Plutocracy

plutocracy

Plutocracy [ploo-tok-ruh-see] is rule by the wealthy, or power provided by wealth. The combination of both plutocracy and oligarchy is called plutarchy. The word ‘plutocracy’ is derived from the Ancient Greek root ‘ploutos,’ meaning ‘wealth’ and ‘kratos,’ meaning ‘to rule’ or ‘to govern.’

The term is generally used to describe these two distinct concepts: one of a historical nature and one of a modern political nature. The former indicates the political control of the state by an oligarchy of the wealthy. Examples of such plutocracies include the Roman Republic, some city-states in Ancient Greece, the civilization of Carthage, the Italian city-states/merchant republics of Venice, Florence, Genoa, and pre-WWII Empire of Japan zaibatsus.

One modern, perhaps unique, formalized example of a plutocracy is the City of London. The City (not the whole of modern London but the area of the ancient city, which now mainly comprises the financial district) has a unique electoral system. Most of its voters are representatives of businesses and other bodies that occupy premises in the City. Its ancient wards have very unequal numbers of voters. The principal justification for the non-resident vote is that about 450,000 non-residents constitute the city’s day-time population and use most of its services, far outnumbering the City’s 9,000 residents.

The wealthy minority may exert influence over the political arena via many methods. Most western democracies permit partisan organizations to raise funds for politicians, and political parties frequently accept significant donations from various individuals (either directly or through corporations or advocacy groups). These donations may be part of a cronyist or patronage system, in which major contributors and fund-raisers are rewarded with high-ranking government appointments.

While campaign donations need not directly affect the legislative decisions of elected representatives, politicians have a personal interest in serving the needs of their campaign contributors: if they fail to do so, those contributors will likely give their money to candidates who do support their interests in the future. Unless a quid pro quo agreement exists, it is generally legal for politicians to advocate policies favorable to their contributors, or grant appointed government positions to them. In some systems there are also mechanisms of patronage. The UK, for example, uses a variety of means to reward individuals that hold the same values or interests. These include honors such as medals and honorary titles.

In some instances, extremely wealthy individuals have financed their own political campaigns. Many corporations and business interest groups pay lobbyists to maintain constant contact with elected officials, and press them for favorable legislation. Owners of mass media outlets, and the advertisement buyers which financially support them can shape public perception of political issues by controlling the information available to the population and the manner in which it is presented.

Within government bureaucracy, there is often the problem of a revolving door: the employees of government regulatory bodies, such as the Securities and Exchange Commission in the United States, often transition to and from employment with the same companies they are supposed to regulate. This can result in regulations being changed or ignored to suit the needs of business, since the regulators are more likely to later find employment in the private sector if their government work was beneficial to their new potential employer.

In the United States, campaign finance reform efforts ostensibly seek to ameliorate this situation. However, campaign finance reform must successfully challenge officials who are beneficiaries of the system which allows this dynamic in the first place. This has led many reform advocates to suggest taxpayer dollars be used to replace private campaign contributions; these reforms are often called clean money or clean election reform as opposed to simply campaign finance reform which does not address the conflict of interest involved where most or all of the campaign money is from private, often for-profit sources.

In 2010, Justice Stevens along with Justice Ginsburg, Justice Breyer, and Justice Sotomayor view Citizens United v. Federal Election Commission as having drastically weakened efforts to restrain the effect of money in government. In his dissenting remarks Justice Stevens states: ‘At bottom, the Court’s opinion is thus a rejection of the common sense of the American people, who have recognized a need to prevent corporations from undermining self government since the founding, and who have fought against the distinctive corrupting potential of corporate electioneering since the days of Theodore Roosevelt. It is a strange time to repudiate that common sense. While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics.’

One Comment to “Plutocracy”

  1. Your post focuses mostly on blaming wealthy individuals and businesses for the buying of power in politics. You don’t mention the similar capacity of unions to do likewise. California offers the perfect case study.

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