"In the last 250 years oligarchs have used their power to keep societies unequal"

Many may consider Jeffrey Winters' ideas subversive or revolutionary, but in this interview he speaks as an academic.

In fact, this professor of Political Science at Northwestern University (Illinois, USA) has devoted a quarter of a century to the study of a complex topic: The power of wealth and how it is transformed into political influence.

After this study, he wrote the book "Oligarchy", in which he not only traces the history of the power and privilege of the oligarchy from ancient times to the present, but also develops an original theory on this matter.

In this conversation with the BBC, Winters talks about some of his more controversial approaches, such as, for example, the assertion that all current liberal democracies are, at the same time, oligarchy.

He also addresses the reasons why he considers that democratic participation has become ineffective in confronting oligarchic power, as well as the paradox that democratic societies - which maintain political equality - are currently "grossly economically unequal".

What do we talk about when we talk about oligarchy?

Oligarchy refers to the political power of wealth. Since ancient times, in Athens and Rome, when the word oligarchy was first used, it always referred to the power of the few who have extraordinary wealth.

Political power can take many forms, such as holding political office, or controlling coercion, such as a military leader, but one of the most important sources of political power throughout history has been the possession of massive wealth and, today , we have oligarchs operating in the same way as in the ancient world.

Why should we care about the oligarchy now?

It should worry us, because all democratic countries in the world are simultaneously oligarchy. They are a mixture of both.

Even countries that allow political competition between parties and enjoy the right to vote also have a small number of people who use the enormous power of their wealth to fund candidates long before citizens go to the polls. In general, money power largely determines who is a potential candidate.

A second reason is because, especially in today's democracies, we have greater inequality than ever before in history. This is ironic because we usually think of inequality as a problem in non-democratic societies, but in fact, liberal democracies are extremely unequal economically.

One reason for this is that over the past 250 years oligarchs have used their power to ensure that democracy does not make society more economically equal.

So the explosion of inequality that we see in the world and the explosion of rage that we see in citizens is related to the fact that the oligarchy is stronger today in democracy than it has been in decades.

How is it possible that democracy cannot solve this problem of inequality due to oligarchy?

Democracy has a limited ability to solve this issue because the laws are already written by the democracies themselves to favor the oligarchs.

I am giving you an example. In the United States we had a very famous case in 2010 called Citizens United, in which the Supreme Court equated the use of money in politics with the exercise of freedom of expression. This paved the way for the use of money to influence the political system.

And today in the United States, due to the existence of special political action committees, not only is the amount of money that the oligarchs can use practically unlimited, but it is also secret, because we do not know exactly who is influencing in politics.

When we talk about a small group of very rich people using their power and wealth, most people will think of elites. How do you differentiate between elites and oligarchs?

Elite also refers to a minority of people who have a large amount of power, but this power has other characteristics besides wealth. For example, someone like Barack Obama held political office when he was president, so he was a member of the elite, but he was not rich. Someone like Gandhi was a member of the elite because he was extremely powerful but had no wealth. Someone like Oprah Winfrey can have a lot of power being a celebrity.

How do you explain that in liberal democracies, in which elections are free and all citizens have the right to vote, oligarchs can have so much influence?

Let's go back to the example of the United States: long before anyone can vote either in a primary or in an election for public office, we have something called a wealth primary.

Wealth primaries are those in which the candidate who wants to run first goes to all the rich people and says, "What do you want? Let me make sure the policies will favor you." Then the rich decide who to support. .

Generally speaking, primaries for the wealthy begin a year or two before any type of campaign for public office. And if you're going to apply, but you can't attract rich people's money, in most cases you can't compete.

So the role of the power of wealth is to limit the candidates to such a small number of people as are acceptable to the oligarchs. After the oligarchs have eliminated the other candidates, they then open the possibility for the people to decide between candidates A, B and C, who are completely acceptable to the oligarchs.

Let me be clear: do citizens have a choice? Yes, but we have to understand that the combination of oligarchy and democracy severely limits the options and policies that are possible because they want to maintain inequality, extreme inequality and concentration of wealth.

