An oligarchy is a power structure that allows a few businesses, families, or individuals to rule a country. Their power flows through their relationships with each other. An oligarchy can coexist with democracy, theocracy, or a kingdom. Their wealth and connections allow them to influence public policy behind the scenes.
- Power concentrated within an elite group of corporations, families, or individuals forms an oligarchy.
- Oligarchies can wield control over all forms of government, even democracies.
- Such a power structure can also dominate business and industry.
Here are the countries that have the most evidence of being oligarchies, and why.
To be rich in Russia, you must have contacts within the government. If you don't maintain these contacts, you can lose your power and wealth. As a result, many Russian billionaires buy assets in other countries. There, the rule of law protects their property.
The close relationship between billionaires and the government works both ways. Oligarchs have a great deal of influence in Russia's politics.
Today's exclusive club includes Igor Sechin, the chief of Rosneft, the state oil company. His main rival is Gennady Timchenko, the former head of the country's largest oil trading company. A third is Roman Abramovich, the owner of the Chelsea Football Club and the Millhouse investment company.
In 2018, the U.S. Treasury released a list of Russian oligarchs. It included energy czars Vladimir Bogdanov and Oleg Deripaska. They each have an estimated net worth of $1 billion or more. Treasury insists it isn't a sanctions list.
The Russian oligarchy hasn't changed much since the 1400s because it works. It operates regardless of whether communists or capitalists run the country.
Russia's oligarchy system extends back to the 10th century. The medieval boyars were advisors to the prince. In the 13th and 14th centuries, they were rich landowners who counseled the princes. From the 15th to 17th centuries, the Muscovy boyars ruled the country with the czar. By the 18th century, Tsar Peter the Great abolished the title of boyar.
The oligarch system returned in the 1990s with the breakup of the Soviet Union. They had become wealthy through their connections to the government. They benefited when the government privatized state-owned businesses. They also funded the first post-Soviet president, Boris Yeltsin.
An oligarchy took control of China after the death of Mao Tse-Tung. It is the 103 members of the families descended from the "Eight Immortals," according to research done by Bloomberg News. They manage most of the state-owned corporations, collaborate on business deals, and even intermarry.
The Royal Family is an oligarchy since it's not run by any one person. The reigning monarch must share his power with the descendants of the country's founder. That was King Abd al-Aziz al-Sa'ud, who left behind 44 sons, 17 wives, and an unknown number of daughters. The current king, Salman bin Abdulaziz, appointed his son in key positions to consolidate power. Prince Mohammed bin Salman (MBS) became defense minister at age 30 and was given oversight of the state oil monopoly, Saudi Aramco. In 2015, the two changed many long-standing policies.
- They engaged in a proxy war against Iran in Yemen. They hinted they might send forces into Syria to combat Russia's presence.
- They allowed oil prices to fall below the Organization of the Petroleum Exporting Countries' $70 floor. They wanted to put U.S. shale oil producers out of business. They also want to prevent arch-enemy Iran from profiting from the nuclear peace treaty.
- They cracked down on dissidents to prevent further ISIS terrorism.
This team upset the oligarchy. The successor to King Salman was Crown Prince Mohammed bin Nayef. In 2017, the king replaced him with MBS as Crown Prince and successor to the throne.
An oligarchy of Islamic clerics, relatives, and business associates runs the country. They took power after the demise of Ayatollah Ruhollah Khomeini. He led the 1979 revolution that ousted Shah Pahlavi.
Khomeini did not allow his family to rule, but his replacement did. Ayatollah Ali Khamenei put his friends and allies in government positions. The elected president owes his position to these oligarchs. The five Larijani brothers are friends and relatives of Khamenei and his allies. They have become heads of many critical government posts.
South Africa was an oligarchy in the 20th century. It was run by Caucasian descendants of Dutch settlers who made up 20% of the population. It ended with the election of Nelson Mandela as the first Black president in 1994.
The Koc family is a wealthy and powerful family in Turkey. Koc Holding owns businesses in oil refining, banking, car manufacturing, and electronics. In 2005, it purchased the Tupras oil refining business from the government for $4 billion. Tupras holds a dominant position in Europe's fuel market. The government allows Koc to set fuel prices as long as it supplies Turkey before other countries.
Due to their dominance in multiple industries, foreign investors and politics are more likely to work with the Koc family.
A study by political scientists Martin Gilens of Princeton and Benjamin Page of Northwestern found that policies favored by the richest 10% of Americans passed more often than those of the poorest 50%. If they oppose a policy, it is unlikely to pass. It doesn't matter how many middle-class Americans favor it.
Some say that an example of American oligarchs is the Koch brothers, which made their fortune in a variety of industries, including oil pipelines, cattle ranching, and trading oil derivatives.
The Koch brothers influence elections by contributing to political causes and politicians. The overwhelming majority of those contributions benefit Republicans and Libertarians.
In general, they support less government intervention, open borders, and free trade. Their views on Obamacare and other issues lands them on the same side of the ideological spectrum as the Tea Party and the GOP. While they didn't actively support Donald Trump's re-election campaign, they agreed with many of the Trump administration's policy stances and actively funded campaigns for prominent Trump allies like Rep. Devin Nunes.
Some say Silicon Valley created a new class of American oligarchs.
Facebook founder Mark Zuckerberg is one of the founders of a new advocacy group, FWD.us. Its goal is to push for “comprehensive immigration reform” that would allow cheaper immigrant labor.