Shadowing Practice: Oligarchy is worse than you think - Learn English Speaking with Video
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I want to tell you a story.
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Miami, 1973.
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An executive from a bank in the Bahamas is flying in to go on a date.
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Wait, actually, I'm going to let Adam tell the Miami story.
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Adam is my producer, who a few months ago I asked to look into the word oligarchy.
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This concept that I hear about a lot lately, but I don't really understand what it means.
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And we've been talking a lot.
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Good afternoon, Adam why don't you take me through where you're at maybe
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what this project really is is us weekly checking in about rich people for the rest of our lives
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it could be do you mind if i burn some saudi incense
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while we talk why we'll obviously sort of figure out what
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like are you eating a bell pepper hole just like go miami 1973.
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so this guy is the vp of a bank in the bahamas
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and he is in town on business and
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while he's there he has a date with this young woman
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okay woman picks him up at the airport for dinner
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but first they make a stop at her apartment where he leaves his briefcase
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and what the man doesn't know is that the woman is a private investigator
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and the friend who set them up is an informant for
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the irs the us's tax collection agency he's an informant for a division of the irs
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that back then was called the intelligence unit nice
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so they get back in the car they continue on to dinner
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and the friend who set them up the informant he enters a woman's apartment takes the briefcase
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and brings it to some irs agents
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and they start to photograph everything inside the briefcase once
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they're done put everything back they send the informant back to the apartment with the briefcase
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he leaves the briefcase there exactly as it was a couple comes back from their date.
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Guy has no idea that anything happened, takes his briefcase, flies back to the Bahamas.
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Inside those briefcase files, the IRS agents basically find exactly what they were looking for, which is a list of the bank's clients,
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the people who are using this offshore bank in the Bahamas to evade taxes.
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Okay.
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And as they also expect, the list includes multiple known figures in organized crime.
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But the vast majority of the hundreds of names on the list are not known criminals.
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Instead, they realize that they are looking at a list of some of the richest people in America.
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And the investigation becomes this historic turning point.
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U .S.
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investigators realized the degree to which the richest people in the U .S were moving
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and hiding these massive amounts of money from the government in order to avoid paying taxes.
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This intelligence unit basically realizes we've been trying to go after organized crime for tax evasion.
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We haven't even touched the 0 .1 % in the country.
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That may be where the big money is in terms of collecting these unpaid taxes, right?
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So here's what happens next.
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The IRS has a new director.
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And when this new director learns about this investigation, he steps in.
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He personally stops it from happening.
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Whoa, whoa, whoa.
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So the new head of the IRS doesn't like
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that there is a crackdown on rich people hiding their money from the government?
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This is like a former elite tax lawyer.
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And he basically is like, this is not a proper use of the IRS's resources.
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We shouldn't be spending all this time going after rich people.
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I'm shutting it down.
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And not only am I shutting it down, the intelligence unit is getting refocused and renamed.
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It's now going to be called the Criminal Investigation Division.
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In other words, we're going to be focusing on like typical crime, not ultra rich tax evasion.
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The U .S decides at the very top, basically to turn a blind eye to the ways that the ultra -rich are avoiding taxes.
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Whoa.
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In 1973, the year of that Miami briefcase heist, the richest 0 .1 % of Americans had 9 % of the country's wealth.
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Today, they have double that.
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A group of Americans that would fit inside a double -decker bus has as much money as half the entire population.
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And listen, I understand that the super rich live in a completely different universe.
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We've made one or several videos about that.
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But today we're gonna do something else.
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We're gonna understand why it's so hard to change.
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The very weird reality is whether we vote for liberals or conservatives, the world keeps getting more and more lopsided not less
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and I know you know this like you don't need
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this chart to tell you you can feel it the richer getting richer
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and you aren't and you feel like you can't really do anything about it so
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that story about the briefcase we heard
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it from this professor who like a few weeks ago sent us
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this email he had just gotten done watching one of our old videos
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and he sent us this like quick note really short quick note to let us know
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that we left like a couple things out.
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And yeah, that short note.
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It was the video that we made about the creation of the U .S.
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Constitution.
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And basically what he wanted to tell us was
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that there is another way to look at that story of the founding of the United States.
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And in his words, it's the story of a clash between democracy and oligarchy.
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Oligarchy.
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Oligarchy.
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Oligarchy.
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Oligarchy.
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Oligarchy.
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Oligarchy.
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Oligarchy.
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Oligarchy.
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Oligarchy.
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Oligarchy.
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Oligarchy.
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Oligarchy.
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Oligarchy.
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I've been hearing this word a bunch lately.
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I remember learning about it in school.
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It comes from this root word olig, which means like few or small in number.
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And arky, which means like to rule.
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It's a system where a small group of people rule.
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My other association with oligarchy is like Russia.
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Rich oligarchs who control
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Russia's industries, like telecoms and oil and whatever.
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And the reason we're hearing it all the time lately is because of these guys here in the U .S.
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Our billionaires, or more specifically, these centibillionaires, guys who have more than a hundred billion dollars, the richest of the rich in the entire world.
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Bezos, an oligarch.
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Zuckerberg, one of the oligarchs.
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Musk is an oligarch.
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But Adam is telling me that there's a deeper story here.
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If we want to understand oligarchy, they're like the tip of the iceberg.
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That there's actually something going on that is harder to see, but much more important to understand.
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And much more powerful than I ever imagined.
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And once you understand it, you start to see it everywhere.
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And help me out, what's everyone's favorite subject here?
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Money, alright?
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Okay, this is Kevin Trudeau.
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He was like a 1990s infomercial superstar.
