The term “oligarch” derives from “oligarchy,” a system of government in which a small number of people maintain power. Oligarchies most often connote tyrannical or despotic rule by a small number of people who control or limit political agency of the majority not in control. Rulers in an oligarchy may establish power via nobility, social caste, religion, economic status, or any number of other factors.
In contemporary terms, an “oligarch” most commonly refers to an individual who is a member of an elite economic group and who maintains power through extreme wealth, important business ties, or similar connections.
- Most commonly today, the term “oligarch” refers to an individual who derives political power from their extreme wealth or significant business interests.
- The term oligarch is derived from “oligarchy,” meaning government by the few. Oligarchs can rule as a result of noble status, religion, language, or many other factors.
- Many societies have oligarchs, but some of the most common countries cited include Russia, China, and Iran.
- While oligarchies are commonly associated with despotic or tyrannical leadership, many forms of government can include elements of oligarchy.
The term “oligarch” is commonly associated with a group of powerful business leaders in Russia, most of whom built or consolidated their wealth following the dissolution of the Soviet Union in the 1990s. As the Soviet state collapsed, the future of state-owned assets and resources became unclear. A small group of well-connected businessmen jumped at the chance to privatize and take ownership of these assets and resources. Russian oligarchs include owners of mining and steel operations, media conglomerates, and similar operations that were formerly state-run.
Russian Oligarchs and the Government
The relationship between Russian oligarchs and the Russian government has been extremely volatile. While Boris Yeltsin was president of Russia in the 1990s, oligarchs became heavily involved in the country’s politics. Recognizing that connections with the government could provide insider information that could steer their own financial decisions, a small group of business tycoons became known as the “semibankirshchina” or “seven-banker outfit.” This group served as informal advisors to Yeltsin and steered his policies, sometimes even engineering the installation of their own politicians into positions of power.
When Vladimir Putin claimed the presidency in 2000, he drew attention for his efforts to crack down on oligarchs. He made efforts to break up some of these individuals’ companies and imprison some of the oligarchs themselves. However, some have argued that this punishment was intended primarily to exert control over oligarchs, rather than to rid the Russian government of corruption.
During Putin’s presidency, a significant number of new oligarchs have consolidated wealth and power. These include individuals with long-standing ties to Putin, business executives who have risen to power in the last two decades, and elite national security and military leaders. Typically, these new oligarchs have close ties with Putin’s government.
Many Russian oligarchs have developed a reputation for living lavish and ostentatious lifestyles. Oligarchs are known for investments in superyachts, mansions around the world, soccer teams, and other ultra-luxury items available only to the richest individuals in the world.
Since Russia’s invasion of Ukraine in February 2022, the United States, the European Union, and other nations have instituted strict sanctions against the Russian government. President Biden announced that the U.S. would “identify, hunt down, and freeze the assets” of oligarchs. There have been many reports of seized oligarch assets in recent weeks.
What Countries Are Oligarchies?
Russia is a country commonly referred to as an oligarchy. However, several other countries could be said to have oligarchs, including China.
What Makes Someone an Oligarch?
An oligarch typically refers to an individual who is extremely wealthy and exerts significant social or, especially, political power. Oligarchs are often associated with corrupt governments and despotic rulers.
How Do Oligarchs Become Rich?
Oligarchs may gain wealth through a variety of different means. In the case of Russia and former Soviet states, many oligarchs amassed wealth as the country moved from state-controlled to privatized industry after the fall of the Soviet Union. Many oligarchs gained control over formerly state-run operations, including energy, mining, and media companies.