'Oligarchy 2.0': Experts weigh in on whether Biden's warning about wealthy justified
IVAN PEREIRA
Sat, January 18, 2025 at 12:48 PM MST·6 min read
President Joe Biden's farewell address included a stark warning about the danger of what he called abuses by the ultra-wealthy, particularly what he called the "tech-industrial complex."
"Today, an oligarchy is taking shape in America of extreme wealth, power and influence that literally threatens our entire democracy, our basic rights and freedoms, and a fair shot for everyone to get ahead," he said Wednesday night.
PHOTO: President Joe Biden delivers his farewell address to the nation from the Oval Office of the White House in Washington, D.C., on Jan. 15, 2025. (Mandel Ngan, Pool via Reuters)
"I'm equally concerned about the potential rise of a tech-industrial complex that could pose real dangers for our country as well," he said.
MORE: Biden, in farewell address, warns about dangers of unchecked power in ultra-wealthy
Biden's remarks came as President-elect Donald Trump has strengthened his ties with Big Tech executives such as Elon Musk, co-chair of his outside-government commission to recommend spending cuts, as well as with Amazon's Jeff Bezos and Meta's Mark Zuckerberg.
Trump has invited all three of the powerful CEOs to his Monday swearing-in ceremony, now moved to be inside the Capitol Rotunda.
Historians and economic experts told ABC News that Biden's warning echoes a long-building problem that people on both sides of the aisle are already sensing.
"When you have the three richest men in the country on the dais … you cannot overlook how much influence the billionaire has on the government," Sarah Anderson, global economy project director for the non-profit research group Institute for Policy Studies, told ABC News.
PHOTO: In this Nov. 19, 2024, file photo, President-elect Donald Trump and Elon Musk watch the launch of the sixth test flight of the SpaceX Starship rocket in Brownsville, Texas. (Brandon Bell/Getty Images, FILE)
While it is too early to determine how the public will respond to Biden's warning, the experts who spoke with ABC News contended that history has shown that Americans have traditionally pushed back against oligarchies, and in some instances, businesses have been forced to scale back their influence with government and political leaders to escape economic consequences.
Turbocharged oligarchy
Daniel Kinderman, associate professor of political science at the University of Delaware who has researched how businesses respond to right-wing populism, said current income inequality in the United States constitutes "oligarchic conditions."
"Since the late 2000s, the top 1% of Americans, roughly 3 million people, have owned upwards of one-third of the wealth and capital in our country. It's now about 35%. The bottom 50% of Americans, which is about 150 million people, own about 1.5% of wealth," he said.
Biden likened the current situation to the "robber barons" and industrial monopolies of the 19th century. Trump, House Speaker Mike Johnson and other leaders on Capitol Hill have welcomed the alliances with the tech CEOs, particularly Musk, contending that their ideas will help to make the government more "efficient."
While acknowledging the corporate elite has always influenced government, Kinderman noted that the country is now in uncharted territory because the current top CEOs have more control over the public discourse.
"There is a sense in the business community that there should be efficiency and that the government should have that same goal," he said. "There definitely is a role there for [the CEOs], but what you don't want is for them to write their own rules that just benefit their own industry."
PHOTO: In this Sept. 25, 2024, file photo, Mark Zuckerberg speaks about Meta AI during the Meta Connect conference in Menlo Park, Calif. (Godofredo A. Vasquez/AP, FILE)
Musk and Zuckerberg have scaled back and removed content moderation tools against misinformation on their social media sites X and Facebook following criticism from Trump, who was banned from their platforms after the Jan. 6 attack by a pro-Trump mob on the U.S. Capitol.
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In recent interviews, they have also expressed more conservative viewpoints.
MORE: Musk, Zuckerberg and Bezos will have ringside seats for Trump's inauguration
Bezos and other CEOs have come under fire for removing DEI -- diversity, equity and inclusion -- initiatives, a target of conservative scorn.
"This is oligarchy 2.0," Kinderman said. "It's kind of a turbocharged technological oligarchy that has control over media and technology."
Jonathan Hanson, a political scientist and lecturer in statistics at the University of Michigan's Gerald R. Ford School of Public Policy, told ABC News that Musk's deep involvement with Trump, from the campaign trail to his appointment to DOGE, the Department of Government Efficiency, the outside advisory board aimed at cutting government waste, has been largely unprecedented.
The fate of government agencies and billions in spending could be in the hands of Musk and fellow businessman Vivek Ramaswamy, he noted.
"This goes beyond influence, this is close control to government matters to someone who wasn't elected," Hanson said.
PHOTO: In this Nov. 19, 2024, file photo, President-elect Donald Trump greets Elon Musk as he arrives to attend a viewing of the launch of the sixth test flight of the SpaceX Starship rocket, in Brownsville, Texas. (Brandon Bell/Getty Images, FILE)
Hanson and the other experts warned that the consequences are not going unnoticed, especially among those who voted for Trump.
Public pushback inevitable
While Trump and the tech CEOs have not immediately responded to Biden's speech and warning, early search data indicate it has sparked interest in oligarchies.
