Aplutocracy (from Ancient Greekπλοῦτος (ploûtos)'wealth' and κράτος (krátos)'power') orplutarchy is a society that is ruled or controlled by people of greatwealth orincome. It can be considered a specific form ofoligarchy (rule by the few) where the ruling few are wealthy. The first known use of the term in English dates from 1631.[1] It is not rooted in any establishedpolitical philosophy.[2]
The termplutocracy is generally used as apejorative to describe or warn against an undesirable condition.[3][4] "Dollarocracy", an anglicised adaptation of the word "plutocracy", may refer to "a specificallyAmerican version of plutocracy".[5]
One modern, formal example of a plutocracy, according to some critics,[9] is theCity of London.[10] The City (also called the Square Mile of ancientLondon, corresponding to the modern financial district, an area of about 2.5 km2) has a unique electoral system forits local administration, separate from the rest of London. More than two-thirds of voters are not residents, but rather representatives of businesses and other bodies that occupy premises in the City, with votes distributed according to their numbers of employees. The principal justification for this arrangement is that most of the services provided by the City of London Corporation are used by the businesses in the City. Around 450,000 non-residents constitute the City's day-time population, far outnumbering the City's 7,000 residents.[11]
Some modern historians, politicians, and economists argue that the U.S. was effectively plutocratic for at least part of theGilded Age andProgressive Era periods between the end of theCivil War until the beginning of theGreat Depression.[16][17][18][19][20][21] PresidentTheodore Roosevelt became known as the "trust-buster" for his aggressive use ofantitrust law, through which he managed to break up such major combinations asthe largest railroad andStandard Oil, the largest oil company.[22] According to historian David Burton, "When it came to domestic political concerns, TR'sbête noire was the plutocracy."[23] In his autobiographical account of taking on monopolistic corporations as president, Roosevelt recounted:
...we had come to the stage where for our people what was needed was a real democracy; and of all forms of tyranny the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of a plutocracy.[24]
TheSherman Antitrust Act had been enacted in 1890, when large industries reachingmonopolistic or near-monopolistic levels ofmarket concentration andfinancial capital increasingly integrating corporations and a handful of very wealthy heads of large corporations began to exert increasing influence over industry, public opinion and politics after the Civil War. Money, according to contemporaryprogressive and journalistWalter Weyl, was "the mortar of this edifice", with ideological differences among politicians fading and the political realm becoming "a mere branch in a still larger, integrated business. The state, which through the party formally sold favors to the large corporations, became one of their departments."[25]
In "The Politics of Plutocracy" section of his book,The Conscience of a Liberal, economistPaul Krugman says plutocracy took hold because of three factors: at that time, the poorest quarter of American residents (African-Americans and non-naturalized immigrants) were ineligible to vote, the wealthy funded the campaigns of politicians they preferred, andvote buying was "feasible, easy and widespread", as were other forms ofelectoral fraud such asballot-box stuffing andintimidation of the other party's voters.[26]
The U.S. institutedprogressive taxation in 1913, but according toShamus Khan, in the 1970s, elites used their increasing political power to lower their taxes, and today successfully employ what political scientist Jeffrey Winters calls "the income defense industry" to greatly reduce their taxes.[27]
In modern times, the term is sometimes used pejoratively to refer to societies rooted in state-corporate capitalism or which prioritize the accumulation of wealth over other interests.[28][29][30][31] According toKevin Phillips, author and political strategist toRichard Nixon, the United States is a plutocracy in which there is a "fusion of money and government."[32]
Chrystia Freeland, author ofPlutocrats,[33] says that the present trend towards plutocracy occurs because the rich feel that their interests are shared by society:[34][35]
You don't do this in a kind of chortling, smoking your cigar, conspiratorial thinking way. You do it by persuading yourself that what is in your own personal self-interest is in the interests of everybody else. So you persuade yourself that, actually, government services, things like spending on education, which is what created that social mobility in the first place, need to be cut so that the deficit will shrink, so that your tax bill doesn't go up. And what I really worry about is, there is so much money and so much power at the very top, and the gap between those people at the very top and everybody else is so great, that we are going to see social mobility choked off and society transformed.
