In the third section of the paper “Oligarchy in the United States?” by Winters and Page, the authors take a very brief look at what kinds of public policy would be pursued by potential Oligarchs and if there is any evidence that this happens- of course, they find plenty.
Click here to see part 1 of this commentary, “Theory of Oligarchy”, in which the authors fumble around in their attempts to clearly define oligarchy. Click here to see part 2 of this commentary, “The US Case”, in which the authors attempt to conceptualise how ownership of wealth means ownership of power. To find the full paper use the following DOI: 10.1017/S1368980008002541.
This section begins by pointing out that very often, policy moves oppositely to public opinion. This is actually despite the fact that often public opinion is often correlated with the preferences of potential oligarchs. However, what is of most importance to learn from this is which policies are moving against public opinion and why?
The section continues to outline evidence of “biased pluralism”, evidence showing how wealthier Americans exert more political influence than less wealthy ones, includes higher income constituents having greater impact on their Senator’s votes, changes in policy outputs being more likely to respond to changes in preferences of higher income citizens and foreign policy decision-makers responding more to the wishes of multinational firms rather than the general public.
The kinds of policy that would benefit a potential class of oligarchs is easily thought of when considering that their wealth is based on inequality. As this study shows, policies that allow them to maintain their vastly unequal share of wealth also allow them to keep their vastly unequal share of political power. This imbalance creates a sort of auto-catalytic loop, by which the wealthy use their wealth to change laws in order that they may take a greater share of the wealth, which then becomes available to use as political power, which is used in order to further secure their wealth, and so on and so on.
In this section, the authors examine 3 main policy themes that they consider would be in the interests of an oligarchical class to manipulate. Firstly, international economic policy. While some of these policies can also benefit US workers; for example, policies which help expand and preserve foreign markets, to secure US exports and cheap foreign imports; evidence has shown that these policies have largely suited the interests of multi-national corporations.
In the present globalized economy, the international economic policies pursued by the United States have crucial effects upon the present and future assets of US wealth holders. Opening and keeping open (by force if necessary) foreign markets for US exports, imports, and investments can help preserve wealth and greatly facilitate its further accumulation.
Another important note the authors make here is that these kinds of policies are usually pursued regardless of whether Democrats or Republicans are in office. There is plenty of evidence beyond the scope of this post about the sham of the essentially 2 party system too. Continuing the theme of international economic policy, although awareness of their existence is slowly spreading, the TTIP, TPP and TISA are international economic policies which are posited to be greatly beneficial to multi-national corporations and the super-rich which are currently being negotiated in secret.
Another area of policy of key interest to the rich and a potential set of oligarchs is monetary policy- and it has always favoured them.
US monetary policy has taken a shape consistent with the possibility of oligarchic rule. The 2008–2009 bailout of financial institutions, in which hundreds of billions of dollars went mostly to bankers and bond-holders with little help for homeowners or accountability to taxpayers, also seems consistent with oligarchy.
Thirdly, the authors briefly examine tax policy, another key policy that it would be of great interest for the oligarchs to control. Obviously, it is against the interests of the rich to have their wealth taxed and redistributed to the poor, not simply because they want to keep their wealth, but as we’ve seen, their wealth is their political power. The authors show how throughout American history tax policies have favoured the rich and progressive income tax has been “fiercely resisted”. All this while they tout corruptions of Adam Smith’s ideas of how free markets are the best- despite Smith himself writing on progressive tax: “It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.” Nevertheless:
US governments have not greatly moderated the high inequality in economic outcomes produced by private markets, even during the period of sharply increasing inequality since the early 1970s.
The obvious solution is redistribution. The reality of the past few decades however, is increasing inequality- through less redistribution- or if anything, redistribution completely antithetical to the neoliberal slogan “the wealth trickles down”. Here in the UK for example, we have “corporate welfare” which refers to the big business practice of paying employees a less than liveable wage so that the welfare state must “top-up” the employee’s income- essentially this means a government subsidy on labour costs.
After all this, the authors maintain that we have “by no means established the fact of oligarchic rule”, just that “it is enough to say that there are plausible reasons to suspect that an oligarchy may dominate certain […] areas of policy in the United States”.
In the next section, the authors try to explain the possible ways in which oligarchs utilise their wealth to influence those who are the de jure wielders of political power- i.e. the oligarchs are the de facto government that shape policy vicariously through elected officials. This includes manipulating public opinion, or what Noam Chomsky would call “engineering consent”. The most obvious signs that oligarchs have the power to dispense mass propaganda in order to do this is the increasingly concentrated ownership of mass media apparatus- for example, Rupert Murdoch’s News Corp media empire. More on this next time.