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Mega Memory, featuring Kevin Trudeau.
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He was a best -selling author.
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He was a superstar pusher of quack pseudoscience, which is to say he was basically kind of a scam artist.
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Your wish is your command.
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Love that.
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He was sort of like a catch -all infomercial guy.
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He was a classic infomercial pitchman, basically.
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Knowledge is power, but only if you can remember it.
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And he is easy to laugh at, but he also got insanely rich.
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It's disputed, like, how much money he was actually worth, but, like, it's somewhere in the range of a few hundred million dollars is,
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like, what he eventually built this fortune.
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A few hundred million dollars in, like, what is this, the 90s or something?
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Yeah.
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He got real successful off these infomercials.
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He was a joke, but he was a rich joke.
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And eventually the U .S government caught up with him.
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The government sues him, and eventually they jail him and order him to pay back almost 40 million dollars.
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As this is all going on, before they issue that ultimate judgment of this is what you have to pay back, he knows what's coming.
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And he's like, must get money out of the U .S and into banks overseas.
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Every company needs accounts offshore.
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This is this guy typing this right before he goes to jail.
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And the government demands that he pays a bunch of money.
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So once the government does that, though, it's too late.
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His money managers have already moved all this money to Belize and Liechtenstein and Seychelles and Mauritius.
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Like, it's all gone, right?
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And it literally says in the filing, it was beyond the FTC's reach, beyond the government's reach.
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The United States just literally did not have the jurisdiction to touch.
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So he had been completely successful in hiding his money from the government.
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He said, I got no money.
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Okay, wait, this feels like we're talking about offshore tax havens or like hiding your money.
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I thought we were making a video about oligarchy.
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This is a fair question.
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We are talking about oligarchy, but not because Kevin Trudeau himself is an oligarch.
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It's kind of questionable whether he was, right?
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The reason we're looking at him this early in the story is because he gives us a very important feature of oligarchy.
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Which is what?
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It's that wealth, at a certain level, it can give you the power to evade your own government.
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And that idea is basically going to be what we look at for this entire first part of the story.
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Part one is going to be about the way that the ultra -rich use that power.
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which is they use it to stay rich.
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That is kind of definitionally what oligarchy does.
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How the rich use power to stay rich.
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And then part two is going to be this other question.
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We're going to step back a little bit and we're going to ask sort of, okay, this is what oligarchy looks like.
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Why can't we, the people, seem to do anything about this, right?
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Like we live in a democracy, we have power.
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Why does the power of the rich seem so ingrained that it seems like our political system cannot change that?
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And that's going to require us to look back in time a couple hundred years.
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Okay, so why the system has such a hard time reining this in?
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So first is the machinery that makes that happen, a .k .a the people who helped Kevin Trudeau move all that money.
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Because they, those people, they were part of something big and important.
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Something that scholars call this wealth defense industry.
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Wealth defense industry.
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Wealth defense industry.
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The wealth defense industry.
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A loose network of millions of lawyers, accountants, lobbyists, tax experts, political operatives, money managers, think tanks.
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As state planners, all working for one simple goal, to keep the government from taking rich people's money.
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You don't like taxes, you don't like certain policies,
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you move around the globe and the wealth defense industry offers all of those services to be able to do that.
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That's Jeffrey Winters.
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He's the guy who emailed us, literally wrote the book on oligarchy.
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Has a new book that just came out that is about oligarchy today.
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A lot of the stuff in this video is coming from Winters' new book on oligarchy.
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It's called The Blind Spot.
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We did read more than one book for this video, but Winters is kind of the oligarchy guy.
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And he has kind of a unique way of thinking about oligarchy.
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And it starts with this idea that wealth doesn't buy you power.
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Wealth is itself a type of power, if that makes sense.
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People are empowered in different ways.
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And one of the ways is concentrated wealth.
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Those people who are empowered in that way are oligarchs.
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This is like a different definition from what a lot of modern scholars would tell you.
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A lot of them will tell you more broadly, oligarchs are just people who are wealthy and powerful.
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Oligarchy is about the marriage of political and economic power.
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So the blending of political and economic power.
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But Winters is more specific.
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He says that wealth is power.
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And what that means is that we have to kind of shift what our idea of oligarchy is.
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Yeah, because, like, I'm starting this video, candidly, with what I learned in school.
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It's like you're learning about the different types of governments.
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Oligarchy is a type of government, we learn.
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It's the rule by a small number of people.
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He is saying you have to let go of
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that idea of a government ruled by a small group of people in two ways.
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Number one, it's not just anyone.
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It's not just a group of randomly selected 10 guys who are running a government.
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Oligarchy, this goes back to Aristotle, oligarchy is specifically about the rich.
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That's the first thing.
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Second thing is you don't have to be running a government.
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Oligarchy means rule, but that can just mean power.
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It can just be the power held by the rich.
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They don't necessarily need to be in an official role, but nonetheless exercise outsize power for their own personal interests, their own personal wealth.
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So if oligarchy isn't rich people running a government, what does it actually look like?
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So for the most part, it looks like this obsession that extreme wealth gives you.
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It gives you power, but it also gives you this specific obsession with protecting that power.
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Throughout history, if you have an enormous fortune, others are threatening it.
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Other oligarchs threaten oligarchs.
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So one way that the wealthy get much wealthier in feudal times, for example, is to knock off other oligarchs and take everything they have.
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In other words, oligarchs in these days had to do literal wealth defense, like physical.
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What happens in the modern state is that for the first time,
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all of the defenses of wealth and property are actually in place by an armed state.
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That's what's different.
