Progress is not inevitable. Democracy is not preordained. Throughout our history, organized labor, active citizens, journalists, academics, and political and cultural leaders have made progress in pushing back oligarchic rule. Although elites have at times reclaimed ground, as in the past forty years, many of the foundational policies of the New Deal and Progressive eras remain intact. Some activists are working to build a movement akin to those of the 20th century that brought the nation greater democracy and prosperity. Whether it will be able to bring about the kinds of reforms that delivered the US the largest middle-class and broadest prosperity in the country’s history remains to be seen. Both progressive eras of the 20th century saw an oligarchic backlash that returned the country to undemocratic inequality.
A natural question arises: Are we doomed to suffer this constant return of oligarchy? Will we remain perpetually trapped in this battle between democracy and tyranny? There is no reason to believe that progress will continue inevitably. Nor is there reason to believe that, on our current trajectory, we will ever fully abolish this recurring swing toward oligarchy.
Unless, that is, we make one massive change to the economy.
The global economy runs entirely dependent on oil, gas, and coal. Every sector is intimately reliant on energy derived from these resources. Transportation of humans and resources depends on them. Healthcare depends on them. Food and agriculture depends on them. Manufacturing, minerals, and lumber depend on them. Access to freshwater depends on them. Retailing and service sectors depend on them. Silicon Valley depends on them. Finance depends on them. Automotive and airline industries depend on them. The vast infrastructure of a developing global economy depends on them.
Oil, gas, and coal, as resources, are easily hoarded. They lend themselves to consolidation. This makes it easy to concentrate them in the hands of a few individuals and companies. Those who control oil and gas can control a nation’s government. It is no surprise that when fossil fuel industrialization first gripped the US in the 19th century, the wealthiest oligarch of them all was John Davison Rockefeller, the man who controlled the flow of oil. America’s first oligarchic period was built on his resource.
Virtually every country with a significant resource base of oil and gas has developed a robust oligarchy. Russia, third largest oil producer in the world, was an oligarchic dictatorship under Soviet rule. Since the fall of the Union, it has developed into a kleptocratic oligarchy. Fourth largest, China, maintains a one-party totalitarian oligarchy. Middle Eastern petrostates like Saudi Arabia and UAE – first and seventh largest producers – offer the most vivid examples of oil oligarchy, with hereditary kings and aristocrats ruling over disenfranchised underclasses. The UAE’s oligarchy is even trying to use its oil wealth to influence the US government through DC think tanks like Center for New American Security.
The only top-ten oil producer to have defied this tendency is Canada. But while more egalitarian than other major oil producers, Canada remains strongly beholden to oil and gas interests. Justin Trudeau has shown an utter unwillingness to defy fossil fuel companies and continues against the will of his progressive base to enthusiastically serve oil interests.
When an economically vital resource is easy to hoard, it will be hoarded and that hoarding will result in the concentration of wealth and political power. This has happened throughout recorded history. It is a basic law of human society. Anthropologist Marvin Harris illustrates this principle in Cannibals and Kings in which he describes the hydraulic societies of the ancient world. These were empires in arid regions like Mesopotamia, India, China, Egypt, and elsewhere dependent on large riverine ecologies for drinking and irrigation water. Because a small administrative class could control the flow of this economically vital resource, invariably brutal autocratic oligarchies formed to control it. Oligarch classes administered the divine edicts of demigod kings. Religions were written up and evangelized, gods forged, to countenance the rule of these monarchs. Most toiled as slaves and lived or died by the whim of elites.
Recent dystopian flick Mad Max: Fury Road has done more to illustrate this process than probably any other. In the film, the supreme monarch of the Citadel, Immortan Joe, enjoys complete control over the groundwater resting beneath this harsh, post-apocalyptic desert. He maintains absolute power by controlling the flow of water and builds a small class of privileged individuals while the mass of people live in grave destitution. Immortan Joe even devised his own mythos, Valhalla included, justifying his rule and inspiring his army.
Oil today is little different from water in the ancient world’s riverine empires or Mad Max’s Citadel. Of the six companies with the highest revenue in the world, five are oil, gas, and electric. The few who control this resource are able to amass untold wealth and dominate governments, like Trudeau’s and Trump’s, Putin’s and al Saud’s.
An economy that remains so completely dependent on an easily hoarded resource like oil, gas, and coal will remain ever pulled back toward oligarchy and capital consolidation. Economic elites will continue to devise new ways to justify their domination, as they have in the past. Just as neoliberal ideology was an intellectual innovation justifying an oligarchic economy, some other faith system will emerge in the future, whether resurrecting Valhalla or not, as oil-fueled oligarchs continue to dominate government and economy. And given the absolute certainty of catastrophic atmospheric disruption occurring as a result of the oil economy, the future may be far bleaker than the oligarchy we have today, and may well resemble something close to the world of Mad Max or the slavery of the hydraulic empires.