Google searches for the term oligarchy rose sharply after Biden's speech and have remained higher than usual throughout the week, according to data from the search engine.
Eight of the 10 states that saw the most rise in searches for oligarchy as of Friday afternoon were Republican "red" states, including Wyoming, Arizona and Oklahoma, according to Google data.
PHOTO: President Joe Biden delivers his farewell address to the nation from the Oval Office of the White House in Washington, D.C., on Jan. 15, 2025. (Roberto Schmidt/POOL/AFP via Getty Images)
"It has gotten some attention across the political spectrum," Kinderman said of Biden's warning. "It could have a bit of an impact especially if things move in a direction that a lot of Americans perceive as problematic."
Hanson agreed, noting that exit polling has shown many people who voted for Trump said they were most concerned about the cost of living and income inequality. Candidate Trump cast himself as the champion of the working class.
MORE: Why inflation helped tip the election toward Trump, according to experts
"There are a lot of people who voted for Trump feeling the economy was better under his first term, and they will feel alienated by his allegiances," he said. "If he continues his policies from the first administration that don't tackle inflation and benefit the CEO class, people will notice."
New labor movement?
During his speech, Biden noted that Americans stood up to oligarchs in the past by rising up and forming labor unions.
"They didn't punish the wealthy. They just made the wealthy … play by the rules everybody else had to. Workers won rights to earn their fair share," he said.
MORE: As income inequality soars, languishing labor unions make a return
Anderson predicted similar pushback not only when it comes to organized labor movements, which she said have grown and gained support in the last few years, but also in consumer choices, something that could hurt the CEOs' companies.
PHOTO: In this June 19, 2017, file photo, Jeff Bezos speaks as President Donald Trump, left, and Satya Nadella, CEO of Microsoft, listen during the American Technology Council roundtable hosted at the White House in Washington, D.C. (Bloomberg via Getty Images, FILE)
She noted that over 250,000 people ended their Washington Post subscriptions after Bezos vetoed the paper's planned endorsement of Vice President Kamala Harris. Millions of social media users have fled Meta platforms and X for other social media sites since they rolled back their content moderation policies, according to Anderson.
PHOTO: In this June 29, 2024, file photo, a demonstrator shows a sign with the words ''A minimum wage of at least $15+/Hour, Moving up to a living wage' among other informative texts during the Poor People's March on Pennsylvania Ave in Washington D.C. (Aashish Kiphayet/Sipa USA via AP, FILE)
"There is an aura around these billionaires, and when people connect the power of these oligarchs to the harmful impacts on everyday lives, people will change quickly," she said.
How long will this alliance last?
Kinderman said the real test will come if Trump or Republican congressional leaders cross ethical lines that are perceived to harm the public. He noted that CEOs, including Musk, and businesses backed out of Trump's Strategic and Policy Forum in 2017 after he left the Paris climate agreement and after Trump's comments following the Charlottesville Unite the Right rally.
PHOTO: President-elect Donald Trump speaks to members of the media during a press conference at the Mar-a-Lago Club, on Jan. 7, 2025, in Palm Beach, Fla. (Scott Olson/Getty Images)
MORE: What led 2 White House economic councils to abruptly disband
"It's anyone's guess really, but will the administration's agenda clash with some powerful American business interests? It's quite radical, so I think it almost certainly will," Kinderman said. "The new oligarchs are in a strong position, and they seem to be allied with Trump, but that alliance could break."
'Oligarchy 2.0': Experts weigh in on whether Biden's warning about wealthy justified originally appeared on abcnews.go.com
Trump’s billionaire oligarchs are rewiring America for a new superpower era
Jeremy Warner
Sat, January 18, 2025
Not since Dwight Eisenhower’s post-war military-industrial complex has there been such unity of purpose between political and economic power - NATO/HULTON ARCHIVE
Joe Biden has already dubbed Trump’s new contract with business leaders the “tech industrial complex” – a deliberate reference to Eisenhower’s description of the last time business interests were allowed to reach so powerfully into the heart of government.
“Today, an oligarchy is taking shape in America of extreme wealth, power and influence that really threatens our entire democracy, our basic rights and freedom”, Biden warned in his farewell address as president last week.
If that is what’s happening, it already looks unstoppable.
‘Strong man’ regime
In Trump, the new titans of the US business landscape have found a like-minded champion seemingly willing to implement an agenda so perfectly aligned with their own commercial interests that they could scarcely have believed it possible.
In demanding curbs on the juggernaut of regulation that has supposedly imprisoned them these past four years, they seem to be pushing at an open door, and for many of them it feels like a liberation.
It’s also a two-way street in which something is demanded in return.
For them, it’s the promise of business and finance unleashed, and for Musk and Bezos, of lucrative government contracts to feed their assault on outer space; for Trump the new tech oligarchy is the means by which he pursues his own place in history as the saviour of the Western world, pushing back on an ascendant China and cementing America’s position as the world’s unrivalled superpower.
To that end, he promotes a total rewiring of the US economy to make it match-fit for his wider, expansionary ambitions.
