Dan Snow's History Hit - What Is an Oligarch?

Episode Date: March 17, 2022

The use of the word ‘Oligarch’ has been increasingly rampant across international news outlets since Russia’s invasion of Ukraine just weeks ago. But what does it actually mean?Jeffrey A. Winters, an American political scientist at Northwestern University who specialises in the study of oligarchy, notes that the common thread for oligarchs across history is that wealth defines them, empowers them and inherently exposes them to threats.While Dan makes his voyage home, Matt Lewis, from the ‘Gone Medieval’ podcast, steps in for this timely episode. To try and make sense of this ancient, yet contemporary phenomenon, Jeffrey joins Matt for a discussion of what oligarchy is, historic and contemporary cases and the relationship between oligarchy and democracy.If you'd like to learn more, we have hundreds of history documentaries, ad-free podcasts and audiobooks at History Hit - subscribe today! To download the History Hit app please go to the Android or Apple store.

Welcome to Dan Snow's History Hit. As I'm sure you're aware by now, Dan is still away on his voyage home after the astonishing discovery of Shackleton's ship Endurance last week. I'm Matt Lewis and I've been allowed up from the gone medieval dungeon to try and get a better understanding of a word or a concept that's in the news a lot at the moment. There are many forms of government and getting your archies right can be tricky. You've got a monarchy, a constitutional monarchy like we have in the UK. Democracy is some people's preferred method of government with elected representatives. Plutocracy is ruled by the wealthy and you can even have anarchy, the absence of any government at all. One word we're hearing

a lot amongst the horrifying news coming out of Ukraine is about Russia's oligarchy. Russian oligarchs seen as bolstering President Putin are being sanctioned to apply pressure to him. The fall of the USSR in the early 1990s led to the rapid rise of the oligarchy in Russia. But what is it? Where does the idea come from? And how is it distinguishable, if it is, from other forms of government? Fortunately, we've got Geoffrey Winters, a political scientist at Northwestern University, with us to cut through some of the lingo and complexity and tell us what it all really means. Geoffrey is the author of Oligarchy,

available from Cambridge University Press from 2011, and is working on his next book, Domination Through Democracy. Thank you very much for joining us today, Jeffrey. It's my pleasure, Matt. So we're going to look at this big question of what is an oligarchy, and I guess to start off with, can you help us to understand what that word means? Where does it come from? Where do oligarchies begin to emerge? Yeah, it's a very ancient word. It's a very ancient concept. It goes back at least to ancient Athens and Rome. And a lot of people think that oligarch just means rule by the few, or oligarchy just means rule

by the few. But if we look back to the writings of people like Plato and Aristotle, it was always clear that the few they were talking about were the wealthy. And so what really sets oligarchs apart from mere elites. Elites can be empowered people because they hold positions in government, because they might be a general, but an oligarch is empowered because they have tremendous wealth. And wealth is something that can be deployed as a power resource in politics and in societies. And so throughout history, we've had oligarchs. And oligarchy refers not to a form of government, but it refers to actually what oligarchs do.

And the main thing, whatever oligarchs are focused on, and there's a lot of different things that different oligarchs are focused on, what they all have in common is a tremendous obsession with what I call wealth defense. So some oligarchs today in the United States might be pro-abortion or anti-abortion, but all of them want to escape paying taxes. And all of them want to secure their property against rules and taking and redistribution and so on. And so it is the politics of wealth defense that is the common thread throughout history going all the way back. And one of the key questions in history for oligarchs has been, what is the nature of the threat that they face to their fortune? Where does it come from? And then what instruments do they have at their disposal to be able to

defend their will? If it was relatively successful or core to ancient Greece, was it considered successful? Did it spread from there? Do we see oligarchy making appearances in things like the Roman Republic and other early civilizations? Oh yes, every one of them had oligarchic actors. And one of the big challenges for oligarchs going way back then was not so much the dangers posed by the non-rich, rising up, destabilization, and so on, but it was actually horizontal. Oligarch to oligarch. One of the ways of getting rich way back then was to take over all the property and land of another oligarch. So every oligarch had to actually be armed.