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Oligarchs are willing to give up their role as rulers
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and being armed in exchange for a very strong guarantee from the state to do those functions,
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which allows oligarchs to appear as simply wealthy, not needing to be political, not relying on coercion.
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But just because the state technically is meant to protect your wealth and your property for you, it doesn't mean that your wealth is completely safe.
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States can be redistributive.
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They can use taxation and other kinds of policies to reduce the overall wealth of oligarchs and redistribute it in society.
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So historically, being an oligarch meant having to use your power to defend your wealth this way.
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Today being an oligarch still means using your power to defend your wealth, but now you're trying to defend it against this.
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Against the government trying to tax you.
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So my next question is, what does this actually look like today?
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Banking bombshell causing shockwaves around the world.
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Richest most powerful people on the planet.
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Hiding their money in an effort to avoid taxes.
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Global shadow financial system for the rich.
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Secret offshore accounts.
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Money laundering.
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Widespread corruption and tax evasion.
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Panama.
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Panama.
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Panama.
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Panama.
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Panama Papers.
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Panama Papers.
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I remember the Panama Papers story breaking like a decade ago.
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Yeah, it was huge.
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And I think the reason that I didn't understand it is it was necessarily a very complicated story.
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It involved the analysis of just like terabytes of data and the mapping of connections.
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The Panama Papers were the leech documents of this one company based in Panama.
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They were called Mossack Fonseca, basically a one -stop shop for wealth defense.
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They served lots of different types of people.
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So there were criminals among their client base.
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There were also politicians.
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There were also like just regular old millionaires, right, who wanted to like use them to set up a trust or something.
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But a huge part of their client base was oligarchs.
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The key thing about tax avoidance is you can only afford to do that once you've amassed a certain amount of capital.
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An echelon of services that is only available to the richest of the rich.
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At the core of what these sort of major players in the wealth defense industry are doing, it's actually not that hard to understand.
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If you imagine any kind of asset, it can be money, it can be property, it can be stock or whatever.
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The government can only tax an asset if it knows who owns it, because you can't tax nobody.
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And so the job of the wealth defense industry is to muddy the link between an asset and its owner.
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You can see the asset, but you don't know who owns it.
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And you can see the rich person, but you don't really know what they own.
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The point is that the connection between asset and owner runs through a maze that is impossible to navigate.
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The webs are different every time.
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These shell companies, you can't emphasize how important they are to everything from campaign finance
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and financial secrecy and offshoring to the rise of oligarchy.
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They are this kind of core ingredient that touches on everything.
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It sounds like this is supposed to be shadowy and difficult.
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I would love to understand at least a teaspoon of how these people hide their money.
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So it's the whole thing here is that it's complicated.
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This is sort of like what somebody laid out on a napkin for me.
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On a basic level, you have investors or limited partners and there's city fund administrator.
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All of this comes down to a Cayman.
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Cayman?
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Right.
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There's a management agreement with an investment manager.
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It's a subsidiary in Hong Kong.
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Private placement memorandum.
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It's structured to have investments in Russia, Africa, Ukraine, Southeast Asia.
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Every single person only has a view of the structure that they worked on.
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Okay, well, I didn't understand any of that.
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Okay, so they're hiding their money.
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They're doing it super well.
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How much are we talking here?
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The amount of money that governments around the world basically don't get to collect in taxes globally, it's about half a trillion a year.
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Right, and that's not the amount of money that's like offshore.
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Bad amount of money is like, you know, between 10 and 15 trillion right we're just talking about like the money
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that would be generated by that money that governments could collect in taxes
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that they could use to fund programs to help their people half a trillion every year
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they're losing out on in the u .s alone it's in the neighborhood of like a hundred billion
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that we miss out on every year it's not remake the united states government money
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but it is a couple government agencies several times over
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and in 2001 they determined that the average american is paying 15 percent more in taxes
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because of the taxes the ultra -rich aren't paying the whole problem is anything that's that's not being paid
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that should be paid i mean that's basically what the honest taxpayer is making up
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which basically means that everybody is paying 15 more that's 25 years ago
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and i got news for you ultra -rich pay less in taxes than they did 25 years ago
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so that number is almost certainly more than uh 50 today
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so we pay more in taxes because these guys hide their money from the government well
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now to be 100 clear wealth defense encompasses like a lot more than just tax evasion
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when these guys do wealth defense
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it does look different right like the world's 40th richest guy very rich billionaire the state
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that he lived in was going to raise taxes on the rich
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he spent a few million dollars on an ad campaign to defeat the law
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it worked now he pays way less in taxes because of it
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or there's this australian mining billionaire australia put a new tax on mining so he started his own political party,
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got a few people into parliament, parliament repealed the tax.
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These things are wealth defense too, but they are like one part of it.
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And what Winters and people like him say is that the oligarchs,
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the people whose wealth gives them power and whose power they use to defend their wealth, right?
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It's not just Bezos and Zuckerberg.
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It's a class of thousands upon thousands, most of whom you have never heard before.
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Not long ago, Elon announced that SpaceX is acquiring XAI, which could create the most powerful tech company in the world.
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And as a handful of billionaires continue to expand their influence across AI, media, and geopolitics, the line between corporate
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and government power is starting to blur in strange and kind of dangerous ways like we've never seen before.
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That's kind of why we're making this video.
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These shifts are happening incredibly quickly, and the stakes couldn't be higher.
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Who controls the technology?
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Who shapes the information we receive who actually holds the power
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and how the world is changing
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because of it has become harder than ever to follow through the noise
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which is why i've been partnering with ground news who's today's sponsor
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i've partnered with them for over a year ground news is an app and a website that
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With that, let's get back to our story on oligarchy.