Maintaining and enhancing America’s lead in the technologies of the future – artificial intelligence, robotics, space, weaponry and bioscience – is central to that vision.
After decades of cowering in the wings, forced to bend to whatever fancy the politicians feel minded to pursue, the worm has turned.
A new order in the world’s largest economy has been born: join in or prepare to lose out is the message to business owners and chief executives.
The comparison is with Russia, China and other “strong man” regimes where great wealth and monopoly power in the hands of the few is tolerated, and even actively promoted, provided it supports the regime’s wider ambitions.
Step out of line and expect to get frozen out or even persecuted, as has happened to many of the oligarchs of the Russian and Chinese economies. It’s a world in which the traditional boundaries between economic wealth and political power become increasingly blurred and fungible.
Earthquakes in Davos
Standing alongside Trump on the podium on Monday will be not just the president’s new confidante, Musk, but a whole raft of Johnny-come-lately converts to the Maga cause, including Bezos and Zuckerberg. Just these three alone are collectively worth getting on for $1 trillion (£820bn). Also cheering the new president on the podium will be the bosses of Google and TikTok.
The contrast with Trump’s first term in office, when the almost universal response of Silicon Valley was one of po-faced, self-righteous, liberally minded revulsion, could scarcely be greater.
Call it cynical self-interest if you like. No doubt there is a strong element of it in the current outbreak of fawning adulation.
But amid growing frustration in the business community with the compromises and demands of the environmental, social and governance agenda, business support for Trump has long been in the ascendant.
By coincidence, Trump’s inauguration takes place on the same day as the opening of the World Economic Forum (WEF) annual meeting in Davos, where the rich, powerful, famous and merely opinionated gather to swap business cards, discuss the state of the world, exchange ideas, court customers and suppliers, and drink too much.
Over the years the event has become synonymous with the sort of elite-driven globalism that Trump loves to hate, even if, always one to hog the limelight, he actually attended the event twice when last president.
Like Russia’s Vladimir Putin and China’s Xi Jinping, Donald Trump seeks radical change in the world order - Sergey Guneyev/Pool Sputnik Kremlin
Be that as it may, like some great wrecking ball, Trump’s America First nationalism threatens rudely to interrupt the complacency of the Davos set.
It’s been quite a shock. Out goes multilateralism, free trade and shared solutions to common problems – all things that the WEF has promoted and championed since its establishment five decades ago.
In comes bully-boy unilateralism, some of the biggest protectionist measures since the infamous Smoot-Hawley Tariff Act of 1930, and the unashamed pursuit of national self-interest whatever the collateral damage.
Like Russia’s Putin and China’s Xi Jinping, Trump seeks radical change in the world order, and he cares little about trampling over those who get in his way.
You might think that this would be anathema to the multinational corporations that have come to dominate the US economy and its stock markets; their natural self-interest would seem to draw them closer to the Davos view of the world than the nativism of Trump.
Indeed it is they who helped forge the Davos consensus, with its focus on progressive values and social improvement through corporate responsibility.
But the pendulum has swung, and the corporate backlash against woke diversity, equity and inclusion (DEI) orthodoxy is everywhere to be seen.
Big tech’s switch
Part of Trump’s cleverness as a politician is that he has rendered all such bleeding heart narratives unfashionable while simultaneously harnessing the new money of America’s tech revolution to his own electoral purposes, aggrandisement and vision for the US as an unrivalled superpower.
Somehow or other, he’s managed to make the idea of unbridled, red-in-tooth-and-claw capitalism into an all-powerful vote-winning machine, and for many business leaders, increasingly hemmed in as they see it by stifling social, environmental and anti-trust regulation, it has been like a breath of fresh air.
No more having to worry about offending this, that or the other cause or minority, business can once more be “aggressive”, as Zuckerberg puts it, in pursuit of corporate self-interest and the bottom line.
Some, such as Cantor Fitzgerald’s Howard Lutnick, Trump’s pick as commerce secretary, have long been supporters, but for most it’s been a more recent awakening, prompted in large measure by the growing realisation that Trump was likely to win.
You could see the way the wind was blowing at Davos a year ago in remarks by Jamie Dimon, America’s pre-eminent banker and like much of Wall Street, traditionally a Democrat supporter.
“Take a step back, be honest”, the JP Morgan Chase boss said in reevaluating the narrative around Trump’s first term as president. “[Trump] was kind of right about Nato, kind of right on immigration. He grew the economy quite well. Trade, tax reform worked. He was right about some of China.”
Trump’s bellicose response to an assassination attempt won him admirers, Elon Musk among them - Evan Vucci/AP
Even Musk wasn’t always a Trump admirer. He supported Joe Biden in the 2020 election, and only began to come round to Trump – whose “drill, baby, drill” affiliation with the oil and gas industry seemed to conflict with the Tesla boss’s own ambitions as an environmental champion – after Biden snubbed him over an auto industry event and the administration launched a series of probes into his business affairs.
Yet Musk’s frustration with regulatory intrusion long predated Biden’s failure to invite him to the auto industry conflab, a slight widely attributed to Musk’s resistance to unionisation of his Tesla workforce.
