Improving Our Standard of Living (Wattpad Edition)

Chapter 37: Oligarchy in the United States

We have the best Congress money can buy. – Will Rogers

Like most industrialized nations, the United States is a representative democracy. Despite its vast wealth, it scores 10th place on the Standard of Living Index. It could easily score 1st if not for its wide income gap.

Rising inequality in the United States is linked to its strengthening oligarchy. Since the late 1970s and early 80s, tax rates on the wealthy have fallen. The minimum wage has fallen (adjusted for inflation). Unions have declined. Funding for public colleges has been reduced, forcing students to make up the difference. (That's why education is more expensive today.) Wages as a share of GDP have come down, while stockholders' share of national income has gone up.

America is moving in a more feudal-like direction. A growing percentage of the GDP is being diverted toward asset holders and less toward wageworkers. If this trend continues, America could fall to 15th or 20th place in quality of life among the OECD.

However, what has been happening in the US has been happening in several countries. There's a whole book on the topic by Thomas Piketty called Capital in the Twenty-First Century.

The United States may not fall in ranking, assuming the trend continues, but instead, the rate of improvement in quality of life may slow for a large portion of the OECD.

The world as a whole is much more democratic and better off than it was centuries ago, and even decades ago. But the trend is at risk of reversing if inequality and corruption aren't kept in check.

In America, and a few other developed nations, the weakening of market freedom and income redistribution policies has been due to an increase in campaign contributions and lobbying by billionaires and their corporations. Over the last few decades, legislators passed laws that resulted in the oligarchs acquiring a larger share of national income. In a downward spiral, the oligarchs used that surplus to increase funding for their own candidates, securing for themselves more special privileges and subsidies, giving their companies advantages over smaller firms. Also, the ultra-wealthy purchased tax breaks and loopholes that made it easier for them to avoid paying. That gave them additional competitive advantages in the market and contributed to rising inequality. Since the election of Trump, certain big corporations are lobbying more than ever for restrictions on trade, which will give them advantages over foreign competitors. This will allow those oligarchs to corner the market further. The same is happening in the UK in the aftermath of Brexit.

More often than not, what is mistaken for big government is actually big oligarchy. Burdensome regulations and restrictions on small and medium businesses aren't usually of the legislators' own volition. They originate as bills lobbied by billionaires and big corporations that don't want competition. That's why there's only a handful of internet service providers and healthcare providers. Why you can't buy medicines from foreign countries. Why banks can get away with gambling with other people's money without consequence. Why the fossil fuel and agricultural industries receive tens of billions of taxpayers' dollars. Why there are havens hiding trillions of dollars in unpaid taxes. Why it's so hard to start a small business without violating some law that big companies lobbied for. And countless other examples.

According to a poll, 75% of Americans believe "campaign contributions buy results in Congress." [1] 79% believe congress members are "controlled" by special interests that finance their campaigns. 80% think the government is controlled by "a few big interests looking out for themselves." [2]

In the United States alone, billions of dollars are spent each election cycle on campaign contributions. According to scholar Jeffrey Winters, three-fourths of the total money donated to political campaigns comes from just one-fifth of the donating population, which comprises 0.001% of American adults [3].