Sometimes this process fails and democracy produces candidates or parties that are not acceptable to the oligarchs. When this happens, it is usually democracy itself that collapses because the oligarchs find it unacceptable.

A very clear example was the case of Allende in Chile. Democracy produced a party and candidate that were completely unacceptable to corporations and the rich, and the result was the assassination and end of democracy. And this has happened in many countries of the world.

Therefore, one of the things we need to understand about the relationship between oligarchy and democracy is that democracy is possible as long as oligarchy is not threatened.

In your book you claim that oligarchs have been successful for centuries in making people believe that it is wrong to attempt substantial redistribution of wealth...

When democracy was emerging, the oligarchs were extremely concerned that it would cause a redistribution of wealth. They were very afraid and, in fact, did not want democracy to happen. And it turns out that, in fact, democracy is structured in a way that makes it extremely difficult to redistribute wealth.

They have also tried to use the power of wealth to shape ideas in society. Many oligarchs around the world fund research centers, institutes and economics departments at major universities to spread the idea that without oligarchs and concentrated wealth, no jobs will be created and economies will collapse.

They also put forward the idea that oligarchs are actually beneficial to society because they are philanthropists and donate money to medicine and other causes they support.

What is never said is that the main thing oligarchs do with their money is protect their wealth. Beginning in the 1950s and 1960s, what I call in my book the 'wealth protection industry' emerged, which is a multi-billion dollar industry consisting of lawyers, accountants, lobbyists and wealth management professionals, working whose sole purpose is to make sure the oligarchs don't pay taxes.

There are two ways in which inequality increases. One occurs at the point of production, that is, in the relationship between working people and workplace owners.

Another way inequality is affected is through government redistributive policy. This is why most societies try to deal with inequality through progressive taxation. The poor pay less tax, while the rich have to pay more.

The asset protection industry's job is to make sure progressive taxes don't work. For example, people like Warren Buffet, Elon Musk or Jeff Bezos pay a significantly lower tax rate than the average US citizen.

Why? First, because the wealth protection industry shapes legislation, helping to write laws in Congress to create legal vacuums for the wealthy.

Second, the same wealth protection industry moves money around the world to secret jurisdictions, trusts or tax havens to make it impossible for agencies like the IRS to know where the wealth is.

Finally, the same wealth protection industry is lobbying Congress to cut funding for the IRS, limiting its investigative abilities so that it cannot find the money, prosecute or investigate the oligarchs.

In your book, you mention that the oligarchy represents the 1% of the 1% and that, when they mobilize their power to protect their wealth, those who end up paying the most taxes are those who are slightly less wealthy and the upper class. medium. Can you explain this?

In the book I define an oligarch as a person who reaches an economic level that allows him to pay for the "wealth protection industry". That is, he uses his wealth to protect wealth.

In the United States, for example, there is a group that I call the oligarchs, and the group below them is the "massive rich." This term is applied by the wealth protection industry itself to refer to people who, in reality, are not wealthy enough to purchase their services [these people are estimated to have between $100,000 and $1 million in liquid assets] . And how do they know? Because they have already tried to convert them into customers, but they didn't have enough money to pay for their services.

I am giving you an example of these services. In the United States there is something called a "tax opinion card". It is a document prepared by a law firm that has tax specialists, which, based on the analysis of the law, shows that you do not have to pay certain taxes.

Such a letter usually costs between $1 million and $3 million, but can save you between $30 and $300 million in taxes a year. Most people cannot afford to get a tax opinion letter because it costs more than they earn.

By the way, if you get a tax opinion letter, it means that the lawyers have done an interpretation of the United States tax code that is over 80,000 pages long. Not even the IRS understands!

How did it get so complex? The answer is that the wealth protection industry deliberately made it this way so that their clients could interpret the law, rather than having to follow it.

And this also happens in Western Europe?

