This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

That Study Saying America's an Oligarchy? It's Just the Start

BOSTON (TheStreet) -- The United States is supposed to be a democracy, in which all citizens can participate equally. But the growing income inequality of the past decade brought criticism that it's big business and the rich that really rules U.S. policy, not the average citizen.

This criticism gained momentum with the recent U.S. Supreme Court ruling on McCutcheon v. the Federal Election Commission, which rolled back campaign finance laws to let a person give up to $3.5 million in campaign donations, whether that be directly to candidates, PACs or political parties.

Supporters say it doesn't threaten the inclusion of ordinary citizens in the shaping of policy. But a forthcoming study in Perspectives on Politics suggests government policy already disproportionately favors the interests of big business and the rich over those of the middle or lower classes  that government functions more as an oligarchy than a democracy.

The study, by Martin Gilens, a professor of politics at Princeton University, and Benjamin I. Page, a professor at Northwestern University, analyzed 1,779 policy issues over three decades to estimate how much influence the rich, organized interest groups and average citizens each have on policy outcomes. Gilens and Page found that people in the 90th income percentile had the most political influence, followed closely by organized interest groups.

The preferences of average citizens were found to have very little to no effect on policy-making.

They're reflected in government policy -- but only when they align with those of the rich.

"Affluent and ordinary citizens frequently want the same thing. But when they disagree -- and they do disagree on many important matters -- the affluent generally get their way," Gilens said in a press release. "If democracy means that all citizens should have a say in shaping government policy, our findings cast doubt upon just how democratic U.S. policy making actually is."

What are some of these issues where opinions diverged?

"The deregulatory agenda of the past 40 years has been supported [for the most part] by business and economic elites but was much less popular with the middle class," said Gilens, referring to free-trade policies and a less-progressive tax structure. "These policies were most beneficial to the elites and business interests that supported them."

In 2012, a poll by United Technologies and the National Journal found that 74% of people did not think the Bush-era tax breaks for households making more than $250,000 a year should be extended another year, yet they were. And 82% thought the cuts should not be permanent, but there is a strong push in Washington to make them permanent.

Government response to the economic collapse of 2008 is another big one.

"Very little accountability was demanded from the financial institutions that caused the crisis, regulatory reforms were feeble and the recovery has been very uneven, with economic elites and corporate America recovering nicely but average citizens still suffering," Gilens said.

A quick review of public opinions on policies and Congressional decisions offer other examples.

A Washington Post-ABC News poll late last year found 57% of people wanted the federal minimum wage hiked to more than $10 an hour, but the minimum wage has stayed at $7.25 since 2009.

Speaking last year in Germany, American scholar Noam Chomsky highlighted the minimum wage to show the nation's diminishing democracy.

"The one view is that the minimum wage ought to be indexed to the cost of living and high enough to prevent falling below the poverty line," Chomsky said. "Eighty percent of the public support that and 40% of the wealthy. What's the minimum wage? Going down, way below these levels."

More recently, a Fox News poll found that more than two-thirds of Americans  or 69%   supported extending long-term unemployment insurance longer past the current 26-week period, with many supporting an extension of up to a year if needed. No extension has been granted.

"The United States government is under the control of big money interests," said U.S. Sen. Bernie Sanders (I-Vt). "The great political struggle we now face is whether the United States retains its democratic heritage or we continue to move toward an oligarchic form of society where the real political power rests with a handful of billionaires, not ordinary Americans. In many ways the Supreme Court has helped move our country toward oligarchy."

Not everyone agrees.

"There are a lot of ways that influence is expressed. It's not the government's job to equalize these or to focus on one aspect, such as contributions," says Ilya Shapiro, a senior fellow in constitutional studies at the Cato Institute, which favored the outcome of the recent SCOTUS ruling. "To the extent that big business has an effect on government or the political process, it's through lobbying, not political donations or campaign advocacy."

Ultimately, the authors of the study believe the recent SCOTUS ruling has the potential to even further leverage the influence of the affluent and organized groups over that of regular citizens.

"The Supreme Court's recent decisions ... are likely to increase the political clout of wealthy individuals and leave average citizens with even less influence than they have now," Page said.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs