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Plutocracy

Plutocracy

Overview
Plutocracy is rule by the wealth
Wealth
Wealth is the abundance of valuable resources or material possessions. The word wealth is derived from the old English wela, which is from an Indo-European word stem...

y, or power provided by wealth. The combination of both plutocracy and oligarchy
Oligarchy
Oligarchy is a form of power structure in which power effectively rests with an elite class distinguished by royalty, wealth, family ties, commercial, and/or military legitimacy...

 is called plutarchy.

The word plutocracy (Modern Greek
Modern Greek
Modern Greek refers to the varieties of the Greek language spoken in the modern era. The beginning of the "modern" period of the language is often symbolically assigned to the fall of the Byzantine Empire in 1453, even though that date marks no clear linguistic boundary and many characteristic...

: πλουτοκρατία - ploutokratia) is derived from the Ancient Greek
Ancient Greek
Ancient Greek is the stage of the Greek language in the periods spanning the times c. 9th–6th centuries BC, , c. 5th–4th centuries BC , and the c. 3rd century BC – 6th century AD of ancient Greece and the ancient world; being predated in the 2nd millennium BC by Mycenaean Greek...

 root ploutos, meaning wealth and kratos, meaning to rule or to govern.


The term plutocracy is generally used to describe these two distinct concepts: one of a historical nature and one of a modern political nature.
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Encyclopedia
Plutocracy is rule by the wealth
Wealth
Wealth is the abundance of valuable resources or material possessions. The word wealth is derived from the old English wela, which is from an Indo-European word stem...

y, or power provided by wealth. The combination of both plutocracy and oligarchy
Oligarchy
Oligarchy is a form of power structure in which power effectively rests with an elite class distinguished by royalty, wealth, family ties, commercial, and/or military legitimacy...

 is called plutarchy.

The word plutocracy (Modern Greek
Modern Greek
Modern Greek refers to the varieties of the Greek language spoken in the modern era. The beginning of the "modern" period of the language is often symbolically assigned to the fall of the Byzantine Empire in 1453, even though that date marks no clear linguistic boundary and many characteristic...

: πλουτοκρατία - ploutokratia) is derived from the Ancient Greek
Ancient Greek
Ancient Greek is the stage of the Greek language in the periods spanning the times c. 9th–6th centuries BC, , c. 5th–4th centuries BC , and the c. 3rd century BC – 6th century AD of ancient Greece and the ancient world; being predated in the 2nd millennium BC by Mycenaean Greek...

 root ploutos, meaning wealth and kratos, meaning to rule or to govern.

Usage



The term plutocracy 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
Oligarchy
Oligarchy is a form of power structure in which power effectively rests with an elite class distinguished by royalty, wealth, family ties, commercial, and/or military legitimacy...

 of the wealthy. Examples of such plutocracies include the Roman Republic
Roman Republic
The Roman Republic was the period of the ancient Roman civilization where the government operated as a republic. It began with the overthrow of the Roman monarchy, traditionally dated around 508 BC, and its replacement by a government headed by two consuls, elected annually by the citizens and...

, some city-state
City-state
A city-state is an independent or autonomous entity whose territory consists of a city which is not administered as a part of another local government.-Historical city-states:...

s in Ancient Greece
Ancient Greece
Ancient Greece is a civilization belonging to a period of Greek history that lasted from the Archaic period of the 8th to 6th centuries BC to the end of antiquity. Immediately following this period was the beginning of the Early Middle Ages and the Byzantine era. Included in Ancient Greece is the...

, the civilization of Carthage
Carthage
Carthage , implying it was a 'new Tyre') is a major urban centre that has existed for nearly 3,000 years on the Gulf of Tunis, developing from a Phoenician colony of the 1st millennium BC...

, the Italian city-states
Italian city-states
The Italian city-states were a political phenomenon of small independent states mostly in the central and northern Italian peninsula between the 10th and 15th centuries....

/merchant republics of Venice
Republic of Venice
The Republic of Venice or Venetian Republic was a state originating from the city of Venice in Northeastern Italy. It existed for over a millennium, from the late 7th century until 1797. It was formally known as the Most Serene Republic of Venice and is often referred to as La Serenissima, in...

, Florence
Republic of Florence
The Republic of Florence , or the Florentine Republic, was a city-state that was centered on the city of Florence, located in modern Tuscany, Italy. The republic was founded in 1115, when the Florentine people rebelled against the Margraviate of Tuscany upon Margravine Matilda's death. The...

, Genoa
Republic of Genoa
The Most Serene Republic of Genoa |Ligurian]]: Repúbrica de Zêna) was an independent state from 1005 to 1797 in Liguria on the northwestern Italian coast, as well as Corsica from 1347 to 1768, and numerous other territories throughout the Mediterranean....

, and pre-WWII Empire of Japan
Empire of Japan
The Empire of Japan is the name of the state of Japan that existed from the Meiji Restoration on 3 January 1868 to the enactment of the post-World War II Constitution of...

 zaibatsu
Zaibatsu
is a Japanese term referring to industrial and financial business conglomerates in the Empire of Japan, whose influence and size allowed for control over significant parts of the Japanese economy from the Meiji period until the end of World War II.-Terminology:...

s.