oligarch had to actually be armed. So it was very common in history not only to rule but also to have your own private armed forces. So every oligarch in Rome, for example, in the countryside where their land and their wealth was, they had their own private armies. Meanwhile they assembled the legions of Rome together at the center. And this force that they pulled together jointly was very dangerous to them, because if any one of the oligarchs who, in the rotating positions of generals, happened to get overly ambitious, say Caesar, and cross the Rubicon and bring the Roman legions in without permission. That was incredibly dangerous to the oligarchs. So it was what they had to manage, first of all, was establishing what I call a ruling oligarchy. So the most early form is what might be called a warring oligarchy. That is, they actually can't get

together. They are literally fighting each other, knights and lords and so on in their own separate realms, and they can't rule together because they actually can't sit in the same room together without killing each other. Mafia commissions are very much like that. Lots of mafia dons, they try to form a commission to manage the mafia, and they kill each other. So it's a very unstable form. Eventually, in history, oligarchs form what are called ruling oligarchies, which means that they manage to disarm themselves sufficiently, that they don't pose direct harm threats to each other, and they arm themselves jointly to protect all their assets jointly. So that's Athens, that's Rome. And when that breaks down and you have a takeover, somebody violated the rules. The rules of Rome were that no oligarch

was allowed to enter Rome in an armed posture. There's another kind of oligarchy. There are four kinds that I lay out that kind of cover all the oligarchies in history. The third form I call sultanistic oligarch. A sultanistic oligarch is a single, very powerful oligarch who is primus inter paris and governs and rules and tames the oligarchs and can threaten any one of them and can make their lives good or bad, but it's not a rule of law system, nor do all the oligarchs rule together. What I'm describing is Putin. Putin is a sultanistic oligarch, Putin is a sultanistic oligarch, and he both creates opportunities for oligarchs. He also punishes them.

China is a ruling oligarchy. There's no single individual, although Xi Jinping is increasingly trying to position himself as a sultanistic oligarch. But China is a rules-based, institution-based system. And by the way, as we're moving through these, oligarchs themselves are increasingly disarmed. Okay, and then the final one is what I call a civil oligarchy. That's the society you and I live in, where oligarchs are completely disarmed and the state is armed to defend their property. So Weber's famous definition of a modern state is a monopoly on the means of coercion. What a strange way to define a state. But what he meant was that instead of all property being defended directly by those who hold property because they had to be armed actors to do so. Instead, all the big

property wealth owners agree to be disarmed on the condition that the state will defend their property reliably. And that includes not allowing democracy to threaten their property. That's one of the deals. So there's a lot you can do in democracy, but one of the things you can't do is threaten the property of oligarchs. And redistribution is something they are very, very resistant to. You know, the United States has had two constitutions. The second one, the reason they convened in Philadelphia is because under the first constitution, it was operating too democratically. That is, the legislatures in all of the 13 states, there was a tremendous credit crisis at the time. And the question was, who was going to take a

haircut? Were the ordinary citizens going to be put in debtors' prisons, or were the creditors going to basically be repaid in relatively worthless paper money? And in many of the states which were captured by ordinary farmers, the creditors were being hurt. And when that happened, those wealthy people got together in Philadelphia and said, Those wealthy people got together in Philadelphia and said, we need a system that doesn't empower people this much. We need to have a Senate and we need to have a Supreme Court and we need a president so that there's a pyramid of power to check the power of the people. So during that conversation in Philadelphia, whatever else they disagreed about. And there were many different political positions. All of them used the term, there is an excess of democracy in the United States. Not a lot of people know that history, but it was an oligarchic moment where the first experiments with democracy in the United States didn't quite get it right. And they had to redesign

the institutions to make it a blend of both the wealthy and the non-wealthy. So is it fair to say then that oligarchy is less about ruling in a governmental sense and more about a system of self-preservation and control? Sure. Although in the very earliest oligarchies, everyone who ruled was also wealthy. So it's only in the modern era that we have a sort of separation of civil society, where people are in civil society and they're wealthy. And in government, we have politicians who might or might not be very wealthy. So a politician can be an oligarch in today's world. In the past, all ruling people were oligarchs. So there's really been something of a separation, which has happened, but not necessarily a

