The United States is an oligarchy. We all know it. We stretch our vocabularies to avoid calling it that. Such verbal contortions abound: it’s the special interests influencing Washington. Progressives: it’s the billionaires! Nativists: it’s the Davos class! Left and right (together): globalization! The Establishment! Everybody grumbles about “money in politics,” even those raking it in and those doling it out. A political rite of passage: to lament the demise of the middle-class and shrug when asked what happened to it. Notwithstanding whatever novel wordplay we devise to slip quietly around the truth, Americans of diverse political persuasions have been bemoaning the nation’s oligarchy for a long time.
To climb out of the economic and moral quagmire we’re in, it’s necessary to call out the thing keeping us there. Flaccid euphemism in today’s politics will not lift us out of our current descent. Facing the blunt reality may. Now’s the time to name the enemy: its name is oligarchy. Oligarchy is, as Aristotle defined it, the rule of the few who rule in their own interests.
Since our lived experiences are proofs insufficient to convince most commentators and policymakers, we can call on abundant academic evidence supporting the fact that we live in oligarchic times. Professors Gilens and Page published a famous study declaring, “In the United States…the majority does not rule….When a majority of citizens disagrees with economic elites or with organized interests, they generally lose.” Their study simply compared the passage of policy against what the majority public opinion desires versus the desires of small, elite interests. When the two collide, the latter wins. Professor Nonini has made a strong case for an emergent kleptocratic oligarchy in the US while Winters and Page make an empirical case for considering the US in terms of oligarchy. Nobel laureate Robert Solow has also warned of oligarchy in the US. Plenty of other academics and papers make equally strong arguments. Even Jimmy Carter is saying it: “Now it’s just an oligarchy, with unlimited political bribery…”
Take one look at the daily operation of our government to witness the groping fingers of the oligarch class in action. In every Congressional vote, representatives make a decision to support or oppose a policy based on the ample donations economic elites have made to their campaign budgets. Representatives make their decisions based on the close personal relationships they’ve built with the most expensive lobbyists and executives money can buy. And these economic elites have a lot of money to spend on manipulating the government.
Take a gander at the disparity in wealth to get a sense of how those muculent oligarch fingers are lubricated. The wealthiest Americans possess a greater share of national wealth than they have since the Gilded Age. A comprehensive study by Professors Saez and Zucman revealed that the wealthiest point-one percent (.1%!) of Americans own about as much wealth as ninety-percent (90%!) of Americans. That means if the country were a town with one thousand (1,000) inhabitants, one (1) guy would own as much money as nine hundred (900) of the other citizens. New data from Saez and his collaborators has shown an increasingly detailed picture of this disparity. The super rich have captured far more income gain and economic growth than everybody else, including lower-, middle-, and upper-middle income brackets, since the mid-1970’s. A study by Oxfam suggests that eight men – six of them Americans named Gates, Buffett, Bezos, Zuckerberg, Ellison, and Bloomberg – own wealth equivalent to half the world’s population, three and half billion people. Here are those two numerals next to each other: 8 – 3,500,000,000.
To break it down further: When a small economic elite captures the bulk of a nation’s material wealth, they also capture that nation’s government. This is an iron law of history: it has happened throughout the world and throughout settled, agrarian civilization’s past ten thousand year history, it has happened before in the United States, and it is happening today. Elites achieve this coup through myriad tools. We know how they do it; numerous studies and articles reveal the mechanisms the wealthy use to corrupt the government. For a brief overview:
In a representative democracy, some elites run their own candidates. Oligarchs like Charles and David Koch fund organizations like Aegis Strategic that handpick and run candidates friendly to their interests. Oligarchic institutions like the American Legislative Exchange Council write legislation for both state and federal legislatures that their representatives in Congress then seek to pass. Some build extensive networks of think tanks, propaganda arms, and astroturf (fake grassroots) organizations like the American Enterprise Institute. This particular form of corruption has been an openly acknowledged issue in Washington for decades (centuries), one that both parties have publicly vowed to reform, but neither party takes seriously. Elites also purchase mainstream media outlets. Most major media outlets are owned by super wealthy citizens, and generally maintain editorial stances friendly to their elite ideology.
Now let’s review the ways in which living in an oligarchy is undesirable, if this were not immediately self-evident to all freedom-loving Americans. First and foremost, oligarchy by definition means that a vast majority of Americans are disenfranchised. Their government no longer represents their interests. The basic, fundamental ingredient in a free society – universal enfranchisement – has been significantly curtailed, in some cases abolished. There are other very concrete ways in which an oligarchic economy and polity limits Americans’ pursuit of happiness.
The most recent oligarchic period began in the late-1970’s when we begin to see an upward swing in wealth consolidation. As a result, various ills have rapidly befallen the country. For example, since that time, the country’s middle-class has begun to shrink. More money congealing at the top means less money shared in the middle. Wages have stagnated and remained flat since the late 1970’s. With companies consolidating and growing richer, they spend less money on labor. The average unemployment rate has increased. Entrepreneurship has decreased every decade since the 1970’s. Derek Thompson writes, “Entrepreneurship, as measured by the rate of new-business formation, has declined in each decade since the 1970s….This decline in dynamism has coincided with the rise of extraordinarily large and profitable firms that look discomfortingly like the monopolies and oligopolies of the 19th century.” With real wealth pooled at the top, the rest of us must survive on debt: household debt has increased as a proportion of wealth and GDP. Student debt as a proportion of household debt has increased 828% since 1999. This makes investing in one’s future – and present – difficult, at best, and often impossible.
Labor conditions are increasingly atrocious with novel forms of indentured servitude making a comeback and companies like Amazon engaging in well-documented abuse of employees. Massive companies have grown into little empires with all-powerful management teams ruling over a neofeudal system of exploited, precarious employees. These management teams steal at least $15 billion per year from employees by paying less than minimum wage. That $15 billion doesn’t include many other forms of wage theft, like refusing to pay for benefits or overtime. Since 1980, social mobility has declined. It’s harder now for people to improve their station in the country than it has been in the recent past. Inequality exacerbates economic shocks, which, together with quadrupling of student loan debt in ten years, has hampered an entire generation’s material prosperity. Generational economic crises, like the Great Depression and Great Recession, happen when oligarchs gain too much power. Finally, oligarchy has slowed economic growth.
Let’s be clear: the greatest evil of oligarchy is not some nebulous woe of “inequality.” The greatest evil of oligarchy and the inequality it creates is that it erodes the personal, individual liberty of the majority of Americans. If a handful of oligarchs extract a vast bulk of the nation’s material wealth, that means removing that wealth from the hands of most Americans. With reduced access to capital, we have less freedom to pursue the jobs and lives we wish to pursue, we have less freedom to purchase the homes we desire where we wish to purchase them, we have less freedom of physical mobility. Capital concentration gives oligarchs the power to build an ever more totalitarian government, meaning we have less representation in our civic institutions and less power in our government. Living in an oligarchy means we have less freedom to invest the fruits of our labor into whatever enterprise we wish, we have less freedom and less capacity to start new ventures, to discover and research, to innovate and invent, to create art, to travel and explore, to better ourselves.
Today, we are ruled by an oligarchy. That oligarchy rests at the heart of the economic and moral diseases festering in our country. The nation’s afflictions cannot be excised while it remains an oligarchy.
Part ii here
Part iii here