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I almost automatically had this picture of like, okay, this industry is doing so much damage to our society in a way.
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It must be masterminded by a few nefarious people by a cabal.
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And the bottom line is that if you want to picture like who are the workers in this industry,
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the best way to picture it is to go to Shutterstock and type in financial service worker,
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and that gives you the perfect picture of who is working in this industry.
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It's just this guy.
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Now we know what he's doing.
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He's just, he's setting up the shell company.
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Yeah, this one actually I think has a tough client because she gets kind of frustrated at this point.
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And probably like, if this pays well, which I imagine it does, you're actually attracting some of the best minds to go protect people's wealth.
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I mean, this is what Kimberly Hong told me, right?
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She teaches a lot of students who are there because they're like the smartest of the smart, not because they're the richest of the rich.
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And those people are like, listen, I'd love to work for a public interest law firm, but like.
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Even at the age of 21, they're like, well, how can I live a comfortable lifestyle?
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Well, to go work in the private sector, to lend your like talents and your brain to the private sector.
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And most students are pragmatic, right?
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And part of why I wanted to pull this stuff is that he just had a big idea.
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I mean, this guy just came up with like the thousandth iteration of the shell company maze structure
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that he came up with that day.
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These are not people who see themselves as doing bad things.
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And I don't know, maybe they aren't.
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These are just people with jobs.
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This is how I kind of look when I do my job.
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Many of the people that I study, they'll say, well, yeah, that's all true.
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But if the systems were different, I would do it differently.
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I'm just a cog in the system.
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Until the systems change, this is how I have to do business.
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These guys get really good at stuff and probably way better than the government gets good at enforcing stuff.
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The state in the United States now doesn't have the capacity to pay regulators the salaries
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that they can make in the private sector.
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So, the big lesson for me, the big reframe that I'm having right now is like,
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oligarchs are not just people who like buy elections and squash tax reform.
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It's actually a lot more vanilla.
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It's like people who can afford to hire these armies of wealth defense soldiers who help hide their money from taxes,
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like way more widespread and way quieter and way harder to actually see and track down.
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Right.
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And the thing that
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Winters wanted us to understand is that this level of wealth, it gives these people power whether or not they choose to use it.
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You can buy an election, you can make an effort to pay zero taxes, or you can not do those things.
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I would argue all of them are oligarchs, whether they're active or not.
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They can turn on that power anytime they want.
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And it's that capacity they have that we don't have, which distinguishes us from them.
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there's a youtube channel that has posted one viral video
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and never post it again they posted it in 2012
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you've probably seen it it basically visualizes how people believe wealth is distributed they believe
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that the top have more wealth but like around this much
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and then they believe that it actually should be distributed more like this
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and then the video shows how wealth is actually distributed whoa
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the question for me is like the majority of us are down here right why can't
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we do something about this yeah so this is where we got to talk about this study
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this is the study that we've already talked about in another video
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And when it came out in 2014, it was like a gigantic bombshell.
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Two political scientists looked at almost 2 ,000 policy cases over 20 years.
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They found that average citizens' preferences have essentially zero estimated impact upon policy change.
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To be clear, a bombshell among like 43 nerds at a conference in Southern California.
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Yes, it was covered by exactly one mainstream news show for about three minutes and then never spoken of again.
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But in the world of political science, this changed everything.
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OK, so let me show you what it actually says, right?
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What that middle chart is showing us is
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that for what they call economic elites or what you could call the ultra rich, the more that the ultra rich wants something,
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the more rich people want something, that's the horizontal axis, the more likely it is to happen in terms of policy decisions.
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So like if 100 percent of rich people want a certain policy thing to happen, you know, it's very, very likely to happen.
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There's a correlation between rich people wanting something to happen in terms of policy and it happening.
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And if you go to the top chart, that's showing that exact same thing, but for everybody else, not the rich people.
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And it's totally flat.
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It's like the more the average person wants it, it doesn't change the likelihood at all.
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It barely makes a difference in terms of policy outcomes what average citizens want.
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A sprawling data set highlighting this economic elite that is able to have all kinds of outsized influence on policy decisions,
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even if they're not politicians themselves.
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The problem with that is wealthy people's interests are not always aligned with the interests of ordinary people.
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You know, like mic drop.
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No kidding.
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This was a huge deal because basically the conventional wisdom in political science had been in a democracy, if something is more popular,
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it's more likely to happen.
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It's not a sure thing.
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But the more popular something is, probabilistically, it's more likely to happen.
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And this was basically saying, well, yeah, but if you pull apart the ultra -rich and everyone else,
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then you actually see that that's not the case.
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Is the implication here that, like, democracy is not a thing, that it's all fake?
426
What the study is basically saying is it's not saying your vote doesn't matter.
427
It's saying that your vote can matter as long as you're not in conflict with the ultra -rich on something.
428
In other words, if the ultra rich all agree
429
that they want something and all the everyone else agrees that they want something else, guess who's going to win pretty much every time.
430
Right.
431
But that's not every issue.
432
There are a lot of issues on
433
which the ultra rich as a class either don't care or they don't agree with each other.
434
Right.
435
And a good way to think about this is to sort of like visualize to picture the wealth pyramid as a triangle.
436
In reality, it's more like it looks more like the Space Needle or the Eiffel Tower.
437
You sort of have to like squish it like it goes like that.
438
pretend it looks like a regular triangle, right?
439
And sort of one way to think through different issues in society, different political issues, whatever, is that you can think about them as having A,
440
a vertical dimension, right?
441
Which is to say, if the rich are at the top
442
and everyone else is sort of at the bottom of the pyramid,
443
the vertical dimension of some kind of issue is what deals with any kind of conflict
444
or trade -off between the very wealthy and everyone else.
