Wayne O'Leary

American Oligarchs

When it comes to countries overseas, the US is no friend of oligarchs, those incredibly wealthy individuals who use their ill-gotten gains to prop up corrupt, undemocratic political regimes around the world. Russia’s billionaire oligarchs are the current case in point. In the wake of their patron Vladimir Putin’s invasion of Ukraine, we’re disrupting their outside business interests, freezing their financial assets, seizing their mega-yachts and foreign vacation homes, and applying legal sanctions on them across the board.

But there’s another category of oligarchs who are getting off scot-free. These are America’s very own native oligarchs, the privileged billionaires who contribute little to society, pay next to nothing in taxes, yet wield enormous influence over our way of life in their pursuit of money and power. If this generation of Americans is indeed living through another Gilded Age comparable to the one characterized by Mark Twain over a century ago, as many observers contend, those plutocrats are its symbolic role models.

Like their 19th-century predecessors, they dominate the American economic scene and monopolize the popular imagination. Two qualify as avatars or capitalist icons: Elon Musk and Jeff Bezos, the richest men in the world in 2022 (per Forbes listing of billionaires) at $219 billion and $171 billion respectively. They are the Rockefeller and Carnegie of our time, lionized by some despite their amoral and ruthless approach to business and lack of concern for the common welfare. (Musk was selected as Time magazine’s person of the year for 2021, a judgment 70% of Americans disagreed with according to a YouGov opinion poll.)

Musk and Bezos are not only vociferously antitax but virulently antiunion, the latter a trait common in the billionaire class; they pay their US workers less than what the market will bear, and in an era when organizing is hamstrung by antiquated labor laws, those workers have little recourse.

Both oligarchs offer products or services of dubious value, Musk an electric car mostly marketed abroad that few other than the affluent can presently afford (his Teslas range in price up to $130,000), Bezos an online retailing behemoth (Amazon) that has destroyed countless local and regional businesses while driving down wages nationwide.

Both men are enthralled with developing commercial space travel, providing millionaire thrill seekers the chance to play Buck Rogers by riding aloft in their respective rocket-propelled vehicles — at taxpayer expense in the case of Musk’s heavily subsidized SpaceX venture.

Subsidization is the name of the game for Musk and Bezos, as it has ever been for America’s capitalist class. Free-enterprise mythology invariably implies they’ve earned it all on their own in true ruggedly individualistic fashion. Nothing could be further from the truth. In reality, Bezos built Amazon with taxpayer money, receiving $4.2 billion over the years from state and local governments to offset the costs of erecting his “fulfillment centers” (not counting the $1.7 billion he almost got from New York State in 2019 to build an East Coast headquarters there). He’s also benefited from billions of dollars in federal contracts for computing and software services.

If anything, Musk has spent even more time at the public trough despite his cynically hypocritical comment that the federal government should “get rid of all subsidies” to reduce the deficit. Up through 2015, according to the Los Angeles Times, he’d happily accepted $4.9 billion in state and federal taxpayer largesse, a process that has continued unabated in the form of grants, loans, tax credits and lucrative public contracts. The publication Business Insider (12/15/21) details two decades of massive government financial support for Musk companies Tesla Motors and SpaceX and their various subsidiaries involving multiple federal agencies and several individual states.

Fareed Zakaria, Washington Post analyst, concludes that three of Musk’s enterprises (Tesla, SpaceX and the renewable-energy venture SolarCity) would likely not exist without federal funding. Ever grateful, the tech mogul has reciprocated by attacking the concept of a national billionaires’ tax, ridiculing government attempts to encourage a unionized Tesla workplace, and calling Securities and Exchange Commission (SEC) staffers “those bastards” for daring to investigate his questionable business practices.

The practice by today’s tech billionaires of milking the public purse is neither exceptional nor unprecedented in American history. Musk and Bezos are in a direct line of descent from the robber barons of the late 19th century — the Jay Goulds, Collis Huntingtons and Leland Stanfords — who built the transcontinental railroads with unlimited corporate welfare in the form of free allotments of public land, outright government grants, and Treasury “loans” never repaid. Roughly 183 million acres of state and federal land worth anywhere from $500 million to $2.5 billion (estimates vary) was simply given away to railway companies to do with as they would, which included selling much of it to settlers at an exorbitant profit.

Historian Fred A. Shannon (The Farmer’s Last Frontier, 1860-1897) called it “public charity to the corporations.” The recipients, like Elon Musk today, considered it simply their due as enterprising entrepreneurs. Said one, banker and rail financier J.P. Morgan, “I owe the public nothing.” Some things never change.

Elon Musk and Jeff Bezos have heretofore been nonpolitical in a partisan sense; they’ve played both sides of the street because the leadership of both major parties serves at their beck and call. In modern Gilded Age practice, the prevailing system dictates they must be coddled and given every assistance, so that the promised wealth they will presumably create eventually trickles down. (Musk’s promises, largely unfulfilled, are particularly seductive.) It’s a devil’s bargain: Give us what we want if you desire jobs, a tax base and ancillary benefits — climate-friendly development or a digital economy.

Both Democrats and Republicans have unquestioningly complied for a generation, as they did during the first Gilded Age. The Bush, Obama and Trump administrations all funded Musk and Bezos and smoothed their paths forward; the Biden administration is following suit, though its modest moves toward unionization have raised hackles and complicated relationships between the government and the oligarchs — enough so that the mercurial Musk, who, like Bezos, has given money to both parties, threatens to turn Republican.

The unchallenged subjugation of democratic government to oligarchic capital marking the original Gilded Age lasted until the progressive reforms of the early 20th century. The question now is whether there will be a reformist sequel for our time.

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books.

From The Progressive Populist, July 1-15, 2022

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