A treacherous alliance is growing that will undermine democratic institutions in the US and elsewhere.

The United States presents itself as the beacon of democracy in contrast to the autocracies of China and Russia. Yet American democracy is in danger of succumbing to the same sort of oligarchic economics and racist nationalism that thrive in both these powers.

After all, it wasn’t long ago that Donald Trump – who openly admired Xi Jinping and Vladimir Putin – encouraged racist nationalism in America while delivering much of the US government into the hands of America’s super-rich.

Now state-level Republicans are busily suppressing votes of people of color and paving the way for a possible anti-democratic coup, while the national Republican party excuses the attack on the Capitol – calling it “legitimate political discourse” – and censors Representatives Liz Cheney and Adam Kinzinger, the only two congressional Republicans serving on the panel investigating that attack.

America’s oligarchic wealth, meanwhile, has reached levels rivaling or exceeding those of Russia and China. During the pandemic, America’s 745 billionaires increased their holdings by 70%, adding $2.1tn to their wealth in just over a year.

A portion of this wealth is going into politics. As early as 2012, more than 40% of all money spent in federal elections came from the wealthiest of the wealthiest – not the top 1% or even the top tenth of the 1%, but from the top 1% of the 1%.

Now, some of this wealth is supporting Trumpism. Peter Thiel, a staunch Trump supporter whose net worth is estimated by Forbes to be $2.6bn, has become one of the Republican party’s largest donors.

Last year, Thiel gave $10m each to the campaigns of two protégés – Blake Masters, who is running for the Senate from Arizona, and JD Vance, from Ohio. Thiel is also backing 12 House candidates, three of whom are running primary challenges to Republicans who voted to impeach Trump for the events of January 6.

It’s not just Republicans. Last year, at least 13 billionaires who had previously donated to Trump lavished campaign donations on Democratic senators Joe Manchin and Kyrsten Sinema, according to an analysis of Federal Election Commission records.

The combination of oligarchic wealth and racist nationalism is treacherous for democratic institutions in the US and elsewhere. Capitalism is consistent with democracy only if democracy reduces the inequalities, insecurities, joblessness, and poverty that accompany unbridled profit-seeking.

For the first three decades after the second world war, democracy did this. The US and war-ravaged western Europe built the largest middle classes the world had ever seen, and the most buoyant democracies.

The arrangement was far from perfect, but with the addition of civil rights and voting rights, subsidized healthcare (in the US, Medicare and Medicaid), and a vast expansion of public education, democracy was on the way to making capitalism work for the vast majority.

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