Oligarchy

What is Oligarchy?

a small group of people having control of a country, organization, or institution. :

What countries have had an oligarchy?

Russia, China, Saudi Arabia, Iran, Turkey, South Africa, North Korea, Venezuela

Pros of Oligarchy

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Oligarchies exist in any organization that delegates power to a small group of movers and shakers. Some power must be delegated to a group of expert insiders so that an organization can function. In other words, it's not efficient for everyone to make all the decisions all the time.

An oligarchy allows most people to focus on their day-to-day lives. They can ignore the issues that concern society as a whole. They can spend their time doing other things, such as working on their chosen career, cultivating relationships with their families, or engaging in sports.

The oligarchy allows creative people to spend the time needed to innovate in new technologies. That's because the oligarchy manages the society. They can be successful as long as their inventions and success benefit the oligarchy's interests as well.

The decisions made by an oligarchy are conservative since the goal is to preserve the status quo. It’s therefore unlikely that any single strong leader can steer the society into ventures that are too risky.

Cons of Oligarchy

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Oligarchies increase income inequality. That's because the oligarchs siphon a nation's wealth into their pockets. That leaves less for everyone else.

As the insider group gains power, it seeks to keep it. As their knowledge and expertise grow, it becomes more difficult for anyone else to break in.

Oligarchies can become stale. They pick people like them who share the same values and worldview. This can sow the seeds of decline since they can miss the profitable synergies of a diverse team.

If an oligarchy takes too much power, it can restrict a free market. They can agree informally to fix prices which violate the laws of supply and demand.

If people lose hope that they can one day join the oligarchy, they may become frustrated and violent. Consequently, they may overthrow the ruling class. This can disrupt the economy and cause pain and suffering for everyone in society.

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A monarchy or tyrant system can create an oligarchy if the leader is weak. The oligarchy increases its power around him or her. When the leader leaves, the oligarchs remain in power. They select a puppet or one of their own to replace the leader.

Oligarchies can also arise in a democracy if the people don't stay informed. This happens more when a society becomes extremely complex and difficult to understand. People are willing to make the trade-off. They allow those with the passion and knowledge to rule to take over.

U.S. Oligarchies

Is the United States an oligarchy? Many economists, such as Thomas Piketty and Simon Johnson, say that either it is now or it's headed that way. One sign is that income inequality is worsening. The incomes of the top 1 percent of earners rose 400 percent between 1979 and 2005.

Two-thirds of that increase went to the top 0.1 percent. These are corporate executives, hedge fund and other financial managers, lawyers, and real estate investors. They go to the same schools, travel in the same social circles, and sit on each others' boards.

American oligarchs are not within the same families. They don't all support the same causes. Instead, they are very wealthy people who donate to campaigns and causes that help their businesses.

The Washington Post found that just 10 mega-donor individuals and couples contributed nearly 20 percent of the $1.1 billion raised by super PACs in 2016. Super PACs are political action committees that can shield the identity of their donors. The top givers were split roughly equally along party lines.

For example, David and Charles Koch made their wealth by investing in oil derivatives. They support conservative politics through the Koch foundations. Another is Harold Hamm, owner of Continental Resources, who opened up the Bakken shale oil fields. He supported Republicans who approved the Keystone XL pipeline.

Comcast lobbyist David Cohen is a millionaire who donates to Democrats. He also successfully lobbied the government for the merger of Comcast and NBC. S. Donald Sussman is a hedge fund manager who supports liberal candidates.

Research conducted by Northwestern and Princeton universities supports the oligarchy claim. It found that the nation's economic elite dominate federal policies.

It reviewed 1,800 federal policies enacted between 1981 and 2002. The researchers compared them to the preferences of four groups. It found that the policies most frequently aligned with the wishes of the elite and special interest groups rarely aligned with those of average citizens or mass interest groups.

As a result, most Americans feel disenfranchised. If not, they feel helpless in influencing their society. A 2018 Gallup poll found that 63 percent feel dissatisfied with the way things are going right now. Also, 68 percent are dissatisfied with income distribution. As a result, 37 percent feel that there is not much opportunity to get ahead. That's up from 17 percent in 1997.

These attitudes have led to populist protest groups such as the Tea Party and the Occupy Wall Street movement. However, the Tea Party directed people's anger toward the federal government, not the oligarchy. The Occupy Wall Street movement didn't carry out any real change.

This dissatisfaction became a critical force in the 2016 presidential campaign. It created momentum for candidates on both ends of the political spectrum. Bernie Sanders railed against those policies that perpetuated income inequality. Donald Trump lumped the Tea Party, traditional Republicans, and Democrats into the same "swamp." Trump used the anger at the status quo to win the election.

President Trump then filled his Cabinet positions with many of the same elite he had campaigned against. He also granted waivers to former lobbyists to direct policy in areas they had once lobbied for.

ARTICLE TABLE OF CONTENTS

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Pros of an Oligarchy

Cons of an Oligarchy

Three Causes of Oligarchies

U.S. Oligarchies