Do We Live In A Plutocratic Oligarchy? Why It Matters For Democracy

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The United States is currently facing a significant threat to its democratic system. Although it may enjoy many of the freedoms of a democracy, such as freedom of speech, freedom of press, and fair and regular elections, the US has lost the ability to represent the will of the people in its public policy. Economic inequality is one of the primary sources of this threat and elevates the danger of the US turning into a plutocratic oligarchy.

Quick Summary

  • Plutocratic oligarchy is the governance of the few and wealthy. It is a counterweight to a democracy, which in the words of Abraham Lincoln is a government “of the people, by the people and for the people.”
  • The economic elite have disproportionately dominant influence on public policy in the United States, however, their influence is not unlimited.
  • The wealth inequality is a major contributor. Wealth can buy leisure time and teams to work on behalf of the elite. The average person has to worry about getting and keeping a second job to pay off the bills.
  • Disconnect from policy making can lead to discontent, which can lead to violence.
  • It is important to ensure that the government works in the best interests of its people (the general public).

Action Steps To Take

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Learning what a Plutocratic Oligarchy is, and how it differs from a democracy

To begin this article, it is first important to understand what a plutocratic oligarchy is and its basic differences from a democracy.

A plutocracy is a main governing body composed of a nation’s richest people, according to Cambridge Dictionary. In this system, the rich influence the legislative process to suit their interests. 

Cambridge Dictionary states that an oligarchy is a system of government where the power is held by “a small group of powerful people.” Similar to plutocracy, the select-few that hold power in an oligarchy also form policies that will benefit themselves, leading to exclusion of other classes. An oligarchy is a system that is not necessarily composed of the wealthiest individuals in society.  

Together these systems create a plutocratic oligarchy, or a system of government that is ruled by a small, economically wealthy group of people. A democracy is a community where the power is in the hands of the common citizen, either directly or through elected officials 1Democracy: Definition in the Cambridge English Dictionary. (n.d). Retrieved January 05, 2021, from https://dictionary.cambridge.org/us/dictionary/english/democracy. Democracies focus on protecting the rights of individual citizens and allow them to take part in fair and free elections.

Is the economic-elite in control?

First, we should explain who fits into the alleged controlling elites category. It’s common that most individuals, other than politicians, are overlooked by common readers as having a major influence in politics. For this article, anyone that is involved in continuous influence over policy areas is considered part of the governing elite. This can include lobbyists, PACs, organizations, or individual benefactors.

According to a 2014 study, conducted by Martin Gilens and Benjamin I. Page, citizens with sizable economic resources dominate US policy-making the middle class holds minuscule amounts of influence in comparison. To recognize this, Gilens and Page analyzed 1,779 cases collected over twenty years, comparing the type of policies that the Congress passed directly to the type of policies that the public and the wealthy as separate categories preferred. They found it is much more common for the preferences of the affluent to pass into laws when compared to those of the middle class.

Gilens points to a notable statistic in response to some criticism he faced for his allegations: “When only the affluent strongly support a proposed policy change, that policy is adopted 46 percent of the time; when only the middle-class strongly support a policy, that policy is adopted only 24 percent of the time” 2Gilens, M., & Page, B. (2014). Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens. Perspectives on Politics, 12(3), 564-581. doi:10.1017/S1537592714001595.

In concept, the governing power in the US is meant to be derived from the will of the people. This poses a risk of change in the famous words of the Preamble of the US Constitution, “We the People” to be replaced to “We the Elite.” Proper representation in public policy is essential to this goal.

How much do the common people in the United States have influence over policies that are in their favor? Photo by Anthony Garand on Unsplash.

To find a contributor to this imbalance, look no further than the Citizens United v. Federal Election Commission case. It lifted the restrictions set by the government of independent expenditures for political communications, opening a floodgate of donations from wealthy benefactors to political candidates. In 2012, the first presidential election since the ruling, Sunlight Foundation reported that over one-fourth of the $6 billion donated was from roughly 1/10,000 of the country’s population. That is equivalent to 0.01%. 

