ money of the Adelaide investors who filled the AGM. It seemed fitting that News Corporation, Adelaide’s single claim to a global company,

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was using the Hilton International as a place to mark its departure for globalizing America.4 The AGM was due to commence at 10:00 AM. I arrived at 9:00 and walked upstairs into a roped-off registration area where a number of people were milling around, drinking tea and coffee and eating biscuits served by waiters and waitresses. Shareholders were provided with voting papers colored according to the particular kind of shares they owned (blue for ordinary shareholders and yellow for preferred shareholders).5 The registration table was staffed by elderly women, giving the impression of a family fair or even a cake stall. The process was not particularly efficient or careful, and I was able to get my voting papers without proof of ownership. I walked into the ballroom and easily found a seat two rows from the front. The room was without much decoration. Plain chairs were set up in three columns with the largest set in the middle and two aisles separating each side group. Two microphone stands were set up in each aisle. A number of attendants from Computershare were helping people to their seats.6 Twelve board members, their names printed simply on white cards placed before them, were already seated on a long blue podium in front of two giant projector screens.7 The screens had not yet been switched on. The News Corporation logo was projected on the curtains behind the board members. A recent popular song, “Wrong,” by Everything But the Girl, was playing softly, its obviously significant chorus line, “Wherever you go I’ll follow,” implying, of course, that News Corporation shareholders should follow their leader wherever he took them. Directly in front of the podium were 20 or 30 photographers taking pictures of the board members. One bodyguard stood at the left-hand side of the podium surveying the audience. Generally, however, there was not an obvious security presence.

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The board members seemed bored. They were not speaking to each other and stared nonchalantly around the room. Most of them would not utter a word for the entire meeting. This was a very powerful and very rich group of men. At times they appeared almost uncomfortable—surprised, perhaps, to find themselves in parochial Adelaide. Murdoch has paid his directors very well. All of the board are paid over US$1 million a year in basic salary, with Peter Chernin, the chief operating officer, earning a bigger salary (nearly US$20 million a year) than Murdoch up until 2004. Some, such as Andrew Knight and Chase Carey, have made over US$100 million from News Corporation over the years. Most had flown from the United States to Adelaide International Airport on private jets and would leave directly after the meeting. (Lachlan Murdoch flew in the company’s corporate jet back to Sydney for a celebratory dinner at Machiavelli’s—a favorite restaurant of News Corporation employees.) With the majority of the shareholders seated, there was a sudden disturbance at the central back doors. I turned to see a crowd of people at the beginning of the central isle that led to the podium. Rupert Murdoch had arrived. There were some moments of hesitation and then Murdoch, walking by himself, proceeded down the aisle to take his place at the center of the podium. The cameras flashed wildly as he walked, and he was bathed in their light. Covering his eyes, he walked quickly in a vaguely annoyed, business-like manner toward his fellow board members. The procession to the chair was carefully organized—clearly designed for maximum impact. This was a grand entrance. Murdoch has been referred to as the ‘Sun King’, often in his own newspapers, and this did indeed seem like a royal entrance. Without greeting other members on the board, Murdoch seated himself and quickly got down to business. First, he explained the procedure of the meeting according to

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guidelines laid down by the Federal Court of Australia. He made it clear that the Extra General Meetings to decide the issue of re-incorporation had been ordered by the Federal Court. These meetings, he said, would be “technical and repetitive,” but it was very important that they be conducted properly. At this point, Murdoch’s tone was that of a schoolmaster laying down the law. The two large screens behind the podium now projected a slightly outof-sync image of his face. As the meeting began, the three faces of Murdoch looked out across the room. First on the agenda was the re-election of three board members (Cowley, Thornton, and Dinh) and the retirement of one (Bible).8 The re-election of each member was going through unopposed until Steven Mayne, a well-known ‘shareholder activist’, stood up to ask a series of questions.9 The general reaction to Mayne was one of amused annoyance—both from the board members and from the shareholders on the floor whom he was supposed to be defending! Throughout the meeting he played the Fool to Murdoch’s King, and at certain moments Murdoch greatly amused the crowd by dispensing with formality and wearily welcoming Mayne before he was properly introduced.10 Mayne’s questions were enjoyable moments in the meeting, but I was reminded of Adorno’s wonderful point about tolerated negativity in the culture of administration—“granted the space in which to draw breath by that power against which it rebels.”ll Shareholder activists are completely committed to the profit motive that defines the corporation. This was clear when a representative from the Australian Shareholders Association, who assured everybody that he didn’t want to spoil the positive mood of the meeting, asked a tame question regarding a 66 percent increase in Rupert Murdoch’s 2004 bonus payment (US$12.5 million) and a 94 percent increase in Lachlan Murdoch’s 2004 bonus payment (US$2.35 million).12 He pointed out that the ASA saw

