Plutocracy

Lore & Background

Historic examples of plutocracies include some city-states in Ancient Greece, Carthage, the Italian merchant city-states of Venice, Florence and Genoa, the Dutch Republic, and the pre-World War II Empire of Japan (the zaibatsu). (Note: While wealth influenced politics in the Roman Empire, it is not primarily defined as a plutocracy in mainstream scholarship, being more commonly described as an autocracy or mixed constitution.) According to Noam Chomsky and Jimmy Carter, the modern United States resembles a plutocracy though with democratic forms. In 2018, Paul Volcker, a former chair of the Federal Reserve, stated he also believed the U.S. to be developing into a plutocracy. One modern, formal example, according to some critics, is the City of London, where business votes are weighted such that businesses account for about two-thirds of the vote (not two-thirds of voters), while residents also vote.

Reader's Guide

Plutocracy has been used historically as a critical label for societies where wealth concentrates political power. In the political jargon of Fascist Italy, Nazi Germany and the Communist International, Western democratic states were referred to as plutocracies, implying control by a small number of extremely wealthy individuals. In Nazi Germany, it was often used as a dog whistle term for Jewish people in antisemitic propaganda. Some modern historians argue the U.S. was effectively plutocratic during the Gilded Age and Progressive Era. President Theodore Roosevelt called plutocracy 'the tyranny of mere wealth.' In modern times, economists like Paul Krugman and Joseph Stiglitz have argued that the U.S. is increasingly ruled by the wealthiest 1%. A 2014 study by political scientists Martin Gilens and Benjamin Page suggested that majorities of the American public have little influence over government policies, though they did not characterize the U.S. as an oligarchy or plutocracy per se. The term remains a potent critique of wealth inequality and its influence on governance.

Did You Know?

• The first known use of the term in English dates from 1631.
• In Nazi Germany, 'plutocracy' was often used as a dog whistle term for Jewish people in antisemitic propaganda.
• The City of London has a unique electoral system where business votes are weighted so that businesses account for about two-thirds of the vote, not two-thirds of voters.
• Warren Buffett stated in a 2006 New York Times interview: 'There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.'