In 1998,Bob Herbert ofThe New York Times referred to modern American plutocrats as "TheDonor Class"[36][37] (list of top (political party) donors)[38] and defined the class, for the first time,[39] as "a tiny group – just one-quarter of 1 percent of the population – and it is not representative of the rest of the nation. But its money buys plenty of access."[36]
When the Nobel Prize–winning economistJoseph Stiglitz wrote the 2011Vanity Fair magazine article entitled "Of the 1%, by the 1%, for the 1%", the title and content supported Stiglitz's claim that the U.S. is increasingly ruled by the wealthiest 1%.[40] Some researchers have saidthe U.S. may be drifting towards a form of oligarchy, as individual citizens have less impact than economic elites and organized interest groups upon public policy.[41] In theU.S. Congress itself, more than half of all members are millionaires.[42]
A study conducted by political scientists Martin Gilens ofPrinceton University and Benjamin Page ofNorthwestern University, which was released in April 2014,[43] stated that their "analyses suggest that majorities of the American public actually have little influence over the policies our government adopts". Gilens and Page do not characterize the U.S. as an "oligarchy" or "plutocracy" per se; however, they do apply the concept of "civil oligarchy" as used byJeffrey A. Winters[44] with respect to the U.S.
The investor,billionaire, andphilanthropistWarren Buffett, one of the wealthiest people in the world,[45] voiced in 2005 and once more in 2006 his view that his class, the "rich class", is waging class warfare on the rest of society. In 2005 Buffet said to CNN: "It's class warfare, my class is winning, but they shouldn't be."[46] In a November 2006 interview inThe New York Times, Buffett stated that "[t]here's class warfare all right, but it's my class, the rich class, that's making war, and we're winning."[47]
Reasons why a plutocracy develops are complex.[citation needed] In a nation that is experiencing rapid economic growth,income inequality will tend to increase as the rate of return on innovation increases.[48] In other scenarios, plutocracy may develop whena country is collapsing due toresource depletion as the elites attempt to hoard the diminishing wealth or expand debts to maintain stability, which will tend to enrichcreditors andfinanciers. Economists have also suggested that free market economies tend to drift into monopolies and oligopolies because of the greater efficiency of larger businesses (seeeconomies of scale).
^Coates, Colin M., ed. (2006).Majesty in Canada: essays on the role of royalty. Toronto: Dundurn. p. 119.ISBN978-1550025866.
^Muller, Denis (9 August 2021). "Democracy Under Strain".Journalism and the Future of Democracy. Cham, Zug: Springer Nature. pp. 10–11.ISBN9783030767617. Retrieved13 July 2024.The position of the United States as a 'weak democracy' had degenerated into whatMcChesney and his colleagueJohn Nichols called a 'dollarocracy', 'a specifically American version of plutocracy' in which corporate lobbying had corrupted Congressional processes.
^abcBlamires, Cyprian; Jackson, Paul (2006).World Fascism: A Historical Encyclopedia, Vol. 1. ABC-CLIO. p. 522.ISBN978-1-57607-940-9.
^Herf, Jeffrey (2006).The Jewish Enemy: Nazi Propaganda During World War II and the Holocaust. Harvard University Press. p. 311.ISBN978-0-674-02175-4.
^As quoted in Boelcke, Willi A. The Secret Conferences of Dr. Goebbels: October 1939-March 1943, edited by Willi A. Boelcke; trans. Ewald Osers. London: Weidenfeld and Nicolson, 1970.
^Calvin Reed, John (1903).The New Plutocracy. Kessinger Publishing, LLC (2010 reprint).ISBN978-1120909152.{{cite book}}:ISBN / Date incompatibility (help)
^Brinkmeyer, Robert H. (2009).The fourth ghost: white Southern writers and European fascism, 1930-1950. Baton Rouge: Louisiana State University Press. p. 331.ISBN978-0807133835.
^Schweikart, Larry (2009).American Entrepreneur: The Fascinating Stories of the People Who Defined Business in the United States.AMACOM Div American Mgmt Assn.
^Bowman, Scott R. (1996).The modern corporation and American political thought: law, power, and ideology. University Park, Pa.: Pennsylvania State University Press. pp. 92–103.ISBN978-0271014739.
^Barker, Derek (2013). "Oligarchy or Elite Democracy? Aristotle and Modern Representative Government".New Political Science.35 (4):547–566.doi:10.1080/07393148.2013.848701.S2CID145063601.
