Janine Wedel - Shadow Elite - How the World's New Power Brokers Undermine Democracy, Government, and the Free Market

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It can feel like we're swimming in a sea of corruption, confused by who exactly is in charge and what role they play. The same influential people reappear time after time in different professional guises, pressing their own agendas in one venue after another. These are the powerful "shadow elite," the main players in a vexing new system of power and influence.
In her profoundly original Shadow Elite, award-winning public policy scholar and anthropologist Janine R. Wedel gives us the tools we need to recognize these powerful yet elusive figures and to comprehend the new system. Nothing less than our freedom and our ability to self-govern is at stake.

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Dirty Togetherness

I witnessed firsthand how people organized themselves for survival, and charted the networks that they used within and outside the bureaucracy and economy to get things done. An environment of scarcity and distrust of the communist state encouraged “dirty togetherness,” a Polish sociologist’s reference to cliquishness and core relationships of trust—typically family, friends, and trusted associates who help each other out through under-the-table transactions. Being “dirtily” together implies mutual complicity in such dealings. To be on one’s own under such conditions was about as far from a recipe for success as one could get. You were only as successful as your support network. 4

The rigid system that the communist state constructed had to be bypassed so that people could live in even minimal comfort. The key to state power was its monopolistic control and expansive bureaucracy that supervised the allocation of resources. It was a conflated system, one in which economic decisions were made in the political realm, and state and private power were merged in cliques of ruling communist elites.

The conventional image of a communist “command economy” conjures up a centrally planned, managed, and hierarchical state noted for its rigidity and undergirded by a proliferation of laws and regulations: a total state. But control was never quite as total as this popular caricature would have it. In reality, state control inadvertently encouraged the development of systems of informal relationships and practices that penetrated and stood apart from the state, even as it surrounded and existed within those informal relationships. 5

For instance, demand for consumer goods and services always outpaced supply, resulting in shortage economies. Citizens were forced to finagle to get a lot of what they wanted, leading to an elaborate system of informal distribution of goods and services that paralleled and often overshadowed the official economy. For the Soviet Union, economist Gregory Grossman called this a “second economy” but more familiarly it’s known as the “gray” or “underground” economy. While these terms imply two wholly separate economies or systems—the official and the unofficial—they were two sides of the same coin, acknowledged and unacknowledged aspects of a single system in which institutions and networks met far more extensively than official ideologies conceded. In the Soviet Union, this informal system was known as blat , “the use of personal networks for obtaining goods and services in short supply and for circumventing formal procedures.” 6

To eke out a more livable existence, nearly everyone engaged in under-the-table deals that Westerners might consider corrupt. Because this activity was risky, trust was indispensable, and personalizing bureaucracy essential. People personalized the little bits of the state that they had to interact with, forming relationships with officials, bureaucrats, and clerks. That meant either building relationships with them through an etiquette of exchange or mobilizing trusted contacts through informal social networks of family, friends, neighbors, and work colleagues. 7

The most important asset was word-of-mouth information, which could not be gleaned without trusted sources who could point to who, how, and where. Mama, with her uncanny ability to suss out what people could offer, to probe and retain information, and to bring forth favors from the secretary or clerk to the priest or Party director, was not only a veritable information bank. She was a dealer in privatized information—the quintessential “blatmeister.” 8

The quality of people’s lives often largely depended on knowing which person—rather than which institution or organization—could help secure routine goods and services. The who became far more important than what one needed help with. Among my friends in Poland, a typical list of errands consisted of names of people matched up with tasks. To repair heating, contact Pan (Mr.) Jan; for gasoline, Pan Piotr; for a driver’s license, Pan Grzegorz; for prompt medical attention, Pani (Mrs.) Jadwiga; or to reserve a place in a kindergarten or university, Pani Antonina. 9

Skirting the system—even when one was part of it—became a way of life with its own language, impulses of discretion, and habits of secrecy. If I said I had a matter to załatwić (arrange)—which could mean anything from making a telephone call or scheduling a babysitter to buying booze or gasoline on the black market—even the closest of friends would not ask for an explanation. As one of an entire arsenal of everyday usages, words like załatwić built ambiguity into often shady or illegal yet routine activities and enabled people to work out their daily existence while keeping up appearances. However necessary for survival, such activities often evoked in their protagonists both pride and shame—pride in having ingeniously gamed the system, shame in having lowered oneself to do so. Everyone had matters to arrange, all the time. Nearly everyone was complicit. Nearly everyone was dirty—together. 10

Dirty togetherness made almost everyone vulnerable and potentially guilty in the eyes of those in power. Laws were ambiguous, making them easier to apply arbitrarily when called for by political circumstances. This became the ruling irony of the Communist state: Under the rigid hand of state rule seethed a roiling mixture of commonly understood, officially denied complicity that actually made society run. As a popular saying in People’s Poland went: “Give me the person, and I’ll find the law [that he broke].” 11

In a system where extra-legal factors often determined the outcome of judicial decisions, legality diverged markedly from morality. Take, for example, attitudes toward state property, which belonged to both everyone and no one. The common workers’ practice of setting aside goods belonging to the factory, which was owned by the state, to take home for their side jobs was regarded as merely lifting and morally acceptable. On the other hand, if a worker took goods that already had been set aside for personal use by a fellow worker, this was stealing. It was the difference between loyalty to one’s fellows and to the state. 12

While people exhibited stunning disregard for official institutions, these same institutions depended on the informal practices created by those people to function. The networks and practices typically ascribed to the informal realm also penetrated the workings of the official, formal one, from the economy and bureaucracy to legal, judicial, and political structures, and to communist parties themselves. State-owned enterprises are but one example. As the economist Joseph Berliner wrote in his classic 1957 study of factory operations and management methods in the Soviet Union, “Only by engaging in irregular practices can the manager run a successful enterprise.” False reporting ( pripiski)—used to maintain manageable production targets or to obtain rewards for plan overfulfillment—was the norm, as were “pushers” ( tolkachi ), whose job it was to smooth relations with officials and suppliers and bend the unbendable system of bureaucratic allocation. Such informal practices subverted the system of planning—and rewrote the rules of the game. 13

Of course, at the system’s highest reaches, formal and informal were often fused, as were state and private, bureaucratic and market. The system was tailor-made for the privatization of power: Communist operatives exercised the prevailing influence in state bodies of all kinds, sometimes supplanting their formal prerogatives. In Polish parlance, układy are the relational “arrangements” of operatives who can exercise or activate power, especially that of the state—if only to supplant it. These operatives are not only “dirtily” together to achieve a shared agenda, the formidable power alliances they sometimes create play out on the national stage. Within the Communist power apparatus, charges of criminality or corruption by one group against a rival one could render the rival a discredited nonplayer. Likewise, in the Soviet Union, “clans”—closed informal groups “bound by shadow relations [and] hidden norms” and operating in a harsh environment—ran the military industrial complex and other crucial resource enterprises of the state, as economic sociologist Leonid Kosals has documented. 14Provincial bosses brandished personalized power, and patronage networks virtually ran various regions of the Soviet Union. Thus, while the Soviet state “was a virtual labyrinth of bureaucratic structures, . . . it was a far cry from a rational-legal bureaucratic state,” as a political analyst of these networks has written. 15

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