The Deep Roots of Oligarchy

Clive was a reckless fortune-hunter in the British East India Company (EIC), the chartered monopoly company trading in the Indian Ocean region—heavily armed, to compel trade on its terms. When the British and French went to war globally in 1756, their rivalrous companies in India did, too, and Clive secured the EIC’s first major territory in Bengal in 1757. Long-held company towns at the subcontinent’s edges expanded into a company-owned state.

The company’s shareholders sat in the British Parliament and were politically powerful. Those who rose up in it acquired power as well. Plunder of gold and jewels and a rich annuity in land revenue enabled Clive to secure an Irish barony, a country estate in Shropshire, and a seat in Parliament, as well as seats for his friends. The term for such nouveaux riches, “nabob”—a corruption of the Hindustani word nawab, or prince—captured their political presumption.

This was the Britain that Americans rebelled against.

Since the launch of Trump 2.0, both supporters and critics have analogized its unapologetic embrace of financial and tech titans to America’s Gilded Age. Others see in the administration’s ambitions in Greenland and Panama a throwback to the 19th-century private contractors of colonialism. But the 19th century was itself a new twist on an older oligarchic model exemplified by Clive. Private contracting is in the DNA of the modern state structures that Americans adopted—forgetting that they had rebelled not just against monarchy but also an oligarchic Parliament. Revisiting that foundational struggle shifts our perspective on the threat oligarchy poses today and the tactics needed to contend with it.

A satirical drawing from 1788 depicts King George III, Queen Charlotte, and dignitaries of the British church and state scrambling for rupees from an East India Company nabob. Culture Club/Getty Images

This state was an oligarchy. The aristocrats who controlled Parliament used it to usurp the common rights of ordinary people, passing thousands of laws privatizing land—an internal colonialism that displaced masses of people, many of whom took their memory of oligarchic injury to North America, where they in turn displaced Indigenous inhabitants. The state also depended on contractors and corporations such as the EIC for the military and financial organization that it still lacked. Corporations’ interests in Asia, Africa, and the Americas were entangled with and dependent on Britain’s diplomatic, military, and political pursuits. Apart from trade and conquest, such companies bought, sold, and leased sovereignty like a commodity, as, for instance, with the EIC’s creation and sale of the princely state of “Jammu and Kashmir” to its allies in its conquest of Punjab.

Ordinary Britons were incensed by the hot mess of private wealth and state power in this time, which saw the most consistently negative depictions of big business ever.

In short, corporations were the new state’s partners in governance. The British state was Parliament, an emerging fiscal-military bureaucracy, and the Crown, plus corporations (including the Royal Mint and the Bank of England) and private contractors and financiers. In this sense, it, too, had a corporate form. It’s impossible to say where the state ended and the private sphere began. Great landowners and merchant oligarchs sat in Parliament but also held wide, unsupervised local powers as lord lieutenants, sheriffs, justices of the peace. Such unpaid positions layered state authority on their holders’ local social status and private wealth. They secured compliance with the threat of legitimate force, even though they did not always see themselves primarily as agents of the state and their power did not derive solely from their office.

Most Americans know that when Parliament asked the colonists to help fund debt accrued in the massive Seven Years’ War, which lasted until 1763, they cried, “No taxation without representation!” But ordinary Britons were also incensed by the hot mess of private wealth and state power in this time, which saw the most consistently negative depictions of big business ever. Followers of the radical politician John Wilkes likened the alliance among elites across the state, land, commerce, finance, and industry to a gang of robbers plundering society. Popular reform movements involved petitions and pamphleteering but also marches and mass meetings incorporating song and religious feeling—crowd politics.

Airing of the EIC’s corruption and cruelties as it teetered on the verge of bankruptcy in 1772, threatening the nation’s finances, fueled censure of figures such as Clive. Sharply attacking the company, the philosopher Adam Smith theorized a society in which a private economic realm free from state intervention would drive world-historical progress. The Wealth of Nations, published in 1776, called not for recognition of boundaries between the public and private spheres but the creation of such boundaries—the liberal political-economic principle that shapes many Americans’ expectations of the relationship between government and society today.

Paine wrote about Clive’s death against this backdrop of ire against oligarchy in Britain and the Colonies—months before he drafted Common Sense, the incendiary pamphlet released in 1776 as Americans revolted. Fury about the EIC’s abuses fueled anger at Parliament’s treatment of the Colonies. In 1778, Paine noted the poetic justice that Indian tea had kindled a war in America “to punish the destroyer.” The villain was not just King George III but the oligarchy that had already checked his power.