The average citizen simply does not have the funds to donate this size to a political campaign. As a proxy, during the 2020 Presidential Elections in the United States, Senator Sanders, who ran a campaign funded by individual donors, received about $46.5 million from about 2.2 million contributors, averaging $21 per contributor 3Marans, Daniel, and Hayley Miller. “Bernie Sanders Campaign Says It Raised $46.5 Million In February.” HuffPost, 1 Mar. 2020, https://www.huffpost.com/entry/bernie-sanders-february-fundraising-2020-democratic-primary_n_5e5b9f80c5b6beedb4ecb7ae..

The average American is busy providing food for their families and paying their monthly bills. The wealthy can afford to dedicate themselves to changing government policies. They have the resources to hire and assemble teams who will help them. Because of this advantage, the wealthy have been able to derail many public interests in favor of policy to benefit themselves and their businesses.

The Wealth Gap is the foundational problem

According to Politifact, the top three wealthiest people in the United States owned more wealth combined than the bottom half of the entire country’s wealth combined in 2018. Bill Gates, Jeff Bezos, and Warren Buffet were worth roughly $248.5 billion, whereas the bottom half of the nation was worth roughly $245 billion 4PolitiFact, & Senator, B. (2018, July 19). PolitiFact – Bernie Sanders: Bill Gates, Jeff Bezos, Warren Buffett have more wealth than bottom half of U.S. Retrieved January 05, 2021, from https://www.politifact.com/factchecks/2018/jul/19/bernie-s/bernie-sanders-bill-gates-jeff-bezos-warren-buffet/. It is only natural that some of the nation’s wealthiest people are also many of the highest individual donors to political campaigns. 

For example, in the 2020 US Presidential Elections, Forbes reported that 67 billionaires and their partners made donations of $100,000 to various committees that supported Joe Biden. With those donations, the Biden Victory Fund and the Biden Action Fund reported that together they had received nearly $20 million just between July and September 5Tindera, Michela. “At Least 67 Billionaires Made Six-Figure Donations To Committees Supporting Joe Biden In Last 3 Months.” Forbes, https://www.forbes.com/sites/michelatindera/2020/10/19/at-least-67-billionaires-made-six-figure-donations-to-committees-supporting-joe-biden-in-last-3-months/. Accessed 15 Jan. 2021. In contrast, Senator Sanders’ campaign averaged $21 per individual donor.

It has now been reported by the Center for Responsive Politics that the 2020 election is the most expensive election in history, costing roughly $14 billion 6A 501tax-exempt, The Center for Responsive Politics, et al. “2020 Election to Cost $14 Billion, Blowing Away Spending Records.” OpenSecrets News, 28 Oct. 2020, https://www.opensecrets.org/news/2020/10/cost-of-2020-election-14billion-update/.. A clear sign of the power of these elites is to compare the outcome of the election with the campaign spending of Michael Bloomberg and Joe Biden. 

Bloomsberg, according to opensecrets.org, only raised $65,062 from “Large Contributions” (anything over $200). Whereas Biden, the winner of the democratic primary, raised roughly $646 million; the equivalent of about 61% of his total funding 7Summary data for Michael Bloomberg, 2020 cycle. (n.d.). Retrieved January 13, 2021, from https://www.opensecrets.org/2020-presidential-race/michael-bloomberg/candidate?id=N00029349. In defense of Biden, he also raised about $400 million from contributions lower than $200 8A 501tax-exempt, The Center for Responsive Politics, et al. “Summary Data for Joe Biden, 2020 Cycle.” OpenSecrets, https://www.opensecrets.org/2020-presidential-race/joe-biden/candidate?id=N00001669. Accessed 15 Jan. 2021.. Bloomsberg raised about $800,000 in small contributions for comparison 9Summary data for Michael Bloomberg, 2020 cycle. (n.d.). Retrieved January 13, 2021, from https://www.opensecrets.org/2020-presidential-race/michael-bloomberg/candidate?id=N00029349.

