Plutocracy means ‘rule by the wealthy.’ It’s when a small group consisting of the wealthiest people in a society rule by virtue of their wealth.
Plutocracy is a self-reinforcing system. That is, once a group of wealthy people are in charge, they can use their wealth and political power to change the rules (laws and systems) to make sure that they only get more wealth and power, never less.
Plutocracy isn’t exactly a political philosophy, since no one defends it. The word is used as a pejorative, or insult, to describe a system that nearly everyone agrees is unjust.
II. Plutocracy vs. Oligarchy
Oligarchy is rule by an elite few. Thus, plutocracy is one form of oligarchy. However, oligarchy is a broader term; it can describe any sort of ruling elite minority.
- Aristocratic rule, or rule by social elites. We often confuse aristocracy with wealthy, since the aristocracy tend to have wealth. But not all people from prominent families remain wealthy, and not all wealthy people come from aristocratic families, especially in America. The aristocracy, like the wealthy, tend to hang onto their power, since they usually have advantages and opportunities, but the ideas of aristocracy and plutocracy are actually very different; originally (starting with the Greeks) the aristocracy were thought of as the best qualified people to rule, because they came from good families and received good educations. Only in recent times, have we stopped viewing the aristocracy as superior people, in our society—at least not as much as people used to. Plutocracy is very different because it’s only about having wealth, not belonging to a supposedly “better” class of people.
- Theocracy, or rule by the clergy. The governing elites may be religious authorities such as priests or mullahs who rule in accordance with their interpretation of religious law.
- Technocracy, or rule on the basis of technical knowledge and skill. A technocratic country is ruled by skilled experts of any kind, such as people with degrees in finance and law; however, these days when people say ‘technocratic’ they usually mean people ruling through technological resources and know-how. Although people use the word ‘technocrat’ loosely to describe any person in authority who relies on tech, traditionally technocracy is characterized by unelected technocratic authorities. If we elect a president with technical expertise, that’s not an oligarchy — unless the president seizes more power and gives it to similarly-trained colleagues without elections. A technocracy is technically a society where people rule by virtue of their technical know-how, but you will hear people use it to refer to any kind of technology-centered governance.
Like “plutocracy,” the word “oligarchy” generally has a strong negative connotation. Few people openly support having an oligarchy. However, plenty of people have defended aristocratic, theocratic, and technocratic systems—and some still do. Such people often deny that their favored system is a form of oligarchy. However, all these systems are “rule by the few,” and therefore oligarchy, even if you defend them. That may not be a problem for you if you are willing to defend oligarchy (and many people do).
III. Quotes About Plutocracy
“‘What would happen if someone were to choose the captains of ships by their wealth, refusing to entrust the ship to a poor person even if he was a better captain?’
‘They would make a poor voyage of it.’
‘And isn’t the same true of the rule of anything else whatsoever?’
‘I suppose so.’
‘Except a city? Or does it also apply to a city?’
‘To a city most of all, since it’s the most difficult and most important kind of rule.’” (Plato, The Republic)
Over 2,000 years ago, the Greek philosopher Plato developed some of the first arguments against plutocracy. Clearly, Plato thought it was worth his while to write these arguments down, which implies that someone in his society was pushing for plutocracy. We can probably infer that wealthy Athenians were trying to gain political power in addition to their wealth, and that Plato was trying to undermine their efforts using philosophical arguments.
“[The popular conception of capitalism] is posed abstractly as the freedom of the individual from government control . . . But what it meant in politics a century later, and still means today, is the freedom to accumulate wealth without social or democratic responsibilities and license to buy the political system right out from everyone else.” (Bill Moyers, For America’s Sake)
Probably no one in the media today is more associated with the word “plutocracy” than Bill Moyers. He’s spent the last several years trying to convince people that America is losing its status as a democracy and sliding into plutocracy instead. In this quote, he argues that this is allowed to happen because many well-meaning Americans think that everyone has a right to endless accumulation of wealth, a right that society as a whole should not interfere with. Moyers, on the other hand, sees this as a cover-story for a more sinister power-grab (see section VI for more on this controversy).
