The American oligarchy is back, and it’s out of control

It’s the third time in the nation’s history that a small group of hyper-wealthy people have gained political power over the rest of us. Here’s what we must do.

Friends,

Today we don’t know if the United States government will shut down tomorrow because, first, Elon Musk followed by his co-president Donald Trump, persuaded House Republicans to vote against a compromise bill, and then, last night, Republicans couldn’t summon enough votes for a stripped-down continuing resolution because Trump insisted that it contain a measure lifting the debt ceiling.

This is not governing. Trump and the Republicans are not a governing party.

What’s the back story to all this? It’s the oligarchy that put Trump into the presidency.

A half-century ago, when America had a large and growing middle class, those on the “left” wanted stronger social safety nets and more public investment in schools, roads, and research. Those on the “right” sought greater reliance on the free market.

But as power and wealth have moved to the top, everyone else — whether on the old right or the old left — has become disempowered and less secure.

Today the great divide is not between left and right. It’s between democracy and oligarchy.

The word “oligarchy” comes from the Greek words meaning rule (arche) by the few (oligos). It refers to a government of and by a few exceedingly rich people or families who control the major institutions of society — and therefore have most power over other peoples’ lives.

So far, Trump has picked 13 billionaires for his administration. It’s the wealthiest in history, including the richest person in the world. They and Trump are part of the American oligarchy, even though Trump campaigned on being the “voice” of the working class.

America’s two previous oligarchies

America has experienced oligarchy twice before. Many of the men who founded America were slaveholding white oligarchs. At that time, the new nation did not have much of a middle class. Most white people were farmers, indentured servants, farm hands, traders, day laborers, and artisans. A fifth of the American population was Black, almost all of them enslaved.

A century later a new American oligarchy emerged comprised of men who amassed fortunes through their railroad, steel, oil, and financial empires — men such as J. Pierpont Morgan, John D. Rockefeller, Andrew Carnegie, Cornelius Vanderbilt, and Andrew Mellon. It was called the Gilded Age.

They ushered the nation into an industrial revolution that vastly expanded economic output. But they also corrupted government, brutally suppressed wages, generated unprecedented levels of inequality and urban poverty, pillaged rivals, shut down competitors, and made out like bandits — which is why they earned the sobriquet “robber barons.”

World War I and the Great Depression of the 1930s eroded most of the robber barons’ wealth, and much of their power was eliminated with the elections of Franklin D. Roosevelt in 1932 and Democratic majorities in the House and Senate.

America demanded fundamental reforms — a progressive income tax, corporate taxes, estate taxes, limits on the political power of large corporations, antitrust laws, laws enabling workers to form unions and requiring that employers negotiate with them, Social Security, the forty-hour workweek, unemployment insurance, civil rights and voting rights, and Medicare.

For the next half-century, the gains from growth were more widely shared and democracy became more responsive to the needs and aspirations of average Americans. During these years America created the largest middle class the world had ever seen.

There was still much to do: wider economic opportunities for Black people, Latinos, and women, protection of the environment. Yet by almost every measure the nation was making progress.

America’s current oligarchy

Starting around 1980, a third American oligarchy emerged.

Since then, the median wage of the bottom 90 percent has stagnated. The share of the nation’s wealth owned by the richest 400 Americans has quadrupled (from less than 1 percent to 3.5 percent) while the share owned by the entire bottom half of America has dropped to 1.3 percent, according to an analysis by my Berkeley colleagues Emmanuel Saez and Gabriel Zucman.

The richest 1 percent of Americans now has more wealth than the bottom 90 percent combined.

The only other country with similarly high levels of wealth concentration is Russia, another oligarchy.

All this has been accompanied by a dramatic increase in the political power of the super-wealthy and an equally dramatic decline in the political influence of everyone else.

While the Biden administration sought to realign America with its ideals, it did not and could not accomplish nearly enough. Trump’s lies and demagoguery exploited the anger and frustration of much of America — creating the false impression he was a tribune of the working class and an anti-establishment hero — thereby allowing the oligarchy to triumph.

In 2022, Elon Musk spent $44 billion to buy Twitter and turn it into his own personal political megaphone. Then, in 2024, he spent $277 million to get Trump elected, also using Twitter (now X) to amplify pro-Trump, anti-Harris messages.

These were good investments for Musk. Since Election Day, Musk’s fortune has increased by $170 billion. That’s because investors in Tesla and SpaceX have pushed their value into the stratosphere.

