Elon Musk and the rise of the alt-oligarchy

The US is increasingly a country ruled by oligarchs who pour cascading levels of funds into the competing parties. In 2024, election spending was two-to-three times what it was two decades ago in real terms.

To see historic parallels, you have to go back to the Gilded Age in the late 19th century, where great money men and monopolists lorded over the political class, particularly in the Republican Party. This golden age of oligarchy was eventually dimmed by progressive reform and, later, by the New Deal. Today, according to Jacobin, some 40 per cent of all political contributions once again come from the top one per cent of the top one per cent.

Ever since the US Supreme Court’s 2010 Citizens United ruling, which essentially blocked any real attempt to control campaign spending, the situation has worsened. This has generally benefitted Democrats, which is perhaps surprising given the GOP’s traditional ties to the ultra-rich. Wall Street and big-spending oligarchs like Bill and Melinda Gates, Reid Hoffman and Marc Benioff helped Kamala Harris raise well over $1.5 billion, the highest figure in history, for her losing campaign.

Most oligarchs still align with the Democrats, but this year there was a significant drift of investors and tech moguls to the GOP. This has been led by X owner Elon Musk, who gave Trump’s effort an estimated $239million. Venture capitalists like Marc Andreessen and Wall Street heavyweights like investor Bill Ackman also pitched in, as did many Jewish political-action committees alarmed by the Democrats’ anti-Israel drift.

This shift has been accelerated by the remarkable failures of the incoherent and painfully incompetent Biden administration. Although he was originally marketed as a moderate, or a kind of low-intensity Bill Clinton, Joe Biden instead embraced an ultra-progressive programme that sought to undermine fossil fuels, promote racial quotas, impose censorship on the internet and, most ghastly of all to many rich people, increase taxes, particularly on capital gains.

These policies helped forge a whole new crop of pro-Trump oligarchs, who joined traditional Republican big backers like oil executives and heavy-industry moguls. Examples include Musk, who builds spaceships and cars, as well as a host of cutting-edge ‘defence bros’ like Palantir co-founders Joe Lonsdale and Peter Thiel, and Anduril’s Palmer Luckey.

The Democrats still draw their support from the ephemeral economy concentrated in Hollywood, Wall Street and Silicon Valley. This includes firms like Alphabet (Google), Meta and Microsoft, whose now retired founder, Bill Gates, kicked in a cool $50million to the Harris campaign. Harris also received hefty funding from the ultra-subsidised green industries.

In the business world, Democrats tend to appeal to established firms like General Motors, who welcome big government. Auto firms seek subsidies and ways to block foreign competitors. In contrast, Trump appeals to upstarts like Musk and Vivek Ramaswamy, the people he has entrusted with downsizing the federal behemoth. Trump’s cabinet and close circle also includes many wealthy people, like South African-born David Sacks, the new crypto tsar, who come from outside the corporate elite.

In essence, the Trump GOP epitomises the revolt of capitalist outlaws. It includes people like proposed treasury secretary Scott Bessent, who comes not from Goldman Sachs (often referred to as ‘Government Sachs’) but instead runs a smallish hedge fund. Another second-tier financial type, former Clinton backer Warren Stephens, has won the coveted ambassadorship to the UK.

Similarly, energy secretary Chris Wright comes not from a major oil giant, but from a wildcat fracking firm. Pam Bondi, Trump’s proposed attorney general, attended the University of Florida law school, not Harvard or Yale as is the norm. She was previously Florida’s attorney general and worked with the new chief of staff, Susie Wiles, in a lobbying operation for both US and foreign interests.

Corporate interests likely hope that Bondi and the new FBI director, Kash Patel, might discontinue efforts to police speech and curb competition, particularly in emerging areas like AI. This expectation helped lure newly Trump-curious venture capitalists like Andreessen – who sees such controls as an unwelcome assault on both free expression and competition – to switch to the GOP.

In the short term, this Trumpian alt-elite may be a welcome respite from the current configuration. Even so, the reality of the growing power of oligarchs in politics threatens democratic norms, allowing billionaires, whose numbers continue to swell, to control both parties. There will also inevitably be conflict of interests, particularly related to Musk’s omnipresent, government-related activities.

Since the election, the same oligarchs who financed Biden and Harris can also now be seen slathering to win Trump’s favour. This includes the likes of Mark Zuckerberg, Jeff Bezos and Open AI’s Sam Altman, who have written seven-figure cheques to pay for Trump’s inauguration. Oligarchic moguls with media interests, like Bezos and LA Times owner Patrick Soon-Shiong, have also bent the knee, promising a less rigidly progressive news spin. In the end, people like Bezos, however much he may dislike Trump’s manner, might be pleased to see the new Securities and Exchange Commission regulator, Gail Slater, call off the assaults launched against Amazon’s practices initiated by her predecessor, Lina Khan.

Under any circumstances, left or right, the power of the oligarchs represents a threat to democracy. According to Pew Research, 80 per cent of Americans believe wealthy donors wield too much power, and they are spot on. But until the political class, congress or the Supreme Court find ways to constrain their power, the oligarchs will continue to rule. They will turn us ever more towards a reprise of the Roman Republic, where patricians battle for power and the plebs get mauled in the process.

Joel Kotkin is a spiked columnist, a presidential fellow in Urban Studies at Chapman University in Orange, California, and a senior research fellow at the University of Texas’ Civitas Institute.