Trump’s pugnacious “fight, fight, fight” response to an assassination attempt, which saw the presidential candidate narrowly escape death, appealed to Musk’s own sense of high-wire bravado, and seemed to seal the deal.
In any case, Musk’s growing obsession with culture wars and what he calls “the woke-mind virus” made him a natural Trump bedfellow.
For Biden, alienating Musk was a disastrous miscalculation. By pumping money into Trump’s campaign and using X (formerly known as Twitter) as a platform for hardline Maga views, Musk played a pivotal role in Trump’s eventual victory.
Others were slower to climb aboard but no less enthusiastic once they had drunk the Kool Aid of Trump’s promise to tear down regulatory checks on business, finance and technological development.
I once met Bezos in the days when he still had some hair and was no more than a rather unassuming, socially sensitive online book retailer. He seemed quite the nicest capitalist you could ever hope to meet, a far cry from the ruthless entrepreneurial genius he was later to become.
He held on to some of that aura even as his business achievements mounted, and when the Democrat-supporting Washington Post – of Watergate fame – came up for sale, he seemed a supremely well-suited buyer.
Amazon’s Jeff Bezos has become a regular on the Mar-a-Lago pilgrimage of ‘tech bros’ to pay homage to Trump - Isaiah Downing/REUTERS
Yet despite Bezos’s digital skills, the title’s somewhat dull offering of centrist, politically consensual content has struggled to make headway in the polarised and febrile atmosphere of today’s politics. By never missing an opportunity to attack Trump, the Post threatened to poison the well for the Amazon founder’s wider commercial interest.
As Trump’s chances of success grew, and Bezos’s great rival in the private sector space race, Elon Musk, threw his weight behind the Maga campaign, the Post came to be seen as more of a liability than an asset.
With the election looming, Bezos instructed his apparatchiks to insert an editorial that backed neither candidate for the presidency, trampling rough shod over the Post’s decades long tradition of unquestioning support for the Democrats. It was the least he could do to appease Trump, and ensure that his Blue Origin space venture secured at least some of the government contracts likely to fall from Trump’s table.
Since then he has been a regular on the Mar-a-Lago pilgrimage of “tech bros” to pay homage at the feet of the president-elect – and he has donated $1m (£820,000) to Trump’s inauguration fund.
Facebook’s Zuckerberg and OpenAI’s Sam Altman have chipped in similar amounts. “We are turning the page,” said Marc Benioff, the chief executive of Salesforce, soon after the publication he owns, Time magazine, declared Trump “person of the year”.
Of all these Damascene conversions to the president-elect’s cause, the most cringeworthy was perhaps that of Zuckerberg.
You knew something was up when he sacked Sir Nick Clegg as his head of communications and replaced him with Joel Kaplan, an unrepentant Republican who had served as George W Bush’s deputy chief of staff.
Mark Zuckerberg’s volte-face includes the appointment of Joel Kaplan, an unrepentant Republican who served as George W Bush’s deputy chief of staff - Samuel Corum/Getty Images North America
Clegg had been brought in to help sanitise Facebook after the Cambridge Analytica scandal and to answer what was then a fierce political backlash against big tech’s use and monetisation of private data.
A former deputy prime minister in Britain’s coalition government of 2010-15, Clegg was widely seen – perhaps unfairly – as the very personification of DEI, “woke” culture. He was instrumental both in establishing Meta’s oversight board and in de-platforming Trump from Facebook following the 2021 attack on Capitol Hill. With Trump heading for the White House anew, Clegg had plainly outgrown his usefulness.
Shortly afterwards, Zuckerberg ditched third-party “fact-checking” on his US platforms, and announced he was moving to the same system of “community notes” as used by Musk at X.
The old approach had gone too far, he said: “Too much harmless content gets censored, too many people find themselves wrongly locked up in ‘Facebook jail’, and we are often too slow to respond when they do”.
It was music to Trump’s ears. The volte-face was so complete and sudden that one can only assume Zuckerberg never believed in Clegg’s “woke dressing” approach to brand management in the first place, and only went along with it to fit in with the political zeitgeist of the time.
As consolation, Clegg leaves $100m richer in Meta share options. No doubt he briefly served his purpose.
A new Gilded Age?
Part of Trump’s fascination as a political leader is that he sells himself as an anti-establishment champion determined to sweep away the “deep state” influence of the Washington elites, yet he breaks bread with and glorifies the three richest industrialists of the age.
It’s a seeming contradiction, but one explained not just by Trump’s weakness for flattery and attention, or even his own ascent to billionaire status; it’s also because these new corporate goliaths regard themselves as kindred spirits, disrupting and tearing down the walls of the presiding establishment in much the same way as Trump is demolishing traditional political elites.
There have been several phases like this before in US history. The most obviously comparable was the so-called “Gilded Age” of the late 19th century, which was similarly a time of rapid economic change, social upheaval, political corruption and industrial growth.
Rapid technological progress went hand in hand with the emergence of a new class of super-rich whose fortunes in today’s money would have eclipsed even those of the current roster of “tech bros”.
