Defining the Deep State

With elections looming in the US, UK and EU, it’s worth examining the term “Deep State” being used by populists in the hope of understanding their perspective.

Summary: Western populists use the term “Deep State” to refer to the establishment. By using this term, they are attempting to convey that there is a class conflict between them and the specialised bureaucracy, that this bureaucracy, which is charged with competently safeguarding their interests, is failing them, and that elected politicians of various stripes are complicit in this failure. This essay attempts to explain this point of view from a political economy perspective, in the hope that those on both sides of the political divide can better understand one another.

The “Principal Agent Problem”

Economists have written extensively about the “Principal-Agent Problem”, the natural conflict that occurs in a corporation between the owners – the shareholders, or principals – and their agents – the managers. The “Principal Agent Problem” stems from diverging interests between management and owners. Managers’ interests may include empire building, maximising their own pay and prestige, enlarging their staff, investing in technology that the owners may not understand, or pursuing products that they believe in even if they go against commercial logic. The owners, or principals, have a different set of interests – profit, short term or long term, a small payroll, less legal risks, high dividends and high share prices. The conflict is accentuated by information asymmetry – top executives have more information than shareholders, who rely on public disclosures made by the managers. This conflict is understood as natural and is extensively studied in economic literature.

The “Principal Agent Problem” in Politics

There is a similar conflict between any bureaucracy, or leadership, or establishment, that possesses specialised knowledge and keeps many of its actions and deliberations secret, often rightly so, and the elected representatives who are meant to control or be responsible for that establishment. The insiders – the bureaucrats or the establishment– naturally have information and experience that the public and their elected representatives – or the principals – do not have. Furthermore, throughout the West, the professional bureaucracy – not elected representatives – often controls its own promotion prospects. Like any organisation, it uses this ability to reward loyalty and punish dissent. As with any other organisation, this creates the possibility of informal back-scratching networks, group think, and hostility to outsiders. Furthermore, no bureaucracy or establishment is immune from the temptation to expand its influence, membership and funding. People naturally seek power.

In addition, in the modern West, elected representatives depend on the bureaucracy for expertise and knowledge – most elected representatives, including those who become cabinet secretaries or ministers, do not understand the intricacies of their own portfolios. They are in office for two or three years, they often come from a different background, and they are very vulnerable to being publicly humiliated by the press due to their lack of specialised knowledge and skills relevant to their portfolio. They therefore need to remain on good terms with the bureaucracy and/or the establishment or unelected expert community. The politicians cannot dissent too far from the elite consensus. As a result of this information asymmetry and skill gap, elected representatives often have to defer the establishment, with their role often being reduced to selecting from among the options that bureaucrats and experts give to them.

Moreover, the press depends on its connections to the bureaucracy to obtain its stories – most modern media depends on young journalists, who are, by virtue of their inexperience and youth, poorly informed and easy to manipulate. These journalists need to be briefed by bureaucrats or establishment figures who have far more experience. It is easy to feed them stories that favour the bureaucracy and its favoured experts which can show the elected representatives as foolish. The journalists, at the end of the day, depend on the establishment. Barack Obama’s Deputy National Security Advisor, Ben Rhodes, bragged about that.

These considerations are true of any bureaucracy or establishment– they are true of the civil service, the education establishment, the healthcare sector, or central banks and the banking sector. They are also true of the foreign service, defence, intelligence and security bureaucracies. That said, however, the term “Deep State” primarily refers to the latter group, as they are believed to have more power over war and peace, and over government spending, than any of the others.

A Conflict of Interests?

Those with specialised knowledge and long experience in defence, foreign affairs, intelligence, economics, security and geopolitics may view the world in a particular manner. They may, for example, carry assumptions about the relationship with Russia, or about the military capabilities of the West, or about the rise of China, that others may view as unjustified. They may view relationships with defence companies or with major banks as critical to national security or economic health, respectively, and may be willing to sacrifice efficiency to guarantee that national defence or banking champions survive. They may think of their country’s international military presence, and/or of the foreign aid their country provides, as necessary for retaining their country’s influence – or even their own influence as individuals. They may wish to replicate their own country’s governance or economic systems in other countries, viewing that as a way of securing their own systems and of expanding their country’s power. These all may well be legitimate objectives or justified views.

There can also be less legitimate objectives. Throughout the world, national defence companies hire former defence officials to their ranks, just as banks and pharmaceutical companies hire former regulators. There is an understandable need to obtain their expertise. However, there is an inherent conflict of interests. Those on government salaries may view their retirement provisions or compensation as inadequate. The private sector can pay considerably more in comparison. There is therefore an incentive to serve the interests of corporations, even at the public’s expense, during one’s tenure in officialdom, in the hope that, after retirement, these corporations will prove generous. How else can on explain the fiasco that is Britain’s two modern aircraft carriers, neither of which can be sent even to training exercises, let alone war? How else can one explain the repeated failures of regulators to rein in the banking industry, despite its obvious problems?