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nothing wrong with the large bonuses paid to the Murdochs except that shareholders should also receive better returns. He was told by Andrew Knight, the chairman of News Corporation’s Compensation Committee that he had asked a “legitimate question” and that, “in future,” bonuses would be decided on an “arithmetical basis, with all human emotion removed.” This pseudo-science was unquestioningly accepted by the ASA representative. All of the questioners were exceedingly deferential to Murdoch. One speaker even began his question with an apology: “Sorry to bother you, Mr. Murdoch.” Most of the speakers made simple statements celebrating the company and praising the business acumen of Murdoch: “In my opinion, and I’ve told my wife this many times, you’re the most successful Australian businessman ever!” Or there were simple declarations of adoration from one woman: “We’ll miss you and we’ll miss these meetings.” Murdoch was certainly among friends—a tight little economic community directed toward the magnificent incomes and record profits of News Corporation.13 Any difficult questions—mostly those asked by Mayne—were either ignored or met with single word responses, for example, Mayne: “Mr. Murdoch, can I ask that you don’t vote the undirected proxies in your favour?” Murdoch: “No.” On another occasion, Mayne worried about the fact that 70 percent of the shares in the company do not have a vote, at which Murdoch became annoyed and argued that “stability of management is primary.” He insisted that autocratic control was essential for good profits, that other American media companies have voting and nonvoting shares, and, anyway, that “everyone has done very well.” An interesting piece of information emerged when Murdoch was asked to clarify the nature of his employment by News Corporation and the specific superannuation liabilities he is owed. Geoffrey Bible informed the meeting that Murdoch has no contract whatsoever—he

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is under no contractual obligation to shareholders. At this point, Murdoch jokingly informed the meeting that “you’re free to fire me at any time.” This was met with much laughter, despite its ominous implications. The News Corporation board also takes a very flexible approach to death. In answer to a question about state taxes in the United States, Arthur Siskind, the group general counsel, assured the shareholder that these would not affect Australian residents unless they had over US$1.5 million in shares, and even these were to be phased out if the Bush government was returned to office. He went on to say that he assumed the descendants of the shareholder would not volunteer information to the US tax officials “if, and when, you die.” This echoed an earlier comment made by Bible in relation to Murdoch’s retirement: “Rupert tells me he intends to live forever.” In the News Corporation community of money even death loses its sting.14 The AGM lasted 1 hour and 21 minutes, setting a News Corporation record with 16 speakers—the most speakers ever at an annual general meeting. The Extra General Meetings that followed went relatively quickly. Murdoch informed the meeting that the decision had already been carried by a massive 92 percent in favor. This overwhelming majority was due to heavy support from American funds managers. The formal procedures started to break down as each set of shareholders and option holders cast their irrelevant votes. At one point, Murdoch, who had been asking the company secretary, Keith Brodie, to read out the voting results, told us all that Brodie had “quit” and read them himself. Everyone had been worn out by the bureaucratic procedures. Each meeting decreased in time until the final meeting, which lasted a mere nine minutes with no speakers. By the end of the last meeting, most of the shareholders had already left the room and were eating the lunch

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provided outside by the company. No members of the board stayed for the AGM lunch. Many of them were already at the airport. The lunch was a quasi-gourmet affair playing at wealth—finger sandwiches with ‘high end’ ingredients, some cocktail pies, and a surprising abundance of cakes. Table after table of cakes awaited shareholders as they arrived in the reception rooms. One shareholder, a university student dressed in shorts and a T-shirt, told me that he knew the meeting was pointless but that he had come over anyway, between lectures, to “have lunch on Rupert.” Other shareholders expressed similar sentiments. There seemed to me to be a general feeling of impotence or irrelevance, which was perhaps diminished by such bravado. “It’s not every day Rupert Murdoch buys you lunch,” laughed another shareholder. Finally, the loyal shareholders waited patiently in a queue and handed over their proof of share ownership in exchange for ‘show bags’—a light-material bag containing some gifts from the company: • a DVD of the Matt Damon comedy, Stuck on You • RM Younger’s official biography of Rupert Murdoch’s father, Keith Murdoch: Founder of an Empire • Kylie Minogue’s greatest hits CD • a Donna Hay fashion magazine • Inside Magazine, a home improvement magazine • the Meg Henderson novel, The Last Wanderer Everyone had done very well.

