Over the past several decades, there has been growing concern among political analysts, economists, and the public at large about the shifting dynamics of governance in the United States. The country, long heralded as the bastion of democracy, appears to be transitioning into an oligarchic state – nation where power is concentrated in the hands of a wealthy few. This transformation is being driven by the intertwining of economic and political power, with billionaire businessmen exercising unprecedented control over both spheres.

The United States has witnessed a dramatic rise in economic inequality. According to a 2023 report by Oxfam, the top 1% of Americans now control approximately 34% of the nation’s wealth, while the bottom 50% collectively own just 2.5%. Billionaires like Elon Musk, Jeff Bezos, and Warren Buffett not only dominate the economy but also exert considerable influence over public policy. Their vast financial resources enable them to lobby for legislation that protects their interests, often at the expense of the broader public.

One illustrative example is the 2017 Tax Cuts and Jobs Act, which significantly reduced corporate tax rates from 35% to 21%. While proponents argued that these cuts would stimulate economic growth, the primary beneficiaries were large corporations and the ultra-wealthy. An analysis by the Institute on Taxation and Economic Policy found that the richest 5% of Americans reaped the bulk of the benefits, while middle- and low-income households saw minimal relief.

Moreover, the wealth of billionaires has skyrocketed during times of crisis. During the COVID-19 pandemic, U.S. billionaires saw their collective wealth increase by over $1 trillion between March 2020 and March 2021, even as millions of Americans lost their jobs and struggled to make ends meet. This stark contrast underscores the growing chasm between the economic elite and the rest of the population.

The influence of billionaires is not limited to the economic realm; it has increasingly permeated the political landscape. Billionaire-backed super PACs (political action committees) and dark money groups have become critical players in elections, effectively allowing the ultra-wealthy to shape political outcomes. The 2010 Citizens United v. FEC Supreme Court decision, which allowed unlimited corporate and individual spending in elections, has further entrenched this power dynamic.

For instance, in the 2020 election cycle, billionaire Sheldon Adelson and his wife Miriam contributed over $218 million to Republican candidates and causes. On the Democratic side, Michael Bloomberg spent nearly $1 billion of his own fortune on his presidential campaign and to support Democratic candidates. This trend raises questions about whether elected officials are accountable to their constituents or to the deep-pocketed donors who fund their campaigns.

The revolving door between business and government further blurs the line between public service and private interests. High-ranking officials often transition seamlessly between corporate boardrooms and government offices, ensuring that policies remain favorable to the business elite. The appointment of former Goldman Sachs executives to key positions in government during multiple administrations exemplifies this phenomenon.The recent actions of the president-elect have amplified concerns about the United States’ drift toward oligarchy. By signaling a preference for appointing family members, friends, and loyalists to high-ranking government positions, the president-elect appears to prioritize personal loyalty over merit and public service.

One controversial example is the nomination of a relative as an ambassador, raising questions about the qualifications and motivations behind such appointments. Similarly, the nomination of the president-elect’s son’s girlfriend to another ambassadorship has drawn widespread criticism. These actions are reminiscent of oligarchic governance, where power is concentrated within a small, interconnected group, rather than being distributed based on democratic principles.

The potential consequences of such appointments are far-reaching. They risk undermining public trust in institutions, fostering cronyism, and diminishing the effectiveness of governance. When key positions are filled based on loyalty rather than expertise, the government’s ability to address complex challenges and serve the public interest is compromised.

The United States’ trajectory toward oligarchy is not without precedent. The Gilded Age of the late 19th and early 20th centuries was characterized by extreme wealth concentration and the outsized influence of industrial magnates like John D. Rockefeller, Andrew Carnegie, and J.P. Morgan. These “robber barons” wielded immense economic and political power, often at the expense of workers and consumers.

However, the Progressive Era that followed brought significant reforms, including antitrust laws, labor protections, and campaign finance regulations, aimed at curbing the excesses of oligarchy. These measures helped restore a degree of balance to the American political and economic systems.

Today, many of these safeguards have been eroded or rendered ineffective. The weakening of campaign finance laws, the rollback of antitrust enforcement, and the decline of labor unions have all contributed to the resurgence of oligarchic tendencies. As a result, the United States risks repeating the mistakes of the past.

The United States is not alone in grappling with the challenges of oligarchic influence. Countries like Russia and China are often cited as modern examples of oligarchies, where economic elites wield significant control over political decision-making. In Russia, for instance, a small group of oligarchs has benefited from close ties to the Kremlin, while in China, the Communist Party maintains tight control over both the economy and political apparatus.

However, what sets the United States apart is its historical commitment to democratic ideals and its reputation as a global leader in promoting democracy. The erosion of these principles risks undermining the country’s moral authority and standing on the world stage.

To prevent the United States from becoming a full-fledged oligarchy, urgent action is needed to restore the balance of power. Several key reforms could help address the underlying issues:

Campaign Finance Reform: Reversing the Citizens United decision and implementing stricter limits on campaign contributions would reduce the influence of money in politics.

Antitrust Enforcement: Strengthening antitrust laws and breaking up monopolies would curb the economic power of large corporations and promote competition.

Tax Reform: Implementing a more progressive tax system and closing loopholes that benefit the ultra-wealthy would help reduce economic inequality.

Strengthening Labor Protections: Reinvigorating labor unions and ensuring fair wages and working conditions would empower workers and reduce disparities.

Ethics and Transparency: Enforcing stricter ethics rules and increasing transparency in government appointments would help rebuild public trust in institutions.

The United States stands at a crossroads. The concentration of economic and political power in the hands of a wealthy few threatens to undermine the democratic principles upon which the nation was founded. While the challenges are formidable, history offers hope that meaningful reform is possible. By addressing the root causes of oligarchic influence, the United States can reaffirm its commitment to democracy and ensure that power truly resides with the people.

(Prof. Indrajit S Saluja is editor, The Indian Panorama)