American Plutocracy? [UPDATED]

November 10, 2010 at 11:26 pm (By Randy)

(Click on graphic for more readable version)

A plutocracy is a government which is ruled by the wealthy, or controlled by wealthy individuals. The term is usually used pejoratively, as it implies a lack of democratic freedom and social mobility. Numerous historical governments were plutocracies, controlled by an oligarchy composed of the wealthy ruling class, and some modern governments have been accused of being plutocracies, including the United States.

The term comes from the Ancient Greek ploutos, for “wealth,” and the suffix -kratia, for “ruler.” Many nations have experienced a state of plutocracy at some point, since wealth often comes with immense power, especially in the formative stages of a new country. Countries with valuable natural resources like oil and precious metals have also experienced government in the form of a plutocracy, as the entities which control these resources generally want to maintain conditions which are favorable to them.

An outright plutocracy governed by a handful of wealthy individuals is relatively rare in the modern era. However, the governments of many nations are obviously heavily influenced by wealth. Wealth buys political power, in the form of lobbying, campaign contributions, bribing, and other forms of financial pressure. Many nations have tried to limit the influence of the wealthy through laws controlling campaign finances and lobbying, but these laws can be difficult to define and enforce.

One of the hallmarks of a plutocracy is economic disparity. In nations where the wealthy control the government, the wealthy have a vested interest in retaining their wealth, and in promoting government policies which will enhance their situations. As a result, people without the power of money are unable to effect change in their governments. Economic inequality can lead to social unrest, as members of the lower classes rebel against the moneyed ruling upper classes.

Another common feature of a plutocracy, as mentioned above, is a lack of social mobility. Plutocrats tend to socialize and marry amongst each other, thus concentrating their wealth and making it difficult for people in the lower classes to break through. Rule by the wealthy is often associated also with ethnic disparities, in which members of the plutocracy have similar religious beliefs, ethnic backgrounds, and skin colors, while people with obvious physical differences remain trapped in the lower class.

(Credits: text: wisegeek.com; charts via Business Insider)

 

 

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7 Comments

  1. wj said,

    Especially in developing nations, it’s a synergy: The wealthy do control the government. But that’s partly because controlling the government allows them to grab the wealth (usually from natural resources) of the country. The nasty cases are where the pre-existing wealth gets destroyed in the process. So not only do the rulers get richer, but the bulk of the population gets significantly poorer. I’m thinking Zimbabwe, Burma, and Russia, for just three examples, but there are many others.

  2. realpc said,

    The US is a plutocracy, because you don’t see too many poor people winning elections. For one thing, who wants to vote for someone who has not been able to succeed? Or who can’t gather enough support to raise money? Wealth is a sign of success and/or popularity.

    Should we elect unsuccessful people who no one likes? That seems to be the reverse of what politics is about.

    The government can give out campaign money to all candidates, but how can you make that a fair process? Why should an unpopular candidate be given as much money as a popular candidate?

    Should we elect politicians by giving them intelligence tests, instead of by voting? I’m sure a lot of progressive academics would go for that, but I sure wouldn’t.

    Or should we just fall back on that old favorite, communism? Everyone shares and everything is fair and we are all prosperous. Yeah sure.

    So we will always be stuck with a plutocracy. But it’s still democracy, because we, the poor ignorant masses, can just keep voting rich jerks out until we finally get someone with good sense and good motives. But they will be rich.

    Sarah Palin didn’t start out as rich, but she sure must be now. If enough people like you and want to hear your speeches and read your books, you get rich.

  3. wj said,

    Am I the only one who has noticed that the same people who have an enormous nostalgia for the way (at least in their minds/memories) things were in the 1950s, are the ones who scream the loudest at the thought that taxes on the highest incomes might rise to a level still a small fraction of what they were them?

  4. Randy said,

    LOL! No, I doubt it but it is very un-pc to point out such things these days. “Don’t you dare raise taxes and don’t you dare touch any of my favorite programs” is the mantra of the day for most. Look at the predictable responses from both left and right to the proposals from the two chairs of the deficit commission.

  5. Icepick said,

    That last chart ends around 2003 or 2004. Imagine what the probability of moving down looks like now.

    wj, why do you assume that people that are nostalgic for the 50s would want everything to be the same way it was then? That a pretty biased way of pigeon-holing people to feed your own biases. I guess your preference for the present means that you every single thing that is happening now.

    Not to mention that there’s no reason to believe that 90% marginal income tax rates had much to do with all the other stuff going on back in the 1950s. I’m pretty sure that the lower divorce rate and higher incidence children living in two-parent households wasn’t entirely dependent on high marginal tax rates for the rich.

  6. wj said,

    I’m neither suffering from terminal nostalgia for the 1950s (much as I enjoyed them at the time) nor unbridled enthusiasm for the modern era (happy as I am with some of the improvements that have been made). Which doesn’t keep me from noticing that there is some inconsistency on the part of those who are given to one or the other.

    In particular, when someone who carries on (often at length) about how wonderful things used to be starts telling me how the utter destruction of the American economy, not to mention the end of Western Civilization, must follow if taxes are raised…well, lets just say I see some facts which suggest otherwise.

    Granted, I could have unpacked that rather more than my one-liner. Mea culpa.

  7. WAS said,

    How fortunate the party people are in the Chinese Communist Plutocracy we are forced to live in.

    Freedom is beginning to ring more silent as the debt to the Chinese Communists increases.

    It was mentioned this morning by a member of congress we should consider cutting to corporate farmers.

    Twenty years ago when I heard Sam Donaldson was getting $100,000 a year from the Federal Government for his sheep, I asked what the hell is he doing to deserve that.

    The Liberal TV media said little.

    WAS

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