Unelected Oligarchy:

Corporate and Financial Dominance in Britain’s Democracy

By David Beetham ( Democratic Audit):  [“What we call democracy is in fact a compromise between the power of the vote and the power of business, with government negotiating the interface between the two.”]

– This democratic audit of the UK takes place in the aftermath of the most severe financial crisis and economic recession since the 1930s, whose consequences will be with us for a decade or more. Like that of the 1930s this crisis has a global reach and significance, though with particular features distinctive to the UK in view of the comparative weight of the financial sector in its overall economy. The purpose of this paper is to identify what are the implications of this crisis and recession for the health of our democracy, in terms of both their causes and effects, and for what they reveal about the nature of power in a political process where supposedly ‘everyone counts for one and none for more than one’.

It will be worth beginning by posing a simple question or question series. How have we arrived at a situation where the government:

  • has been unable to prevent a near-terminal crisis of the banking system from taking place, with a subsequent recession affecting all sectors of the economy including the public finances?
  • has only been able to prevent a total collapse of financial markets by using enormous sums of taxpayers’ money to bail out the banking sector?
  • expects the burden of resolving the crisis to be borne by ordinary taxpayers, service users, welfare dependants and other vulnerable groups, rather than by the banks which were mainly responsible for the crisis?
  • is seemingly unable to control the bonus culture in the financial sector, or to get credit flowing to the businesses on which economic revival depends?
  • is so pusillanimous in reforming the way the banking system is organised, which Sir Mervyn King, Governor of the Bank of England, has described as ‘the worst it is possible to have’?

Answering this question series involves exploring a two-sided historical process since the 1980s, whereby, on the one hand, governments have increasingly lost capacity to control key areas of policy, particularly economic; and, on the other, the corporate sector as a whole has come to enjoy an unprecedented level of influence across all aspects of government and public life. Certainly governments, especially in the US and UK, have often proved all too willing collaborators in these processes. Yet the outcome of them has been an extraordinary limitation in government’s discretion on issues of substantial public concern, especially when faced with determined pressure from key corporate and financial elites.


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