reduction in oligarchic power. It's just how it gets used that's different. a reduction in oligarchic power. It's just how it gets used that's different. Imagine a few thousand years ago that the nature of your wealth is that you have 50,000 heads of cattle. You're a tremendously wealthy person, but it's very hard to turn cattle into political influence. So the nature of one's wealth, you might have owned a large latifundia, a large plantation that had lots of farmers on it. You didn't necessarily have wealth in the form of money, but you had wealth in the form of the land and the territory you controlled and what you could extract from it in the form of produce. Just as an example,

today, our oligarchs are very different in that most of their wealth power has been financialized. You know, some of it is still fixed assets, a mansion, a yacht, a plot of land, but a lot of it is even those things can be borrowed against and financialized. So in a way, today's oligarchs are much more agile in terms of the power and the way they can deploy it in politics. And it doesn't matter if those politics are authoritarian or democratic. Wealth power is in play in all of those systems. And the presence of oligarchy makes it difficult, I think, sometimes to draw lines between types of government that we're talking about. So an oligarchy can sound a lot like a plutarchy

ruled by the rich, or even a monarchy ruled by hereditary succession of an elite. And even some democracies would surely end up with a small ruling elite that looks a lot like an oligarchy. Are those borders between systems quite often porous? So I don't actually juxtapose democracy to oligarchy as being different systems. It's not the case that the problem of oligarchy is a deficiency of democracy. That's not the problem. I mean, in the United States, we went from having only property white males being able to vote, and eventually we had full suffrage. And that had no impact on oligarchs and what they did with their wealth power. So think of oligarchy as a process of defending wealth within whatever

political system one is engaged. And that can be authoritarian or it can be democratic. So this also means that the solution to oligarchy is not actually more democracy. It doesn't work that way. It's a very different kind of mix. Every system is a blend, actually, of wealth power and what might be called, in a democracy, participation power. So people like you and me, we're empowered by the rights we have politically.

We can vote, we can lobby, we can give voice, we can assemble, we can protest. That's pretty much the spectrum of the power resources we have available to us. Oligarchs have all of those, and they have something else that they bring to the table, and it is the use of their money power to be able to influence democracy. So let me give you a concrete example. You and I get to vote on voting day. The role of oligarchs is to shape between whom we can pick. So their money shapes the agenda as much, by the way, keeping things off the agenda as putting things on the agenda. So a lot of oligarchic powers express without you ever knowing it's happened. without you ever knowing it's happened. So they deploy their money through what I call the wealth defense industry. This is armies of lawyers, accountants, wealth management

specialists. These people are hired by oligarchs to make sure that governments operate in a way that doesn't threaten their wealth. And so that means, for example, making sure a regulation doesn't happen by lobbying a committee of Congress or the Parliament. You never knew that happened, actually. Or they very visibly back a candidate. Or they run themselves with their own money. What oligarchs do then is they shape the space within which the rest of us operate politically in a democracy. And so it's a blend of the two. Aristotle actually said something very interesting. He said, pure democracy is a problem. He started with the notion that every society has rich and poor, and he believed it always would. It turns out that that is a pretty solid

thing for Aristotle to assume way back then. And he said, a government ruled exclusively by the rich is unstable because it damages the interests of the poor. But he also said, a government exclusively run by the non-rich is threatening to the rich, to the oligarchs, and that's unstable because they fight back. So he said the ideal system is one in which on any given day you're not sure whether it's a democracy or an oligarchy. That is exquisite. And if you ask people today, do they live in a democracy or an oligarchy? They will tell you, well, on the one hand, I do have freedoms. I do participate. On the other hand, there are very, very powerful actors who are shaping this system in a way that it would take millions of

ordinary citizens to equal their power. That's the blend we actually live in. We're all sitting on a set of scales somewhere. You mentioned before that if you asked someone whether they live in a democracy or an oligarchy, they would probably balance themselves between the two. And the recognition of that is an awareness of the way in which we actually live our lives. Do you think most Americans would recognise that? I feel like most Americans would probably believe that they live in the ultimate democracy and that oligarchy is something that Russia has that is bad and foreign. Do you think Americans recognize that they live in an oligarchy? At Northwestern University, I began offering a course called Oligarchs and Elites 15 years ago. And a graduate student in that class on the first