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Notes 1. This is despite the fact that, in 1985, in order to buy Metromedia, an American television company, he became a US citizen. Murdoch inherited two South Australian newspapers from his father, Keith Murdoch, in 1952, and has since become famous for the aggressive, risky way in which he has built up his global empire. 2. Another important Australian take-over law makes it impossible for Murdoch to sell his 29 percent voting stock to a predator at a certain price without guaranteeing the same price to every other shareholder in the company. At the time of the 2004 AGM, News Corporation’s biggest hostile take-over threat was from John Malone and his Liberty Media group. Liberty Media is actually the largest News Corporation shareholder in terms of stock value, but due to a dual shareholder system installed by Murdoch in the 1980s, it only has 9 percent of the voting rights. 3. Institutional Investor Services is the most powerful provider of proxy voting and corporate governance services in the United States. The company provides research for 1,200 institutional clients, including the two largest institutional shareholders in the US—Capital and Fidelity. 4. It is almost as if the word ‘international’ stands for an older world modernism of states and their relations, while the key word for most companies now seems to be ‘global’—a postmodern corporate form in the process of establishing itself under new state conditions. Big hotels with fountains in open plazas have a kind of James Bond Cold War charm. These days, of course, celebrities and wealthy businessmen travel in secret on private jets and stay in unknown ‘boutique’ hotels. 5. News Corporation operates a dual share system and divides its shares into ‘ordinary shares’, which give shareholders the right to vote. and ‘preferred shareholders’, who are not allowed to vote. Currently, 70 percent of shares on issue are of the nonvoting variety. Since the dual system was introduced in 1991 (during News Corporation’s debt crisis), Murdoch has gradually increased the number of non-voting shares on the market. The Murdoch family holds the largest amount of ordinary or voting stock. Preferred shares, the non-voting stock, have always run at a discount to the ordinary shares. This encourages shareholders to buy the cheap non-voting stock and leave voting control

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to Murdoch and his associates. A number of investors at the AGM told me that they did not mind losing voting privileges as long as Murdoch continued to increase the share price. It is significant that the word ‘ordinary’ is used for voting shareholders and the word ‘preferred’ is used for non-voting shareholders. ‘Preferred’ would seem to indicate some special treatment, and it does—you get the honor of not having a vote! 6. Computershare is an Australian company that provides financial market services and technology to the global securities industry. They claim to be the world’s “largest—and only global—share registry.” They manage 70 million shareholder accounts for over 13,000 corporations. 7. The directors of the News Corporation board present at the meeting were Peter Chernin, executive director, president, and chief operating officer of News Corp; Peter Barnes, a non-executive director and member of the Audit Committee, who also sits on the board of Ansell, Metcash, and Samuel Smith and Sons and who, from 1993 to 1998, was the president of the Altria Group (formerly Phillip Morris), Asia (Rupert Murdoch sat on the Phillip Morris board for many years); Geoffrey Bible, a former chairman and CEO of the Altria Group (he was CEO of Phillip Morris when Murdoch was on the board of directors); Kenneth Cowley, who is also the chairman of RM Williams and was formerly the chairman of Ansett Airways and a director of the Commonwealth Bank of Australia; David DeVoe, senior executive vicepresident, chief financial officer, and finance director of News Corp; Viet Dinh, a Georgetown University Law professor who recently served as assistant attorney general for legal policy at the United States Department of Justice and, notably, helped to write the Patriot Act; Andrew Knight, non-executive director of News Corp and chairman of the Compensation Committee, who is also a non-executive director of the Rothschild Investment Trust; Lachlan Murdoch, deputy chief operating officer and a possible successor to his father; Arthur Siskind, the departing general counsel and senior advisor to Rupert Murdoch; Tom Perkins, non-executive director and also a partner at Kliener, Perkins, Caufield and Byers, a US law firm; Stan Schuman, a non-executive director who is also the managing director of Allen & Company and a director of Six Flags; John Thornton, who is a professor of global leadership at Tsinghua University of Beijing, a director of the Ford Motor Group, a director of Intel Corporation, and, until 2003, the president and chief operating

