What Is Plutocracy?

THE LAST U.S. PRESIDENTIAL ELECTION AND RECENT FINANCIAL SCANDALS involving high-flying American CEOs and top politicians in Italy, France and Germany have revived the more than century-old debate about the role of money in politics in general, and the illicit marriage between government and concentrated economic power known as plutocracy in particular.(1) Today the term plutocracy is used repeatedly, albeit rather casually, by social critics, such as 2000 Green Party presidential candidate Ralph Nader and commentators like Kevin Phillips, Paul Krugman, Paul Kurtz, William Keegan (who has unwittingly revived the old Paretian term "plutodemocracy"), and others.(2) But very few users have bothered to define clearly the term plutocracy and its differentia specifica. In this respect there is a gap in the theoretical literature that cries out to be filled.

So, what exactly is "plutocracy" and what are its main characteristics? For analytical and comparative purposes it is necessary to define a concept that provides a clear idea of what plutocracy is and what its essential elements are. The term is derived from the Greek word ploutokratia, meaning "government based on wealth" - combining ploutos, wealth, and cratos, rule or government.

Like democracy, plutocracy is a controversial, value-laden, and imprecise term. According to one dictionary, it has several different meanings: (1) government by the wealthy; (2) a wealthy class that controls the government; and (3) a state or society in which the wealthy classes rule.(3) Yet the essence of plutocracy has been defined more broadly as "the determination and ability of wealth to reach beyond its own realm of money and control politics and government as well."(4) There are many conceptual definitions of plutocracy - such as, for example, "government by or in the interests of the rich"(5) - but very few, if any, operational ones. Although various writers differ widely on the precise definition, they generally agree that plutocracy is an oligarchic form of government(6) based on the rule of the economically dominant social classes.

According to at least one writer, over the last twenty years or so the world has witnessed a quiet revolution, or "the silent takeover,"(7) by what might be best described as global corporate plutocracy. But are there any historical precedents of a plutocratic form of government? In fact, there...