day declared that Russia has oligarchs and the United States has rich people. So he threw the gauntlet down on day one. And that's because the impression is that oligarchs are rich people who somehow got their wealth in a corrupt way, and they didn't build a business and so on and so on. So oligarch was kind of like a dirty word. Also, interestingly, 15 years ago, when I would poll the students in the seminar and ask them, do you think the United States is a democracy, or is it an oligarchy? Is there a strong presence of wealth power? It was not easy to get them to buy into the word oligarchy as what the United States had at least blended in, interestingly. So I had to argue the case for, there's oligarchy,

here's what it looks like. And I succeeded or not, depending on how resistant some of these folks were. Here's the challenge today. I have taught this course every year for 15 years. I have trouble convincing any Northwestern student that they live in a democracy. They almost all think that the only things that we get to really decide on democratically are things oligarchs don't care about. But when they care about it, the system is incredibly constrained. And what happened in between? The Occupy Wall Street movement occurred and erupted. And the Occupy Wall Street movement had the theme, the 1% versus the 99%. And this was the first time in the United States in eight decades that there had been a popular movement based on wealth inequality. that there had been a popular movement based on wealth inequality. We'd had everything else,

race, gender, you name it, but wealth itself was the focus. Also what happened around the same time was the Supreme Court decision, Citizens United, which said that the expression of money in politics was a First Amendment voice issue. It was speech. Money was speech. That meant that if you had an enormous amount of money, there were no limits allowed on how you could deploy it politically. Those two things happened. One of the things that came out of it was a figure like Bernie Sanders, who had been there forever and had been consistent for the last, what, 50 years. And no one was paying attention to Bernie Sanders. But what changed is the awareness of the role of concentrated wealth power in the United States was transformed. And his politics was all about millionaires and billionaires and how the system

is completely distorted. That was his theme. He nearly got the nomination of the Democratic Party, unheard of in post-war U.S. history. Also in the last election, every candidate for presidency used the word oligarch with reference to people in the United States. I have been tracking the very different way in which Americans, but not just Americans, this is happening in Europe, where people are really recognizing that however democratic you may be, there are other kinds of power resources that are in play in that democracy that have nothing to do with the power conferred by the democratic institutions and practices. I think we had something very similar in the UK to what you had in the US with Bernie Sanders,

with Jeremy Corbyn and the Labour Party. He became leader of the Labour Party, fought a general election on a very similar platform, I think, to Bernie Sanders. Do you think oligarchy needs to stop being a dirty word? It feels like it's a dirty word that we apply to people that we don't like, rather than recognising that they are all around us in every society. Is oligarchy always bad or is it necessary? One of the people I interviewed in Southeast Asia was an oligarch. And this Southeast Asian oligarch wasn't terribly familiar with the word. This was a multi-billionaire. And he asked me, is it bad to be an oligarch? And I said, look, have you ever seen the Wizard of Oz? There are good witches and there are bad witches.

witches and there are bad witches. Oligarch should be a term that describes a power position. What you do with that power is up to you. One thing we've never seen is an oligarch fund the institute to study and undermine oligarchs. No oligarch has given a hundred million dollars for such an institute. I would gladly take it and share it and fill it with very subversive people. No oligarch has ever funded something called the Institute for Class Warfare. Never. They fund actually the opposite of all those things on a very regular basis. The vast majority of oligarchs, probably at a personal level, you know, nice people for the most part. But one thing about wealth is that it is very focusing. It's amazing how focusing having a fortune is. You become obsessed with things like not losing it. So in the modern world today, it's not horizontal challenges that you're worried about. It's not other oligarchs coming in and grabbing you, unless you're in Russia and some other places where horizontal threats among oligarchs are still very, very much happening.

