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The world according to the oligarchs
Over the past 40 years, technology has been used to reorganize work worldwide, creating large gains for the already wealthy and highly educated, but making life harder for everyone else.
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Tesla and SpaceX CEO Elon Musk, accompanied by United States President Donald Trump (right), and his son X Musk, speaks on Feb. 11, 2025, during an executive order signing in the Oval Office at the White House in Washington, DC. (AFP/Getty Images/Andrew Harnik)
T
he United States has long had a powerful private sector. And rich individuals have long used their wealth to seek political influence and leverage it to promote their views and support policies that further enhance their wealth. Yet in recent decades, American oligarchs have become much more dangerous to economic health and democracy globally. Why?
Classical oligarchy is based on monopoly power: the command of a large enough market share to set the prices of goods and services well above the cost of producing them.
Modern thinking about antitrust developed as a way to counter this strategy, with the US Department of Justice defining and preventing excessive concentration (meaning market share above a threshold level).
But over the last 40 years or so, antitrust enforcement has relied on some version of the consumer welfare standard, according to which “business conduct and mergers are evaluated” based on “whether they harm consumers in any relevant market.”
The next chapter of antitrust is likely to involve even less enforcement, partly owing to personnel changes in Washington, but also because of a long-standing campaign to replace judges with people who believe that “the market is always right,” and that it is unconstitutional for regulators to have any discretion in interpreting laws.
This being the case, we should expect to see market share and monopoly power increase across a wide range of sectors. Higher prices will hurt consumers and depress living standards over time.
Two other forms of oligarchic power have developed in recent decades. The first is in the financial sector, where leading banks and some other investment firms have become too big to fail (TBTF). The executives who run these firms can take on more risk because they know that the government will provide some form of bailout, rather than allow them to collapse, if things go pear-shaped.
