Plutocracy is a government-controlled exclusively by the wealthy, either directly or indirectly. A plutocracy allows, either openly or by circumstance, only the wealthy to rule. This can then result in policies exclusively designed to assist the wealthy, which is reflected in its name (comes from the Greek words "ploutos" or wealthy, and "kratos" - power, ruling).
- Plutocracy is a system of rule by the wealthy, directly or indirectly.
- Indirectly, plutocracy can take the form of regulatory frameworks and programs designed to benefit only the wealthy.
- Commentators state that rising income inequality has converted America into a plutocracy, with Congress getting richer on average.
- Plutocracy has been present since ancient times. The Roman Empire was considered a form of plutocracy in which a Senate consisting of the wealthy aristocracy had the power to elect local administration officials and proposing new policies.
- Plutocracy is not to be confused with oligarchy, which defines a political structure in which power is concentrated within a small group of people but not necessarily wealthy.
Plutocracy doesn't have to be a purposeful, overt format for government. Instead, it can be created through the allowance of access to certain programs and educational resources only to the wealthy, thereby making it so that the wealthy hold more sway. The concern of inadvertently creating a plutocracy is that the regulatory focus will be narrow and concentrated on the goals of the wealthy, creating even more income and asset-based inequality.
"Of all forms of tyranny, the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of a plutocracy," President Theodore Roosevelt wrote in his autobiography. Roosevelt wrote this at a time when the wealthy paid little or no income tax and could afford summer homes in Newport that made the White House look shabby.
Plutocracy in the U.S.
Although many people talk about the widening gap between rich and poor in the United States, plutocracy is more a concept than a governing model in any modern country. Author and former Harvard Business School professor, David Korten, believes that plutocracy "describes our situation in the United States far more accurately than the term democracy. We have been an Empire ruled as a plutocracy since our founding."
Princeton University Prof. Martin Gilens and Northwestern University Professor Benjamin I. Page concluded in a study that "multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence."
Others have come to similar conclusions. According to 2017 research by Thomas Hayes and Layle Scruggs, political science professors at the University of Connecticut, the concentration of state incomes with select individuals produces a sharp reduction in social welfare schemes. They write that "income concentration at the top has become so skewed, and politicians so reliant on their support for re-election, that representation in America may have veered quite far from the ideal of one-person, one-vote in recent years," they wrote.
Plutocracy In the 115th Congress
When it came to the 115th Congress, Roll Call estimated that their total wealth was at least $2.43 billion, or 20% more than the collective riches of the previous Congress. According to estimated net worth calculations by the Center for Responsible Politics, more than half of the members of the 116th Congress are millionaires. That said, there are still plenty of middle-class people in Congress who sleep in their offices because they can't afford the costly rents in Washington D.C., in addition to paying for housing in their home district.
Overlaid with personal wealth, the policy choices made by the 115th Congress also leaned heavily toward plutocracy with tax cuts aimed at the wealthy and the elimination of rules and regulations thought to hinder business and profits. The country has yet to see whether the legislation touted by the 116th Congress will have underlinings of plutocracy.
The policy choices made by the 115th Congress leaned heavily toward plutocracy, with tax cuts aimed at the wealthy and the elimination of rules and regulations thought to hinder business and profits.
Plutocracy vs. Oligarchy
Oligarchy defines a political structure in which power is concentrated within a small group of people. However, this group of people doesn't necessarily have to be wealthy, as is in the case of a plutocracy. For example, an oligarchy can consist of a military ruling a country, a powerful business or industry family having influence, or even rule by the peasants. Only when an oligarchy is concentrated among a small group of wealthy individuals, can it also be considered a plutocracy.
Examples of Plutocracy
Plutocracy has been present since ancient times. The Roman Empire was considered a form of plutocracy in which a Senate consisting of the wealthy aristocracy had the power to elect local administration officials and proposing new policies. In recent times, America is held as an example of a nation with elements of plutocracy, as explored above, due to the disproportionately powerful influence wielded by the wealthy in the country's election and policy-making process.
In the early 1900s, America was also heavily influenced by a small group of plutocrats based in New York City. This was eventually investigated by the Pujo Committee. Now household names, some of these individuals included business titans and robber barons such as J.P. Morgan, William and John D. Rockefeller, and others who had virtual monopoly control over the U.S. financial system.
What does plutocracy mean in government?
Plutocracy indicates a government that is controlled exclusively by the wealthy, either directly or indirectly.
What is a plutocrat?
A plutocrat is an individual who has political influence or power because of their wealth.
Is America a plutocracy or oligarchy?
There is a lot of debate on whether the United States is better defined as a plutocracy or oligarchy, rather than a democracy. Ultimately, this depends on who you ask, and what kinds of individuals make up our current presidential and congressional administrations.
Where did the word plutocracy come from?
The word "plutocracy" comes from the Greek words "ploutos" or wealthy, and "kratos" meaning power or ruling.
What is the difference between a plutocracy and an aristocracy?
While a plutocracy is a government ruled by the wealthy, an aristocracy is a form of government ruled by an elite few or a privileged, minority ruling class. An aristocracy often has both money and nobility or hereditary favor, such as in historic Britain and India.
The Bottom Line
Plutocracy defines a government ruled by the wealthy, whether that's explicitly (such as with former President Donald Trump) or indirectly, through the allowance of access to certain programs and educational resources that give more political power to the rich. In the United States, many believe that our government is more reflective of an oligarchy than a democracy, with Congress getting richer and richer. Ultimately, it depends who you ask.