This isn’t our first rodeo. The United States has suffered oligarchy before. There have been two periods of oligarchic domination prior to this current episode. The country has endured regional oligarchic conditions of course: some southern and mid-Atlantic founding colonies were home to a landed, slave-owning aristocracy. Old money dynasties have dominated northeastern politics, e.g., the New York knickerbockers like the Roosevelts, the Boston Brahmins like the Adams’s. But at the nation’s founding, on the whole wealth inequality was relatively low. Alana Semuels quotes authors Peter Lindert and Jeffrey Williamson, “In the late 18th century, ‘incomes were more equally distributed in colonial America than in any other place that can be measured…’”
The vast material abundance of the continent allowed citizens to push the frontier and capture new wealth – often forcibly from indigenous peoples – escaping the confines of a more concentrated economy back east. But as the frontier closed in the latter quarter of the 19th century, the nation’s land and material wealth began to consolidate in the hands of a few robber barons, the first true industrial oligarchs, whose corpulent names remain with us, like Rockefeller, Carnegie, Vanderbilt, J. P. Morgan, and Charles Schwab. The robber barons concentrated the economy into monopolies and monopolies into trusts that fixed prices, manipulated markets, exploited customers, and kept out competitors.
Colin Woodard writes in American Character, “a handful of companies controlled the nation’s sugar, meatpacking, and agricultural machinery markets,” and built immensely wealthy empires. With their grotesquely hoarded wealth they did what today’s oligarchs do: they purchased the government and the media. By 1890, “the richest 1 percent of Americans had the same combined income as the bottom 50 percent and owned more property than the other 99 percent….In 1905, [Boston University law] Professor Parsons found that two-thirds of the Senate was under railroad control plus a majority of the House. ‘There was a time when senators represented the states; but too often now they represent giant corporations,’ he concluded.”
Living and labor conditions during this oligarchic period were atrocious. Toxic food and drugs poisoned consumers, children and the elderly toiled long days for little compensation, much of which was stolen by employers, while less affluent Americans worked in dangerous conditions and lived in squalor; air and water quality declined nationwide. The Long Depression – then still called the Great Depression – saw the US suffering an economic panic every decade, in 1873, 1884, 1893, and 1896. Employees who tried to fight back against wage theft and unsafe working conditions – conditions that killed or maimed many without compensation – were brutally repressed by police, federal troops, and private strikebreakers. Dozens of workers were killed in the Great Strike of 1877.
Through the struggle of labor organizers, muckraking journalists, coalitions of activists from all corners of society, and a few courageous politicians like Theodore Roosevelt, a progressive wave pushed back against the oligarch class. Their sacrifices helped usher in policies that would create the precursor to the Food and Drug Administration, put in place labor protections, including child labor laws, establish the National Park system, pass antitrust laws that broke up some of the major monopolies, and culminated in women’s suffrage. Progressive era reforms failed to demolish the nation’s oligarchy, however, and by the 1920’s the proportion of wealth owned by the top one percent reached its height. The dramatic economic consolidation of the Gilded Age would fuel the Great Depression.
By about mid-century, another President Roosevelt supported, again, by a vast network of activists, journalists, academics, and workers would pass a series of laws that brought the oligarchs to heel. Collective bargaining laws, high progressive wealth taxes, federal employment programs, subsidized higher education, and social services like Medicare and Social Security would help build the largest, most affluent middle-class the country had seen, and establish a more democratic polity than the nation had enjoyed since before the robber baron era. The Civil Rights Act, Voting Rights Act, and Clean Air and Clean Water Acts would further this legacy in later years. But the progressive wave would not last.
The rise of neoliberal ideology in the late 1970’s brought an end to the New Deal era and rapidly, vastly increased the portion of wealth owned by a tiny minority. By the time neoliberal ideology had thoroughly penetrated policy and academic circles in the early 1980’s, consolidation of wealth began to skyrocket. Neoliberal ideas – developed by European aristocrats and evangelized by Anglophone academics – promoted this inequality explicitly. As Daniel Stedman Jones writes in Masters of the Universe, “[Neoliberal tenets] implied a fundamental acceptance of substantive inequality—an essential feature of neoliberal ideas…An understanding of inequality as unavoidable, even desirable, gets at the crux of the conflict between neoliberal ideals and those of New Deal liberals…”
The book further details the trans-Atlantic network of think tanks, writers, academics, corporate executives, and politicians who waged an ideological war to embed neoliberal tenets in Western society. They were exceptionally successful in shaping culture and policy. Neoliberal creeds like deregulating big business, corporatizing civil society, privatizing public services, privatizing profits while socializing risks, and the marketization of all facets of life are considered common sense. Neoliberal tenets remain stubbornly persistent mechanisms continuing to bolster oligarchy in the US and abroad. Behold: two generations tricked into swallowing the tripe of trickle-down economics.
Advocates of neoliberal ideology achieved this through many channels, including professional research institutions and mainstream media outlets. They founded think tanks like the Cato Institute, Heritage Foundation, and Adam Smith Institute. They built curricula into economics departments and business schools at universities around the world. Students attending elite business schools today can still take courses designed as indoctrination courses, teaching neoliberal ideology in place of economics. A course at one particular elite management school, for instance, called Capitalism and Its Critics, consists primarily of a series of straw man arguments against capitalism being propped up and uncritically knocked down. One example: proclaiming that because Stalin killed a lot of people capitalism, therefore, is the best form of economy. A simplified Joan Robinson gem thrown around by the professor went something like, “The only thing worse than being exploited by capitalism is not being exploited by capitalism.”
While some ideological challenges to neoliberalism have been building at the fringes of political discourse, policymaking institutions remain captured by the superstitions peddled by neoliberal ideologues. Both political parties remain led by high priests of the neoliberal faith and therefore beholden to the interests of oligarchs.
Since Reconstruction and the closing of the frontier, the United States has endured three periods of oligarchic rule. Progressive era citizens fought against oligarchy in the early 20th century and won a temporary reprieve. New Deal era citizens fought against the nation’s oligarchy in the mid-20th century and again expanded democracy and prosperity. This, too, was only a temporary victory. So far the nation has been unable to completely break this cycle of creeping oligarchy. Despite the progress we have made, oligarchic interests have found a way to return to power.