top of page

America is moving toward an oligarchical socialism

Where do we go after Trump? This question becomes more pertinent as the soap opera administration seeks its own dramatic demise. Yet before they can seize power from the president and his now subservient party, the Democrats need to agree on what will replace Trumpism.

Conventional wisdom implies an endless battle between pragmatic, corporate Clintonites on one side, and Democratic socialists of the Bernie brand. Yet this conflict could resolve itself in a new, innovative approach that could be best described as oligarchal socialism.

Oligarchal socialism allows for the current, ever-growing concentration of wealth and power in a few hands — notably tech and financial moguls — while seeking ways to ameliorate the reality of growing poverty, slowing social mobility and indebtedness. This will be achieved not by breaking up or targeting the oligarchs, which they would fight to the bitter end, but through the massive increase in state taxpayer support.

Conflicting visions

Historically, liberals advocated helping the middle class achieve greater independence, notably by owning houses and starting companies. But the tech oligarchy — the people who run the five most capitalized firms on Wall Street — have a far less egalitarian vision. Greg Fehrenstein, who interviewed 147 digital company founders, says most believe that “an increasingly greater share of economic wealth will be generated by a smaller slice of very talented or original people. Everyone else will increasingly subsist on some combination of part-time entrepreneurial ’gig work‘ and government aid.”

Numerous oligarchs — Mark Zuckerberg, Pierre Omidyar, founder of eBay, Elon Musk and Sam Altman, founder of the Y Combinator — have embraced this vision including a “guaranteed wage,” usually $500 or a $1,000 monthly. Our new economic overlords are not typical anti-tax billionaires in the traditional mode; they see government spending as a means of keeping the populist pitchforks away. This may be the only politically sustainable way to expand “the gig economy,” which grew to 7 million workers this year, 26 percent above the year before.

Handouts, including housing subsidies, could guarantee for the next generation a future not of owned houses, but rented small, modest apartments. Unable to grow into property-owning adults, they will subsist while playing with their phones, video games and virtual reality in what Google calls “immersive computing.”

The socialist challenge

Particularly since Donald Trump’s election, the leaders of corporate America — especially in tech and finance — have merged with the Democrats. They appeal to progressives by advocating politically correct views on immigration, gender rights and climate change, while muzzling conservatives both inside and outside their companies.

But now the socialists have raised the ante for progressive credibility. Going beyond green and identity issues, they are raising issues that impact most families. Arguably their strongest case can be seen in health care, now the top issue with voters, according to Gallup. In some states, notably California, socialists are also backing a drive for rent control to help families cope with high rents and low wages.

A focus on such basic issues could reorder not just the Democratic Party but the country itself. Faced with limited future prospects, more millennials already prefer socialism to capitalism and generally renounce constitutionally sanctioned free speech — not something you like to see in what will soon be the largest voting bloc in the country.

A New Deal for oligarchs

Theoretically, the Democrats moving to the left should terrify the oligarchs. Yet increased income guarantees, nationalized health care, housing subsidies, rent control and free education could also help firms maintain a gig-oriented economy since these employers do not provide the basic benefits often offered by more traditional “evil” corporations in energy, manufacturing and basic business services.

Such subsidies would help millions of gig workers, as well as the vastly underpaid production workers at Amazon’s warehouses, erratically paid workers at the Tesla car factory or the contract labor who clean the tech firms’ buildings and provide security. As historian Jeff Winters has pointed out, the oligarchy, representing basically the top .01 percent of the population, are primarily interested not in lower taxes but in protecting their market shares and capital; they have been at least as brilliant in avoiding taxes as developing innovative products. He points out the very rich have maintained their share of assets even in welfare states such as Sweden and Finland.

The losers here will be our once-protean middle class. Unlike the owners of corporations in the past, oligarchs have no interest in their workers become homeowners or moving up the class ladder. Their agenda instead is forever-denser, super-expensive rental housing for their primarily young, and often short-term, employees.

There’s surely a compelling logic for oligarchic socialism. The tech moguls get to remain wealthy beyond the most extreme dreams of avarice, while their allies in progressive circles and the media, which they increasingly own, continue to hector everyone else about giving up their own aspirations. All the middle and upwardly mobile working class gets is the right to pay ever more taxes, while they watch many of their children devolve into serfs, dependent on alms and subsidies for their survival.

Joel Kotkin is the R.C. Hobbs Presidential Fellow in Urban Futures at Chapman University in Orange and executive director of the Houston-based Center for Opportunity Urbanism (

Featured Posts
Recent Posts
bottom of page