Trump has put Musk (and another billionaire, Vivek Ramaswamy) in charge of gutting government services in the name of “efficiency.” Musk’s investors assume that Musk will eliminate the health, safety, labor, and environmental regulations that have limited the profits of Musk-owned corporations, and that Trump will put more government money into SpaceX and xAI (Musk’s artificial intelligence company).

Unlike income or wealth, power is a zero-sum game. The more of it at the top, the less of it anywhere else.

The power shift across America is related to a tsunami of big money into politics. Corporate lobbying has soared. The voices of average people have been drowned out.

The American oligarchy is back, with a vengeance.

Not all wealthy people are culpable, of course. The abuse is occurring at the nexus of wealth and power, where those with great wealth use it to gain power and then utilize that power to accumulate more wealth. Today’s robber barons include Elon Musk, Jeff Bezos, Peter Thiel, David Sacks, Charles Koch, Jeff Yass, Ken Griffin, and Rupert Murdoch.

What the new oligarchy wants

This is how oligarchy destroys democracy. As oligarchs fill the coffers of political candidates and deploy platoons of lobbyists and public relations flaks, they buy off democracy. Oligarchs know that politicians won’t bite the hands that feed them.

As long as they control the purse strings, there will be no meaningful response to the failure of most people’s paychecks to rise, nor to climate change, nor racism, nor the soaring costs of health insurance, pharmaceuticals, college, and housing, because those are not the main concerns of the oligarchy.

The oligarchs want lower taxes, which is what Trump, Musk, and other oligarchs are planning — an extension of the 2017 Trump tax cut, with an estimated price tag of at least $5 trillion.

They want no antitrust enforcement to puncture the power of their giant corporations. Instead, their corporations will grow larger, able to charge consumers even more. Trump is replacing Lina Khan, the trustbusting chair of the Federal Trade Commission, with a Trump crony.

There will be no meaningful constraint on Wall Street’s dangerous gambling addiction. The gambling will only increase.

Wall Street is already celebrating Trump’s victory. The stock market has reached new heights. But the stock market is inconsequential for most people, because the richest 1 percent own over half of all shares of stock owned by Americans while the richest 10 percent own over 90 percent.

There will be no limits to CEO pay. Wall Street hedge fund and private equity managers will also rake in billions more. Government will dole out even more corporate subsidies, bailouts, and loan guarantees while eliminating protections for consumers, workers, and the environment.

It will become a government for, of, and by the oligarchy.

The biggest divide in America today is not between “right” and “left,” or between Republicans and Democrats. It’s between democracy and oligarchy. The old labels — “right” and “left” — prevent most people from noticing they’re being shafted.

The propagandists and demagogues who protect the oligarchy stoke racial and ethnic resentments — describing human beings as illegal aliens, fueling hatred of immigrants, and spreading fears of communists and socialists.

This strategy gives the oligarchy freer rein: It distracts Americans from how the oligarchy is looting the nation, buying off politicians, and silencing critics. It causes Americans to hate each other so we don’t look upward and see where the wealth and power have really gone.

The necessary agenda

The way to overcome oligarchy is for the rest of us to join together and win America back, as we did in response to the oligarchy that dominated America’s last Gilded Age.

This will require a multiracial, multiethnic coalition of working-class, poor, and middle-class Americans fighting for democracy and against concentrated power and privilege.

It will require that the Democratic Party, or a new third party, tell the truth to the American people: that the major reason most peoples’ wages have gone nowhere and their jobs are less secure, why most families have to live paycheck to paycheck, why CEO pay has soared to 300 times the pay of the typical worker, and why billionaires are about to run our government, is because the market has been rigged against average working people by the oligarchy.

The agenda ahead is simply stated but it will not be easy to implement: We must get big money out of our politics. End corporate welfare and crony capitalism. Bust up monopolies. Stop voter suppression.

We must strengthen labor unions, give workers a stronger voice in their workplaces, create more employee-owned corporations, encourage worker cooperatives, fund and grow more state and local public banks, and develop other institutions of economic democracy.

This agenda is neither “right” nor “left.” It is the bedrock for everything else America must do.

It may seem an odd time in our history to suggest such reforms, but this is the best time. Trump and his oligarchy will inevitably overreach. The lesson from the last Gilded Age is that when the corruption and ensuing hardship become so blatant that they offend the values of the majority of Americans, the majority will rise up and demand real, systemic change.

It’s only a matter of time. A government shutdown that hurts average people, engineered by the richest person in the world, might just hasten it.