Improving Our Standard of Living (Wattpad Edition)

Chapter 36: Defining Oligarchy and Democracy

Oligarchy (pronounced oli-gar-key) was first defined by the ancient Greeks. It means "rule of the few."

Historical descriptions elaborate further. Aristotle and Plato said that an oligarchy exists when a small minority owns most of society's wealth and use it to wield disproportionate influence over the government. Aristotle wrote,

A democracy exists whenever those who are free and poor are in sovereign control of the government, an oligarchy when control lies in the hands of the rich and better born. . .oligarchy is when men of property have the government in their hands; democracy, the opposite, when the indigent, and not the men of property, are the rulers. . .the real difference between democracy and oligarchy is poverty and wealth...wherever men rule by reason of their wealth, whenever they be few or many, that is an oligarchy, and where the poor rule, that is a democracy. – Politics, Book 3 and 4

Plato had the same definition. In Republic, he wrote that in an oligarchy, "the rich rule and the poor man has no share." By "no share," he meant no political voice or wealth with which to attain it.

Aristotle said class conflict exists in every society between the rich and poor. The rich fight for a government that will allow them to extract as much of society's wealth as possible. That's an oligarchy. The poor fight for a government that will use society's resources to serve the greatest number of people—the public itself. That's a democracy. In Book 4, Part 11 of Politics he wrote, "the poor and the rich quarrel with one another, and whichever side gets the better...regards political supremacy as the prize of victory, and the one party sets up a democracy and the other an oligarchy."

By "poor," the Greek scholars were referring to non-oligarchs. Anyone that wasn't wealthy. They are poor in the sense that they don't own the means of production. The farms, mines, fisheries, buildings, businesses, etc. where people labor. When Aristotle and Plato said that democracy was the "rule of the poor," they didn't mean a government ruled by the homeless. They were saying democracy is a society in which ordinary, working class people wield the bulk of political and economic power. The "poor" are simply the most numerous group in society. Aristotle made that clear when he wrote in Book 3, Part 8, "whether in oligarchies or in democracies, the number of the governing body, whether the greater number, as in a democracy, or the smaller number, as in an oligarchy, is an accident due to the fact that the rich everywhere are few, and the poor numerous."

Democracy doesn't mean that wealthy people are rendered powerless or don't get to vote. It means they no longer wield disproportionate influence over policymaking.

The ancient Greek scholars understood the connection between disproportionate ownership of wealth and disproportionate influence over legislation.

Former Supreme Court Justice Louis Brandeis was referring to this connection when said, "We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both."

(Note that whenever I refer to disparity of wealth in these latter sections, I'm referring specifically to income inequality. Throughout antiquity and the Middle Ages, the people that owned most of the property also received most of the income. This became less true with the advent of capitalism, labor unions, aggressive taxation on the rich, minimum wage laws, and welfare. Today, it's possible for high inequality of property ownership to exist without the same degree of income inequality. And, as I've shown, it's disparity of income, not disparity of property that reduces living standards. Income inequality often leads to oligarchy because money is used to influence politicians. The ancients didn't make a distinction between asset inequality and income inequality. There was no reason to because there were few mechanisms of income redistribution back then. The people that owned most of the business assets also received most of the income. But today, the people who own most of the assets don't necessarily receive a corresponding amount of income. However, in countries where they do, oligarchy emerges.)