The Rockerfellers, Carnegies, Vanderbilts and the JP Morgans were the Musks and Zuckerbergs of their time.
And like today, they were far from universally admired, despite the rapid growth in productivity and wages that they enabled.
Looked at through the lens of today’s world, the oil, steel, railroads, telecommunications, shipping and finance sectors on which these fortunes were founded look old, commoditised and mundane.
But back then they were as much at the cutting-edge of industry as current developments in mass communications and artificial intelligence. They also gave rise to a pretty similar array of public interest complaints, not least abuse of monopoly power and political favouritism, and like today’s tech giants, initially went substantially unregulated.
Increasingly beset by scandal and allegations of political corruption, many of the “robber barons” of the Gilded Age eventually fell prey to the trust-busting of Teddy Roosevelt, and were broken up by competition regulators or otherwise out done by rivals.
Thus began an abiding feature of the US political economy – that those who grow too powerful and big for their boots always end up cut back to size, allowing the light and oxygen through for the next generation of industrial pioneers.
This may in time be the fate of today’s tech behemoths, but not yet, and not under this president. For that to happen, the weather vane of political power will have to turn again.
While there are obvious similarities with the “military industrial complex” speech in 1961, the irony here was that Eisenhower was himself instrumental in creating the very economy he complained of – one dominated by what he characterised as “a scientific-technological elite” feeding off the largesse of exorbitant deficit and military spending.
The corporate winners of that time were the likes of Boeing and IBM, both today pale shadows of their former selves, forced to compete for lucrative government contracts alongside nimbler, more innovative rivals such as Musk, Peter Thiel’s Palantir Technologies, Oracle and Microsoft among others.
Both have seen once mighty monopoly positions destroyed by competition and regulatory intervention as one industrial age morphs irresistibly into another.
Eisenhower’s concerns were echoed last week in Biden’s valedictory as president when he warned that “an oligarchy is taking shape in America of extreme wealth, power and influence”. The similarities were uncanny.
Already cracks are appearing in the latest marriage of technological and political power.
Both Musk and Apple have extensive interests in China (as a market and manufacturing base), which would be badly damaged by Trump’s proposed deluge of tariff protections. They want to see current tensions dialled down, not up, and are acutely aware of the damage to the bottom line that mounting superpower rivalry might inflict.
Musk has likewise found himself at odds with the wider Maga agenda on immigration, which he fears might deny him access to the foreign software engineering talent that his many enterprises need.
Steve Bannon, a one-time Trump adviser with deity-like status in the Maga movement, has called Musk a “truly evil guy” for promoting liberal immigration policies, and vowed to “take him down”.
In any case, there’s an underlying contradiction between the libertarian instincts of the tech oligarchs and the nativist leanings of the Maga base that makes many believe the current love-in cannot last.
For now, however, the two are bound together tightly by mutual self-interest. Trump promises to give the new oligopoly all the freedom it wants, and in return the titans of tech promise a new industrial age that will drive the US to ever greater heights of economic and geopolitical prowess.
Is it the end of American democracy, as Biden forewarns, or the beginnings of another giant leap forward in economic progress and prosperity? The tectonic plates of history are shifting violently; we know not how they’ll settle.
Jeremy Warner
Sat, January 18, 2025
THE TELEGRAPH, UK
Illustration: Elon Musk and Jeff Bezos
When Donald Trump takes the oath at his inauguration on Monday, standing alongside him in an ostentatious display of support will be not just the usual roster of political hangers-on, but a star-studded array of tech oligarchs, business leaders and financiers that includes the three richest men in the world – Tesla’s Elon Musk, Amazon’s Jeff Bezos and Meta’s Mark Zuckerberg.
It’ll be quite a spectacle, and one in marked contrast to Trump’s first presidency, when he was widely cold-shouldered. There is, of course, nothing unusual about business attempting to cosy up to an incoming president in the hope of influence, favours and contracts.
But normally it’s done in a low-profile, arms-length way behind closed doors, mindful of the perception of corruption if business and political elites get too close.
With Trump’s second term, it’s different: it’s open, flamboyant and conspicuous, and there’s a unity of purpose between the main repositories of political and economic power not seen since Dwight Eisenhower’s “military-industrial complex” of the immediate post-war age.
To the drumbeat of “make America great again” (Maga), they are today again marching together in lockstep. If not quite unprecedented, it’s rare to see the birth of a new plutocracy in such rampant and unashamed form.
Illustration: Elon Musk and Jeff Bezos
When Donald Trump takes the oath at his inauguration on Monday, standing alongside him in an ostentatious display of support will be not just the usual roster of political hangers-on, but a star-studded array of tech oligarchs, business leaders and financiers that includes the three richest men in the world – Tesla’s Elon Musk, Amazon’s Jeff Bezos and Meta’s Mark Zuckerberg.
It’ll be quite a spectacle, and one in marked contrast to Trump’s first presidency, when he was widely cold-shouldered. There is, of course, nothing unusual about business attempting to cosy up to an incoming president in the hope of influence, favours and contracts.