IV. The History and Importance of Plutocracy
Some people imagine that plutocracy is the oldest form of government in the world; they imagine that our ancient ancestors, long before the modern age of science, capitalism, and democracy, were ruled by powerful, wealthy leaders who could do whatever they wanted because they had all the resources.
This is partly a myth. Pre-capitalist and non-capitalist societies had or have various forms of social organization, some based on wealth, but not all. For example, there have been many tribal societies in which the leader is the person who gives away the most, not the person who owns the most. For example, the Anglo-Saxons leaders had to earn their followers through generosity and by leading men successfully in battle. Saxon kings gave the spoils of battle to their followers and kept little for themselves — and what they did keep were usually gifts from others in the tribe.
But there were many other forms of economy in Europe (and everywhere else) before trade naturally evolved into the competitive market-based system that we live in today. The development of capitalism differs most from other systems in that everyone has equal rights to own, buy, and sell goods. Therefore, under capitalism, any individual may be able to acquire enough wealth to influence politics in their favor. Thus, while this system creates the most opportunities to make wealth, it also opens the door to plutocracy (see section VI). And this has happened in many places; Florence is a notable example, as the incredibly wealthy Medici family effectively ruled the city for much of the 15th and 16th centuries. Even in supposedly non-capitalist nations, such as modern China, capitalism has enabled many people to gain power.
Today, plutocracy is hotly-debated—the question of whether one nation or another is becoming plutocratic — a concern not only in capitalist countries like the UK and the USA, but also in post-Communist countries like Russia and China, and neutral countries like India. People are justly concerned about the fact that a tiny percentage of the population has the vast majority of the wealth, and obviously this gives them political power, and it does get used. The questions are only whether these wealthy elite really can or do use their wealth to rule the world in general, and whether we have the right or the need to oppose them. Many people believe that some plutocracy is a fair trade in exchange for economic development. Also, many people believe that those who become wealthy through business are inherently superior and therefore well-suited to rule. Needless to say, not everybody believes that!
V. Plutocracy in Popular Culture
The world of The LEGO Movie is ruled by President Business, a single character who is both the president of a country and the CEO of a huge corporation. Because President Business combines his incredible wealth with political power, he rules over a plutocratic system. He also has a secret identity as Lord Business, an evil tyrant and villain who wants to control the entire world.
The two main houses (families with wealth and power) in Dune are House Harkonnen and House Atreides, and their ancient conflict is basically a battle between aristocrats and plutocrats. The Atreides have noble blood, being related to the Royal Family by birth. The Harkonnen, on the other hand, have influence due to massive accumulated wealth but are not actually “nobles.” In the books, the Atreides are the heroes while the Harkonnen are hideous villains, which may suggest that the author finds plutocracy an uglier system than aristocracy.
Capitalism and Plutocracy
How close is the link between capitalism and plutocracy? Some critics of capitalism feel that it inevitably leads to plutocracy without strong protections in place to prevent this; others feel that plutocracy is only a possible outcome of unfettered capitalism, not an inevitable result.
Capitalism rewards those who gain wealth using what they own: if you own a ship, you can use it to bring your goods to foreign lands and sell them at high prices. Eventually you may earn enough to hire a captain and then all your income will come from your ownership of the vessel rather than from you doing any work.
Imagine now that you acquire a whole fleet of ships and that your children inherit them when you die. Now your children have all the income they could ever need, and they never have to work for it, and if they hire wealth managers they can become even more wealthy without any personal labor. Some people find this unjust, while others find it perfectly just, and this is the source of some bitter controversies in the modern era.
But the controversy gets even more complicated, because now that your children have so much free time, they can dedicate themselves to political activism on a level that their poorer fellow-citizens can’t match: they can donate massively to campaigns, and spend time shaking hands and gaining influence in the capital, and thus try to skew the system in their favor. Some people argue that this is justified because you worked hard for your money and your children deserve to have power and influence as a consequence of what you did. Others argue that it’s unjust because the children themselves didn’t earn the money, but only inherited it. (This, of course, assumes that you acquired your wealth honestly and didn’t cheat, steal, or enslave people to get it; because if you didn’t acquire your money honestly then it’s definitely unjust that your children should have so much power!)