Furthermore, there may be a conflict of values, or, at least, priorities, between those in the defence, foreign affairs, intelligence and security establishments, and those elected representatives whose primary concerns are domestic. The latter may view defence and aid spending as excessive, and wish to direct that spending towards domestic concerns, such as infrastructure, benefits, or investment spending. The entrenched establishment may believe, sometimes correctly, that the economic wellbeing of its country is dependent on its international relations, which are lubricated by aid, military prowess, and an interventionist policy, and that undermining those policy areas to prioritise domestic concerns may backfire.

An Echo Chamber

Crucially, however, former defence, intelligence and security officials are no longer working just for weapons companies. Some of them are joining media organisations as pundits, others are joining think tanks and the independent expert community who are brought on by the media to explain the world to their viewers. This creates an overlap between the media and social media companies on the one side and the security, foreign policy and defence establishment on the other. This overlap is concerning, in that it reinforces the ties between the bureaucracy and the press. It makes the establishment more interconnected and increases its ability to shape public opinion. The media is meant to be a watchdog that oversees the establishment. But who watches the establishment when their current personnel leak stories to the press, and their retired personnel join the media directly? What prevents the kind of group think that led to the Iraq and Afghanistan fiascos, and to the unfolding Ukraine and China fiascos?

Moreover, former intelligence, defence and security officials are joining social media companies. They are helping transfer skills that are appropriately used against the West’s enemies to help form opinions and police speech abroad into the domestic sphere. This latter development is particularly disturbing, as this gives extensive control over what ought to be free political speech to a network of security professionals that are often still deeply connected to their former employers. With the ability of social media to amplify certain viewpoints and silence others, the risk of an echo chamber only increases.

Defining the Deep State

The above discussion allows us to define the deep state, from the perspective of the populists. The deep state in the context used here and by populists refers to the network or networks formed by security, defence, foreign relations and intelligence bureaucrats, be they active, retired or going through the revolving door between the private and public sectors. This network is composed of unelected individuals, with deep ties to commercial interests and to the press. It seeks to shape and guide policymaking, based on its perception that it is more experienced and more competent than elected representatives. It shares a certain set of liberal interventionist values, predicated on the assumption that Western intervention can always be beneficial both to the West and to the countries that the West is intervening in, and that Western militaries are capable of achieving the political objectives set for them by their leaders. This establishment lives in metropolitan areas, not the hinterlands, and its work is not manual or in the service industry - its work is in writing, publishing and speaking. It does not understand the farmer, the nurse, the plumber or the shopkeeper.

The individual bureaucrats within the so-called Deep State, and their former colleagues who now work for large defence corporations, or in politics, or the media, or social media, this network, has shared beliefs and experiences. Others who have not been in their world of intelligence, war, surveillance and defence do not share these experiences, and do not have the resultant cohesive bonds and shared beliefs. Moreover, without resorting to conspiracy theories about smoke-filled rooms, these networks can move in step, each individual acting in accordance with the values and collective interests of the group and from his own position in the private or public sector, or the media and social media. This is not necessarily malevolent, as these individuals may well believe that their own interests and values further the wellbeing of their countries and the West in general. From the perspective of the populists, however, it can most certainly be malevolent. Some cases that populists may cite include:

• The Obama administration got its foreign allies, including in the UK, to spy on Donald Trump’s campaign. It then used that as a pretext to spy on the Trump campaign itself through highly un-transparent FISA warrants.

• Trump was accused of collusion with Russia, but then there was no evidence presented by the Mueller investigation. Trump went on to provide Ukraine with arms to fight Russia, something which Obama had strongly opposed. From the populist perspective, it was never explained how Trump was working for Russia but also providing Ukraine with lethal arms that his Democratic predecessor had refused to provide.

• More than 50 intelligence officials claimed, right before the 2020 presidential elections, that the Hunter Biden laptop, which contained evidence of Hunter receiving payments most likely for access to his father, was Russian misinformation. Court filings by Department of Justice lawyers showed that it was genuine. The officials were never reprimanded or held to account, despite their blatant intervention in elections.

• Twitter locked the New York Post out of its account to prevent it from reporting on the Hunter Biden laptop story, while Facebook prevented the story from being shared, in October 2020 – preventing an “October surprise” that, according to populist Trump supporters, could have cost Biden the election.

• Social media companies were instructed by officials working during the Trump administration to silence “conspiracy theories” that COVID had leaked from a lab. The “lab leak conspiracy theory” then became the official position of at least some US government agencies under Biden. The populists claim that these companies were never held to account, nor was there an adequate review of their power.

• The British Army’s information warfare unit illegally spied on critics of lockdowns, including journalists. Ministers then sought to protect the unit involved from consequences. Lockdowns were then found to have had a negligible impact on COVID death tolls.  

• The media, security bureaucracy and pundit communities almost uniformly supported the Iraq intervention, the Syrian jihadi-dominated rebels, the Libya intervention, Ukraine and now, soon, Taiwan, leading to wars that populists view as unnecessary and as having led to unsustainable migrant flows.

