In this post, Stone Center Affiliated Scholar Guido Alfani reflects on the increasing influence of the super-rich in U.S. politics, and the risk this poses to democratic institutions and equality of access to the political process. Billionaires from the worlds of Silicon Valley, hedge funds, and banking like Elon Musk, Kenneth Griffin, and Timothy Mellon, have poured tens of millions of dollars into the 2024 campaigns of Republican candidates, while others from the same industries, like Michael Bloomberg, Reid Hoffman, and Fred Eychaner have backed Democrats.

Alfani is a professor of economic history at Bocconi University in Milan and the author of As Gods Among Men: A History of the Rich in the West.

By Guido Alfani

Today in the United States the super-rich appear to be super-involved in politics — either directly, by running for top public offices themselves, or through their financial support to politicians, political parties, and political campaigns. If looked at from a historical perspective, this is a worrying development. Indeed, our ancestors have always worried about the possibility of wealth capturing politics. As the fourteenth-century French philosopher Nicole Oresme claimed, translating Aristotle’s Politics and adapting it to the conditions of his time, “The super-rich are so unequal and exceed and overcome the others regarding their political power so much that it is reasonable to think that they are among the others as God is among men… The cities which are governed democratically, should relegate these people, i.e. they should send them into exile or banish them, as such cities try and pursue equality of all.”[1]

The super-rich are the “gods” in the title of my book As Gods Among Men: A History of the Rich in the West (Princeton University Press 2023). There, I provide ample historical evidence that when the super-rich meddle too much, things go poorly for the rest of us — at least, if we wish to live in a truly “democratic” polity. A particularly juicy example is that of Cosimo de’ Medici, who in 1433 was expelled from Florence and charged with aspiring to rise above ordinary citizens, and thus to overturn the republican government. Yet the following year he was called back to save Florence from bankruptcy with his vast financial resources, which he did, leading him to be “hailed as the benefactor of the people, and the father of his country,” according to the great political philosopher, writer, and statesman of the Tuscan Renaissance, Niccolò Machiavelli. But this help was not at all disinterested: 1434 is also the year when the so-called “hidden lordship” of the Medici over Florence began (Cosimo’s descendants would come to openly rule the state, as its hereditary dukes). By saving his country from financial ruin, Cosimo had basically bought it.

About five centuries later, at the turn of the twentieth century, American politicians were acutely aware of the risk that democratic institutions could be captured by the super-rich. An episode that helped open their eyes was the bank panic of 1907, when the powerful financier John Pierpont Morgan mobilized his financial and relational resources to prevent the crisis from spiraling out of control. The story is well known: on Saturday evening, November 3, J.P. Morgan summoned a group of financiers to his private library in New York, locked them in the room, and refused to allow them out until a solution to the looming catastrophe was found. At around 5 a.m. on Sunday, all those present agreed to sign a pledge in which they committed to bail out the shaking institutions. Similarly to Cosimo de’ Medici, J.P. Morgan had saved his country from financial ruin, and many publicly thanked him for this. Yet this display of economic power ended up fueling suspicion toward the so-called “money trust” that, from its base in New York, had supposedly come to control U.S. finances. Many, including President Theodore Roosevelt, feared this group of financiers might attempt to control U.S. politics as well. It is in this context of growing suspicion of the (possible) political involvement of the super-rich that, in 1912, Congress established the Pujo Committee “to investigate the concentration of control of money and credit.” [2] The findings of the committee helped consolidate support for the establishment of the Federal Reserve System, precisely to prevent the United States from ever again needing to be saved by the goodwill of private financiers. The fight against the money trust continued in the following decades, when a combination of more intense and more progressive taxation of incomes and estates, as well as more forceful application of antitrust legislation, served also the political objective of curtailing the influence of the super-wealthy elite.

Over the last century or so much has changed. The voters of today, not only in the United States but across the West, appear to be exceptionally accepting of the political involvement of the super-rich whose donations, in the current presidential run, are set to reach unprecedented levels. Even assuming that all such donations are made in good faith (namely, without expecting anything in exchange, for example in terms of influence over future policy-making), the fact remains that in this way, the super-rich are exerting a substantial influence over the election process, acting as super-voters. However, in a democracy, as Aristotle pointed out, all voters are supposed to be equal.

Read More:
Guido Alfani’s ‘As Gods Among Men’ Offers a Surprising History of the Rich in the West

[1] Citation from Guido Alfani, As Gods Among Men. A History of the Rich in the West, Princeton University Press, 2023, p. 213.

[2] https://info.publicintelligence.net/PujoCommitteeReport.pdf