The Path to Oligarchic Governance

Photos of Donald Trump’s second inauguration showed him surrounded by at least five tech billionaires: Elon Musk, Mark Zuckerberg, Jeff Bezos, Sundar Pichai, and Tim Cook.  This image is stark evidence that we now live under oligarchic rule.  Donald Trump and his fellow oligarchs are fixated on becoming even richer and that requires a further assault on the living standards of most people in this country.

There have been previous periods of oligarchic rule in U.S. history.  Most of our founders were slaveholders or wealthy Northern merchants who were eager to minimize popular influence over governmental decisions.  It was only through popular mobilization that white men without property gained a vote.  And in the Gilded Age, the major parties competed to win the favor of robber barons who were becoming fantastically rich.  But through the 20th century, with the partial exception of the 1920’s, oligarchic tendencies were largely contained.

What happened to unleash oligarchic power in the 21st century?  The most obvious explanation is a series of Supreme Court decisions including Citizens United vs. FEC (2010) that claimed that campaign donations were the equivalent of speech that could not be curtailed under the First Amendment’s promise of freedom of speech.  This judicial assertion was the equivalent of Orwell’s satirical line in Animal Farm that some animals were more equal than others. The ruling transformed elections into bidding wars in which those with the most money had a huge advantage.  In 2024, a single individual, Elon Musk, influenced the outcome of the 2024 Presidential election by spending around $277 million to elect Donald Trump.  Musk and I are still formally equal since both of us are allowed only a single vote in the election, but his ability to multiply my donation by a factor of 277,000 effectively obliterates any idea of equality.

However, bad decisions by the Supreme Court are only a partial explanation.  After all, some other dangerous high court decisions have been overturned through new legislation, or   constitutional amendments, or popular pressure for the court to reverse itself.  It is important to understand why there have not been more vigorous efforts by the public to once again mobilize against rulings that allow the reassertion of oligarchic power.

There are two longer term developments, predating Citizen’s United, that have played an important, and yet rarely recognized, role in paving the road to oligarchy.  The first has been the influence, particularly in the Democratic Party, of an approach to politics that can be called “technocratic liberalism”.  This is the idea that the best route to effective government is to hand over decision making to well-meaning experts who will draw on their own knowledge and that of other experts to formulate optimal policies.  The role of the public is simply to vote for leaders who will hire good technocrats.

Technocratic liberals played a role in Franklin Roosevelt’s New Deal, but their influence was often offset or countered by currents that were strongly committed to democratic participation through trade unions, farmer’s organizations or popular involvement in electoral politics.  But after World War II, the balance of power in the Democratic Party shifted strongly in the direction of technocratic liberalism.  Robert Moses, the technocrat who built much of New York City’s infrastructure and Robert McNamara, the Secretary of Defense under both John F. Kennedy and Lyndon Johnson, were exemplars of technocratic liberalism.

As Sabeel Rahman has argued in his book, Democracy Against Domination, our system of regulatory agencies was built on the principles of technocratic liberalism.  These agencies from the Federal Reserve to the Food and Drug Administration to the Environmental Protection Agency have been staffed with politically neutral experts who are expected to protect the interests of the public.  The first problem is that these agencies lack any ongoing democratic legitimation; they are vulnerable to continued attack from vested interests who insist that the resulting regulations are nothing more than bureaucratic red tape that serve no legitimate   purpose.  Second, when these regulators are on the defensive, they are vulnerable to the ongoing campaign by the regulated industries to get the technocrats to look at the issues from the particular industry’s point of view.

The consequence, in case after case, has been successful “cognitive capture”.  The so-called neutral regulators start to see the terrain from the vantage point of industry incumbents whether they are bankers or drug companies or the chemical industry.  The resulting rulings prioritize industry profits rather than protecting the public.  We saw this most dramatically when the Federal Reserve stood on the sidelines as predatory lenders and investment banks made enormous profits by packaging subprime home mortgages into collateralized mortgage obligations that ultimately crashed the global economy.

