Financial Oligarchy

In capitalist countries, a small number of financial monopoly capitalists or groups of financial monopoly capitalists control the financial capital, control the national economic lifeline and actually manipulate the state power.

The formation and characteristics of financial oligarchy are discussed in detail. With the development of capitalism, credit is also developing day by day. On the basis of developed credit, share capital is produced. At this time, industrial capital and bank capital are also increasingly infiltrating, and bankers are becoming industrial capitalists to a greater extent. Through this way, the bank capital which is actually transformed into industrial capital, namely the capital in the form of money, is called “financial capital”. The few monopoly capitalists who control the financial capital are financial oligarchs. The essence of financial capital is the rule of financial oligarchs.

Lenin affirmed the statement of “financial capital does not want freedom, but domination.” In his book Imperialism, the Highest Stage of Capitalism, he not only reveals the economic basis and law of the formation and development of financial capital, but also studies the influence of financial capital on economy, politics, social culture and other aspects, that is, the rule of financial oligarchs. Lenin expounded how “under the general conditions of commodity production and private property, the ‘business operations’ of capitalist monopolies inevitably lead to the domination of a financial oligarchy”.

The rule of financial oligarchs is first and foremost economic domination. The main means for financial oligarchs to realize economic rule is “participation system”. The so-called “participation system” means that, in order to control a certain production sector, financial oligarchs can not only directly annex small and medium-sized enterprises, but also purchase or exchange stocks, that is, “participation” in the capital of these enterprises. Through this “participation system”, the financial oligarch controls the parent company (the parent company), which dominates the subsidiary company (daughter company) that relies on it, and the latter controls the smaller company (granddaughter company). In this way, the participation and control at all levels formed a huge financial capital control system, and the top layer of this system is a few financial oligarchs. As long as they have less capital, they can control the huge production sector. In theory, 50% of the capital is needed to control the entire joint-stock company. However, practice has proved that the share of stock that must be controlled by a company is far less than 50%. Because there are always some small shareholders can not participate in the decision-making of the general meeting of shareholders. This may enable financial oligarchs to control much more than their own capital with very little capital. A financial oligarch, which controls its subsidiaries, dominates many of its subsidiaries with a total capital of far more than its own through the “participatory system”. And these subsidiaries can control more companies in the same way. Therefore, Lenin argued that the so-called democratization of stock ownership is only a means of ruling by financial oligarchs.

Issuing securities, especially stocks, is a major business of financial capital and financial oligarchs. In the period of industrial boom, this business can make financial capital and financial oligarchs obtain excess profits and entrepreneurial profits. During the crisis period, it can increase its income and expand its power by participating in the “reorganization” and “reorganization” of loss-making enterprises. Land speculation is also a particularly advantageous business for financial capital and financial oligarchs. In the suburbs of big cities that are developing rapidly, land prices will rise rapidly because of the development of transportation and the expansion of urban areas. At this time, bank monopoly, land monopoly and transportation monopoly will be combined together to engage in land speculation. “‘American ethics’, which the European professors and well-meaning bourgeois so hypocritically deplore, have, in the age of finance capital, become the ethics of literally every large city in any country.”

The economic monopoly of financial oligarchs will inevitably lead to the strengthening of their political rule, and their influence will permeate all fields of social life. Lenin said: “A monopoly, once it is formed and controls thousands of millions, inevitably penetrates into every sphere of public life, regardless of the form of government and all other ‘details’.” In order to turn the state power into their ruling tools, financial oligarchs, on the one hand, bribe government decision-makers and senior officials through various channels to exert pressure and influence on the internal and external policies of the government, so as to ensure the formulation and implementation of policies, decrees and measures conducive to financial capital; on the other hand, they send agents or go out in person to hold important positions in the government and parliament then master the state machine. In addition to the economic “individual union”, it also implements the political “individual union”. In addition, they have set up many enterprises and institutions, mastered the tools of public opinion such as publishing, newspapers, communications, radio and television networks, intervened in various undertakings such as culture, education, scientific research, art, sports and health, and penetrated the rule of financial oligarchs into all areas of the superstructure.

After the financial oligarchs have gained the dominant position in the domestic economy and politics, they must demand external expansion. By means of capital export, establishment of transnational corporations, and monetary and financial means, they have occupied foreign markets, seized raw material resources and established spheres of influence, and exploited and plundered people all over the world. A few profit-making countries have gained hegemony. Financial oligarchs use financial instruments as weapons to bring the whole world into the capitalist world system and impose colonial rule and financial strangulation on the vast majority of the world’s residents. Lenin said: “Capitalism has grown into a world system of colonial oppression and of the financial strangulation of the overwhelming majority of the population of the world by a handful of ‘advanced’ countries.” Lenin put forward imperialism as the world system of capitalism, which went beyond the research method of taking the state as the unit, closely combined the economic and social development of various countries in the world with the development of monopoly capitalism, regarded monopoly capitalism as a world system with internal connection, and examined the development and change process of capitalism from the perspective of the overall development and change of the world, and in this scientific theoretical system, it expounds the role of financial capital and financial oligarchs.

After the World War II, due to the development of private monopoly to state monopoly, financial capital not only expanded its economic strength rapidly, but also possessed more and more social wealth. Moreover, the “personal union” between financial oligarchs and government institutions was further strengthened. Financial oligarchs personally or appoint agents to assume important positions in government organs, so that the policies and decrees formulated by the government directly serve the interests of financial oligarchs. Kennedy and Rockefeller, the financial oligarchs of the United States, served as president and vice president in person. At the same time, financial oligarchs employed officials who had held important positions in political and military circles to their own companies to hold senior positions, and used their contacts with political and military circles to influence government policies. In addition, financial oligarchs also set up various social institutions, such as “Entrepreneur Association”, “Federation of Economic Organizations” and “Think Tank”, through which they put forward various suggestions to government institutions to control government policies and make them serve the interests of financial oligarchs better.