The power of oligarchs in autocracies around the world, such as Putin’s Russia, has become normalised. But to see it happening in America is a matter of huge concern to many.
London: It was Karl Marx, the father of communism, who once said “History repeats itself, first as a tragedy, second as a farce.” Looking at the oligarchs surrounding Donald Trump during his inauguration ceremony last Monday, there was certainly a sense of déjà vu, an echo of the past when Russia’s oligarchs rescued Boris Yeltsin.
When the Soviet Union collapsed thirty four years ago, a small number of business-savvy Russians became immensely wealthy by buying up State assets on the cheap. Paupers became billionaires almost overnight. The ancient Greek word “oligarch” re-surfaced and became common as flash Ferraris zoomed past sclerotic Soviet-era Ladas as they crawled around the muddy streets of Moscow. Panic spread among the chosen few, however, as the 1996 elections approached and the unpopular president, Boris Yeltsin, appeared likely to lose against the communist candidate, Gennady Zyuganov. Two of Russia’s billionaires, Boris Berezovsky and Mikhail Khodorkovsky, got together as a matter of urgency at the Swiss ski resort of Davos in January 1996 to plan the alcoholic Yeltin’s victory in the election, the only outcome that would protect their wealth. Together with the media baron Vladimir Gusinsky, they ensured that all newspapers and television stations promoted only Boris Yeltsin, completely ignoring Zyuganov. Yeltsin duly won and the relieved oligarchs gorged themselves on even more state assets as their reward.
Fast forward twenty-eight years and once again a group of oligarchs met around a table to discuss how they could ensure that their favourite candidate was elected president later in the year and therefore safeguard their wealth. This time the venue was Hollywood and the candidate was Donald Trump. According to Robert Reich, former President Bill Clinton’s Secretary of Labour, the world’s richest man Elon Musk and entrepreneur David Sacks held a secret dinner party of millionaires and billionaires at Sack’s $23 million home in the Hollywood Hills. The group, which reportedly included media mogul Rupert Murdoch and billionaire Peter Thiel, (the German-born US entrepreneur founder of PayPal, who once wrote “I no longer believe that freedom and democracy are compatible”), met as members of a burgeoning anti-Biden brains-trust. The objective was simple: to get Trump re-elected president of the United States. At the time, Trump was facing multiple legal charges and his poll rating was too low for comfort. There was the real possibility that he would lose the election. An alarmed Musk had been furiously posting anti-Biden harangues to his 184 million followers on Twitter/X, the platform which he owns, criticizing the incumbent president’s age and policies on health and immigration, calling Biden “a tragic front for a far-left political machine.”
Musk and his fellow oligarchs were not alone. According to the group “Americans for Tax Fairness” (ATF), some 150 billionaire families contributed well over $2 billion in support of the presidential candidates in last November’s elections, mostly to Trump. This disturbed ATF’s executive director, David Kass, who argued in the report that “Billionaire campaign spending on this scale drowns out the voices and concerns of ordinary Americans. It’s one of the most obvious and disturbing consequences of the growth of billionaire fortunes. We need to rein in the political power of billionaire families by limiting their campaign donations. Until we do so we can only expect the influence of the super-rich over our politics and government to escalate.” Limiting donations is the last thing Donald Trump wants to do, as he received more than three times as much cash from the oligarchs as did Kamala Harris.
Billionaires, of course, know which side of their bread is buttered. During his last period in the White House, Trump cut taxes for the wealthy and the big corporations they mostly own, and has promised more of the same in his second term. In contrast, Vice President Harris supported higher taxes on corporations and encouraged the tax authorities to catch tax cheats. In the run-up to November’s election, Harris vowed to raise taxes on the wealthy if elected, and promised a special tax on billionaires and other hyper-wealthy people. She was therefore the last person American oligarchs wanted in the White House and their modest contribution of a $billion or so to the Trump PAC turned out to be an excellent investment. After all, the oligarchs who supported Trump are believed to be worth about $3 trillion, so their contribution represented a tiny fractions of their wealth.
Even better for the oligarchs, this “investment” not only protects them from the burden of extra taxation, it also buys influence in a Trump administration. Trump, of course, knows all about buying influence from politicians. When interviewed on live television in 2015, he was quite open and frank about the matter. “When they call for donation, I give” he said. “When I need something from them, two years later, three years later, I call them. They are there for me!”
As it happens, in the current Trump administration many oligarchs have no need to buy influence as they already occupy positions of power. The political magazine, New Statesman, has analysed Trump’s early political appointments and found 26 whose personal fortunes exceed $100 million; 12 are billionaires. At least two others have spouses who are billionaires, others belong to billionaire families. Trump’s early appointees have a combined net worth of around half a trillion dollars, already making his second administration the richest democratically elected government in history.
The power and influence of oligarchs in autocracies around the world, such as Putin’s Russia, has become normalised. But to see it happening in a country such as America, which boasts of being the world’s greatest democracy, is a matter of huge concern to many, even to some of the super-wealthy. In a report published last Tuesday, the pressure group ‘Patriotic Millionaires’ said a survey it had undertaken of the world’s wealthy found almost two thirds viewed the influence of the super-rich on the new US president as a danger to the world. Just over half of the 2,900 millionaires surveyed agreed that “extreme wealth concentration is a threat to democracy”. The report noted that billionaires such as Elon Musk, Mark Zuckerberg, the chief of Facebook owner Meta, and Jeff Bezos, the founder of Amazon, had some of the prime seats at Donald Trump’s inauguration on Monday. PM’s survey was released alongside “We Must Draw the Line”, an open letter from millionaires and billionaires urging elected leaders to tackle the corrosive impact of extreme wealth on our democracies and broader society.
It’s not difficult to see parallels between the Russian oligarchs who returned Yeltsin to power and the American billionaires who supported Trump. The distinguished historian, Mark Galeotti, told the New Statesman last week that “in 1996 you had wealthy interests deciding to throw their weight behind Yeltsin; that’s the Elon Musk model. But at the same time, what’s fascinating is the degree to which people like Mark Zuckerberg, after the election suddenly realise they need to be in with the regime. And that’s much more like the Putin era – the house training of the oligarchs. The difference between Trump today and Putin at the turn of the millennium is that it was necessary for Putin to give his oligarchs a sense of what was at risk before they were house trained. We’ve had a turn of Trump already, to get a sense of the shallows of this man, his vanity, his capacity for revenge. And with Zuckerberg, Bezos and others, we’re seeing people already toeing the line”.
Perhaps Karl Marx was correct about history repeating itself. What has happened in Russia since Putin took over at the turn of the century has been a colossal tragedy for the Russian people, particularly for those who needlessly sacrificed their lives in a senseless war brought about by Putin’s enormous ego. As another super-ego moves into his second term in the White House surrounded by his oligarchs, will we see Trump 2.0 turn into a democratic farce? If so, as the ‘Patriotic Millionaires’ warned, it will be a dangerous one.
* John Dobson is a former British diplomat, who also worked in UK Prime Minister John Major’s office between 1995 and 1998. He is currently a visiting fellow at the University of Plymouth.