445
The question of higher taxes on the wealthy is the most obviously vertical question in politics, right?
446
But issues can also have a horizontal dimension.
447
That is like something that deals with the differences among the rest of us.
448
Like abortion, religion, basically culture wars.
449
You might call it like the things on which we fight each other.
450
And the truth is that on these issues, on issues that have a heavy horizontal dimension,
451
we do have a lot of freedom to determine the outcome as voters.
452
They're like, you guys, fight about marijuana legalization.
453
As long as you don't talk about taxes, that's fine.
454
and it turns out keeping people heavily focused on that left
455
and right of you dimension who's getting what down the street
456
or at my place of work distracts them from an ability
457
to all say well instead of what divides all of us what actually unites us
458
and that is the fact that we don't have much
459
and others at the top have a lot immigrants are taking our job we have a problem with white supremacy.
460
This transgender movement, this LGBTQ.
461
The right -wing mob.
462
Our number one political enemy is women.
463
A lot of these
464
Republicans are dumbish.
465
The truth is that every single one of those statements is one that oligarchs are very comfortable with you making.
466
And it's not because they all represent the same political view.
467
They extremely don't.
468
But it's because of who they all don't point the finger at.
469
And what Winters would say is that that is the exact reason why our politics, as practiced by our leaders, as practiced by our media,
470
allows such an open playing field.
471
What's so unique about our era is that we have what I call participatory inequality.
472
We actually have real freedoms.
473
Democracy is not fake.
474
It's not a sham, but it's very limited.
475
Democracy is real.
476
Oligarchy is real.
477
They coexist.
478
We live in both systems at the same time, right?
479
It is a balance.
480
It's an old balance and if things are feeling different to you right now, if the last...
481
10 years, you're all of a sudden feeling like people who are worth $100 billion or more,
482
they seem like they're really everywhere and they seem to really be controlling everything.
483
And, you know, they're buying these political campaigns and they're standing behind the president at the inauguration.
484
If it feels new, what
485
Winters would actually say is that it's not just that oligarchy just showed up, it's that it's getting more obvious.
486
We're in a moment of what I've called in -your -face oligarchy.
487
It is so visible.
488
I think partly what's happening is that people are beginning to say there's something
489
that isn't horizontal about this there's something vertical about it
490
and the last time oligarchs have been this visible this clearly present
491
was the gilded age if you're still watching this video it means
492
that you're probably really into this stuff you really want to understand the world
493
and so do the thousands of members of our club called NewPress.
494
NewPress is a place where smart curious people come to get a deeper version of what we do here on the channel.
495
In -depth interviews with the experts that we talk to, conversations between our creators, and the ability to connect directly with other members to talk
496
about what's going on in the world with other smart curious people.
497
Right now it's 60 bucks a year to become a founding member of the NewPress Club.
498
That money goes directly to supporting this work.
499
You can go
500
Go check it out at newpress .com, the link's in the description, let's get back to it.
501
These guys, you may not recognize all of their faces, but you know their names.
502
Rockefeller, Carnegie, Vanderbilt, Duke.
503
These are guys who made huge amounts of money in oil, railroad, steel, banking, real estate, tobacco.
504
They built huge empires in these industries, like over a hundred years ago.
505
And in many cases, they consolidated full monopolies over these industries.
506
Basically the same dynamics that we're seeing right now.
507
Increased monopolization, lack of actual taxation or success in implementing taxation.
508
Lots of brand new technologies and businesses getting in on them, making some people incredibly rich all while there was very little government regulation.
509
And the wealth concentration that it produced was gigantic.
510
By the late 1800s, the richest 1 % of Americans owned half the country's wealth.
511
These were these era's oligarchs.
512
And their wealth defense wasn't these stock footage guys.
513
It was government corruption, paying off local judges and US senators and entire state governments to do their will,
514
which is why they became known as the robber barons.
515
Back then they used another
516
Greek word, plutocrats.
517
Today we use oligarch.
518
But all of this inequality and corruption and unconscionable labor practices, all of this poverty at the other end of the pyramid,
519
it eventually produced a backlash.
520
In 1877, railroad workers went on strike in West Virginia.
521
It turned into a massive uprising that spread almost to the entire country.
522
It was the beginning of years of mass strikes.
523
Labor agitation.
524
And then this wasn't just strikes, this also gave way to populist politics politics, people who came into government looking to reform the system.
525
The very visibility of oligarchs then generated a backlash,
526
generated a kind of politics of limiting the power of the few.
527
And in 1890, Congress finally passed a major anti -monopoly law.
528
And then in 1894, we got the federal income tax.
529
The federal government now has the power to take the money from the top
530
that is highly concentrated and redistribute it to the rest of the country.
531
This was a very big deal.
532
But here's what happens next.
533
Less than a year after the income tax law has passed, the US Supreme Court steps in and votes five to four that it's unconstitutional.
534
Struck down.
