Book Discussion: <i>Shadow Elite: How Studying Post-Communist Societies Illuminates the Structure of Power in America and Beyond</i>

A new system of power and influence has arisen in the past few decades. While key elements of this system debuted most visibly amid communism's aftermath in Eastern Europe – as new governing networks fused state and private power – the United States has also entered a new era of blurred boundaries. At a Kennan Institute lecture on 19 January 2009, Janine Wedel, Professor, School of Public Policy, George Mason University, described the striking parallels between post-communist power brokers and their American counterparts.

When the Berlin Wall fell, social networks, which Wedel observed first-hand in Poland, arose to fill the leadership vacuums of Eastern Europe. Such networks, which had both "undergirded" and "undermined" central planning, now helped shape the emerging system, according to Wedel. This network-based mode of governance developed because no strong authority rose up to fill the power vacuum. Known in Russia as "clans," in Poland as "institutional nomadic networks," and elsewhere in the region by still other names, these power structures were comprised of individuals loyal primarily to the network, not the state, business, and nongovernmental organizations for which they worked. These networks bear similarity to those that Wedel has given a new term to—"flex nets"—that operate in the U.S. and beyond. These networks of unannounced operators are distinct from the traditional lobbies and interest groups that have existed for decades.

Wedel described several similarities between these Eastern European networks and the ones arising in the U.S.– from the interlocking handful of Wall Street-government policy deciders who "coincide" at the highest echelons of power (and have come to be symbolized by "Government Sachs") to the new interdependencies between bureaucracy and market that their maneuverings help fashion. In the U.S., Wedel explained that one of the most prominent flex nets is centered around a core group of neoconservatives – a dozen or so tight-knit players she calls the "Neocon core" – some of whose members have been working together in various incarnations for the past thirty years to reshape U.S. foreign policy closer to their own vision. Just like the institutional nomadic networks of Poland, members of this Neocon core work both from outside and within the government, where they marginalize officials that are not part of their network and also bypass standard bureaucratic protocol and practices.

Wedel also described how members of this Neocon core have set up alternative structures that duplicate existing job descriptions, such as creating units in the Pentagon manned with trusted associates and fashioning an "alternate national security staff" to promote their specific foreign policy prescriptions. "The most vital function of any flex net – and the Neocon core is an excellent example –" said Wedel, "is to acquire and fashion their own official information. They construct an alternate official version and seek to brand it as the most authoritative." Wherever they operate, prime movers in the new system of power and influence make public decisions without public input in realms from finance and foreign affairs to government and society. They test both governments' rules of accountability and businesses' codes of competition, ultimately answering only to each other and challenging democracy from the inside.

In both the Eastern European and the American case, the networks of shadow elite came about as a confluence of four transformational developments. The first was a redesign of governing, characterized largely by outsourcing, deregulating, and contracting out government functions to the private sector. Second, the end of the Cold War and bipolarity created new sparsely governed arenas—from borders controlled by smugglers to financial sectors organized by wizards of finance—where various non-state actors could assume control. Third, increasingly complex technology, especially in the fields of communication and information, has created new forms of power that aren't bureaucratic or centralized. The fourth development, while not unique to the current American experience, pervades American media; Wedel describes it as the "embrace of ‘truthiness,'" a term coined by comedian Steven Colbert. Truthiness allows people to play with how they present themselves to the world, regardless of fact or track record, and often to get away with it because appearances of the moment have become nearly all important.

"The interaction of these four developments provides ample opportunity for today's top powerbrokers to weave new institutional forms of power and influence in which official and private power are interdependent and even reinforce each other," said Wedel. Flex nets are more amorphous and less transparent than traditional lobbies and interest groups, but they are also more coherent. Today's flex nets differ from power brokers of the past in that they are less visible, less stable, more elastic in their engagements, and more global in reach than their forebears. They also specialize in branding. Wedel concluded that studying post-communist societies helps illuminate the current structures of power that are forming in the U.S and elsewhere by demonstrating the necessity of focusing on the roles, networks, and sponsors of players at the state-private nexus and on the changing system that these players mirror. It is also imperative, she said, to critically examine standard concepts employed to describe power and influence—from interest groups and lobbies to a state-versus-private dichotomy—which often obscured analysis in transitional Eastern Europe and, with regard to the new breed of power brokers, does the same in the U.S. today.

By Larissa Eltsefon
Blair Ruble, Director, Kennan Institute