As impressed as we all may be with his technological prowess, strategic vision, and entrepreneurial flair, Elon Musk has become a threat to American democracy.
But while it might be easy for Democrats like me to critique Musk as if he were a singular problem, that would be a mistake. Musk is only one manifestation of a larger collective challenge faced by all Americans in our new Gilded Age.
A century and a half ago in America’s first Gilded Age, a small number of “robber barons” leveraged their control over railroads, oilfields, newspapers, banks, and other assets to dominate much of society. In 1890, the wealthiest one percent of the US population controlled an astounding 51 percent of America’s economic output and America’s 4,000 wealthiest individuals held a fifth of our nation’s total wealth. These magnates used their power to extract excessive rents from everyone else. “This is a government of the people, by the people and for the people no longer,” former US president Rutherford B. Hayes wrote in 1886. “It is a government by the corporations, of the corporations and for the corporations.”
Today, we are witnessing a very similar situation. The wealthiest 1 percent of Americans control 27 percent of our wealth, and the richest 10 percent of us control 60 percent. America’s wealthiest families were 36 times wealthier than middle income families in 1963 and are an estimated 71 times wealthier today. America’s oligarchs have lobbied to avoid paying their proportional share of taxes and fought tooth and nail against restrictions on their growing advantages across the board. They have also exerted increasing influence over our political system.
An estimated 16 billion dollars was spent in this election cycle, much of it “dark money” donated by megadonors to secretive political action committees. Contributions of over five million dollars provided a two-times larger percentage of overall contributions to these committees than just four years ago. Candidates from both parties made clear that financial support to their campaigns would influence legislative priorities.
In some ways, our entrepreneurs and business leaders have helped us all, just like John D. Rockefeller and JP Morgan did in the first Gilded Age. We love our whizbang gadgets, our overall economy is the envy of the world, and we can’t seem to get enough of our social media. But just like before, today’s American oligarchs are increasingly operating above our democracy and to our detriment.
Elon Musk is only one example of this larger phenomenon, but an important one.
If a Chinese state-owned enterprise purchased the national media company of Zimbabwe for more than market value, then slanted Zimbabwean national media coverage to highlight China’s interests, then did a deal with a budding autocrat trading full media support helping the autocrat assume power in exchange for Chinese control of key government decisions and national resources, we would rightly cry foul. But that is, by and large, what Elon Musk has just done.
In 2022, Musk purchased Twitter for a price that was orders of magnitude greater than the company’s estimated market value. Then Musk had Twitter/X’s engineers rejigger the algorithm to radically promote Musk’s voice above all others. Then Musk implicitly made a deal with President Trump exchanging full support for Trump’s campaign, including the apparent manipulation of the Twitter/X algorithm to promote content supportive of Trump, for a commitment to put Musk in charge of an effort to gut America’s regulatory state should Trump win. Musk was essentially offered control, or at least massive influence, over the regulators of all of his companies. Musk will assume his new role without needing to make any financial disclosures and without any congressional or national security review of any potential conflicts of interest. Rumors are now swirling in Washington that Musk has pledged to support primary challenges against any Republican congresspeople who oppose Trump’s agenda.
The markets recognized the value of Musk’s deal with Trump when the total value of Musk’s companies jumped an estimated $70 billion dollars in the week after Trump was elected. Advertisers who fled Twitter when it became so toxic after Musk’s acquisition are now apparently flocking back to avoid retribution. It’s hard to imagine even the most dominant robber barrons of the late nineteenth century having more power or deploying it so brazenly.
But criticizing Musk alone for doing what many other of our new Gilded Age billionaires are also doing would be dishonest and hypocritical.
Although we Democrats may be enamored with our favorite billionaires like Reid Hoffman, Bill Gates, and Michael Bloomberg, and harbor concerns about conservative donors like Musk, the Koch brothers, and Ken Griffin, the efforts of all of these people are increasingly at odds with the communitarian values of our democracy. There is something distinctly undemocratic about our “clash of the Titans” electoral system where one side’s favorite billionaire megadonors battle it out against the other’s.
America’s democracy is supposed to be based on the idea of one person, one vote, but those votes are far from the full story. Individually and collectively, America’s oligarchs have voices that are orders of magnitude greater than those of average Americans. An academic paper weighing the relative influence of American megadonors and corporations versus everyone else concluded that “the preferences of the average American appear to have only a miniscule, near-zero, statistically non-significant impact upon public policy.”
The primary culprit is our campaign finance system, which has been unleashed in the most antidemocratic of ways since the supreme court ruled in 1976 that candidates could spend unlimited amounts of their own money on elections, and in 2010 that secretive political action committees could spend unlimited funds supporting their candidates of choice.
We have also failed to regulate social media for the common good in the same ways we have regulated radio and television for many decades. The resulting Wild West environment enabled the 2018 Cambridge Analytica scandal and made Musk’s politicization of Twitter almost inevitable. The US government has wisely decided to force a ban or sale of TikTok after it became clear the social media company was being indirectly controlled and influenced by China’s government (a move Trump and Musk seem set to somehow overturn), but we’ll need to smartly regulate all of social media if we wish to protect ourselves from excessive levels of political, economic, and algorithm-driven manipulation from all sources.
If we are serious about laying a stronger foundation for our democracy, we’ll also need to heed the lessons of our first Gilded Age.
When the American public eventually came to feel they were being harmed more than helped by the Gilded Age oligarchs, our government passed a series of Progressive Era reforms starting with the Sherman Antitrust Act of 1890, which have limited the power of monopolies to this day. We established the Federal Trade Commission to protect consumers from misleading marketing and anticompetitive practices. We introduced a series of tax reform laws that ensured that the wealthiest Americans paid their fair share of taxes. These reforms helped usher in a new age of American economic growth and innovation which has benefited all Americans.
As we now see the toxic consequences of our new Gilded Age playing out around us, America has a choice. We can support our system as it is, each hoping that our favorite oligarchs will prevail against the others, or we can make the same decision our forebears did at the dawn of the last century and establish common sense laws and regulations resuscitating our system of government.
Whether one likes, dislikes, or is indifferent to Musk is beside the point. The question for us is whether we believe in and are willing to fight for the foundational principles of our democracy.