535
eventually the gilded age would give way to what we call the progressive era
536
when reformers gain more power in the u .s
537
and they try to right a lot of the wrongs of
538
the gilded age strong anti -monopoly laws campaign finance laws constitutional amendments
539
that let us vote directly for our senators for the first time
540
which we couldn't do that before
541
and finally we did get an income tax we had to do it via a constitutional amendment
542
that was 1913 nearly 20 years after congress had first passed it
543
and now look what happens this line is the income tax for the top earners in the country
544
and this line is the concentration of wealth among the 0
545
.1 percent the top 0 .1 percent in america watch what
546
happens okay play the graph look at this graph look look the income tax goes up
547
this huge wealth inequality goes down the golden age of american
548
capitalism 1950s 1960 1970s where a lot of people made a lot of money
549
but it wasn't concentrated to the same degree
550
that it is now okay let's just hang on i want to just go back
551
because we got the income tax and it fixed a lot of things
552
and it was transformative but i just want to like review part of that story 1894
553
congress passes the income tax it goes into effect
554
it becomes law 1895 supreme court overturns it says this is unconstitutional
555
so it's a five to four decision which means
556
that five men overturn the representatives of the entire country
557
and then it takes almost 20 more years like a whole generation passes before we're able to actually get
558
that lawed via a constitutional amendment, which is insanely hard to pass a constitutional amendment.
559
The only way to stop the Supreme Court, which had made this decision in favor of oligarchs, was to change the Constitution.
560
There was no other way.
561
And this is the thing that Jeffrey Winters emailed us about.
562
He wanted us to understand that the American system, where five men can overrule the will of millions like this,
563
this is very, very deliberately designed.
564
This is an example of how oligarchy is baked into the system to begin with.
565
And to understand what he wanted us to know about this,
566
we have to go back even farther in history to the beginning of the United States.
567
So here's Jeffrey Winters' email.
568
Short email, as we've said.
569
Real quick note, he dashed off.
570
Love this guy.
571
He had just watched this video about how the American federal government was designed.
572
And I would love if every viewer paused and went to watch that video.
573
But if you're not going to do that, all you need to know to understand the point that
574
Winters wants us to understand is sort of two things.
575
Number one, federal U .S government, it's split into three sections, right?
576
Congress, the president, the federal courts.
577
So Congress, bicameral, split into two houses, right?
578
Lower house, the House of Representatives.
579
This one is voted on directly by us.
580
We get to vote on who our representative is and they represent us directly in the House of Representatives, right?
581
The Senate, today, we do the same thing.
582
Today, we do vote for who our senator is.
583
But for the first 100 plus years of the United States, it was not that way.
584
The way it's written in the Constitution is the state government, the state legislature gets together and they decide this is who
585
New York's senator is going to be.
586
So it's not democratically elected.
587
It's decided upon by the state.
588
The president, chosen by famously the Electoral College, which today, again, has a connection to how we vote in each of the states.
589
But at the time, didn't really, It was supposed to be the electors,
590
a wise group of men who was going to decide who the president was.
591
And then you have the federal court system
592
and who the judges who sit in the federal court system are selected by the president
593
and they are confirmed by the U .S.
594
Senate.
595
And the second thing you have to understand is that for any law to exist in the American system, all these bodies have to align.
596
So both houses of Congress have to agree to pass a law.
597
If either of them disagrees, it doesn't pass.
598
The president can always veto a law that he doesn't like.
599
And the court system can always decide this is unconstitutional.
600
This law is actually not allowed.
601
So there's a lot of different ways a law can fail in the American system.
602
And what we learn about in school is that's called checks and balances.
603
Another way of saying that is that it spreads power around multiple bodies.
604
And this is what we say in our video.
605
Spread around so it doesn't get centralized around a king.
606
Yes.
607
But what Winters was emailing us about, what he was saying, is that if you look at who's actually choosing,
608
who gets to be in these different bodies within the federal government, distributing power among them is not really spreading power around.
609
Because only this one part of it is designed to be responsive to the democratic will of the people,
610
and the rest of them are chosen by other powerful people.
611
The Supreme Court's role is to make sure democracy can't do certain things.
612
And the function of the Senate is to block what the House does.
613
That's its historic function.
614
Winters' whole theory of the founding of the United States is that the Constitution, the American Constitution, doesn't spread power around.
615
It is consolidating power with rich people. So in that
616
Constitution video, I remember taking great pains to go into these transcripts and really emphasize what these guys were saying,
617
what they were saying in that room, to sort of tell our story.
618
And you're telling me that there's an alternative set of quotes
619
that tells this other story that these guys were actually designing an oligarchy.
620
What were they saying?
621
I'm curious what those are.
622
It's true.
623
Like, you can go into the transcripts of the Constitutional Convention and you can tell two different stories.
624
Which of those stories is correct?
625
They're probably both correct.
626
So let's look at this one, right?
627
So you have James Madison warning that, you know, under democracy, poor and working people — or as he says,
628
those who labor under all the hardships of life and secretly sigh for a more equal distribution — under democracy,
629
those people are going to outnumber what he
630
He calls those above the feelings of indigence.
631
So rich people, right?
632
And that power will slide into the hands of the former.
633
In other words, democracy might not give rich people enough power.
634
Or there's another one.
635
Another founder, he basically reminds his colleagues, guys, remember, a big reason that we created the Senate was to secure the rights of property.
636
There's another one saying the evils we experience flow from the excess of democracy.
637
I don't know if any of these things is a smoking gun.
638
But to me, what it sounds like it adds up to is they weren't just sort of like ideologically skeptical of a democracy
639
that hadn't been tried before.
640
They were specifically skeptical of regular working and poor people having too much power.
641
It is this idea of a tyranny of the majority, that you need to balance out the majority with something else.
642
And this is a core part of America's system of government.
643
And I don't think it's wrong.
644
It's just that
645
Winter says there's another way to look at it.
646
What he says, basically, is that is a big part of why it's important to talk about the U .S.,
647
even though oligarchy is a global system.
648
The United States in the 1780s set the model for how oligarchy and democracy were going to coexist.
649
Many of the limitations on what democracy could do were thought up, put in place institutionally in the United States.
650
And that really became a model for democracies around the world.