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officer of the major US investment firm, Goldman Sachs. Two directors not in attendance were Rod Eddington, who is also the chief operating officer of British Airways, and Chase Carey, who is the chief executive officer of DirecTV, a digital television and satellite company recently bought by News Corporation. Murdoch thanked Bible for his long years of duty and bid him farewell. It is worth noting that Bible was the chairman of the special committee called to consider the re-incorporation in Delaware and that, despite this key role in the company’s future, he immediately resigned following his recommendations to the board. This was pointed out by Steven Mayne at the meeting, but he was ignored. The structure of the question process at the meeting had a regal aura to it. If you wished to ask a question, you were to notify a Computershare attendant. After verifying your share ownership, the attendant would formally introduce you to the chairman. A shareholder would then greet the chairman, and Murdoch would either say “Good morning” or wearily nod his head in acknowledgment. “Oh, go ahead, Mr. Mayne” or “Yes, Mr. Mayne, you need no introduction.” This jolly interaction seemed to please Mayne, who clearly took some pride in being addressed in this fashion. After all, he was being recognized by “the most powerful man in the world,” as Mayne has called him in the articles he writes for Crikey.com.au, the popular Australian Internet Web site started by Mayne. Theodor W. Adorno, “Culture and Administration,” in The Culture Industry: Selected Essays on Mass Culture (London: Routledge, 1991), 118. The News Corporation annual general report states that Rupert Murdoch was paid a total of US$20,656,00 in 2004, and Lachlan Murdoch was paid a total of US$4,554,000. In 2004, operating revenues were up 20 percent to US$21 billion, while operating income was up 21 percent to US$3.1 billion. Both are standing records for the company. Warren Buffett, the second richest man in the world, has also achieved immortality through money. In the Berkshire Hathaway annual report a few years ago, he informed the market that his retirement was scheduled for “five years after my death—a date subject, however, to extension.” See the fascinating 2002 Chairman’s Letter to Berkshire Hathaway Shareholders at http://www.berkshirehathaway.com/letters/2002pdf.pdf, 5.

NOTES ON CONTRIBUTORS

 Caroline Ifeka is an Honorary Research Fellow in the Department of Anthropology, University College London, is currently a Visiting Fellow in the School of Archaeology and Anthropology, Australian National University, and is a member of the Editorial Working Group, Review of African Political Economy. Since the early 1990s, she has been based in the UK and Nigeria, where she is Senior Adviser to the Board of Directors of the African Research Association, a leading Nigerian NGO working with pastoralists and farmers for more sustainable development. Currently supported by a Leverhulme Trust grant, she is researching and writing on the role of the state, market forces, and indigenous cosmologies in political violence and changing responses to Christianity and Islam in West African formations. In late 2005 she is commencing a major new field research project with trans-border pastoralists and NGOs for conflict and poverty reduction in Nigeria, Niger, Chad, and Cameroon. Bruce Kapferer is a Fellow of the Australian Academy of Social Sciences and is currently Professor of Social Anthropology at the University of Bergen, Norway. Previously, he was Foundation Professor of Anthropology at the University of Adelaide and at James Cook University, as well as Professor and Chair at University College London. He is currently Davis Senior Fellow at the National

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Humanities Center, North Carolina, US. His published books include A Celebration of Demons (1983), Legends of People, Myths of State (1988), and The Feast of the Sorcerer (1997). He is leading a Norwegian Research Foundation project centered at Bergen on contemporary state formations and their effects. Roland Kapferer is a film and television producer and freelance writer based in London and Sydney. He has a PhD in Philosophy from Macquarie University, Sydney. From 2001–2003, he was the editor of the finance page for Tribe Online. He is a regular contributor to the art magazine Frieze, and in 2004 he was an associate producer and chief researcher for the Australian television series John Safran vs. God. He is currently co-writing and co-producing a new feature film for SBSi and completing a book on cinema and philosophy. Donald M. Nonini is Professor of Anthropology at the University of North Carolina, Chapel Hill, US. His ethnographic and historical research has centered on the formation of peasantries in British Malaya, on post-colonial ethnic and class relations among the Chinese populations of South-East Asia in the context of state formation, and on local politics and race relations in the southern United States during the current period of neo-liberal restructuring. His publications include British Colonial Rule and the Resistance of the Malay Peasantry, 1900–1957 (1992); Ungrounded Empires: The Cultural Politics of Modern Chinese Transnationalism, co-edited with Aihwa Ong (1997); and If This Is Democracy: Public Interests and Private Politics in a Neoliberal Age, co-authored with Dorothy Holland, Catherine Lutz et al. (forthcoming, 2006), as well as numerous refereed articles and book chapters on these and related topics.

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Steve Reyna is Professor of Anthropology, University of New Hampshire, US, and Visiting Research Professor, MPI for Social Anthropology, Halle/Saale, Germany. His research concerns social and cultural theory, systems of power, and Africa. He is the founding and first editor of the journal Anthropological Theory and the author of Connections: Brain, Mind, and Culture in a Social Anthropology (2002), Wars without End (1990), and “Literary Anthropology and the Case Against Science” (Man, 1994). Jakob Rigi has a PhD from the School of Oriental and African Studies, University of London, and is currently an assistant professor of Anthropology, Cornell University. His research focuses on post-Soviet change in Russia and Central Asia and the contemporary conditions in the Middle East. His major publication is PostSoviet Chaos: Violence and Dispossession in Kazakhstan (2002). His major research topic is empire and chaos. His current research project compares the forms of state in the Middle East and in the post-Soviet space. His major theoretical contribution is the concept of chaotic mode of domination as a new form of sovereignty.