CHAPTER 3 (V.1a)

The argument this book presents is straightforward, if unpalatable: “Democracy,” as most people know and understand the word, is a facade. Instead, we live in a “pluto-democracy,” which is a hybrid form of government combining the outward form of democracy, but the inward reality of power concentrated in the hands of a small, privileged group, defined by their vast wealth. Plutocrats.

Think of Parliament, political parties, election campaigns and everything associated with them as being a kind of Potemkin Village. The story goes that to conceal the devastation of the newly conquered Crimea from Catherine the Great, Prince Grigory Potemkin constructed merry-looking mock villages along the banks of the Dnieper to deceive the Empress as she travelled downstream on her barge. The story is probably a myth, but in modern usage, the term "Potemkin village" is used to describe any elaborate facade designed to conceal an unsavoury reality or create an inaccurate impression. Democracy in the UK is just that, a facade.

The reality of pluto-democracy in the UK is a little more complicated than that, though, hence this chapter. Here, we go beyond the narrow definition of “pluto-democracy” provided in Chapter 1 and outline in a little more detail what “pluto-democracy” is.

To begin at the very beginning, the primary inspiration for the concept of pluto-democracy comes from Maurice Duverger’s (1974) book, “Modern Democracies: Economic Power Versus Political Power.”^[1] In this work, Duverger, a French jurist, sociologist, and political scientist, argues that modern democracies suffer from a fundamental contradiction. While political power is formally embodied in universal suffrage and democratic institutions, economic power is concentrated in the hands of a wealthy elite. This concentration undermines true political equality and popular sovereignty. In Duverger’s view, with which I agree (obviously), concentrated economic power inevitably translates into disproportionate political influence. Wealthy individuals and corporations shape politics and policy through campaign financing, lobbying, media ownership, and influencing policy agendas. Consequently, democracy is constrained or subverted. Not across the whole policy spectrum, however. Britain’s super-rich are primarily interested in government policy as it relates to taxation and the economy. Here, they will often exert their considerable might at the drop of a hat. When it comes to something like the recent Assisted Dying Bill, though, the likelihood is that they are not really interested. It does not affect them financially.

Duverger’s book is a historical and cross-cultural analysis of the rise of what he terms “plutodemocracy” (ploutodémocratie). He argues that plutodemocracy is inherent to all Western democracies. It is baked in. However, in each country, it evolved and is expressed differently, according to the historical development of that country into a so-called “modern democracy.”

The evolution of capitalism alongside democracy is very important for Duverger. No Marxist, he disavows a class-based analysis of history. But what he does argue is that capitalism, which emerged in its modern form in the UK during the 18^th century, is a precondition for the rise to power of major industrialists, financiers, bankers, media barons and corporate managers. AKA plutocrats, which is only common sense. The concentration of economic power in their hands, which began during the Industrial Revolution and continues today, is simply not possible without an economic system designed to enable private individuals to accumulate vast wealth.

If capitalism is good for anything, it is good for that.

At the same time, capitalism was coming of age in the 18^th and 19^th centuries - as a consequence of its coming of age - conditions for workers deteriorated significantly. Working-class people in the new industrial cities worked long hours, 12 to 14 hours a day, 6 days a week and faced harsh, often dangerous working conditions. Their pay was at subsistence levels, and they lived in overcrowded, unsanitary conditions. Often, multiple families occupied a single room. The result was the first stirrings of working-class political movements. Not that working-class activism was the primary cause of the initial expansion of suffrage. Instead, it was the increasing pressure from the growing middle classes: industrialists, business owners, and professionals. Affluent and with a growing voice in Parliament, they sought political power commensurate with their economic contributions. In 1832, Parliament finally gave way. The 1832 Reform Act was passed into law, and middle-class men in the new industrial cities, who until then had not been properly represented, were enfranchised.

Naturally, political pragmatism and competition between the two main political parties (The Conservatives [Tories] and Liberals [Whigs]) played their part in the expansion of the franchise. Both parties sought electoral advantage by extending the vote to groups likely to support them. For example, the Conservatives, led by Disraeli, passed the 1867 Reform Act, which gave the vote to urban working-class men. They did so with the express aim of winning new voters. Women were the last social group in the UK to gain the right to vote.  They were finally enfranchised in 1918.

Unsurprisingly, the UK’s plutocrats felt threatened from the outset by the demands of the lower orders for enfranchisement. Fuelled in large part by events in Europe, they feared social unrest and potential revolution. In 1848, Europe experienced widespread and interconnected revolutions, often referred to as the "Springtime of Nations" or the "Year of Revolution.” These uprisings, which impacted dozens of countries, were driven by a combination of political, social, and economic factors, including demands for greater political representation, national unity, and improved working conditions. While the revolutions ultimately failed to achieve all their objectives, they did lead to significant reforms and had a lasting impact on the European political landscape. They also scared the UK’s elites silly.