651
So, what Winters would call the oligarchy that's baked into our system, this idea that you can't have a tyranny of a majority,
652
that you have to have these tempering forces that counterbalance what the majority wants, we definitely exported that.
653
It coexists with a true democracy, with a place where regular people do have a voice
654
but there's a tension and a spectrum between oligarchy
655
and democracy that's like a slider that goes back and forth
656
and we as we've seen that one graph that dips down
657
when the income tax comes in and then comes back up we're just sliding back
658
and forth on that spectrum and again the point is not
659
that like oh the US is an oligarchy at heart no it's
660
that the US is both of these things and globally
661
if you live in a democracy you won't certainly live in a system that is both of those things.
662
The U .S is not unique in this sense.
663
We're Americans.
664
We like to talk about America.
665
But the U .S is also important to talk about in this story because of our role
666
in the formation of what modern democracies look like, our role in terms of the concentration of wealth that we have here, et cetera.
667
At our founding, in our source code, oligarchy is right there.
668
So is democracy.
669
But they're both there.
670
We have within our reach a far more healthy society
671
but inequality tears at the fabric of society it wears it thin
672
and it increases those conflicts horizontally among us okay
673
so now what like what does all
674
this mean what can we do about it first let me just state plainly what i see is wrong here
675
it may be different than what you see is wrong here,
676
but my read in all of this is that it's not actually bad to have rich people in a society.
677
Someone who invented something, started a business, whatever, fine, get rich, sell your stuff, get customers, get rich, buy cool stuff, whatever.
678
The problem I think we can all agree upon is that
679
when a small group of the top rich people in a country play by different rules to protect their money.
680
That's wrong.
681
That's unjust.
682
That's money that belongs to all of us according to our laws.
683
That's oligarchy.
684
Rule by a few in the interest of those few.
685
And it happens through all this boring paperwork.
686
It's invisible.
687
It's hard to track down.
688
And it's incredibly hard to change.
689
I teach a lot of 19 and 20 year olds.
690
And one of the things that scares me the most about that is if they think politicians are greedy and corrupt,
691
then they're not going to participate.
692
And if they don't participate, there are no
693
Democratic guardrails that prevent the rapid concentration of wealth and power in the hands of a few.
694
And I think that's precisely what oligarchs want.
695
They want like a paralyzed and cynical body politic.
696
But there actually are a few things that we could change right now.
697
First, we actually have laws that would help this.
698
So we have something called the Corporate Transparency Act.
699
It is a law on the books.
700
Like we have a law that actually bans anonymous shell companies.
701
It created a whole reporting system inside the U .S.
702
Treasury Department.
703
And then in 2025, the Treasury suddenly made a rule that every U .S company is exempt from it.
704
Simply having transparency in this realm would have been a massive setback for oligarchs.
705
Next.
706
Let our government actually investigate financial crimes of the ultra -rich.
707
Right now, the government can't really investigate super -rich people
708
because super -rich people have armies of wealth defense professionals hiding their money for them.
709
We just don't have enough resources to actually fight that fight.
710
So instead, the IRS ends up going after like your rich dentist neighbor, instead of going after the billions that are being stolen away by oligarchs.
711
Properly funding the IRS, an agency
712
that every single person in this country hates is actually something we should do so they go after the right people.
713
Experts also talk to me about a wealth tax, so let's not just tax income, let's tax the actual wealth of the richest people.
714
Average citizens are already paying a wealth tax.
715
It's called a property tax.
716
It's assessed by the government.
717
You pay it annually.
718
But listen, for this to really change, it's going to have to be something deep and structural,
719
something that changes in the DNA of our country, how our system works.
720
Much deeper structural transformations that would really change the way wealth,
721
power, and its political influence would be felt.
722
And Winters in particular can get kind of radical here.
723
One is eliminate all senates.
724
Now someone would say, how do you do that?
725
It's in the Constitution.
726
And what I'm saying is, during ruptures, things which one would think are not possible become possible.
727
I don't know if we need to go that far.
728
I don't know.
729
Maybe. Who knows?
730
But there is another way of looking at this, which is that we can also tell ourselves different stories.
731
Would it be possible to disrupt this link between being rich and being good?
732
So many people take for granted that you need to run the government like you run a business.
733
It's not true.
734
They're not the same things.
735
But remember, we've done this.
736
A version of it.
737
We've made this kind of change once before.
738
We were in a situation where a few rich unelected dudes controlled the whole society.
739
And look, we reversed it.
740
But you know what?
741
That didn't happen all at once.
742
It happened because for decades, people were talking about it.
743
They were clamoring about something being wrong, calling it out, stewing on solutions, not letting this be normal.
744
And then it took a catastrophe, a world war, a Great Depression, to create the opening for those ideas to actually take root.
745
The idea is that what seems absolutely ridiculous,
746
undoable, not feasible, is actually possible during crises, during ruptures.
747
And the key question is, are you ready?
748
Which means today we need to be looking at this stuff.
749
We need to be questioning it, questioning our beliefs about it, so that when the moment is right,
750
we will be ready to upgrade our society to one that is hopefully a little more equal and a little more fair here.
751
Stories like this one look very different depending on where you read them.
752
Ground News helps me see those perspectives side by side.
753
Go to ground .news .johnnyharris for 40 % off the Unlimited Access Vantage plan to see for for yourself.
754
Thank you.
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Vocabulary and speaking notes for this lesson
This speaking lesson is built on the video “Oligarchy is worse than you think”. The speaker keeps coming back to these words: rich, wealth, oligarchy. This video has 607 sentences and 8579 words to shadow. The speech runs for 48:14. The speaker talks at a natural 178 words per minute, close to everyday conversation. 86% of the words are among the 3,000 most common in English; the rest is worth studying before you start.