In the face of sustained outcry, new institutions did evolve to exert control over the state’s private partners. The EIC, for instance, was integrated into the bureaucratic structure of the state, and newly formed state offices, the Colonial and Foreign offices, engaged in activities previously entirely outsourced to corporations.

Americans, too, worked to create institutions that would limit the potential for despotism. To be sure, the “articles” incorporating their government echoed the company charters that governed the earliest Colonies and gave Americans their understanding of a constitution: a written charter from a sovereign ordaining and setting out the limits of a government. But now “the people,” rather than the monarch, were the sovereign. Both countries also pursued civil service reform in the 19th century, meaning fewer political appointees and buying of positions—the creation of the professionalized government bureaucracy that the Trump administration is attempting to undo.

The process of separating business from state activity took time and remained ever incomplete because these states were designed for the pursuit of territorial expansion and maintenance of power within that territory through a security establishment. Both governments thus continued to invest in military industry and depend on contractors and corporate control of media, and a revolving door kept elites in these fields intimate with government offices. While the robber barons of the Gilded Age shaped U.S. industrial policies and westward expansion, monopoly companies continued to undertake British colonial expansion, profiting from government support while relieving the government of responsibility. Cecil Rhodes’s British South Africa Company is merely the most famous, or infamous, of the companies that dominated this era.

Both countries also pursued civil service reform in the 19th century, meaning fewer political appointees and buying of positions—the creation of the professionalized government bureaucracy that the Trump administration is attempting to undo.

Rhodes’s machinations triggered a grueling war in South Africa in which Britain prevailed only by recourse to scorched-earth tactics and concentration camps. Covering the war for the Manchester Guardian, the economist J.A. Hobson perceived that reckless imperialism was driven by oligarchs who hijacked foreign policy to serve their ends—inspiring Vladimir Lenin’s later critique of imperialism as the highest stage of capitalism. Such theorists grasped that asserting sovereignty uniformly across a bounded space was innately colonial, requiring the backing of military or security contractors and financiers. Voting was no guarantee of a democratic check on their power and policies, given the way that private donations swayed elections and that press barons cozy with the government manipulated public opinion in favor of jingoistic causes.

After World War I, a wised-up British public with a mass franchise and more consciously assertive press railed passionately against the sway of arms contractors who led the country into unnecessary conflicts. Again, imperial conflicts continued, albeit at times more covertly, to evade public scrutiny.

The public failed to dislodge oligarchic influence partly because it focused on tactics that liberalism prioritized at the expense of the more powerful tools it once wielded. From the 18th century, British reformers focused on franchise expansion as the key to changing Parliament’s composition and thus breaking the elite monopoly of state power. This emphasis on institutions of formal democracy was rooted in liberal ideals of political subjectivity: a highly individualized coherent self who formed his (and I mean “his,” up until after World War I) opinions rationally through careful reading of material produced by a presumptively free press. Institutionalized politics and secret balloting would deliver progress, liberal philosophers assured. This ideal meant moving away from the more fluid and collective sense of identity that drove the subversive street politics of the 17th and 18th centuries. Faith in print media facilitating debate among enlightened individuals undermined the emotive, melodramatic, and collective uses of more radically democratic forms of political expression, as did the state’s expanding capacity to police public spaces.

As World War II and the Cold War stoked doubts about liberal assumptions, the British New Left tried to revive collective forms of consciousness and action. In 1965, one of its leaders, the historian E.P. Thompson, identified the new “predatory complex” occupying the British state, with “its interpenetration of private industry and the State … [and] control over major media,” as a “new Thing.” A few years earlier, in his farewell address as U.S. president, Dwight D. Eisenhower had named the “military-industrial complex” entangling the interests of military contractors, the Defense Department, and politicians and distorting U.S. policy. The term was new, but the phenomenon was not.

Despite this warning, military contractors and financial elites continued to mold U.S. policy. If robber barons laid the foundation of Stanford University (the company town I write from), Pentagon contracts nurtured the rise of Silicon Valley through the present moment of tech billionaire-contractors lining up to kiss Donald Trump’s ring.

The public failed to dislodge oligarchic influence partly because it focused on tactics that liberalism prioritized at the expense of the more powerful tools it once wielded.

It’s no accident that tech billionaires style themselves as explorers on the frontiers of knowledge and space. Just as Clive molded himself on the conquistadors of narratives of the Age of Exploration, stories of the Clives and Rhodeses of empires past, long whitewashed by historians despite their ignominy in their own time, have made them models for men aspiring to enact the science fiction fantasies that were the Cold War update to adventure stories about colonial exploration of so-called dark continents.

