By 1937, John D. Rockefeller had accumulated $1.4 billion from his monopolistic oil business. That was 1.5% of the whole nation’s GDP, concentrated in one person. It conferred vast political power on him and his family. His descendents were to include New York Governor and US Vice President Nelson Rockefeller, Arkansas Governor Winthrop Rockefeller, West Virginia Senator and Governor John D. Rockefeller IV, and other prominent leaders of government and philanthropy. In Aristotle’s terms, the Rockefeller family and their peers added an element of oligarchy to the mixed regime of the United States.
However, per Thomas Picketty’s argument, economic growth was larger than the returns to capital from 1913-2000. Meanwhile, the Rockefeller clan grew in number. They earned money from their capital (and from other business activities), but the country grew at a faster pace. As a result, according to Forbes, there are now 200 descendents of John D. Rockefeller, and they have $8.5 billion in combined assets. Their total wealth is 0.05% of the nation’s GDP. It is shared 200 ways, leaving each Rockefeller with an average share of .0002% of GDP.
In short, John D. had a slice of the national pie 7,500 times bigger than that of his descendents. To the extent that today’s Rockefellers have an advantage in politics, it is mainly because the generations after John D. genuinely served the public and built up some honor. His son John D. Jr. quit active management of the family business and devoted himself to philanthropy with a strongly progressive tilt. Many of his children and in-laws then became public servants.
Arguably this happened because, in Aristotle’s terms, the Rockefellers lived in a constitutional polity, or at least a society that aspired to be one. In any proper constitutional polity, “The end of the state is the good life … by which we mean a happy and honorable life” (Politics 3.9). Congress forced John D. Jr., to testify about the Ludlow Massacre, and then Mother Jones herself persuaded him that his testimony had been false. “Mackenzie King was later to say that this testimony was the turning point in Junior’s life, restoring the reputation of the family name; it also heralded a new era of industrial relations in the country.”
In a constitutional order, the rich can grow richer than they were, but their ability to convert their wealth into power must shrink over time; they must be required to explain and justify their behavior; and they must be disciplined by the need to demonstrate public service.
But Aristotle observed a cycle of decline before his own day: “The ruling class soon deteriorated and enriched themselves out of the public treasury; riches became the path to honor, and so oligarchies naturally grew up.” Signs that the same decline is happening today:
- The owners of capital and their heirs accumulate growing shares of GDP.
- Capital can be converted into political power. Restraints are removed.
- Wealth (inherited or otherwise) confers respect or honor, independent of genuine public service.
- The very wealthy are insulated from their critics and do not have to explain themselves.