Key vocabulary in this video
15 words from the video worth learning, with pronunciation and meaning:
| Word | Pronunciation | Meaning |
|---|---|---|
| ultra noun | /ˈʌltɹə/ | A political extremist, in particular |
| wealthy adjective | /ˈwɛl.θi/ | Possessing financial wealth; rich. |
| constitutional adjective | /ˌkɒn.stɪˈtjuː.ʃ(ə)n.(ə)l/ | Belonging to, or inherent in, the constitution or structure of one's body or mind. |
| concentration noun | /ˌkɑn.sənˈtɹeɪ.ʃən/ | The act, process or ability of concentrating; the process of becoming concentrated, or the state of being concentrated. |
| asset noun | /ˈæsɛt/ | A thing or quality that has value, especially one that generates cash flows. |
| dimension noun | /daɪˈmɛn.ʃən/ | A single aspect of a given thing. |
| offshore adjective | /ɒfˈʃɔː(ɹ)/ | Moving away from the shore. |
| whoa | /woʊ/ | Stop (especially when commanding a horse or imitative thereof); calm down; slow down. |
| defend verb | /dɪˈfɪnd/ | To ward off attacks against (something or someone). |
| shell noun | /ʃɛl/ | The calcareous or chitinous external covering of mollusks, crustaceans, and some other invertebrates. |
| vertical adjective | /ˈvɝ.tɪ.kəl/ | Standing, pointing, or moving straight up or down; parallel to the local direction of gravity; along the direction of a plumb line; perpendicular to something… |
| inequality noun | /ˌɪn.ɪˈkwɑ.lɪ.ti/ | A condition or state (of social, cultural, or legal matters) that is not equal; especially, such a condition that is thereby also unfair. |
| horizontal adjective | /ˌhoɹəˈzɑn.təl/ | Perpendicular to the vertical; parallel to the plane of the horizon; level, flat. |
| billionaire noun | /ˌbɪl.jəˈnɛɚ/ | Somebody whose wealth is at least one billion (10⁹) currency units (usually understood to exclude holders of hyperinflated currencies). |
| chart noun | /t͡ʃɑɹt/ | A map illustrating the geography of a specific phenomenon. |
Phrasal verbs you will hear
| Word | Pronunciation | Meaning |
|---|---|---|
| go back verb | To return to a place or state after having been there at a previous time. | |
| come up with verb | To manage to produce, deliver, or present (something) by inventing, creating, thinking of, or obtaining it. | |
| get back to verb | Return to (an activity) | |
| get in on verb | To gain participation in an activity, especially an attractive one. | |
| pay back verb | /peɪ bæk/ | To pay (a debt or the lender) so as to provide the entire amount of money owed. |
| set up verb | /ˌsɛt ˈʌp/ | To make ready for use. |
| track down verb | To hunt for or locate; to search for; to find. | |
| add up to verb | To have a particular effect in combination. |
Sentences worth repeating
Short, complete lines from the video that you can reuse in everyday conversation:
- Why don't you take me through where you're at.
- How much are we talking here?
- Why can't we do something about this?
- What can we do about it?
- I don't know, maybe, who knows?
Grammar in this video
The structures the speaker uses most, with the exact words from the video:
| Structure | In the video |
|---|---|
| Present perfect continuous have/has been + -ing — an action that started earlier and is still going on | we've been talking · we've been trying · I've been hearing |
| Conditional sentences if + clause, will/would + verb — a condition and its result | if the systems were different, I would do |
| Present perfect have/has + past participle — a past action that still matters now | haven't even touched · We've made · have already moved |
| Passive voice be + past participle — the focus is on what happens, not who does it | was called · are not known · be called |
Pronunciation to watch
The speaker uses 138 contractions and reduced forms, such as don't, they're, we're. Say them the short way, as you hear them.
- The “th” sounds: wealthy /ˈwɛl.θi/, thin /ˈθɪn/
- The “sh” and “zh” sounds: constitutional /ˌkɒn.stɪˈtjuː.ʃ(ə)n.(ə)l/, concentration /ˌkɑn.sənˈtɹeɪ.ʃən/, dimension /daɪˈmɛn.ʃən/, offshore /ɒfˈʃɔː(ɹ)/, shell /ʃɛl/
- Long words — get the stress right: constitutional /ˌkɒn.stɪˈtjuː.ʃ(ə)n.(ə)l/, concentration /ˌkɑn.sənˈtɹeɪ.ʃən/, inequality /ˌɪn.ɪˈkwɑ.lɪ.ti/, horizontal /ˌhoɹəˈzɑn.təl/, incredibly /ɪŋˈkɹɛdɪbli/
How to practise with this video
- Listen to the whole video once without speaking and note the words you do not know.
- Start at 0.75× speed, shadow it sentence by sentence, then go back to normal speed once it feels easy.
- Record yourself and compare with the original, paying attention to words like ultra, wealthy, constitutional.
What is the Shadowing Technique?
Shadowing is a science-backed language learning technique originally developed for professional interpreter training and popularized by polyglot Dr. Alexander Arguelles. The method is simple but powerful: you listen to native English audio and immediately repeat it out loud — like a shadow following the speaker with just a 1–2 second delay. Unlike passive listening or grammar drills, shadowing forces your brain and mouth muscles to simultaneously process and reproduce real speech patterns. Research shows it significantly improves pronunciation accuracy, intonation, rhythm, connected speech, listening comprehension, and speaking fluency — making it one of the most effective methods for IELTS Speaking preparation and real-world English communication.