There has never been a time in the history of human civilization when the wealthy did not rule. Oligarchy – rule of the people by the rich and for the rich – has always been the status quo, and remains so today. This system does not just depend on rampant inequality; it is defined by inequality. It can be found in all nations, and it is nestled underneath every extant system of government and social order.
The United States is, of course, no exception. The economist Edward Wolff, quoted in O’Reilly 2015, illustrates US inequality and oligarchic excess via the following example.
Imagine a theater with a large stage. On the stage, there are 100 people, as well as 100 empty chairs. None of the people are seated. Each chair represents 1% of all US wealth; each person represents 1% of the US population.
A master of ceremonies appears to assign chairs according to the wealth distribution in the United States today, in several tiers.
First, 60 people are excused from the stage and asked to leave the theater. This represents the bottom 60% of the US population, whose combined wealth (o.3%) is not enough to justify the assignment of a single chair to the group.
There are now 40 people remaining, with no chairs yet assigned.
The MC now assigns the next tier of people to chairs: 7 chairs are awarded to 20 people, roughly 3 to a chair.
With 20 people now seated, there remain 20 unseated while 60 stand outside the theater, with 93 chairs still vacant.
So much for those people who represent the percentage of the population below the threshold of equitable distribution. The MC now assigns the percentage at that threshold – 10 people – to 10 of the remaining vacant chairs, 1-to-1.
That leaves 10 unseated people and 83 unfilled chairs.
Reviewing Wolff’s data, the top 10% of the US population possesses 82.9% of the wealth; the bottom 90% just 17.1%.
The MC now awards 11 chairs to the next 5 people – slightly more than 2 chairs apiece. That leaves only 5 unseated people, with 72 remaining chairs. Per the Wolff data: the top 5% of the US population possesses 72% of the wealth, while the bottom 95% has 28%.
We’re getting down to it. The MC next awards 4 of the remaining 5 people a total of 29 chairs – about 7 chairs each.
That leaves 43 chairs – not too far from half of the original 100 – for the sole remaining person.
Put another way, the top 1% of the US population possesses not much less than half of all the nation’s wealth.
That’s the economic position of the oligarchs in the United States today.
For those inclined to question Wolff’s data, it was taken from the Federal Reserve and the IRS. Limited to those sources, his presentation cannot be spot-on, because it is incomplete.
It is incomplete, but that makes his numbers conservative: by definition, sheltered/hidden wealth – US fortunes sequestered in inaccessible tax havens – are excluded. If those numbers were available, the reality of US oligarchy would be even more breathtaking than what Wolff presents. (As for wealth stashed in such havens, the economist Ronen Palan guestimates it at $11-$21 trillion; economist James Henry thinks is more in the ballpark of $21-$32 trillion.)
O’Reilly’s point, in presenting Wolff’s exercise: oligarchy isn’t a consequence of inequality; oligarchy is inequality. To see it otherwise is to assign complexity to something that has been, from day one, very simple.
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