Oligarchy, Democracy, or Both?

April - Economy News - Campaign Contributions

Oligarchy is an ugly word. The meaning almost sounds innocent: a small group of people having control of a country, organization, or institution. However, when applied to the United States of America, an alleged democracy, it does not bode well.

As the economic gap widens between the privileged few and the proletariat, oligarchy becomes the operative term, the proverbial elephant in the room. The gap has widened to the point that the elephant has all but demanded to be addressed.

The government manipulated mainstream media treats the issue delicately. Any publication daring to cross the unwritten, but obvious line in an attempt to force discussion on oligarchy runs the risk of losing favor with the administration. If they press too hard, they will have to read their competitor’s newspaper for newsworthy information from government sources.

However, where the media failed, academia recently succeeded, and confirmed the suspicions of the many—that oligarchy exists in America. Political scientists Martin Gilens of Princeton University, and Benjamin Page of Northwestern, published a study concluding that rich people and organizations representing business interests have a powerful grip on U.S. government policy.

When their study was made public, the mainstream media gave their findings unexpected support. Ruy Teixeira, a senior fellow at the Center for American Progress, Jelani Cobb, an associate professor of history and director of the Institute for African-American Studies at the University of Connecticut, The Washington Times, Meredith Clark of MSNBC, and John Cassidy, economic analyst and staff writer for the New Yorker all published articles addressing the issue.

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The Supreme Court of the United States recent decision to remove the cap from individual political campaign contributions also opened the floodgates of public opposition to empowering the wealthy, and made the economic disparities even more apparent.

Specifically, after examining differences in public opinion across income groups on a wide variety of issues, the Gilens and Page study found that the preferences of rich people had a much bigger impact on subsequent policy decisions than the views of middle-income and poor Americans. The opinions of lower-income groups, and the interest groups that represent them, appear to have little or no independent impact on policy.

The Gilens and Page study did say that Americans do enjoy many features central to democratic governance, such as regular elections, freedom of speech and association, and a widespread (if still contested) franchise. “But we believe that if policymaking is dominated by powerful business organizations and a small number of affluent Americans, then America’s claims to being a democratic society are seriously threatened.”

They went on to say, “When a majority of citizens disagrees with economic elites and/or with organized interests they generally lose. Moreover . . . even when fairly large majorities of Americans favor policy change, they generally do not get it.”

That is not to say that when average and affluent citizens are in agreement and want the same things that the government does not respond accordingly. However, when a change in policy that works for or against the financially elite is introduced, the decision usually favors the desires of the affluent.

The data reveals that when the economic elites support a given policy change it has a forty-five percent chance of being enacted. When the elites oppose a given measure, its chances of becoming law is eighteen percent.

How does this affect us?

The answer lies in the distribution of wealth. According to U.S. Census data, the top one percent of households control 35.4 percent of all privately held wealth. The next financial tier, which is 19 percent of the population, controls 53.5 percent of the wealth. This means that 80 percent of the population is left with only 11 percent of the wealth. In terms of financial wealth (total net worth minus the value of one’s home), the top one percent of households had an even greater share: 42.1 percent.

An economist at the University of California-Santa Cruz estimated that between 2009 and 2012, the richest one percent of Americans held 95 percent of all income growth.

The top 20 percent of the population donates more money to political campaigns than the balance of the population combined. They are the group that puts politicians in office and lobbies those politicians to set policy in their favor. The politicians are all but forced to comply. That is not how a democracy is designed to work. It is a classic model of an oligarchy.

Oligarchy is responsible for wars fought on foreign soil to allegedly protect American interests, which are the investments of the few. That protection falls on the shoulders of the young men and women in our military who put themselves at risk under the guise of protecting the lives of the majority.

When is the last time anyone heard of poor people investing in Mideast oil? Arms manufacturers and other companies owned by the 1% supply the American war machine. Our defense budget is bigger than the defense budgets of all other countries combined. And 99% of the population is paying for it.

Now the question is: How long will the majority of the American population tolerate the country being run by an oligarchy?