Oligarchy Is the Politics of Wealth Defense by the Richest
In order to come to grips with the actual government of the United States, we have to understand the theory and practice of oligarchy. Over the last three years, we have seen the failure of ordinary politics to deal with the depredations of the rich. Our bought and paid for congress protects the interests of the richest citizens in the country. The President refuses to hold any of them accountable for their crimes. Regulators from the Obama Administration slap a few of them on the wrist as a sop to our outrage. The President refused to carry out his campaign pledge to raise taxes on the rich.
This is exactly what you would expect from a nation governed by an oligarchy fused with a democracy, as described in this important paper by Jeffrey Winters, Oligarchy in the United States? (.pdf, kindly provided by Professor Winters), and fleshed out in his book Oligarchy. From the book:
Oligarchs are actors who command and control massive concentrations of material resources that can be deployed to defend or enhance their personal wealth and exclusive social position.
Oligarchy refer to the politics of wealth defense by materially endowed actors.
Oligarchs are defined by their wealth and their unrelenting efforts to defend that wealth against legitimate and illegitimate claims. That would include thieves, crooks, cheats and frauds, and the legitimate claims of taxing authorities.
Oligarchic wealth today is not created by tangible personal property, although the richest among us have plenty of that. It is defined by ownership of paper rights, stock in companies, bonds issued by the government and corporations, oil wells, patents, deeds to real estate and so on. The only substantial protector of both forms of wealth is the State, meaning both local and national government.
The threat to oligarchic wealth isn’t thieves or banks trying to foreclose on mortgages unlawfully; those are the concerns of the 99%. The big threat to Oligarchs is taxation, especially progressive income taxation and the Estate Tax, which are the only ways we have to bring about redistribution of wealth. Rich people don’t want to pay taxes; so they get low capital gains rates. Hedge fundies don’t want to pay taxes; so they get carried interests. Traders don’t want to pay taxes on their bonuses; so they set up off-shore trusts. Billionaires hate the Estate Tax, which they won’t even pay. The goal of the Oligarchs, according to Winters, is to shove those taxes off onto other people. They want to shift the cost of government to other people, even though they are by far the biggest beneficiaries of government.
Here is how it’s done. An ant warren of lawyers, accountants, brokers and bankers exists for the sole purpose of hiding assets from taxation. A murder of crows in the PR/Media business shriek that taxation is theft, class war, and job-destroying, and blithers on about how those few job creators will just do a Galt, pack up their money and leave. The carrion eaters in academic economics scrawl screeds on chalkboards showing that taxing the rich is irresponsible and bad, priming another generation to go forth and protect the interests of the rich at the expense of their parents, families and friends (well if they have any friends). Professional pundits bellow and whine in polyphonic cacophony about the death tax, as if it what happens to Mr. Sam’s money matters to the creepy Walton heirs after they go down into the dust.
Of particular note in this crowd is Adam Davidson, of NPR’s Planet Money. He claims that taxing corporations is a bad idea. If you tax something, you get less of it, he says, parroting the economists who gave us the Great Crash, and learned nothing from their failure. So, if we tax corporations, we get fewer of them? Here’s his big idea:
To solve our debt problems, we have to go to where the money is — the middle class. People who earn between $30,000 and $200,000 a year make a total of around $5 trillion and pay less than 10 percent of that in taxes (owing mostly to tax incentives and the fact that most families make less than $68,000, where larger tax rates begin).
That’s right, he wants to cut taxes on the rich and the corporations they own and control; and he wants to raise taxes on the middle class, or what’s left of it. I’d say that pretty much proves Winters’ point.
Other posts in this series on Oligarchy:
Oligarchy Inside Democracy
The Roots of US Oligarchy Are Deep
Evidence of Economic Oligarchy
Oligarchy Is The Problem