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Definition: An oligarchy is an organization controlled by just a few businesses or individuals. They have enough power to turn the organization to benefit them to the exclusion of other members. They maintain their power through their relationships with each other. Oligarchy is from the Greek word oligarkhes. It means "few governing." 

A plutocracy is a subset of an oligarchy. A plutocracy is when the leaders are almost all rich.

What is  of an Oligarchy

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 elite group gains power, it seeks to keep it. As their knowledge and expertise gains more control, it becomes more difficult for anyone else to influence. 

Oligarchies can become stale. They pick people like them who share the same values and worldview, but often incompetent and ignorant about diplomacy.

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 restricts 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 the society.

Three Causes of Oligarchies

An oligarchy forms when leaders agree to increase their power regardless of whether it benefits the larger society. The people in charge are very good at lying to their supporters, otherwise they wouldn't have risen to that level. That's how they can continue to take more wealth and power from those who are desperate and gullible and don't have those skills or interests.

Like the current US Republican Party under Donald Trump, a 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 continue to 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 or manage. gullible and overwhelmed citizens are willing to make the trade-off between a democracy and a authoritarian state. They allow those with the passion and knowledge to rule to take over.

What About the United States?

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. And this was before the election of Donald Trump.

One sign is that income inequality is worsening. The incomes of the top 1 percent of earners rose 500 percent between 1980 and 2015.

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' corporoate boards.

For example, the Koch brothers, David and Charles, 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 and supports Republicans (Source: "Five Oligarchs Whose Names You Need to Know," Jen Alic,, September 5, 2012).

Today, most Americans feel angry and disenfranchised. If not, they feel helpless in influencing their society. Gallup reports that 76 percent feel dissatisfied with the way things are going right now. Also, 67 percent are dissatisfied with income distribution. As a result, 43 percent feel that there is not much opportunity to get ahead. 

Such disenfranchisement 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 private sector corporate oligarchy. The Occupy Wall Street movement didn't carry out real change.

Ominously, 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 oligarchy policies that perpetuate 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. Trump also used racist "dog whistle" hate to rile up some white voters.

In the last year, Donald 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 (Source: "President Trump's False Commitment to Drain the Swamp," The Washington Post, June 1, 2017).

Fortunately, in the last two years, the corrupt Clinton mini-oligarchy has been rejected, but now with white supremacy but now with the Trump oligarchy enabled and legitimized In its place.

Rocky Boschert

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