The real threat they face is a combination of from above and from below. From above means the state can take and redistribute your money through progressive taxation, wealth taxes, and so on. By below, I mean if democracy is functioning in a way where society successfully demands that redistribution, it's partly coming from below. I would say, though, for the most part, oligarchs have shown that they don't have a great deal to worry about. They have managed to set up, as I said, an entire wealth defense industry, a multi-billion dollar industry where people are paid very well to do nothing but think every day about taxes and trusts and offshore secrecy jurisdictions,

and so on and so on, to use the global geography to be able to defend themselves against governments that might try to take their money. And you might be thinking, well, but look at Scandinavia. What's very interesting about the Scandinavian, more socialist welfare states is that those programs that help the poor are uniformly on the basis of regressive sales taxation. They are not based on progressive taxation of oligarchs. Most people don't know this. So those states are as unsuccessful in redistributing from the very top as any other. It is the redistribution from the middle class, however broadly that is described, downward, which is really happening in the Scandinavian countries. And I'll tell you, in all of the Scandinavian countries, the ownership of their stock markets

by the few is greater than the ownership of the stock market in the United States. That is fewer people. Wealth is more concentrated in those Scandinavian countries than it is even in the U.S. And in the U.S., just 10 years ago, you needed 50 oligarchs to equal the total wealth of the bottom half of the United States. Everything that they've got, house, car, everything. Today, it's two people. Two people. Jeff Bezos and Elon Musk have as much wealth as the entire bottom half of the United States. half of the United States. Globally, it's about 50 people have as much wealth as the entire bottom half of the planet. That's where we're at. And the mystery is this. The modern era of democracy

basically began 250 years ago. It has spread in two senses. More and more countries are democratic, and within those countries, democracy has deepened in the sense of full suffrage and so on and so on. And yet, wealth is more concentrated in the hands of very few today than it was 250 years ago. Something is not working when it comes to people's empowerment. Because if people were genuinely fully empowered, it's not that they would take all the wealth of oligarchs, but we might at least hold wealth inequality stable, or under an ideal world, somehow close the gap between the very wealthiest and the average citizen. We live in systems of participatory inequality. That's what we really have. The inequality part is not new. It's that somehow in the modern era, we've managed to have inequality with

participation. In the past, it's always been through direct and often violent domination and exclusion. And so the modern invention that we have today, and it really is remarkable, is that we now have domination through democracy. That's what we've achieved. through democracy. That's what we've achieved. You're listening to Dan Snow's History Hit. More coming up after this. Hi, I'm Professor Susanna Lipscomb, and on my podcast, Not Just the Tudors, we talk about everything from ballads to banqueting, from ghosts to gunpowder plots. Not in other words, just the Tudors, but most definitely also the Tudors. Subscribe from

History Hit, wherever you get your podcasts. To be continued... kings and popes, who were rarely the best of friends, murder, rebellions, and crusades. Find out who we really were by subscribing to Gone Medieval from History Hit, wherever you get your podcasts. Is there a good example, just for us to take away from this as well, of how an individual oligarch made their money? I mean, it could be Putin, it could be a Russian, it could be somebody else. How do you become an oligarch? In specifically the Russian context? Perhaps Russian would be the most applicable at the moment. Because Russia is a very special case. You had the Soviet Union where you actually had no oligarchs because you weren't allowed

to have concentrated wealth in that communist state. So you had elites who had access to state money and dachas or whatever they were called and so on. So these were the highest ranking members of the communist party. But you had no oligarchs. Then as the Soviet Union collapsed, a number of well-positioned people managed to grab state assets, financial institutions, oil and gas, mines, and so on. And they very quickly emerged as new oligarchs under Yeltsin. By the time Putin, and by the way,

they used their wealth in all kinds of direct political ways. And another thing, because rule of law was so weak, all of them hired their own thugs and militias to be able to protect their wealth. That is a common thing oligarchs do when the situation is iffy. So Putin had to do two things. He had to disarm his oligarchs, which he did in exchange for guaranteeing their property, but he also had to tame them.

And so he selectively tamed them in the way I described. So those oligarchs emerged very, very rapidly. And you could think of it as concentric circles. They're the oligarchs who are just very closely into Putin. They're all on each other's speed dials. And then there are concentric circles that sort of radiate out from there. And you are ever smaller oligarchs as you go out, as you're more distant from the power center. Very different in China. The way that oligarchs

arose in China was through being a member of the Communist Party, but also setting up various corporations, either state corporations or private corporations. Today, China is estimated to have somewhere between 200 and 300 billionaires. This is new in China. And so these two countries have very rapidly, these former communist countries that had no oligarchs. By the way, it's worth noting, there's not always oligarchs. When there is no concentrated wealth, there are no oligarchs. By the way, it's worth noting, there's not always oligarchs. When there is no concentrated wealth, there are no oligarchs. And we have two very modern cases where there were no oligarchs, but they exploded and appeared suddenly in both places. And one of the very