Completely. One of the interesting things about Europe is that we often think of Scandinavian countries as having more socialism and more welfare. But even the oligarchs of Sweden, Finland or Denmark pay almost no taxes.

So how do they fund the welfare of the poor in their countries, access to health care, education, etc.? The answer is that they use regressive taxes. Basically, these are taxes paid by the middle class and the people above them, the rich. They pay all the taxes, but the oligarchs don't.

You have said that although it is often thought that representative democracy means overcoming oligarchy, this idea is not true. And that oligarchy is not only present only in modern democracies, but also that modern democracy is not an effective antidote against it. Why?

Democracy and oligarchy are not zero-sum [games]. The reason we have oligarchies is not because we don't have enough democracy. The reason we have oligarchies is because of the power of concentrated wealth. So, regardless of whether the country is authoritarian or democratic, the presence of oligarchs is determined by two things: the concentration of wealth power and the ability to turn that wealth power into political influence.

The form of wealth power matters a lot. If we go back in history 1000 years ago, maybe I was very rich because I had 10,000 head of cattle, but it was not easy for me to turn cattle into political power.

But if we go into the 20th and 21st centuries, we have an explosion of financial wealth that converts much more easily into political influence than owning land or mines. So, in history, the form of wealth power has changed. And today we are in the highest wealth power in the world. This is the first point.

The second point is that if we compare the power of the oligarchs in the United States and in China, we will find that it is very different.

Under the Communist Party, controlled by Xi Jinping in China, there are hundreds, if not thousands, of billionaires. But for those oligarchs to use the power of their wealth to control the government is far more dangerous than in the United States.

Xi Jinping demonstrated it with Jack Ma [co-founder of Alibaba]. He spoke and upset Xi Jinping and suddenly disappeared from the public and lost control of his company. China is one of the few countries in the world where, if you are an oligarch, you can go to jail or be executed.

Practically, how does the existence of the oligarchy affect the lives of the remaining 99.9 percent?

The existence of oligarchy means that the power to make society more and more unequal is unlimited. The main interest of the oligarchs is to concentrate more and more wealth in their hands. When I started studying oligarchs about 25 years ago, it took hundreds and hundreds of oligarchs to equal the wealth of the world's poorest 50%. Today, about 50 oligarchs have as much wealth as the poorest 4 billion people in the world.

In the United States, 25 years ago it took about 30 oligarchs to equal the total wealth of the poorest half of the country. Today there are only three people. What impact does this have? First of all, the life expectancy of rich people compared to people who are not rich is very different. Because of the growing inequality in the world, millions of people die 5 to 10 years earlier than if inequality were lower.

Another change? Children leave home much later. They marry later, buy their first home later, have children later and have less and less wealth. All this happens because their economic situation is much more uncertain. Their lives are more at risk because of growing inequality.

And as inequality increases, their willingness to consider extremist politicians increases because their hope for the future decreases. And around the world we are seeing that even young people, especially, are more open to very extreme figures. All this is the result of the oligarchs' success in increasing inequality around the world.

So would you say that oligarchs and the income protection system create inequality and extreme inequality is a threat to democracy?

Completely.

What can be done about it?

We have seen in the past that countries around the world have the ability to limit and reduce oligarchic power, though not necessarily eliminate it completely.

A simple example? Controls that can be placed on the use of money in politics. These are measures that have been used before in democracies around the world and we have seen that they are possible. But to do this, we need to have a stronger mobilization in society around these issues.

Another thing that could be done is something that is now being seriously discussed between the United States, the European Union, Brazil and the United Nations: the possibility of a global wealth tax. Why is it important? Because if countries coordinate on this issue of wealth taxation, it means that the oligarchs cannot use global geography against each country.

We've also seen that when ordinary citizens organize and mobilize, especially through things like unions, their political power to challenge the oligarchs increases significantly.

So there are things that can be done, but they must be done so that there is an awareness of the problem and a direct response to it. We should not see the power of wealth and oligarchic power as inevitable. There are very specific things that can be done./ Taken from BBC, Adapt to Albanian VoxNews