This process of cognitive capture has been central in making the wealthy even more wealthy, but it has also driven rising popular distrust of the political system.  Despite the greedy and unethical behavior by mortgage brokers and bankers that led to the Global Financial Crisis, only one of those people in the U.S. was sent to jail.  Meanwhile millions of homeowners lost their homes to foreclosures.  It is hardly surprising that many came to the conclusion that the political system was rigged against them.

This disillusionment interacts with another long-term trend.  Ever since the 1970’s, state and local governments across the U.S. have faced ongoing fiscal crises.  The Federal Government commands about two-thirds of all tax revenue collected in the U.S., and that remaining one-third is not enough to cover all of the responsibilities of state and local government including law enforcement, public health, education, infrastructure, and social services.  One of the most dramatic signs of this ongoing fiscal pressure has been dramatically reduced funding of public higher education.  For the first decades after World War II, the cost barriers to public colleges and universities were very low, creating a mobility route for children from families with low incomes.  For decades now, these public institutions have been forced to fund themselves by raising tuition and fees.  As a result, the costs have become prohibitively high for many families, effectively closing off an important avenue for upward social mobility.

This ongoing fiscal crisis has had a devastating consequence for democracy at the local level.  A lack of resources means that residents cannot get government to address their needs; often the best they can do is to try to keep damaging budget cuts to a minimum.  City or town council meetings turn into pitched battles among conflicting factions over budgetary crumbs.  But the whole idea of democracy is that people are supposed to learn how politics works by participating at the local level.   Instead, people learn to hate politics and politicians and they start listening to demagogues who promise to overturn the whole system.

In a word, the triumph of oligarchy is a direct consequence of technocratic governance and decades of fiscal crisis that have eroded both public trust and public participation in politics.  (For example, the number of voters in the 2024 presidential race was three million less than in 2020 even though the electorate was larger as millions of young people turned 18 each year.)  And, to make matters even worse, the public’s increased reliance on social media for news coverage has further magnified the clout of tech oligarchs.

The only consolation is that oligarchic rule has serious flaws.  It is often difficult to maintain peace among a group of perpetually greedy leaders determined to make themselves even richer.  Their strategy to avoid infighting is to take ever larger shares of income away from everyone else.  In short, they have to impose austerity and major cuts in popular programs like pensions and publicly-funded health care.  Moreover, oligarchic rule slows down competition and innovation as big firms are free to take advantage of their dominant positions.  This, in turn, means slower economic growth and more unemployment.

We see this last dynamic at work in the acquisition practices of the dominant technology firms.  Meta—the parent organization of Facebook– acquired more than 100 other firms between its founding and 2022.   The number for Alphabet—Google’s parent—is about 260 through the end of 2024.  Many of these takeovers are designed to stifle a potential competitor that is working on a product that could threaten the acquirer’s dominant position.  The entrepreneurs who build the acquired firms usually find it extremely difficult to secure the funding needed to bring their products to the market.  Hence, selling the firm to one of the dominant firms for tens or hundreds of million dollars becomes the path of least resistance.  Just as often, the acquiring firm stops development of the new technology and assigns the firm’s technologists to other tasks.

These flaws create space for opponents of oligarchic rule to build broad coalitions in support of democratic regimes that constrain the oligarchs.  We saw a dramatic example of this in 1989 when such coalitions overturned the regimes in Eastern Europe that had consolidated both economic and political power in the hands of communist bureaucrats.  Similar movements were able to establish democratic regimes in South Korea, Taiwan, Chile, and Brazil after years of oligarchic rule.   Nevertheless, in all of these places, those with great wealth or control over the largest corporations continue to have far greater political influence than average citizens, and a restoration of oligarchic rule is a continuing threat.

In a word, the only durable strategy for diminishing the danger of oligarchic power grabbing control of government is to place limits on the levels of income and wealth inequality that are permitted in a society.  The extremes of wealth inequality that we now have are not needed to incentivize innovation. The fact that Mark Zuckerberg had the idea to create a website to rate the attractiveness of female students at Harvard does not justify his now having a net worth of roughly $250 billion.

