Poisonous unofficial networks are the rule among the British establishment—something the phone hacking scandal has exposed.
Informal mechanisms of networking and influence provide real power for the wealthy. It is not that the meetings drinks and dinners appear corrupt. They are corrupt.
A unity of purpose and a sense of decorum—or secrecy—about these arrangements are usually enough to keep them concealed or at least opaque.
The divisions between the media, police and politicians in the hacking scandal temporarily fragmented that unity.
The state is the instrument by which the wealthy rule.
But it is not necessary for the whole ruling class to be present at all the state’s meetings. That’s where politicians come in.
Most of the time the rich and multinational firms can rely on lobbyists and pressure groups to push their cases for reduced taxation, less regulation, or increased attacks on the poor.
In recent years big business has tried to make the government the direct servant of its immediate needs.
We can see this most starkly when companies get into trouble then demand government bailouts. But it is also there in the background with corporations asserting their control over the state.
Officially, a majority of citizens direct the state in modern democracies.
Individual greed may exist but the state supposedly transcends this to become the collective expression of “national” will. The state expresses the common good.
Where this breaks down and vested interests distort politics the term corruption is used. The dominant ideology argues that this is the exception in modern democracies.
But in reality the state is far from neutral, and legalised corruption is built into the nature of all modern capitalist societies.
It isn’t unusual for a crisis to bring the state’s contradictions to the fore—or for accidents to bring corruption to light.
Far from companies simply behaving as isolated units chasing profits, they cement alliances with each other and politicians.
Partially this is done through socialising, networking, marriage or affairs. That is why former ministers sit on the boards of the companies they regulated.
It is why the lobbyists become spin doctors, and advisers and corporate lawyers become politicians.
The handful of people who control the big corporations and financial institutions take all the major decisions about investment and jobs. They have only one interest—profit.
And the state always comes down on the side of the class that shapes society through its economic decision-making.
Partly this is because the judges, the police chiefs, the military top brass and the editors of newspapers come from the same background as those running the top firms.
They are allowed to share some of the wealth of the system and they all maintain close connections.
Such people represent the core of the state machine. They will stop at nothing to preserve their power.
The state and capital are intertwined and feed off each other.
The state tries to regulate the supply of labour to companies and to remove obstacles to the sale of their products. It creates an infrastructure that allows the production and distribution of goods.
The state establishes rules so that companies can compete and cooperate.
Importantly, it also acts as a nightwatchman by providing a security service to protect property. Its police force and army tackle domestic and external threats.
The state relies on companies to provide a viable economy to uphold its vast bureaucracy—and the lifestyle of those at the top of it.
This means there is a structural interdependence between the state and those who run the economy at the heart of the system.
The circulation of personnel between business and politics is not simply corrupt. It is necessary for the smooth running of capitalism.
Despite some predictions to the contrary, the growth of multinational corporations and globalisation means companies need ever greater access and close personal ties.
And the state bureaucracy spends more time concerning itself with corporate welfare.
The circle of toxic filth between Rupert Murdoch and Tory and Labour politicians worked like this.
The money to fund the papers came from the growing empire of television channels of News International. Prime Ministers from Thatcher through to Blair deregulated broadcasting—enabling Murdoch to make a fortune.
David Cameron was about to deregulate further—but a planned BSkyB deal was aborted when the hacking scandal broke.
Murdoch used the newspapers as both a blackmail tool and, because of their perceived influence over voters, as leverage over the politicians. That the politicians took little convincing is beside the point.
Crisis cracks the class consensus
The hacking of phones was widespread across the media.
The blagging of identities by police officers was not just standard practice, but actively encouraged and guaranteed a steady income stream.
Former cops and spooks spied with impunity. But when Glenn Mulcaire tapped the phone of the royals he accidentally turned one bit of the state against them.
As the hacking scandal developed, the different parts of the establishment turned on each other.
The police went for the journalists who had been bribing them. The politicians went for the police who had been cosy with the journalists who were blackmailing them.
Each blamed each other and each attack widened the crisis yet further.
That is why the cops, in an ill-conceived defence against cuts, targeted a cabinet minister in what became known as “plebgate”.
It is why Cameron and Ed Miliband could find themselves both attacking and courting the Murdoch empire.
It is also one reason why the scandal was, and is, potentially so damning. The pillars of the establishment are meant to protect and support each other.
When a crisis hits, British institutions have often appeared to embrace drastic reforms while staying basically unchanged.
They are capable of casting aside previously important individuals for the sake of stability.
These institutions are a facade behind which the real rulers can pursue their objectives.
Public inquiries in essence play this role. They bring delays and confusion when those at the top are in crisis.
So Lord Leveson didn’t look at hacking or corruption, but “press ethics”. The trial of Andy Coulson looked narrowly at some very precise charges.
In each case there is a wealth of detail, some of it deeply damaging.
But the purpose is to keep the issue from fundamentally harming the institutions they claim to investigate.
But every time we get to see the way the system works it should provide another reason to get rid of it.
Karl Marx pointed out that the wealthy wallow in their alienation. They may have lol’d through the country suppers and the yachts but the relationship is a necessary one.
Business is under pressure to develop strong relations with the state. That means a pressure to cut others out and gain an advantage over rivals.
Why else would a company donate to a political party except to further its interests?
Different bosses have differing interests. When these bosses compete for access, corruption can develop. But this corruption is not always healthy for the system.
If one set of capitalists is more successful at influencing politics in their interest, inevitably others will do badly.
Capitalism is built on competition, and as competitive pressure increases, so does the corruption.
What scandals can do is puncture the illusion of a state that rules in everyone’s interest—an illusion that the day to day running of the state relies on.
The US sociologist Amitai Etzioni made a distinction between “retail corruption”—bribing an official for planning permission—and “wholesale corruption”, where enormous funds are used to make sure elected representatives bend to your interests.
The hacking scandal was about the wholesale corruption of politics.