Money can buy many things, even elections, but not all the time. The power of money has its limits. Michael Bloomberg, a multi-billionaire, failed to win the Democratic nomination for US presidency in 2020.

We should note it that money does not hold all the power in the US or that it can “buy elections or policies.” Bloomberg for example was the highest spender during the 2020 Democratic Primary, at over $1 billion, but still fell short of being the party’s frontrunner 10Summary data for Michael Bloomberg, 2020 cycle. (n.d.). Retrieved January 13, 2021, from https://www.opensecrets.org/2020-presidential-race/michael-bloomberg/candidate?id=N00029349.

On the other hand, Senator Bernie Sanders found more success in donations from the common people, but he also lost in the primary as well. Early in the primaries, Senator Sanders enjoyed a convincing lead. In fact, in February 2020, betting markets placed Sanders at 43.6% winning compared to current President Elect, Joe Biden at 9.1%. Senator Sanders was also in the lead in national polls 11“What If It’s Bernie?” National Review, 12 Feb. 2020, https://www.nationalreview.com/2020/02/what-if-its-bernie/.

Lobbying efforts have also seen a major spike in the past few years. According to the Center for Responsive Politics, lobbyist spending from 2019 falls just short of the record at roughly $3.51 billion. To see a breakdown of how this money was spent, follow this link. The wealthy want to see policy changes that they believe will help the country or their businesses, and using their money is the most convenient way for them to support the changes that they favor. 

What has been proven by Gilens and Page is that affluence allows an individual to make campaign contributions for a louder voice in public policymaking. Before his presidential campaign, Michael Bloomberg was known as one of the highest campaign contributors for the Democratic party. Along with Thomas Steyer and the late Sheldon Adelson, these billionaires have donated hundreds of millions of dollars in official dealings and an undisclosed amount behind closed doors. Adelson and his wife contributed about $113 million in the 2018 midterm elections, whereas Thomas Steyer donated roughly $50.7 million 12Jones, N. (2018, November 02). Midterm big spenders: The top 20 political donors this election. Retrieved January 13, 2021, from https://www.theguardian.com/us-news/2018/nov/02/midterm-spending-top-political-donors-sheldon-adelson

This appears to be a common thread amongst the wealthy. Benjamin I. Page, Larry M. Bartels, and Jason Seawright conducted the Survey of Economically Successful Americans (SESA). Teaming up with the National Opinion Research Center (NORC), a non-partisan social research institution, SESA modified the NORC system to narrow down the top 4% of affluent citizens to the desired top 1% by analyzing income data, home values, and income-producing assets to name a few methods. NORC interviewed the responses of 83 Chicago-area individuals during the winter and spring of 2011 13Page, B., Bartels, L., & Seawright, J. (2013). Democracy and the Policy Preferences of Wealthy Americans. Perspectives on Politics, 11(1), 51-73. doi:10.1017/S153759271200360X . With the raw data from NORC, SESA could find a list of the top 1% and contact them directly to fill out their survey. 

Among their respondents, the average wealth was roughly $14 million. Much to the surprise of the researchers, many of the wealthy agreed to cooperate. We will dig deeper into SESA’s findings later in this article. But for now, SESA found that 68% of the top 1% admitted that they have donated money to a political campaign, and 41% have attended either political meetings, dinners, or rallies 14Page, B., Bartels, L., & Seawright, J. (2013). Democracy and the Policy Preferences of Wealthy Americans. Perspectives on Politics, 11(1), 51-73. doi:10.1017/S153759271200360X . For comparison, a 2016 Pew Research Center study found that only 12% of all Americans gave any money to political candidates, when the wealthy are included. 

The wealthy recognize that money can help them get their voices heard over those of others.

Why does this matter? Disconnect leads to discontent, which in turn may result in violence 

Now that there is little doubt that the affluent use their money at a higher proportionate rate than the average citizen, it is time to point out why it matters: many fundamental beliefs of the wealthy differ greatly from the average middle-class. 