Example


One modern, perhaps unique, formalised example of a plutocracy is the City of London
City of London
The City of London is a small area within Greater London, England. It is the historic core of London around which the modern conurbation grew and has held city status since time immemorial. The City’s boundaries have remained almost unchanged since the Middle Ages, and it is now only a tiny part of...

. The City (not the whole of modern London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...

 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 9000 residents.

Modern politics


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
Quid pro quo
Quid pro quo most often means a more-or-less equal exchange or substitution of goods or services. English speakers often use the term to mean "a favour for a favour" and the phrases with almost identical meaning include: "give and take", "tit for tat", "this for that", and "you scratch my back,...

 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
Patronage
Patronage is the support, encouragement, privilege, or financial aid that an organization or individual bestows to another. In the history of art, arts patronage refers to the support that kings or popes have provided to musicians, painters, and sculptors...

. The UK, for example, uses a variety of means to reward individuals that hold the same values or interests. These include honours 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 (see also: fourth estate
Fourth Estate
The concept of the Fourth Estate is a societal or political force or institution whose influence is not consistently or officially recognized. The Fourth Estate now most commonly refers to the news media; especially print journalism, referred to hereon as "The Press"...

). Within government bureaucracy, there is often the problem of a revolving door
Revolving door (politics)
The revolving door is the movement of personnel between roles as legislators and regulators and the industries affected by the legislation and regulation and on within lobbying companies. In some cases the roles are performed in sequence but in certain circumstances may be performed at the same time...

: the employees of government regulatory
Regulation
Regulation is administrative legislation that constitutes or constrains rights and allocates responsibilities. It can be distinguished from primary legislation on the one hand and judge-made law on the other...

 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
Campaign finance
Campaign finance refers to all funds that are raised and spent in order to promote candidates, parties or policies in some sort of electoral contest. In modern democracies such funds are not necessarily devoted to election campaigns. Issue campaigns in referendums, party activities and party...

 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
Citizens United v. Federal Election Commission
Citizens United v. Federal Election Commission, , was a landmark decision by the United States Supreme Court holding that the First Amendment prohibits government from censoring political broadcasts in candidate elections when those broadcasts are funded by corporations or unions...

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.


Critics of clean elections point out that it allows the sitting government to decide which candidates would qualify to receive tax dollars - and therefore influence who would be allowed to win - thus solving one problem by creating another problem; These laws have increasingly run into constitutional problems in the Courts. Substantial portions of the Vermont (see Randall v. Sorrell
Randall v. Sorrell
Randall v. Sorrell, 548 U.S. 230 , is a decision by the Supreme Court of the United States involving a Vermont law which placed a cap on financial donations made to politicians. The court ruled that Vermont's law, the strictest in the nation, unconstitutionally hindered the citizens' First...

), Connecticut,, and Arizona systems were found unconstitutional by the U.S. Supreme Court
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...

.

Relative wealth


An individual who is considered wealthy, affluent, or rich is someone who has accumulated substantial wealth relative to others in their society or reference group. One common measure of wealth inequality is the Gini Index.

Alternative definition


An alternate use of plutocracy is a reference to a disproportionate influence the wealthy have on political process in contemporary society: for example, according to Kevin Phillips
Kevin Phillips (political commentator)
Kevin Price Phillips is an American writer and commentator on politics, economics, and history. Formerly a Republican Party strategist, Phillips has become disaffected with his former party over the last two decades, and is now one of its most scathing critics...

, author and political strategist to U.S. President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....

 Richard Nixon
Richard Nixon
Richard Milhous Nixon was the 37th President of the United States, serving from 1969 to 1974. The only president to resign the office, Nixon had previously served as a US representative and senator from California and as the 36th Vice President of the United States from 1953 to 1961 under...

, the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

 is a plutocracy in which there is a "fusion of money and government."

As a propaganda term


In the political jargon
Jargon
Jargon is terminology which is especially defined in relationship to a specific activity, profession, group, or event. The philosophe Condillac observed in 1782 that "Every science requires a special language because every science has its own ideas." As a rationalist member of the Enlightenment he...

 and propaganda
Propaganda
Propaganda is a form of communication that is aimed at influencing the attitude of a community toward some cause or position so as to benefit oneself or one's group....

 of Fascist Italy
Kingdom of Italy (1861–1946)
The Kingdom of Italy was a state forged in 1861 by the unification of Italy under the influence of the Kingdom of Sardinia, which was its legal predecessor state...

 and Nazi Germany
Nazi Germany
Nazi Germany , also known as the Third Reich , but officially called German Reich from 1933 to 1943 and Greater German Reich from 26 June 1943 onward, is the name commonly used to refer to the state of Germany from 1933 to 1945, when it was a totalitarian dictatorship ruled by...

, western democratic states were referred to as "plutocracies", with the implication being that a small number of extremely wealthy individuals were controlling the countries and holding them in ransom. "Plutocracy" replaced "democracy
Democracy
Democracy is generally defined as a form of government in which all adult citizens have an equal say in the decisions that affect their lives. Ideally, this includes equal participation in the proposal, development and passage of legislation into law...

" and "capitalism
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...

" as the principal fascist term for the United States and Great Britain during the Second World War. For the Nazis, the term was often a code word for "the Jews".

In modern times, the term is often used to refer to societies rooted in state-corporate capitalism and the prioritization of endless accumulation of wealth over other interests, such as public health, education, or the environment.

Further reading