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the resurgence of oligarchies: how and why they’ve returned

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oligarchies taking all resources
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After decades of economic growth and the rise of the middle class throughout the twentieth century, the last several decades have seen a troubling resurgence of oligarchies. The post-World War II era brought widespread prosperity in many parts of the world, fueled by policies that promoted economic equity and social mobility. However, in recent decades, many of these gains have been reversed. So, what has allowed oligarchies to reemerge?

1. Deregulation of Markets

Beginning in the late 20th century, deregulation became a dominant economic policy trend, particularly in the United States and Western Europe. Governments rolled back restrictions on industries ranging from finance to telecommunications, enabling corporations to grow unchecked. The result was a wave of mergers and acquisitions that concentrated wealth and power into fewer hands.

For example, financial deregulation in the 1980s paved the way for the growth of global banking giants whose executives wield enormous influence over economic policies. These deregulated markets prioritized short-term profits over long-term stability, with devastating effects during crises like the 2008 global financial meltdown.

2. Erosion of Progressive Taxation

The mid-20th century saw high marginal tax rates for the wealthy, which helped redistribute wealth and fund public services. However, beginning in the 1980s, tax reforms in many countries drastically reduced these rates, allowing the richest individuals and corporations to accumulate unprecedented wealth. For instance, in the U.S., the top marginal tax rate fell from 70% in the 1970s to 37% by 2023. Simultaneously, loopholes and tax havens proliferated, enabling the ultra-rich to shield their wealth from public scrutiny and taxation. The erosion of progressive taxation has exacerbated the wealth gap, effectively shrinking the middle class and eroding funding for public goods like education and infrastructure.

3. Globalization and Outsourcing

Globalization has created vast new markets and supply chains, enabling multinational corporations to expand rapidly. However, it has also facilitated the outsourcing of labor to regions with lower wages and fewer worker protections, increasing profit margins for corporations while stagnating wages for middle-class workers in developed countries. This growing wealth gap has concentrated economic power among a global elite. For example, major apparel and tech companies have built fortunes by exploiting low-cost labor abroad, often bypassing regulations that protect workers’ rights or environmental standards.

4. Technological Monopolies

The digital revolution has created a new class of oligarchs in the tech industry. Companies like Amazon, Google, and Facebook dominate their respective markets, leveraging network effects to entrench their positions. Their founders and executives control immense wealth, with tech billionaires among the richest individuals in history. These companies also exert significant influence over public discourse and regulatory policies, often lobbying to prevent antitrust actions that could break up their monopolies. For instance, Amazon’s vertical integration has allowed it to dominate e-commerce, logistics, and cloud computing, leaving little room for smaller competitors.

5. Weakening of Organized Labor

Unions played a crucial role in building the middle class by advocating for fair wages, benefits, and working conditions. Over the past several decades, union membership has declined sharply, particularly in developed nations. This decline has weakened workers’ bargaining power, allowing corporations to capture a larger share of economic gains and further concentrate wealth. In industries like manufacturing and retail, where unions once held significant sway, wages have stagnated while executive compensation has soared.

6. Rise of Political Populism

Ironically, the populist movements that claim to fight against elites often exacerbate oligarchic power. Leaders who rise on anti-establishment platforms frequently enact policies that benefit the wealthy, such as tax cuts for corporations and deregulation. This creates a cycle where oligarchs leverage their resources to fund populist campaigns, ensuring their interests are protected. For example, populist rhetoric has often masked legislation favoring powerful donors while diverting public attention from structural inequality.

Consequences of the Resurgence

The resurgence of oligarchies has profound implications. Economic inequality has reached levels not seen since the early 20th century, with a handful of billionaires controlling as much wealth as the bottom half of the global population. This concentration of wealth undermines democratic institutions, as oligarchs use their resources to shape policy, influence elections, and suppress dissent. Social mobility has declined, leaving younger generations with fewer opportunities to achieve economic stability. Communities feel the strain as underfunded public services and stagnant wages create cycles of discontent.

Addressing the Resurgence

Reversing the rise of oligarchies requires bold action. Policymakers must:

The resurgence of oligarchies is not inevitable. With determined action, societies can reclaim economic balance and ensure a more equitable future. By learning from the past and prioritizing policies that empower the majority, we can challenge the structures that perpetuate inequality.

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