Yesterday, you'll recall I blogged about Mr. Putin's remarks to his national Security Council in which he seemed to outline two fundamental and long range challenges to the two central dogmas of Western finance capitalism: the dogma of the obscolescence of the nation-state, and the dogma of the ability of multinational corporations, trusts and cartels, to manage world affairs, politics, and culture, more successfully than nations and traditional sytems of alliances and collective security. These dogmas, as many suspect, have been behind the whole post-World War Two structure of the western world.
The effects and results of these dogmas in operation are visible for all to see, and have been particularly in evidence in all the use of all the instrumentalities of "soft power": credit ratings and their agencies being one. If one does not appreciate their role in the mess, consider again only the recent example of Greece, the role of Goldman Sachs, and more importantly, the role of Deutsche Bank and its ratings system.
Russia, too, has felt the influence of these institutions and corporations, and has acted accordingly:
There's a key point here, however, and one that indicates that Russia (and for that matter, China) are thinking about more than just their domestic ratings, and that this is perhaps far more than just a defensive measure:
Non-accredited rating agencies will also have the right to operate in Russia, but the law implies referencing only to accredited rating agencies. The Central Bank has also the right to establish the usage patterns of assigned credit ratings that are registered outside Russia.
The rating activity is recognized as exceptional and may not be combined with other activities, according to the law. The rating agency should ensure independence of its activities from any political and economic influence, prevent and detect conflicts of interest. It cannot withdraw the ratings assigned by the national rating scale based on the decisions of foreign states or international unions.
This is, to my mind, a crucial point, for the law is recognizing the role of the credit ratings agencies as instrumentalities of the West's soft power, for it is recognizing two things:
- It recognizes the role of these agencies in their interface between western governments and financial interests, and hence, that the agencies' touted "neutrality" is not actually the fact; far from it; and,
- It recognizes therefore that these agencies have acted in concert with the financial interests of the West versus the geopolitical and financial interests of Russia, and hence, under the new Russian law, cannot be seen as engaged in any way in any form of financial activity other than rating itself, a stricture that will be very difficult for those agencies to meet.
So herewith my high octane speculation of the day: the new Russian law and the joint Russo-Chinese efforts to establish their own parallel ratings agencies, will perhaps be used by those countries and their own corporate interests to challenge not only the ratings of the principal western agencies, but their underlying philosophical and financial assumptions. As I noted yesterday, Mr. Putin's remarks to his security council indicated a willingness to challenge the entire cosmology of the western oligarchs and Eurocrats. A parallel system of ratings could conceivable do that, if over time, that agency's ratings were more reliable than those of the West.
Time will tell, of course, if this speculative hypothesis bears out and has any merit, but the mere existence of the possibility, in the context of Mr. Putin's other remarks, indicates that Russia understands the sweeping nature of the current ideological conflict, and is prepared to take whatever steps it can in order to address them. This is not, therefore, a struggle that will end any time soon. it's a very long range view of things, and how it plays out in detail over the next few years and decades will be interesting to watch.