The term "oligarchy" is bandied about in the public sphere with considerable frequency these days, more frequently than we have heard since the Progressive Era. People who write the kind of stuff I write love words like "oligarchy" or "plutocrat." They are shiny, phonetically pleasing, five dollar words with a distinctly nasty edge. Rarely are these terms used accurately, though. Oligarchy, for example, is often used generically to refer to a group of people who have a lot of power.
Oligarchy, as Webster's and any half-decent Intro to Government textbook will tell you, is "a form of government in which power effectively rests with a small elite segment of society." Perhaps a democratic theorist who studies these things for a living could pick nits with me, but I find this definition lacking. What does "power" mean in this context? Economic power? Political power? Cultural influence? Thousands of different groups or individuals could fall into those categories. Nor does size help us define things. Big and Powerful are often poorly correlated.
A better definition of oligarchy, I believe, is a group of social elites with sufficient power (economic, political, religious, etc.) to destroy the society by their actions. In other words, if society can function without you, you are not part of the club. If it can't, call the printer and get "Reigning Oligarch" added to your business cards. Wal-Mart is huge and certainly society would be affected by their collapse, but we'd be fine without them. We could shop elsewhere. So they haven't quite earned membership to the club yet. They can't credibly threaten to bring the whole society crashing down. You're not an oligarch until you can stare the country in the eye and say "I will fucking end you." And mean it.
For the first 75 years of American history, the landed plantation aristocracy of the South constituted a legitimate oligarchy. They controlled 99% of the nation's export economy (which prior to income taxation was essentially the only real source of revenue for the Federal government) and its food supply. This power was concentrated in an incredibly small number of hands but they controlled states large enough to exercise effective veto power over the entire political process. They kept slavery off the political agenda – and more generally got their way about, well, everything – for decades because the Federal government was weak and they could credibly threaten to secede and do serious harm to the North. It is not a coincidence that Washington didn't call their bluff until the balance of economic power had shifted to the industrial North in the 1850s.
After the Civil War the banks on Wall Street assumed this role. Their stranglehold on the country was made apparent in the Panic of 1907 when, lacking a central bank to inject liquidity into the economy, the embarrassed Federal government had to go to J.P. Morgan hat-in-hand and beg him to personally rescue the economy. Like, with his own money. It took the Crash of 1929, however, to shock the government into taking back some of that power from the financial industry.
Now we are right back in 1907. The giant banks, unencumbered by Glass-Stegall, that brought us to ruin have spent the last year and most of the billions in taxpayer bailout dollars getting even bigger. As any decent financial blogger has noted repeatedly over the past year, the bailout did not come with strings attached. Lacking any meaningful financial regulation, the crisis has produced nothing but bigger banks operating much the same as they have been for the past two decades. And when the next collapse comes a few years from now, Congress will bail them out again. Because they have to. Because a small number of players control the banking and financial industries and their collapse means the collapse of our entire economy (not to mention the U.S. Dollar).
Thirty years of downsizing, privatizing, and deregulating have left the Federal government too weak to even administer TARP – they contracted that work out to Goldman Sachs. Let that sink in; Washington paid Goldman Sachs to administer the bailout plan for the industry GS helped bring to ruin, not because of crony capitalism but because Treasury simply lacks the power and resources to do it. The phrase "Too big to fail" is nothing more than a tacit admission of being on the short end of an unequal power sharing arrangement.