Tesla CEO and X owner Elon Musk gestures on stage as he prepares to speak inside the Capital One arena on the inauguration day of Donald Trump’s second Presidential term, in Washington D.C. on January 20, 2025.
| Photo Credit: Reuters
In his farewell remarks as U.S. President, Joe Biden warned that an oligarchy was taking shape and threatening American democracy. Similar to Dwight Eisenhower’s cautionary warning in 1961 about the “military-industrial complex”, Mr. Biden highlighted a “tech industrial complex”. He said that a new Gilded Age of “robber barons” was in danger of eroding hard-won freedoms.
As The Guardian noted in its editorial, U.S. President Theodore Roosevelt “undermined the ‘malefactors of wealth’ by trust-busting, creating regulatory agencies and putting land off limits to commercial exploitation.” Today, the question of who will rule the U.S. — the people or the new aristocrats — may ultimately be at stake, it said.
Everywhere, political and economic power are intertwined. However, the connection can occasionally turn bleak and dangerous. There are 13 billionaires in U.S. President Donald Trump’s cabinet. Elon Musk, the first individual with a net worth of over $400 billion, asked voters to brace for “temporary hardship” as his Department of Government Efficiency will reduce public spending. Mr. Musk invested $200 million in Mr. Trump’s election campaign. “Oilgarchs” are already benefiting from their support for the fossil fuel-friendly President. At Mr. Trump’s inauguration, among others, Amazon’s Jeff Bezos, Apple’s Tim Cook, and Meta’s Mark Zuckerberg were present. Some of their businesses have significant contracts with the federal government.
Oligarchy across the ages
The Greek philosopher Aristotle coined the word oligarchy to contrast the ruling of a wealthy few “for corrupt and unjust purposes” with that of the aristocracy, or elite upper class. Oligarchs usually acquire power by financial means, such as making large donations to politicians who then govern in ways that the oligarchs specify. But oligarchs can also become powerful because of their social standing, notoriety, education, military, religious, or political ties.
Political scientist Jeffrey A. Winters outlined the historical commonality of oligarchs in his 2011 book Oligarchy. How oligarchs respond to the threats they face, including how directly involved they are in supplying the coercion underlying all property claims, whether individually or collectively, all influence their pursuit of wealth defence, he said.
Nonetheless, there have been significant shifts in the nature of oligarchy across the ages. The U.S. media had likened Michael Bloomberg to the Roman oligarch Marcus Licinius Crassus as Mr. Bloomberg was vying for a third term as mayor of New York in 2009. But while for oligarchs such as Crassus, becoming consul was one of the most crucial political moves favouring their fundamental oligarchic interests, for contemporary oligarchs, using private funds to purchase public office is motivated more by vanity than by oligarchic survival.
An oligarchy is only “evil” if and when oligarchs violate the rule of law, remove the checks and balances on their own power, and prioritise their own interests over those of the people, as noted by Aristotle and Robert Michels. This is what happened historically. The Philippines is said to be an oligarchy because of its colonial past and powerful families. China defines itself as a communist ‘People’s Republic’, but some have referred to it as an oligarchy, as a small number of people have held all the power for several decades. More recently, the term has been used to refer to affluent, powerful, and well-connected Russian businessmen. But in 2022, U.S. Senator Bernie Sanders noted, “Of course the oligarchs run Russia. But guess what? Oligarchs run the United States as well.”
What is the nature of oligarchy then? In his 2017 book, American Oligarchy: The Permanent Political Class, historian Ron Formisano wrote about the emergence of a permanent political class on a scale never seen in American history. Rising inequality is a result of its corruption, nepotism, and self-dealing. In addition to politicians, Formisano explores the activities of lobbyists, consultants, appointed bureaucrats, pollsters, celebrity journalists, and billionaires working behind the scenes.
Economist Simon Johnson, however, perceived that the emergence of an American financial aristocracy gained traction during the 2008 financial crisis. In 2015, former President Jimmy Carter described the U.S. as an “oligarchy with unlimited political bribery,” as the Citizens United v. FEC Supreme Court ruling in 2010 lifted restrictions on political campaign donations.
Is oligarchy confined to a select few countries? As Mr. Sanders said, “…All over the world, we’re seeing a small number of incredibly wealthy people running things in their favour.” It would be unjust to blame only Mr. Trump for encouraging oligarchy. Several billionaires contributed to Mr. Biden’s re-election campaign too.
Democracy and oligarchy
Can democracy fight against oligarchy? Despite Aristotle’s assertion in his book, Politics, that “democracy is safer and more free from civil strife than oligarchy,” the German sociologist Robert Michels’ early 20th-century ‘iron law of oligarchy’ contends that democracy is an oxymoron because it will inevitably turn into an oligarchy due to the necessity to divide labour.
More than 200 years ago, U.S. President John Adams had expressed fear about the ‘power elite’. In today’s increasingly unequal world, empowered by tech marvels such as Artificial Intelligence, economic power invariably gets concentrated in a few hands. This may lead to intense oligarchy.
Atanu Biswas is Professor of Statistics, Indian Statistical Institute, Kolkata
Published – January 23, 2025 01:24 am IST
