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  1. International Politics
15 January 2025

America’s new plutocracy

The second Trump administration will be the wealthiest democratically elected government in history.

By Will Dunn

In August 2015 a prominent American businessman let slip, on live TV, how easy it was to buy favours from politicians: “When they call [for donations], I give,” he said. “When I need something from them, two years later, three years later, I call them. They are there for me. And that’s a broken system.”

The businessman was, of course, Donald Trump. Central to his first presidential campaign was a promise to “drain the swamp” of Washington’s influence dealers – and in a way, he did. There is no longer any need for plutocrats to buy influence through lobbyists and conversations behind closed doors. The age of political subterfuge is over. In the new Trump administration, the super-rich personally occupy positions of power.

It’s there in broad daylight: a New Statesman analysis of political appointments announced so far by the Trump administration has found 26 appointees whose personal fortunes exceed $100m; 12 are billionaires. At least two others have spouses who are billionaires; others belong to billionaire families, or have concealed their wealth so it is hard to say how much they have (all we know is it’s a lot). America’s new ambassador to the UK is the investment banker Warren Stephens (estimated net worth $3.4bn); Trump’s commerce secretary is the investment banker Howard Lutnick ($2bn); his education secretary, the former wrestling promoter Linda McMahon ($3.2bn). Nasa will be run by the defence tycoon Jared Isaacman ($1.8bn). Trump’s appointees so far have a combined net worth of around half a trillion dollars. The second Trump administration will be the richest democratically elected government in history.

The Belgian-Dutch philosopher Ingrid Robeyns describes this as “plutocracy on steroids”. In her recent book, Limitarianism, Robeyns charts the concentration of extreme wealth over the past four decades. The super-rich, she told me, “have benefited tremendously from the economic choices” made in Western countries since economic policy changed in the late 1970s – “financialisation, globalisation, privatisation – all the stock ingredients of neoliberal policy” – as well as the long boom in assets since the 2008 financial crisis.

Somewhere along the way, the priorities of the rich seem to have changed. In his 2024 book As Gods Among Men, the Italian economic historian Guido Alfani writes that in centuries past the very rich were tolerated with suspicion, because their wealth could be deployed  – during a plague, a war or a financial crisis – to stabilise society. The modern super-rich are different, he argues: they may indulge in philanthropy, but most avoid their obligations to society. Money now buys the means to avoid paying tax, to silence critics and rewrite laws. In this reading of history, Trump’s inauguration on 20 January is a moment of change, the enthroning of a new and more aggressive form of plutocracy.

As often happens in history, today’s tipping point is an echo of the past. In Russia 30 years ago, the oligarchs of the staggering post-Soviet  economy were concerned. The people were furious with Boris Yeltsin; it looked as if the communists were going to win the 1996 election. At a café table in the ski resort of Davos, two of Russia’s richest men, Mikhail Khodorkovsky and Boris Berezovsky, began to talk about how to avoid a return to a planned economy.

Before long the media barons, Berezovsky and Vladimir Gusinsky, had turned Russia’s newspapers and TV stations into admirers of Yeltsin. Khodorkovsky and others committed the money to get the economy working in time for the election. When Yeltsin won, the oligarchs gorged themselves on the state’s riches, taking hundreds of companies for themselves.

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The historian Mark Galeotti agrees there are parallels between the Russian oligarchs who returned Yeltsin to power and the American billionaires who support Trump: “In 1996 you have 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, Galeotti said, is that it was necessary for Putin to give his oligarchs a sense of what was at risk – Khodorkovsky spent a decade in a Siberian prison on politically motivated charges for tax evasion and theft – before they were house-trained. “We’ve had a term of Trump already, to get a sense of… the shallows of this man, his vanity, his capacity for revenge. And with Zuckerberg and [Jeff] Bezos and others, we’re seeing people already toeing the line.”

In his 2019 book on the Russian regime, We Need to Talk About Putin, Galeotti describes Putin’s power structure as an “ad-hocracy” in which direct orders are rare. Neither Trump nor Putin “wants to get involved in the banal nitty-gritty”. With little direction from the top, those around the leader gamble on their own initiative – perhaps by doing some freelance diplomacy with another state (two Democratic senators have accused Musk of contact with Russia; he has denied their allegations), or pitching for changes to other countries’ laws, as Zuckerberg has with EU tech regulations. Government becomes “a monarch’s court, in which everyone can be anything, but only so long as the boss likes it”.

America’s oligarchs also represent a risk for Trump, however, because their interests are a weak point that others can target. Creon Butler, director of the global economy programme at Chatham House, told me other nations are planning for Trump’s threats of trade war. “China, and the EU in particular, are very adept at targeting sectors that they know will be politically sensitive in the US.” The EU knows which tariffs, such as a levy on the produce of Republican-voting farmers in the Midwest, are more likely to create problems for the president. “You could imagine [the EU or China] targeting areas that are particularly important to some of these very wealthy people in his administration. “We shouldn’t assume the rest of the world is going to go along with the Trump approach to international economic relations,” said Butler, who believes there is a risk of a “doughnut effect” forming around the US, as other nations form their own agreements.

Today’s plutocrats have a different kind of money to the aristocrats of the past, who owned land, or to the robber barons, whose wealth came from the revenues of their industrial monopolies. The wealth of Trump’s team is made and stored in financial markets; their net worth is the sum of other people’s confidence in their power. It travels easily and can buy citizenship, safety and influence almost anywhere.

This is why Trump will remain loyal to his billionaires, or at least to the policies that have enriched them: he is one of them. In 2016 his net worth was a touchy subject; few people believed his boasts. He is much wealthier today. Since 2021 he has been encouraging his supporters to invest in Trump Media & Technology Group, of which he owns about half. The company has so far lost $400m and employs fewer people than the average McDonald’s franchise, but it has a market capitalisation of $8.4bn at time of writing. In post-Soviet Russia, power bought money. For the new plutocracy, running on the strong medicine  of market exuberance, they are the same thing.

[See also: Elon Musk’s secret weapon]

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This article appears in the 15 Jan 2025 issue of the New Statesman, The Disruptors