interesting things I and others study is, what is the nature of wealth defense in these two places? Because it's not the same as how you do wealth defense in France, the UK, or the United States. And very interesting to track how oligarchs in China have tried to move their assets offshore as well. But that's a touchy thing to do in China, because that can get you jailed. China and Russia are the only two places I know of that jail oligarchs. And if an oligarch can emerge that quickly and appear sort of almost overnight by a power grab or by any other means, is it possible? Is it feasible? Is it ever likely? Does it happen? The oligarchs disappear, lose their money? I mean, I guess in Russia, if you fall foul of Putin, you disappear. But more generally, in more established oligarchies, do oligarchs ever fall? Or once

you're there, does the mechanisms of wealth preservation mean you stay there? So oligarchs as a group are constantly churning, constantly changing who is in there, up and down, various fortunes and misfortunes. So oligarchy as sort of a pyramid, the form of it stays while there is churning of who makes it up. The question of the elimination of oligarchs overall, that has only happened in history when revolutions have occurred and literally the wealth of these people, it's confiscated by the state. We have modern examples of that. It happened in Cuba.

It happened in Russia. It happened in China. And very often, oligarchs get lined up and machine gunned. So it's not pretty. But the result is not obviously democracy in any of these places. That isn't what happened. But they didn't have oligarchy, interestingly. So there have been moments in history, very, very brutal, very, very bloody, when oligarchs have

faced existential crises. But it's infrequent, and we have no case of it being really long-lasting, enduring. A very interesting thing is happening in the world of oligarchy because of the Ukraine invasion, and specifically the fact that Russian oligarchs are being targeted as part of the response of the U.S. and the West. And that is the assets of Russian oligarchs are being frozen around the world. Now, that's not confiscated. All the Western governments still very much recognize and support private property. So they won't just outright take the property, but they're freezing those assets all over the world. whether it's in property in New York, or if you stand at Miami Beach and you look straight north up the coast of Miami Beach, it's all buildings owned by Russian oligarchs who have bought all this property. And London is a big location of Russian offshore money and Cyprus. But what's happening is this. For the first time ever, secrecy jurisdictions around the world are

actually cooperating by revealing the identity of oligarchic money stashed in offshore locations, Cayman Islands, Panama, Cyprus, and elsewhere. And this is actually sending shockwaves throughout the oligarchic world because those secrecy jurisdictions have always said, we will never reveal who you are. They've got to invade us to get this information. Now, that's helping Western governments put pressure on the oligarchs with the intention of putting pressure on Putin. Because if they turn against him in unison, that is going to greatly destabilize his power position. So whatever's going on in society down below, he needs the oligarchs on his side. So targeting them is a specific strategy to go after the sultanistic oligarch who is at the center.

But what this means to other oligarchs is, A, they are watching oligarchic assets get frozen all over the world, and they're thinking, hmm, this could happen to me. Second, they are seeing the breaches of secrecy. And there are trillions of dollars in offshore locations around the world, trillions. And we've seen the Panama Papers and the Paradise Papers and all these other revelatory papers that tell us what's going on and who's putting money where. We are seeing, for the first time that I've been studying this, a breach in those secrecy jurisdictions.

So what often happens in history is something is done against powerful actors for one reason, and it has ripple effects that are unanticipated. And one of those might be we may see a change in the role of secrecy jurisdictions going forward. That's possible. Just as a footnote, just so it's clear, all offshore money is actually onshore. Just to be clear, not a lot of people realize this. The Russian oligarch's money is not sitting in Cyprus. It's not sitting in the Bahamas.

I mean, they don't have armies. I mean, how do you defend money, gold, bullion, everything else? So what happens is that the money is actually in New York and London and Paris and Tokyo. How does that work? A bank of Cyprus is opened up. The bank of Cyprus takes oligarchic money on numbered accounts. Then the Bank of Cyprus opens up an account in London under the name of the Bank of Cyprus, and all that money is there. It just is, it looks like the Bank of Cyprus. You don't know whose money is actually digitally in the accounts back in Cyprus. So all the money is onshore, which may explain why the banking and financial systems of the world have never attacked the offshore world in a competitive sense, as if we're losing out on money that could be in accounts we have.