There is a remedy.  Just as the U.S. and other nations began passing minimum wage legislation in the period from 1896 to 1938, it is time to establish maximum income limits.  For example, legislation could establish that any income earned above $2 million in a given year could simply be taxed away by imposing a maximum income ceiling.  With such a law, entrepreneurs would continue to have an incentive to work hard and innovate so they would be sure to earn their $2 million, but they would be blocked from acquiring the kind of wealth that generates oligarchic power.  Hollywood stars, the most skillful athletes, and lottery winners could be incentivized with contracts that guaranteed them the $2 million payments for multiple years. combining this ceiling with taxes on accumulated wealth and strict limits on campaign donations, today’s billionaires would be incentivized to give their fortunes away.

When minimum wage laws were initially proposed, they were widely seen as radical and too much of an interference with the workings of the market.  The Supreme Court’s notorious Lochner decision in 1905 struck down a New York State law limiting the number of hours that employees at bakeries could work because it interfered with freedom of contract. that logic, minimum wage laws would also be an anathema.  However, over time, the idea of a floor below which wages cannot fall has been recognized as a necessary instrument to make markets work.  Today, more than 170 nations have minimum wage laws, although there are significant variations in their effectiveness.

While a ceiling on income might sound too radical today, the reality is that it is quite possibly the only way to protect democratic institutions from oligarchic capture.  The danger was illustrated by one of Elon Musk’s stunts during the 2024 presidential election.  He ran a scheme in which seventeen checks for a million dollars were given to winners of a lottery that was open to registered voters in swing states who had agreed to sign a petition in support of gun rights and “free speech”.   Next time, he could promise to donate $10 billion to a state government to provide rent rebates to people if that state voted for his preferred candidate.  In Pennsylvania, always a critical swing state, each of 1.5 million renting households could expect to receive a benefit of $6,666.00.   In short, as the oligarchs race to be the first trillionaire in history, they are already able to use their dollars to eviscerate the idea of democratic governance. When the danger to society is acute, seemingly radical solutions must be considered.

Author

  • Fred Block

    Fred Block is Research Professor of Sociology at the University of California, Davis. His new book is The Habitation Society: Creating Sustainable Prosperity.

    View all posts

Latest Issue

2025: Vol. 24, No. 1-2

Latest Issue

2025: Vol. 24, No. 1-2

Elodie Fabre: The Challenge of Tackling the Far-Right in France

Fred Block: The Path to Oligarchic Governance

Darren Barany: The Center Needs to Fall ...

Menachem Klein: The Illusion of Safety: H...

P. Adams Sitney: The Avant-Garde Film, Revisited

Joy James: Ringing bell hooks: A Brilliant Feminist Calling for Liberation

Justin Elghanayan: You Do Not Talk About the...

Robert Lacey: On Authenticity: Townes Van Zandt, Natasha Rostova, and the “Uncles”

Fred Camper: Remembering P. Adams Sitney

Daniel Heller-Roazen: Pointing to Unknown Places: A Tribute to P. Adams Sitney

Akua Nkansah-Amankra: Jonathan Swanson Jacobs’ ...

Oluwatoyin Adepoju: Exploring Yoruba Across Time and Space: Toyin Falola’s Global Yoruba

Eduardo Mendieta: Peter Gordon’s A Precarious Happiness

Jack H. Guenther: Matthew Specter’s The Atlantic Realists

Joseph Pomp: John Powers’ Technology and the Making of Experimental Film Culture

Hank Kennedy: David Mikics’ The Mad Files

Joseph Chuman: Hartmut Rosa’s Democracy Needs Religion

Warren Leming: Sarah Wynn Williams’ Careless People

Christine Norton: Benjamin Heim Shepard’s On Activism, Friendships, and Fighting

Maor Levitin: Matheus Romanetto’s Critique and Affirmation in Erich Fromm

Benjamin Heim Shepard: Alexei Navalny’s Patriot: A Memoir