Crony capitalism is a global imperial legacy. After 1947, corporations that had profited from military contracts under India’s colonial government cultivated a relationship with the new independent government, profoundly shaping its policies. Like the EIC, as the historian Mircea Raianu writes, the Tata Group acquired “attributes of sovereignty in the interstices of state power,” including company-owned towns established for mineral extraction and industrial production by displacing local inhabitants. Indeed, the group’s vision of systematic expansion across diverse industries—mills, land, mines, and more—was consciously imperial. Ordinary people and the government at times checked this influence—for instance, by resisting displacement and nationalizing airlines—to the extent that “corporate social responsibility” became a necessary public commitment for the Tatas. Today’s newer corporate billionaires, including Gautam Adani, wanted on charges of fraud and bribery in the United States, likewise rose through intimacy with the state. Their grip on the media, however, has all but banished acknowledgment that greedy tycoons loot the nation and exploit the common man. Today’s oligarchs unapologetically pursue and exhibit extravagant wealth, as masses of dispossessed Indians turn desperately to emigration to North America, like Britons in the 18th century.

A depiction of the Boston Tea Party in Boston Harbor in 1773.Bettmann Archive/Getty Images

Much distinguishes the current moment, not least that the stakes are planetary. But this is no freakishly unprecedented capture of a democracy by corporate power. The failure to recognize that the United States was born out of rebellion against oligarchy, not just monarchy, has long helped preserve oligarchic influence in the country. Even Sen. Bernie Sanders likens today’s oligarchs to the kings who ruled Americans by divine right before the 1770s, forgetting the oligarchic tyranny of Parliament.

Perhaps partly because Britons are more aware of their long struggle against oligarchy, as evident in Thompson’s invocation of Cobbett’s “Thing,” they have been more able to regulate campaign finance, albeit still not enough to prevent the rise of super-rich politicians such as Rishi Sunak (who married into India’s billionaire class), plutocratic control of the country’s biggest newspapers, and ideologically driven dismantling of the very state regulatory functions that could keep corruption in check.

Americans can mourn the loss of even the pretense of separation between government and big money. But the stark revelation of their entanglement is also an opportunity to rethink inherited concepts of normative governance and democracy.

The lesson of the past three centuries of recurring oligarchic influence on elections and governance is that democracy cannot be just about voting. Nor can we simply hope that the courts will challenge the avalanche of executive orders. Confronting oligarchy requires reclaiming the local forms of sovereignty sacrificed at its altar, which means collective action, forged through values of mutuality, outside electoral and legal institutions. It is worth considering whether British victims of 18th-century oligarchy might have more effectively defended the commons had they stayed rather than become settlers visiting their rage upon others abroad. Federal governments that are more substantively federal (i.e., not uniformly sovereign across their territory) yield less easily to oligarchic influence. The same applies to India.

The failure to recognize that the United States was born out of rebellion against oligarchy, not just monarchy, has long helped preserve oligarchic influence in the country.

To be sure, some of the Trump administration’s cheerleaders insist that dismantling the federal government is precisely about returning power to local communities and states. But the public goods at stake—food and air safety, public health—are necessarily federal. If the oligarchs call for privatizing the Postal Service and space exploration, the people should call for nationalizing X. Moreover, without reversion of federal taxes to local units, such rhetoric is merely cover-up for the administration’s actual effort to lay claim to local resources to serve its own ends. Local governments have already launched lawsuits against this imperial assertion.

Paine was too optimistic about Clive’s liberal subjectivity. Most probably, Clive did not die by his own hand but from overmedicating abdominal pain with opium. Conscience can’t stay the hand of unstable, violent, narcissistic personalities; it requires action, melodramatic action, from others. Some, however, are already pouring their melodramatic capacities into dark proclamations of a ruthless new order. Such despair in the world of print arises perhaps from the disappointed expectation of progress by the expected means. But nothing is settled, not least given the demonstrated ineptitude of the villains of the latest “Thing.” Optimistic action is a moral obligation in this situation; watch, don’t just read about, the example of the Indian farmers whose protests since 2020, drawing on memory of their struggle against British rule, have forestalled the billionaire-backed move to corporatize agriculture.

Right-wing American accelerationists dreaming of a world of high-tech enclaves governed as corporations dream an old dream. We have seen this EIC movie before. Oligarchy has always been an innate tendency of the modern state, one requiring stiffer resistance than Americans have yet offered. Democracy is, at its essence, the active challenging of “the Thing.” It’s time for Americans to be melodramatically democratic.