Right. The answer to that mystery is why would they? All the money is on deposit with them anyway. It's just secretly through accounts that are offshore. Anyway, it's just secretly through accounts that are offshore. Vikings, Normans, Kings and Popes, who were rarely the best of friends, murder, rebellions, and crusades. Find out who we really were by subscribing to Gone Medieval from History Hit, wherever you get your podcasts. Maintaining a sense of mystique and throwing smoke and mirrors around all of these things so we're never quite sure what's happening? Two things work in oligarchs' favor, non-transparency and complexity. Those are the most important things for them. And the third one is a global geography. So the fact that they can always move somewhere else is a big plus. And all that moving

of Russian oligarchic money offshore was previously to their advantage because their number one threat was Putin. So they had to position themselves so they were supportive of him on the one hand, but they needed to have a significant amount of money offshore because he has proven over and over, he'll just take your assets. Suddenly you're corrupt. You've been corrupt the whole time, but suddenly the light switch gets hit and you're on the wrong side of Putin's mood. So they always had to place a lot of money offshore. Here's what's very interesting. It is precisely that placement offshore in a global geography of the West that has made them now vulnerable to these sanctions. So the tables have turned on them. And that's why they can be targeted right now.

If they had kept all their money in Russia, there's nothing we could do to them. Yeah, so the steps they've taken to protect themselves from Putin's fickleness, I guess, are actually what are allowing other countries now to get at Putin, albeit indirectly. Oligarchs all over the world do this. So that entire world called wealth management professionals, what they do 24 hours a day is help oligarchs figure out where to put their assets. And so it's a very interesting moment with regard to Russia, because this is the first time really that being globally positioned with your oligarchic money has actually been a major disadvantage to these oligarchs. You paint a picture in which we have convinced ourselves in many societies that we have

oligarchs trapped between the hammer of government and the anvil of the people, when in fact we would have absolutely no chance of striking them even if we were to try. What's the solution? Is there an answer? How do we harness oligarchy? Is there a way to do that? I always hate this question because it's so depressing. I would really like to devote much more attention to trying to come up with solutions. But here's what I will say. First, in societies where, shall we say, democracy has hyper-performed, that is to say, the people really do seize much more power and take much more control of their government. And as a consequence, oligarchs perceive this as threatening. And I'm describing this as this is

going on in a democratic process in a democratic way. Over and over, what we see is the shutdown of democracy, not the overcoming of extreme oligarchic arrangements. That's what we see. So think of Allende in Chile. Democratically, he comes to power, he has a very redistributive agenda in mind, and he was killed. And they went into a very long authoritarian period to sort of teach the people of Chile what the boundaries of democracy are, and then Chile experienced re-democratization. And we haven't seen anything like what happened under Allende. Let me give another example that people aren't really aware of, and this is an example from Southeast Asia. In the 1950s and 60s, Indonesia had the largest communist party outside of a communist country in the world.

They were called the Partai Komunis Indonesia. And what was interesting about them is that they were not an armed revolutionary party. They were playing the democracy game. They wanted to come to power by organizing in the villages and in the factories and so on. And they were better at it than any of the other parties. And they were not armed. And there were a couple things that were problematic about this. One is, in the 50s and 60s, that didn't fit the Cold War picture of what communism was about. Communism was supposed to be the opposite of democracy. was about. Communism was supposed to be the opposite of democracy. Anyway, this party turned out to be so successful in the first national elections of 1955 and then the regional elections

of 1957 that the national elections of 1959 did not happen. All the other parties said, shut down democracy before the Communist Party wins democratically. And democracy was shut down in Indonesia. And then that same party continued to organize at the grassroots level. And in 1965, a massacre of between 500,000 and a million members of the Communist Party occurred, and the Suharto dictatorship of 32 years was put in place with the full backing of the West. That is what happened when democracy and people power overperformed. So I know this is a long answer to your question, and I haven't gotten into anything optimistic yet, but let me just say this. If I were to say, what does it take to tame the oligarchs, to diminish their power? The story of those 250 years I told you about,

of democracy and increasing wealth inequality, it isn't the case that wealth inequality always increased. There were periods, actually, when the average citizen did very, very well and oligarchs were making no progress whatsoever. So, for example, under the New Deal in the United States, under Roosevelt, in real terms, triple the increase in the standard of living. Those policies that were put in place, which the oligarchs fought, made a big difference. Meanwhile, during that same period, the ultra-wealthy in the United States, they didn't become poor, but they didn't increase their share of the total pie. They actually were stagnant.

