Plutocracy refers to a government that is controlled exclusively by the rich, either directly or indirectly. A plutocracy allows, either openly or under certain circumstances, that only the rich can govern. This can lead to policies designed exclusively to help the rich, which is reflected in their name.
The plutocracy is not necessarily an open and deliberate format for the government, on the contrary, it can be created through the permission of access to certain educational programs and resources to which only the rich can have access and it is done for the rich to have more influence. The concern of inadvertently creating a plutocracy is that the regulatory approach will be limited and will concentrate on the objectives of the rich, creating even more income and asset-based inequalities.
The term plutocracy comes from ancient Greek. It is formed by the words “ploutos” meaning wealth and “krathos” meaning power and government.
The word was first used by the Greek historian and philosopher Xenophon, and he used it to refer to the Athenian society that existed before the Solon reforms, whose political congress was under the control of the big landowners and owners of most of the slaves, forcing the enactment of measures that excluded the lower classes from the government.
Among the main characteristics of the plutocracy we can mention the following:
The plutocracy impedes the good functioning of a democracy and thus promotes the creation of many hidden interests within the field of politics which can generate different struggles between groups and economic tensions that leave aside the real needs of a country.
The term was first used in 1652. Unlike other democratic systems, the plutocracy is not adapted to an established political philosophy. Throughout history, different political thinkers such as Winston Churchill, Alexis de Tocqueville and Juan Donoso Cortés, as well as Noam Chomsky, have made accusations and condemnations against plutocracy, since it has been known since ancient times that it increases class poverty and corrupts societies.
Years ago, countries were established in states when state governments were formed. Throughout history the forerunners of plutocratic states within societies managed to gain and retain control through obvious, luxurious and competitive manifestations of the wealth they had.
For example, Mexico and the United States are considered to be plutocracy countries. There are many monopolies and oligopolies that influence politics.
Carthage is an example city of an ancient plutocracy. This city was the main part of Phoenician civilization after Tyre was defeated by Babylonians. The first kings of Carthage were military leaders, and the crown was in the hands of the highest bidder.
The city-states that existed in Italy during the Middle Ages were plutocracies and were the ones that set the precedent in medieval Europe. The fall of the Byzantine empire by the Ottomans transformed Venice, Genoa and Florence from flourishing trading empires. This generated a dependence on foreign resources which was so costly that even the elites could not maintain.