But normally it’s done in a low-profile, arms-length way behind closed doors, mindful of the perception of corruption if business and political elites get too close.
With Trump’s second term, it’s different: it’s open, flamboyant and conspicuous, and there’s a unity of purpose between the main repositories of political and economic power not seen since Dwight Eisenhower’s “military-industrial complex” of the immediate post-war age.
To the drumbeat of “make America great again” (Maga), they are today again marching together in lockstep. If not quite unprecedented, it’s rare to see the birth of a new plutocracy in such rampant and unashamed form.
Not since Dwight Eisenhower’s post-war military-industrial complex has there been such unity of purpose between political and economic power - NATO/HULTON ARCHIVE
Joe Biden has already dubbed Trump’s new contract with business leaders the “tech industrial complex” – a deliberate reference to Eisenhower’s description of the last time business interests were allowed to reach so powerfully into the heart of government.
“Today, an oligarchy is taking shape in America of extreme wealth, power and influence that really threatens our entire democracy, our basic rights and freedom”, Biden warned in his farewell address as president last week.
If that is what’s happening, it already looks unstoppable.
‘Strong man’ regime
In Trump, the new titans of the US business landscape have found a like-minded champion seemingly willing to implement an agenda so perfectly aligned with their own commercial interests that they could scarcely have believed it possible.
In demanding curbs on the juggernaut of regulation that has supposedly imprisoned them these past four years, they seem to be pushing at an open door, and for many of them it feels like a liberation.
It’s also a two-way street in which something is demanded in return.
For them, it’s the promise of business and finance unleashed, and for Musk and Bezos, of lucrative government contracts to feed their assault on outer space; for Trump the new tech oligarchy is the means by which he pursues his own place in history as the saviour of the Western world, pushing back on an ascendant China and cementing America’s position as the world’s unrivalled superpower.
To that end, he promotes a total rewiring of the US economy to make it match-fit for his wider, expansionary ambitions.
Maintaining and enhancing America’s lead in the technologies of the future – artificial intelligence, robotics, space, weaponry and bioscience – is central to that vision.
After decades of cowering in the wings, forced to bend to whatever fancy the politicians feel minded to pursue, the worm has turned.
A new order in the world’s largest economy has been born: join in or prepare to lose out is the message to business owners and chief executives.
The comparison is with Russia, China and other “strong man” regimes where great wealth and monopoly power in the hands of the few is tolerated, and even actively promoted, provided it supports the regime’s wider ambitions.
Step out of line and expect to get frozen out or even persecuted, as has happened to many of the oligarchs of the Russian and Chinese economies. It’s a world in which the traditional boundaries between economic wealth and political power become increasingly blurred and fungible.
Earthquakes in Davos
Standing alongside Trump on the podium on Monday will be not just the president’s new confidante, Musk, but a whole raft of Johnny-come-lately converts to the Maga cause, including Bezos and Zuckerberg. Just these three alone are collectively worth getting on for $1 trillion (£820bn). Also cheering the new president on the podium will be the bosses of Google and TikTok.
The contrast with Trump’s first term in office, when the almost universal response of Silicon Valley was one of po-faced, self-righteous, liberally minded revulsion, could scarcely be greater.
Call it cynical self-interest if you like. No doubt there is a strong element of it in the current outbreak of fawning adulation.
But amid growing frustration in the business community with the compromises and demands of the environmental, social and governance agenda, business support for Trump has long been in the ascendant.
By coincidence, Trump’s inauguration takes place on the same day as the opening of the World Economic Forum (WEF) annual meeting in Davos, where the rich, powerful, famous and merely opinionated gather to swap business cards, discuss the state of the world, exchange ideas, court customers and suppliers, and drink too much.
Over the years the event has become synonymous with the sort of elite-driven globalism that Trump loves to hate, even if, always one to hog the limelight, he actually attended the event twice when last president.
Like Russia’s Vladimir Putin and China’s Xi Jinping, Donald Trump seeks radical change in the world order - Sergey Guneyev/Pool Sputnik Kremlin
Be that as it may, like some great wrecking ball, Trump’s America First nationalism threatens rudely to interrupt the complacency of the Davos set.
It’s been quite a shock. Out goes multilateralism, free trade and shared solutions to common problems – all things that the WEF has promoted and championed since its establishment five decades ago.
In comes bully-boy unilateralism, some of the biggest protectionist measures since the infamous Smoot-Hawley Tariff Act of 1930, and the unashamed pursuit of national self-interest whatever the collateral damage.
Like Russia’s Putin and China’s Xi Jinping, Trump seeks radical change in the world order, and he cares little about trampling over those who get in his way.
You might think that this would be anathema to the multinational corporations that have come to dominate the US economy and its stock markets; their natural self-interest would seem to draw them closer to the Davos view of the world than the nativism of Trump.
Indeed it is they who helped forge the Davos consensus, with its focus on progressive values and social improvement through corporate responsibility.
But the pendulum has swung, and the corporate backlash against woke diversity, equity and inclusion (DEI) orthodoxy is everywhere to be seen.