Real rich, but they held steady. From 1975 forward, the average standard of living for an American household till today has increased by zero. No increase. The increase for oligarchs has been 15-fold. So what does this tell us? The policies that we have in place matter. And what made a difference during the 20th century, in the earlier part of the 20th century, versus the later and now? And the difference is this. Workers and unions organized. They had power based on their mobilization, and they got results in terms of policy. Globalization and a lot of other

factors, government policies, you had Thatcher, we had Reagan, and the idea was to devastate the power of people and workers to be able to organize and effectively shape policies in their favor with devastating consequences. We can see what happens. And meanwhile, the wealth defense industry I'm describing to you arose in the 50s and 60s and matured by the 70s. And that industry went to work to defend the interests of oligarchs and make sure they won policy battle after policy battle. So the moral of the story

is this. The elites and the oligarchs will never, for moral reasons or anything else, ever give anything. It's got to be won. And that means that in a democracy, it's not enough to simply participate in the sense of voting on a regular basis. You actually have to mobilize your power. You have to organize it. And what we see is not that oligarchy ends, but that some of the most extreme versions of oligarchy we're living under are much more dampened. That's possible. That is possible. So is it fair to say we need to stop thinking about oligarchy as a form of government of itself, but rather as part of a system of government and perhaps a function of government? We need to stop thinking of oligarchy as a dirty word and that oligarchy could be a good thing dependent on who is holding

all of that wealth and power and what they do with it. And of course, because we're all human, power corrupts and absolute power corrupts absolutely. So first of all, I very much agree that we should not think about oligarchy as a kind of form of government. We should think of it as something present in any society that has tremendous wealth inequality, because that means there is tremendous power inequality. That just describes an element which is built into whatever political system you happen to be in. And so oligarchy is as present in authoritarian systems as it is in democracy. It's not zero-sum with democracy. Secondarily, do we see that some people who have tremendous resources use it, for example,

for philanthropy? Yes, they can use their resources to good ends. But very often, and this is the bad side of philanthropy, very often it's just a power position on their part. So they fight not to pay taxes so that society can decide how to deploy resources. They want to say, I support this, I support that, and celebrate me as a person as a result. I'm a great, great person. Well, I would like to see them pay their taxes, and I would like to see them pay very heavy taxes. And then with whatever they've got left over, I'd like to see them do very, very good things. I think that would be a much better oligarchy to live under. I don't think you could quite get me to the place where I would be able to say oligarchs and oligarchy are just neutral or even a positive word, and here's why. I think fundamentally, it was long, long ago in human history that we had fully egalitarian societies. And one of the reasons we had egalitarian societies is because there was no wealth. So there wasn't a lot. They were hierarchical in different ways. You had elders, you had people who were warriors, you had people who interpreted the cosmos. So you always had people who had different kinds of power. But once wealth emerged as a source of power, it's been present ever since. And we are more unequal today at the height of liberal democracy than we've ever been in human history. And I think those extreme inequalities are inherently a problem,

inherently so. We'll never eliminate, for all kinds of political reasons, we'll never eliminate wealth hierarchies. What we can do is greatly diminish the gaps between the way people live at an ordinary level and the way people live at the other extreme. I think inequality is inevitable. Our inequality is obscene. That was almost a positive note to finish on there, that we can do something about it, but we're in a terrible mess. That was absolutely wonderful. Thank you very much, Geoff, for taking us through that really complex issue and really throwing a light on oligarchs and oligarchy and what it means for all of us in the world today.

Thank you very much. Matt, it's been a pleasure to talk with you and I really appreciate your questions. Very, very insightful. Thank you, Jeff. I feel the hand of history upon our shoulders. All this tradition of ours, our school history,

our songs, this part of the history our school history, our songs, this part of the history of our country, all were gone and finished. you