In Biden’s poignant farewell address, he notably warned the nation, “An oligarchy is taking shape in America of extreme wealth, power, and influence.” Just five days later, the presence of billionaires at Trump’s inauguration—including four of the five richest men in the world—sent shockwaves through the American political landscape. The implications of this event were clear, the intersection of wealth and politics had become indisputable. However, at what point should the influence of billionaires be recognised as a matter of significant concern and to what extent does this dynamic between wealth and power reflect the historical fabric of the United States?
Democracy signifies governance that is of, by, and for the people, while oligarchy reflects governance that is of, by, and for the wealthy few. It creates a power structure in which a small number of affluent individuals hold excessive political power and leverage this influence to further their own interests. This distinction becomes especially pertinent when evaluating whether the United States’ rigid adherence to capitalism has created an oligarchical power structure, or if democratic processes have successfully prevented the excessive influence of affluent individuals and corporations. During the 2020 presidential election, Pete Buttigieg summarised this notion perfectly. When asked about capitalism, Buttigieg acknowledged “Of course I’m a capitalist, America is a capitalist society.” But, he continued, “It’s got to be democratic capitalism.” He goes on to clarify that capitalism has enabled America’s economic prosperity, but he also warns that capitalism should not be unrestrained by democratic checks and balances.
The notion that the United States is an oligarchy is not new and is not limited to the post-Trump era of American politics. In 2014, political scientists Martin Gilens and Benjamin Page argued the US already was one, asserting that large corporations and wealthy citizens had disproportionate power over policymaking. Their study used 1,800 policy proposals over 30 years, assessing whose interests were served by the outcomes, concluding that policy outcomes overwhelmingly favoured the wealthy, classing the United States as a functional oligarchy.
The historical dimensions of the struggle against oligarchy in the United States which Gilens and Page reference can be divided into three distinct waves. The first wave emerged in the pre-Civil War South, where the invention of the cotton gin led to the establishment of an oligarchic system that directly challenged national power, ultimately resulting in the Civil War. Although the Confederacy was defeated, the legacy of this oligarchy, including widespread poverty in the South and enduring systemic barriers that oppressed Black Americans while elevating white Southerners, would persist for generations. The second wave emerged in the late 1800s, driven by the industrial revolution, which forged a new class of oligarchs who, in 1920, took substantial control over the federal government. This concentration of wealth and influence contributed to the ‘Roaring Twenties,’ a period during which the richest became even wealthier, while the poorest saw their situations worsen. Fortunately, this political power withered during the Great Depression.
Fast forward to 2024, and the presence of a third wave of oligarchy is evident. In the 2024 Presidential election, both candidates received unprecedented support from billionaires. However, the standout aspect of this election was the extensive support for the Trump campaign from the world’s wealthiest man, Elon Musk. The invitation extended to tech billionaires at Trump’s inauguration, along with the establishment of the Department of Government Efficiency, tasked with restructuring the federal government under Musk’s command, clearly indicate an administration that prioritizes the interests of the ultra-wealthy. In fact, today, the top 1% in the United States earn 26.3 times more than the remaining 99%. This wealth divide was exacerbated during Trump’s first term, particularly following the Tax Cuts and Jobs Act of 2017, which provided tax reductions to the top 1% that were more than three times greater than those given to the lowest 60% of income earners. Therefore, it is hardly surprising that billionaires celebrated Trump’s return to the White House for his second term this January.
In the first months of Trump’s second term, it is evident that the power of billionaires will only continue to increase. A recent study by Yale University has found that Trump’s budget plan, which has already been approved by the House in a vote last month, will transfer wealth from the poorest 40% of Americans to the richest 1% through the $4.5 trillion in tax cuts and $1.5 trillion in spending cuts it plans to implement. Not only this, but Trump has sought to attract the super-rich by selling “gold cards” which would provide a route to citizenship for foreign multimillionaires/billionaires for a price of $5 million each. And, with Elon Musk’s entrance into the political arena as the only unelected member of Trump’s cabinet, the excessive political power of the billionaire class has become indisputable.
In conclusion, it has become abundantly clear in the early days of Trump’s second term that the ultra-wealthy have amassed significant political power. While many, with the exception of Musk, do not actively participate in governmental affairs, their support is more subtle, primarily through financial contributions to candidates like Trump who are inclined to implement reforms that favour the billionaire class, often to the detriment of ordinary working Americans. This poses the question, though, is this symptomatic of Trumpism or rooted in the historical fabric of the United States?