However, the UK’s plutocrats learnt swiftly from the mistakes of others. They moved early to stave off revolution and de-fang democracy. Duverger refers to Parliament as a “Trojan Horse” for the historical development of plutodemocracy.  The result, which is still with us now, is “pluto-democracy.” The hyphen has been added to indicate a significant historical development: the importation of the Neoliberal ideology from the USA during the 1970s and early 1980s. From 1945 to 1979, British politics were more social democratic than they are now. The NHS and the judicial system were not the shambles they are today. There were a considerable number of nationalised industries, and tax rates for the rich were significantly higher. Wealth was not as concentrated, and the income gap between rich and poor was not as wide.

However, when Margaret Thatcher came to power in 1979, she immediately began the work of undoing all the social democratic advances made since the end of World War II. Since then, the nationalised industries have been privatised, the gap between the rich and the poor has widened, and wealth has become increasingly concentrated in the hands of a few obscenely wealthy individuals. Today, in the second decade of the 21^st century, pluto-democracy has been renewed and reinvigorated.

FYI: Neoliberalism is an ideology that encompasses both the political and economic spheres. It favours private enterprise and seeks to transfer control of state-owned companies and other institutions, such as the NHS and the BBC, from the government to the private sector. Many neoliberal policies concern the efficient (for plutocrats) functioning of free market capitalism. They focus on free trade, deregulation, and low tariffs. More recently, Neoliberalism has been associated with austerity policies and attempts to cut government spending on social programs.

Okay, the history lesson is over. We have arrived at the present day. It would be wrong to assume – because the UK is a pluto-democracy - that plutocrats are the only significant political elite in the country. Strictly speaking, the UK is an oligarchy (a polity ruled by the few). This oligarchy comprises multiple interconnected and interdependent elites. However, the super-rich play by far the most important role. Like the song says, “money makes the world go around.” Other elites include the aristocracy and landed gentry, the political class, media moguls, the legal and judicial elite, the Civil Service and Whitehall mandarins, the think tank and lobbying network, the intelligence and military establishment, the monarchy and courtiers, and, last but not least, the “Old boy” networks.

A term frequently used to label this grouping is the “Establishment.” The term was popularised in the mid-20th century by the journalist Henry Fairlie, who described the Establishment in a 1955 Spectator article thus:

By the 'Establishment' I do not mean only the centres of official power — though they are certainly part of it — but rather the whole matrix of official and social relations within which power is exercised. The exercise of power in Britain (more specifically, in England) cannot be understood unless it is recognised that it is exercised socially.^[2]

Fairlie’s conceptualisation highlights the informal yet entrenched network of politicians, business leaders, media figures, and other elites who collectively uphold the status quo. More importantly, it demonstrated that power in the UK extends beyond the economic sphere. It is also cultural and social. The Establishment is as much about status, who you are, as about how much money you have. You have to belong to be a part of the Establishment. The journalist Owen Jones tellingly and insightfully examines the Establishment in terms of the role it performs, describing it as being:

 Made up – as it has always been – of powerful groups that need to protect their position in a democracy in which almost the entire adult population has the right to vote. The Establishment represents an attempt on behalf of these groups to "manage" democracy, to make sure that it does not threaten their own interests. In this respect, it might be seen as a firewall that insulates them from the wider population. As the well-connected right-wing blogger and columnist Paul Staines puts it approvingly: "We've had nearly a century of universal suffrage now, and what happens is capital finds ways to protect itself from, you know, the voters. ^[3]

There are times when the various elites that comprise the Establishment are in conflict with one another. Sometimes, they have competing interests. Nonetheless, as a whole, the Establishment is united in adversary by a common set of beliefs and attitudes, with antipathy towards left-wing politics and contempt towards democracy being front and centre. Ultimately, though, when push comes to shove, and the Establishment feels the need to protect its interests, it is usually the super-rich who lead the charge. In politics, little can be done without backers who have very deep pockets indeed. If money were a force like gravity, then the UK’s economic elite would be a blazing star, the Sun, better than a million kilometres in diameter, and every other elite that comprised the Establishment would be a planet in slavish orbit around it, tiny in comparison. As for us, the ordinary people who live and work in this country; we would be the millions of asteroids and comets orbiting ineffectually out in the cold and dark of the Oort Cloud.

Before we get carried away with the idea that the Establishment is the sole power behind the throne, it would be wise to remember that non-Establishment elites exist, and they can be very powerful indeed. If history is to be believed (and it should be), these brash new outsiders periodically displace the old guard, and in their turn, become a part of the Establishment. If they have enough money, a very important part of it.