• The expert community, the state and the security bureaucracy are publicly silent about the threat from Islam, even as British MPs have reported fearing for their personal safety from their Muslim constituents.

A Question of Competence

The establishment – or, if you prefer, the deep state – claims to be safeguarding the national interest of Western countries, utilising its superior knowledge and experience to keep policymakers from committing dangerous mistakes that are based on short-term electioneering but that may harm the nation in the long term.

The authority of the establishment rests on its claim to be capable, competent and effective. However, when the record of the establishment in the past two or three decades is considered, that authority becomes vulnerable. Recall the following.

In the economic sphere, the Western establishment decided to open its markets to China, and to outsource to China critical industries like steelmaking, car-making, electronics, chemicals and pharmaceuticals. Then, having denuded itself of its industrial capacity, the US-led West is choosing to confront China over the question of Taiwan (while officially admitting that Taiwan is a part of China). From a populist perspective, this is incoherent.

The establishment is also choosing to challenge China after having sanctioned Russia in a manner that deprived the West of cheap energy, and, in doing so, gifted it to China in abundance. From the populist perspective, no one explained how the West’s industry is supposed to prosper without cheap energy, or how the West will confront China if China has cheap energy and enormous industrial capacity, but the West does not.

In the military sphere, the Western establishment decided to invade Afghanistan and Iraq and attempt to build liberal democracies that protect women’s rights. The establishment then removed the government of Libya, and watched as the country became a den for smugglers and slavers. The establishment also decided to back jihadists in Syria, painting them as freedom fighters. The results of these policies included domestic terrorism and unsustainable refugee and migrant flows that destabilised the West. The establishment also chose to keep on backing the Ukrainian military, only to belatedly discover that it could not outproduce Russia in basic military goods like tanks and artillery shells.

From the populist perspective, these failures discredit the establishment’s claim to be a competent steward of the national interests of Western nations.

Conspiracy Theory or Class Consciousness?

From the populist perspective, it is distressing that no one in the establishment has expressed any doubt, reversed his position, or admitted any error over the above litany of objective failures, and that no one was held to account. From the perspective of the average person who is interested in politics but not plugged into the establishment, that is, from a potential populist voter’s perspective, it is self-evident that this lack of accountability comes from in-group dynamics: the establishment is covering for its failures and has no interest in honesty or accountability. This is what the populists believe – regardless of whether we agree with it. There is value in understanding this perspective.

To highlight this legacy of failure and unaccountability, some on the populist right and in the dissident left have resorted to referring to the establishment as “the Deep State”. They mean to say that the establishment has too much power, has repeatedly made poor judgement calls, has not been held to account, and continues to push for policies that have failed to deliver benefits to the voting public, who theoretically own it and to whom it theoretically owes allegiance.

Perhaps one should consider Keir Starmer’s response, when asked if he would rather work with Westminster or Davos. Sir Keir said Davos, without a hint of hesitation. To Sir Keir, this reflects his view that politics is now a global issue. To a populist voter, this reflects Sir Keir’s lack of interest in his own everyday concerns. A populist voter who describes Sir Keir (or Boris Johnson, or Rishi Sunak) as a globalist, or as a tool of of the Deep State, is attempting to express an understanding of diverging class interests between those who are in the establishment and in the circles of power, and those who are not.

Populists vs the Deep State

The populists argue that US and Western foreign policies are responsible for the cementing of a Russian – Chinese – Iranian alliance that combines the resources of Asia and Russia with the industrial capacity of China. Considering that the strategic logic for the Anglosphere’s involvement in the two World Wars was to prevent the combination of German industry with Russian natural resources, this is a strategic blunder of world changing proportions. This is happening at a time when the West has hollowed out its industrial capacity and saddled itself with unprecedented levels of debt – in peacetime.  

Furthermore, the populists believe that, while overseeing such strategic failures, the deep state, or the establishment, has gradually adopted far left positions on cultural and social issues, such as feminism, transgenderism, marriage, abortion, immigration and race. In doing so, the populists believe, the establishment alienated the traditional conservatives who had always formed the backbone of the police and armed forces. This led to a crisis of recruitment across the West, where not a single major army is meeting its manpower needs. The populists also blame the establishment for allegedly stifling the West’s economy – and society at large – with regulations about race, diversity, hate speech and the like, threatening the core tenets of freedom of speech, freedom of assembly and the free market. By threatening these core Western tenets, the populists believe that the room for compromise between them and the establishment is reduced, and the stage is set for great instability as the populists – who view themselves, in some cases correctly, as the elected representatives of the public – struggle to bring their supposed agents in the deep state back in line.

Admission

I have attempted to express the views of the populists about the establishment, or what they refer to as the Deep State, as best as I can. As an analyst, I believe that I owe my readers honesty: I have some sympathy for the populist perspective, even though I do not adopt its views or personalities wholesale (or sometimes at all). I hope, however, that the above was sufficiently neutral and objective to explain how populists view the establishment, without unwarranted malice to either side.