The lack of consistency between the opinions and preferences of the general population and the policies that the politicians enact can lead to disillusionment in the political system leading to lower voter turnout and lower faith in the government. These frustrations, if stirred up by a skilled, populist politician, may lead to violent events such as the storming of the US Congress Building on January 7, 2021 resulting in four deaths.

During SESA’s evaluation, they also surveyed the specific beliefs of the wealthy and compared their positions to a group of middle-class individuals. A few key differences show that the elite believes that budget deficit issues, unemployment, and education are among the biggest problems in the US. Page and his colleagues cite a CBS report that found only 7% of the public even mention deficits or national debt as a problem, and only 3% brought up education.

Only 16% of the elite listed climate change as a concern, a problem proven to be a worry for many citizens, including the majority of the scientific community 15Page, B., Bartels, L., & Seawright, J. (2013). Democracy and the Policy Preferences of Wealthy Americans. Perspectives on Politics, 11(1), 51-73. doi:10.1017/S153759271200360X. See the chart below for a few more significant differences.

The survey shows that there is a major disagreement between the wealthy and the general public on major issues that affect any person’s well-being and long-term prospects for success, i.e. education, health and income.

Actions We Can Take: How do we Eliminate plutocracy? What can we do?

So far, we have shown that the economic-elite have disproportionate influence over US public policy and how their beliefs differ from the general public. We have also looked at how they use their wealth to position themselves in places of political influence. Now, we will look at actionable steps to counter this ever-growing threat to our democracy: 

  • SIGN PETITIONS: There are plenty of locations to find government petitions to sign such as https://www.change.org to name a major one. With enough signatures and media attention, petitions are one way to express your opinion in a short amount of time. 
  • WRITE TO YOUR CONGRESSIONAL REPRESENTATIVE: Writing to a congressional representative can be a simple way to reach your representative and voice your opinion about campaign finance reform. The American Psychological Association has a great page to help you determine where to send your letter, it also includes tips on how to best express yourself: https://www.apa.org/advocacy/guide/letter-email. It may take more time than signing a petition, but it guarantees that your direct opinion is given. 
  • ADVOCATE: A great way to ensure the control of government rests with the people is to advocate for campaign finance reform. Luckily, the 2020 elections have demonstrated strong voter support for this type of change. Oregon passed Measure 107, which places a general limit on the contributions to candidates. Alaska narrowly passed Measure 2, which forces more transparency between any donation to candidates and also supports an amendment to the US Constitution granting citizens the right to limit the donations in elections 16Vandewalker, Ian. (2020, December 21). Campaign Finance Victories in 2020 Elections. Various other states passed similar legislation, showing that meaningful change is possible.
  • ORGANIZE CROWDFUNDING CAMPAIGNS: Senator Sanders demonstrated that it is possible organize large-scale and meaningful financing campaigns for US Presidential Elections. Although, he was ultimately not successful, his campaign shows crowdfunding, raising funds from many small donors, can be a way for the general public to raise its voice above that of the wealthy donors. Even though Biden won the Presidency, he ultimately adopted some of Senator Sanders’ agenda items.17EDT, Adrian Carrasquillo On 7/10/20 at 6:15 PM. “Biden Adopts Sanders’ Agenda Items—Here’s Where He Aligns with the Left.” Newsweek, 10 July 2020, https://www.newsweek.com/biden-adopts-sanders-agenda-itemsheres-where-he-aligns-left-1517078.
  • FORM ASSOCIATIONS: Just like the wealthy business interests finance lobbying groups, the general public can also finance its own group of lobbyists who can lobby for policies in their favor. This will help ensure that more people have their voices heard as the responsibility for managing the association and lobbying is delegated to professionals.
  • RUN FOR OFFICE: In the end, one of the best ways to make meaningful change is to run for political office. Even if winning is not the goal of your campaign, you could bring awareness to whatever policy issues would be best for your area. NPR has assembled a simple method to run for office: https://www.npr.org/2019/10/15/770332855/how-to-run-for-office.