Donald Trump campaigned as a populist in the last three presidential elections, vowing that during his presidency “the forgotten men and women of this country will be forgotten no longer.” But when Trump won in 2016, he announced plans to bring individuals from the most rarefied strata of American society – “people who have made a fortune” – into his administration. The billionaires in the first Trump administration then shaped economic policies that expanded their enormous wealth.
In his second term, Trump is on track to be surrounded by an even larger and wealthier group of billionaires-turned-politicians. For example, Trump intends to nominate superstar Wall Street financiers Howard Lutnick and Scott Bessent for two key economic positions. Trump picked billionaire investors to serve as deputy defense secretary and as head of NASA. Ultra-wealthy individuals are slated to head the Department of Education and the Department of Interior. Yet another billionaire was tapped to serve as U.S. ambassador to the United Kingdom.
Then there’s the entry of entrepreneur Vivek Ramaswamy and the world’s richest person, Elon Musk, into the political arena. The two will co-lead the newly created Department of Government Efficiency.
Billionaires often jump into politics, our research finds
Political scientists like us aren’t surprised that Trump found fellow members of the billionaire class willing to make the leap from business to politics. Our research reveals that ultra-wealthy politicians are a common fixture of politics around the world.
As a starting point, we used the 2017 Forbes Billionaires List to generate a global sample of ultra-rich individuals who might seek or hold political office. For each of the 2,072 billionaires in our sample, we looked for evidence that they pursued formal political positions (whether an elected or appointed post) within their country’s established institutional structures.
We found that 11.7% of the world’s billionaires have sought or held a formal political position. In other words, a random draw of nine billionaires includes at least one billionaire with political ambitions that go well beyond the occasional campaign donation.
Like Trump, when billionaires formally enter politics, they tend toward the right side of the ideological spectrum. While research shows that the “merely” wealthy corporate American elite has drifted to the left, the smaller but much richer billionaire class gravitates toward the Republican party. Our data reveal a distinct rightward tilt in the partisan leaning of America’s billionaire politicians. In fact, we found there are two and a half times more GOP-affiliated than Democratic Party-affiliated billionaire politicians. The rightward lean of billionaire politicians exists outside the United States, as well.
Russia and China produce the most billionaire politicians
Interestingly, while the U.S. produces the most billionaires, the country isn’t the most prolific producer of billionaire politicians. The share of American billionaires who formally enter the political sphere (3.7%) falls below the global average in our study. And it is well below the rate at which Chinese (36.4%) and Russian billionaires (21.3%) seek and hold formal political posts. In fact, those two authoritarian countries account for about half of the billionaire politicians in our dataset.
This begs the question: Why are billionaire politicians more common in autocracies? In democracies, the exercise of “stealth politics” typically offers the ultra-rich less costly ways to achieve their policy goals. After all, billionaires that use indirect means of influencing political outcomes in democracies don’t have to endure the hassles of campaigning, the public scrutiny that accompanies office-seeking, or the costs of disclosing assets and setting up blind trusts to comply with conflict-of-interest rules.
In autocratic countries with “extractive” institutions – countries that lack fair elections, independent media, and impartial application of the rule of law – directly entering politics offers the superrich more reliable ways to protect their wealth. In China, for example, billionaires serving in the country’s rubber-stamp legislatures may garner approval from Communist Party leaders and acquire valuable political contacts that can help expand their financial interests. And in countries like Russia, the ultra-rich may seek office to demonstrate fealty to President Vladimir Putin and minimize the risk of wealth confiscation.
Why are U.S. billionaires signing up to serve?
While many worry about the threat Trump poses to democracy, the U.S. is not an authoritarian regime. Does that mean the American billionaires who become politicians do so mainly to serve the public interest? Or, like billionaires in China and Russia, are they seeking to preserve and increase their personal riches? We don’t yet know precisely why so many ultra-wealthy individuals chose to throw their hats into the political ring after Trump’s election. But there are reasons to suspect the wealth-defense motive matters for billionaire politicians in democracies, too.
It’s not hard to link the interests of the billionaires to three key issues on the economic agenda. First, the 2017 tax bill was particularly advantageous for the wealthy. Extending the tax cuts beyond the bill’s 2025 expiration date is likely to be a high priority for the representatives of the billionaire class.
Second, a host of regulatory issues intersect with individual billionaires’ financial interests. Elon Musk’s well-documented entanglements with federal regulatory agencies – and the dependence of several of his companies on government contracts – raises the possibility that having the ear of the president will yield favorable treatment. Other billionaires no doubt would like to have similar access to the White House.
Third, Trump has made it clear he plans to shelter the U.S. economy behind a wall of tariffs. Those plans now threaten billionaire-led firms that depend on imported products and book huge profits from manufacturing and sales in foreign markets. Holding a position in the next Trump administration may give U.S. billionaires an inside route to securing valuable exemptions from costly tariffs.
Given the potential overlap between the political influence and pecuniary interests of America’s billionaires, there is a risk that government by billionaires could become government for billionaires.
Daniel Krcmaric is associate professor of political science at Northwestern University. He is the author of The Justice Dilemma: Leaders and Exile in an Era of Accountability (Cornell University Press, 2020).
Stephen C. Nelson is associate professor of political science at Northwestern University. He is the author of The Currency of Confidence: How Economic Beliefs Shape the IMF’s Relationship with Its Borrowers (Cornell University Press, 2017).
Stay up to date on all things politics and political science. Sign up for Good Authority’s weekly newsletter by entering your email address in the box below.