One necessary step in breaking this cycle of oligarchic creep is to decouple the economy from oil, gas, and coal. One vital action necessary in achieving an economy that ensures broad prosperity and a government of mass enfranchisement is to develop an infrastructure based on distributed energy undergirding a distributed economy.
An economically vital resource like energy must be owned and controlled broadly, by a plurality of citizens, in order to avoid consolidation. To achieve a more democratic economy, citizens must govern their own means of energy production, individually or at a community scale. There must be structures in place to oversee, finance, and distribute broadly owned energy. In this way, the economic consolidation inherent to an oil and gas economy becomes more difficult. While a distributed energy economy may be necessary to break oligarchy, alone it is insufficient. One could envision a world in which a renewable energy system eventually consolidates into massive wind, solar, and storage monopolies.
Alongside the deconsolidation of energy, a more democratic, less oligarchic economy also requires building in a set of durable policies capable of deconsolidating most other industries. Most industries are currently concentrated into oligopolies. Just 147 companies – out of more than 43,000 transnational companies – control 40% of the global economy. A few – yes, two (2) to four (4) – companies dominate the airline, automotive, telecommunications, mass media, entertainment, financial, pharmaceutical, agricultural, retail, beverage, personal computing, aluminum and steel, software, and more industries. Some examples: four airlines control sixty-seven percent of domestic travel, Amazon and Barnes & Noble sell almost half of all books in the US, Walmart sells fifty-seven percent of the country’s groceries, and Anheuser-Busch InBev and Miller-Coors sell sixty-five percent of beer in the US. Six media companies control ninety percent of media.
Oligopoly is the twin menace sowing privation alongside oligarchy. Oligopolistic markets are as destructive to a healthy economy as monopolies. Oligopoly swings the balance of power into the hands of a few companies. This enriches a few executives, bolsters oligarchy, and leads to wage stagnation, stymied competition, fewer new businesses, stagnant growth, less entrepreneurship, less public revenue, and worse treatment of employees.
We have an imperial oil economy. A democratic renewable economy is one built on lots of distributed ventures and enterprises fueled by distributed energy. This is not possible in markets dependent on oil and gas and dominated by empires that prohibit competition. Big business, not government, is the enemy of small business.
New policies that disincentivize empire-building, like zealous enforcement of antitrust laws, closing corporate tax loopholes, and imposing progressive tax and regulatory burdens on large firms are important first steps. But equally important is investing public revenue in new schemes to promote new venture creation. A necessary step entails cultivating a fertile atmosphere for citizens to pursue their professional endeavors independently. Community investments in new businesses are a democratic mechanism for encouraging new ventures, commercial or otherwise. Places in which the risks associated with failure is reduced, places like Germany and Sweden where there are more social services and safety nets, produce more and often better entrepreneurs. Strengthening access to healthcare, investing in something like a universal basic income, and subsidizing higher education are ways of providing a fertile environment for new ventures.
A distributed venture economy based on distributed energy systems could solve most of the economic problems plaguing the country: it would diversify the economy, would increase competition, would return the sources of economic and energy production to more Americans, would allow citizens to pursue their talents, to own their labor, to avoid the predation of unscrupulous employers, to maximize their well-being and utility, and restore the government to a more democratic state by allowing more Americans to participate in civic life.
The technological tools for building this economy are at our disposal. High-speed Internet can connect small businesses to global markets. Solar, wind, and electricity storage are cheaper every day, as are electric vehicles. New micro-grid technology makes it easier to connect distributed energy producers and consumers. An energy transition that gives more people access to cheaper, freer energy would go a long way toward breaking down oligarchy and oligopoly. But that task will also require new policy. The necessary policy tools, too, are at our disposal. Robust antitrust laws, community venture investment schemes, single-payer healthcare, universal basic income and other support systems, progressive taxes on extreme wealth to fund it, and strong, accessible educational institutions are within reach.
Perhaps the greatest hurdle will involve cultivating political tools needed to pass these policies and develop this technology. Wielding those tools will require the kind of mass mobilization that animated previous progressive eras. As before, it will require unifying diverse coalitions and mobilizing millions of Americans. If the Democratic Party and those Americans hungry for democracy are looking for a cohesive program to rebuild the country, these principles of distributed energy and distributed economy could offer a foundation. Instead of an oil oligarchy, we can fight to build a renewable democracy. That is a positive vision worth fighting for.
Part i here
Part ii here
