The Tyranny of Intermediaries

Earlier this year, I wrote an essay, initially for The New Statesman, but which was then never published. Given that it's unlikely to find a home anywhere else, I thought I'd stick it up online as is. I've called it The Tyranny of Intermediaries. (If anyone would like to re-publish it somewhere else, please let me know). It looks at the problem of intermediary power within capitalism, that is the accountants, lawyers, financiers and consultants who are critical to making capitalism possible at all, but also act in their own private interests.

Here's a chunk:

Capitalism relies on its ‘interpreters’ and its ‘judges’. Between, say, a manager overseeing a company and a pension-holder receiving dividends from that company there is a long chain of intermediaries, each of whom subtly translates information as it is passed along. And decision-making by investors, consumers or employers is constantly dependent on the expert judgement of accountants, regulators and lawyers. Just as in a parliament or a court of law, acts of translating and judging carry huge public responsibility. If they become determined by the private interests of the interpretor or judge, then everybody else is in serious trouble. This is what has happened.

The credit-rating agencies have been roundly criticized, for being so seduced by the rhetoric – and money - of the investment banks, that they gave glowing endorsements to financial products that they scarcely understood. And public outrage with (legal) corporate tax avoidance has belatedly turned to the big accountants, who translate ‘profit’ into less taxable categories. But the power of these intermediaries is undimmed, because they are the facilitators of contemporary capitalism, and not ordinary participants.

One might argue that finance itself falls into this category, or should do, and that the tendency of politicians to view financial services as one of Britain’s leading ‘industries’ is dangerously misguided. Kill the car industry, and Britain shifts mournfully towards a post-industrial capitalism of retail, coffee and tourism. But kill financial and business services, with their codes, measurements and audits, and contemporary capitalism simply cannot proceed. Those who we depend on to carry out economic evaluations are placed beyond evaluation, or else the system collapses into infinite regress or relativism.

Comments

[Dave]

I don't know when it's out, but this notion of the collapse of the elite's sense of itself as in any way needing to be a coherent political and economic force under neoliberalism is one Doug Henwood's long-forthcoming new book is addressing. You should hook up with him. I'd love to hear you two riffing on modern capitalism.

[Tomicki]

It's OK for you to write these things and I admit I enjoy reading them, albeit to an extent. what you actually do is you diagnose the contemporary state of affairs, in a way restricted to a branch, and deliver the critique. The area of your observation is your natural economic and scientific habitat, that is the West. Please come to Poland, Slovakia, Bulgaria, and after living there in any of those places for a year, only then revisit your presentations. Now, there's a chalenge in there: on top of brilliant presentations of the problems, give me solutions.