AN oligarchy is defined as a form of government in which economic and political power lies in the hands of the few. Countries with this kind of government are often controlled by a few prominent families who pass on their influence from one generation to the next. Inheritance is not a necessary condition for an oligarchic structure to exist.
Some commentators have called the Philippines the worst example of an oligarchy.
Deng Xiaoping, the former Chinese leader who transformed his country into a market-oriented economy, once said, “Let some people get rich first.” Assuming that the overwhelmingly majority of Chinese during Deng’s time were almost universally equal in their poverty, his statement could not be a better example of pushing for an oligarchic economy.
Interestingly, income inequality has steadily increased in China over the decades, thanks to the widening gap between urban and rural people. India, too, has seen a sharp and steady rise in inequality, but there, it’s been between different classes of workers in the cities.
Power for the members of the oligarchy comes from political control. A 2007 study showed that 60 percent of those elected to Congress had a relative who once served in the Legislature. Political dynasties create an oligarchic environment.
But while the conventional wisdom is that countries like the Philippines are the model of an oligarchic structure, a recent academic study shows that the United States may be on the top of all oligarchies.
In that study, titled “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens,” authors Martin Gilens of Princeton University and Benjamin Page of Northwestern University examined data from 1981 to 2002 and found that even when 80 percent of the people favored a particular public-policy change, it was only instituted 43 percent of the time. For example, the US Congress passed the bank bailout in 2008, despite overwhelming public opposition.
From the study: “Economic elites stand out as quite influential—more so than any other set of actors studied here—in the making of US public policy.” However, “this does not mean that ordinary citizens always lose out; they fairly often get the policies they favor, but only because those policies happen also to be preferred by the economically elite citizens who wield the actual influence.”
The US elites’ financial well-being depends on corporate banking and Wall Street, even if Main Street consumers suffer. But in the Philippines, the elite depend, for the most part, on consumers. The list of the Philippines’s richest make their money from retail, real estate, shipping and casinos, power, food and beverage, insurance, and banking, which supports these other industries, all consumer-driven.
Oligarchies can generate benefits if and when the elites’ needs match those of the majority. That is the difficult part. --BusinessMirror Editorial
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