Big tech’s switch
Part of Trump’s cleverness as a politician is that he has rendered all such bleeding heart narratives unfashionable while simultaneously harnessing the new money of America’s tech revolution to his own electoral purposes, aggrandisement and vision for the US as an unrivalled superpower.
Somehow or other, he’s managed to make the idea of unbridled, red-in-tooth-and-claw capitalism into an all-powerful vote-winning machine, and for many business leaders, increasingly hemmed in as they see it by stifling social, environmental and anti-trust regulation, it has been like a breath of fresh air.
No more having to worry about offending this, that or the other cause or minority, business can once more be “aggressive”, as Zuckerberg puts it, in pursuit of corporate self-interest and the bottom line.
Some, such as Cantor Fitzgerald’s Howard Lutnick, Trump’s pick as commerce secretary, have long been supporters, but for most it’s been a more recent awakening, prompted in large measure by the growing realisation that Trump was likely to win.
You could see the way the wind was blowing at Davos a year ago in remarks by Jamie Dimon, America’s pre-eminent banker and like much of Wall Street, traditionally a Democrat supporter.
“Take a step back, be honest”, the JP Morgan Chase boss said in reevaluating the narrative around Trump’s first term as president. “[Trump] was kind of right about Nato, kind of right on immigration. He grew the economy quite well. Trade, tax reform worked. He was right about some of China.”
Trump’s bellicose response to an assassination attempt won him admirers, Elon Musk among them - Evan Vucci/AP
Even Musk wasn’t always a Trump admirer. He supported Joe Biden in the 2020 election, and only began to come round to Trump – whose “drill, baby, drill” affiliation with the oil and gas industry seemed to conflict with the Tesla boss’s own ambitions as an environmental champion – after Biden snubbed him over an auto industry event and the administration launched a series of probes into his business affairs.
Yet Musk’s frustration with regulatory intrusion long predated Biden’s failure to invite him to the auto industry conflab, a slight widely attributed to Musk’s resistance to unionisation of his Tesla workforce.
Trump’s pugnacious “fight, fight, fight” response to an assassination attempt, which saw the presidential candidate narrowly escape death, appealed to Musk’s own sense of high-wire bravado, and seemed to seal the deal.
In any case, Musk’s growing obsession with culture wars and what he calls “the woke-mind virus” made him a natural Trump bedfellow.
For Biden, alienating Musk was a disastrous miscalculation. By pumping money into Trump’s campaign and using X (formerly known as Twitter) as a platform for hardline Maga views, Musk played a pivotal role in Trump’s eventual victory.
Others were slower to climb aboard but no less enthusiastic once they had drunk the Kool Aid of Trump’s promise to tear down regulatory checks on business, finance and technological development.
I once met Bezos in the days when he still had some hair and was no more than a rather unassuming, socially sensitive online book retailer. He seemed quite the nicest capitalist you could ever hope to meet, a far cry from the ruthless entrepreneurial genius he was later to become.
He held on to some of that aura even as his business achievements mounted, and when the Democrat-supporting Washington Post – of Watergate fame – came up for sale, he seemed a supremely well-suited buyer.
Amazon’s Jeff Bezos has become a regular on the Mar-a-Lago pilgrimage of ‘tech bros’ to pay homage to Trump - Isaiah Downing/REUTERS
Yet despite Bezos’s digital skills, the title’s somewhat dull offering of centrist, politically consensual content has struggled to make headway in the polarised and febrile atmosphere of today’s politics. By never missing an opportunity to attack Trump, the Post threatened to poison the well for the Amazon founder’s wider commercial interest.
As Trump’s chances of success grew, and Bezos’s great rival in the private sector space race, Elon Musk, threw his weight behind the Maga campaign, the Post came to be seen as more of a liability than an asset.
With the election looming, Bezos instructed his apparatchiks to insert an editorial that backed neither candidate for the presidency, trampling rough shod over the Post’s decades long tradition of unquestioning support for the Democrats. It was the least he could do to appease Trump, and ensure that his Blue Origin space venture secured at least some of the government contracts likely to fall from Trump’s table.
Since then he has been a regular on the Mar-a-Lago pilgrimage of “tech bros” to pay homage at the feet of the president-elect – and he has donated $1m (£820,000) to Trump’s inauguration fund.
Facebook’s Zuckerberg and OpenAI’s Sam Altman have chipped in similar amounts. “We are turning the page,” said Marc Benioff, the chief executive of Salesforce, soon after the publication he owns, Time magazine, declared Trump “person of the year”.
Of all these Damascene conversions to the president-elect’s cause, the most cringeworthy was perhaps that of Zuckerberg.
You knew something was up when he sacked Sir Nick Clegg as his head of communications and replaced him with Joel Kaplan, an unrepentant Republican who had served as George W Bush’s deputy chief of staff.
Mark Zuckerberg’s volte-face includes the appointment of Joel Kaplan, an unrepentant Republican who served as George W Bush’s deputy chief of staff - Samuel Corum/Getty Images North America
Clegg had been brought in to help sanitise Facebook after the Cambridge Analytica scandal and to answer what was then a fierce political backlash against big tech’s use and monetisation of private data.
A former deputy prime minister in Britain’s coalition government of 2010-15, Clegg was widely seen – perhaps unfairly – as the very personification of DEI, “woke” culture. He was instrumental both in establishing Meta’s oversight board and in de-platforming Trump from Facebook following the 2021 attack on Capitol Hill. With Trump heading for the White House anew, Clegg had plainly outgrown his usefulness.
Shortly afterwards, Zuckerberg ditched third-party “fact-checking” on his US platforms, and announced he was moving to the same system of “community notes” as used by Musk at X.
The old approach had gone too far, he said: “Too much harmless content gets censored, too many people find themselves wrongly locked up in ‘Facebook jail’, and we are often too slow to respond when they do”.
It was music to Trump’s ears. The volte-face was so complete and sudden that one can only assume Zuckerberg never believed in Clegg’s “woke dressing” approach to brand management in the first place, and only went along with it to fit in with the political zeitgeist of the time.
As consolation, Clegg leaves $100m richer in Meta share options. No doubt he briefly served his purpose.
A new Gilded Age?
Part of Trump’s fascination as a political leader is that he sells himself as an anti-establishment champion determined to sweep away the “deep state” influence of the Washington elites, yet he breaks bread with and glorifies the three richest industrialists of the age.
It’s a seeming contradiction, but one explained not just by Trump’s weakness for flattery and attention, or even his own ascent to billionaire status; it’s also because these new corporate goliaths regard themselves as kindred spirits, disrupting and tearing down the walls of the presiding establishment in much the same way as Trump is demolishing traditional political elites.
There have been several phases like this before in US history. The most obviously comparable was the so-called “Gilded Age” of the late 19th century, which was similarly a time of rapid economic change, social upheaval, political corruption and industrial growth.
Rapid technological progress went hand in hand with the emergence of a new class of super-rich whose fortunes in today’s money would have eclipsed even those of the current roster of “tech bros”.
The Rockerfellers, Carnegies, Vanderbilts and the JP Morgans were the Musks and Zuckerbergs of their time.
And like today, they were far from universally admired, despite the rapid growth in productivity and wages that they enabled.
Looked at through the lens of today’s world, the oil, steel, railroads, telecommunications, shipping and finance sectors on which these fortunes were founded look old, commoditised and mundane.
But back then they were as much at the cutting-edge of industry as current developments in mass communications and artificial intelligence. They also gave rise to a pretty similar array of public interest complaints, not least abuse of monopoly power and political favouritism, and like today’s tech giants, initially went substantially unregulated.
Increasingly beset by scandal and allegations of political corruption, many of the “robber barons” of the Gilded Age eventually fell prey to the trust-busting of Teddy Roosevelt, and were broken up by competition regulators or otherwise out done by rivals.
Thus began an abiding feature of the US political economy – that those who grow too powerful and big for their boots always end up cut back to size, allowing the light and oxygen through for the next generation of industrial pioneers.
This may in time be the fate of today’s tech behemoths, but not yet, and not under this president. For that to happen, the weather vane of political power will have to turn again.
While there are obvious similarities with the “military industrial complex” speech in 1961, the irony here was that Eisenhower was himself instrumental in creating the very economy he complained of – one dominated by what he characterised as “a scientific-technological elite” feeding off the largesse of exorbitant deficit and military spending.
The corporate winners of that time were the likes of Boeing and IBM, both today pale shadows of their former selves, forced to compete for lucrative government contracts alongside nimbler, more innovative rivals such as Musk, Peter Thiel’s Palantir Technologies, Oracle and Microsoft among others.
Both have seen once mighty monopoly positions destroyed by competition and regulatory intervention as one industrial age morphs irresistibly into another.
Eisenhower’s concerns were echoed last week in Biden’s valedictory as president when he warned that “an oligarchy is taking shape in America of extreme wealth, power and influence”. The similarities were uncanny.
Already cracks are appearing in the latest marriage of technological and political power.
Both Musk and Apple have extensive interests in China (as a market and manufacturing base), which would be badly damaged by Trump’s proposed deluge of tariff protections. They want to see current tensions dialled down, not up, and are acutely aware of the damage to the bottom line that mounting superpower rivalry might inflict.
Musk has likewise found himself at odds with the wider Maga agenda on immigration, which he fears might deny him access to the foreign software engineering talent that his many enterprises need.
Steve Bannon, a one-time Trump adviser with deity-like status in the Maga movement, has called Musk a “truly evil guy” for promoting liberal immigration policies, and vowed to “take him down”.
In any case, there’s an underlying contradiction between the libertarian instincts of the tech oligarchs and the nativist leanings of the Maga base that makes many believe the current love-in cannot last.
For now, however, the two are bound together tightly by mutual self-interest. Trump promises to give the new oligopoly all the freedom it wants, and in return the titans of tech promise a new industrial age that will drive the US to ever greater heights of economic and geopolitical prowess.
Is it the end of American democracy, as Biden forewarns, or the beginnings of another giant leap forward in economic progress and prosperity? The tectonic plates of history are shifting violently; we know not how they’ll settle.
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