Groups who are powerful but not currently part of the Establishment include, for example, the Nouveau Riche. These are self-made millionaires and billionaires, tech entrepreneurs, and property tycoons, for instance, whose wealth is too new, or who lack the right connections or did not attend the right schools (Eton/Oxbridge). Others include outsider business figures and mavericks who are controversial or anti-Establishment. Left-wing, far-right or populist political donors are usually on the outside. These include, for example, the super-rich backers of Brexit and Reform UK. Such figures are excluded (today) because they oppose traditional power structures and seek to supplant them. They might not be outsiders forever, though. If Reform UK does as well in the next election as many fear, then in a decade or two, the Arron Banks of this world, or their children, if they go to the right school, might end up nice and cosy at the heart of the Establishment. The Establishment is elite, but it does recruit. There is a constant evolutionary turnover of its members.

Deploying another metaphor, think of politics in the UK as a seesaw. Parliament is the fulcrum. On one end of the seesaw, the end firmly on the ground, you have the immensely weighty political clout of a tiny, privileged elite. The Establishment. On the other side, spread all along its length, is the electorate, millions and millions of hapless men and women, suspended up in the air, powerless to do anything about it because the formal institutions of democracy (elections, Parliament, civil liberties) are an empty shell.

Correction: the people are not, in fact, powerless. In theory, at least, a critical mass could all shuffle to the left, bunch up at their end of the seesaw, and then the sheer weight of their collective action would tilt the UK’s political system in their favour. It would be like the old democratic socialist Labour party being elected to power in 1945 all over again, something the Establishment is dedicated to preventing, and so far, very successfully. In recent decades, the plutocratic core of the Establishment has used its immense economic power to dominate not only politics but also shape the hearts and minds of the people. Democracy has been hollowed out, and both political equality and responsiveness are undermined to the point democracy becomes a farce.

FYI: “Political responsiveness” refers to the degree governments and political leaders align their policies with the needs and preferences of their citizens. A core concept in democratic theory, it suggests that a government's legitimacy, even the legitimacy of a whole political system such as democracy, is intrinsically linked to its responsiveness to public opinion. Essentially, a low degree of responsiveness may delegitimise a government or even a whole political system.

The key defining characteristics of the UK’s pluto-democracy are as follows:

Concentrated Wealth

Most people would regard a Plutocrat as someone worth billions, at the very least hundreds of millions. Such people are indeed plutocrats, but they are not the only kind. A plutocrat is someone who possesses vast wealth or who controls it. A Hedge Fund manager at a prestigious City firm, for example, might only earn a mere six-digit salary (bonus and incentives included), but they have billions of pounds in economic clout at their disposal. Governments think twice before pissing off the City or large national or multinational corporations. Plutocratic financiers can exercise just as much (even more) influence over government policy as a private individual, gifting a few million every year to the Tories.

Whatever its source, concentrated wealth is necessary to exert dominance over governments. And it does not matter in the end who controls the purse strings, the entrepreneur or the manager, what is important is that profits come in with as little tax paid as possible, and that wealth is protected and steadily accumulated, unhindered by the masses calling for a more equitable distribution of wealth.

Elites do Not Rule Directly

In pluto-democracies, the super-rich do not wield executive power. I.e., they do not rule directly. If a plutocrat is a Minister, then in theory (if not always in practice), they serve the Crown rather than their own plutocratic interests. British mega-donors such as Frank Hester and Mohamed Mansour may be Conservative Party donors, but they do not, in conjunction with others, govern as a plutocratic bloc. Instead, by donating tens of millions to political parties, by lobbying, and funding think tanks, they exert influence and even control the political agenda.

Wealth Defence

There is much that I found myself disagreeing with in Jeffrey A. Winters’ (2011) book, “Oligarchy.”^[4] What I term a “pluto-democracy”, he calls a “civil oligarchy.” Whom I would call a “plutocrat,” he calls an “oligarch.” Winters argues that in a civil oligarchy, two things define an oligarch: immense wealth and “wealth defence.” For Winters, an oligarch is not an oligarch unless they actively engage in defending their wealth against the State and those horrible lefty liberals. Indeed, he goes so far as to insist this is an oligarch’s only motive for donating to political parties, etc. In this, once again, I disagree. Sometimes, super-donors and mega-donors have other motives. They might donate to political parties due to “ideological alignment.” Both the donor and the political party have the same ideological outlook, and they go beyond simple wealth defence. That said, there is ample evidence that a key characteristic of pluto-democracy is that plutocrats are primarily (not exclusively) motivated by an intense drive to protect their vast wealth. This is oftentimes their primary motive for donating and lobbying, and all the rest. But not always.

A Wealth Defence Industry

As a corollary of this, pluto-democracies are characterised by a well-developed wealth defence industry. A very effective one, too, if Lord Gordon of Strathblane is to be believed. During a House of Lords debate on 30 October 2013, speaking about corporate and high‑net‑worth tax avoidance, he observed: “A tax system that is mandatory for all but the very biggest, for whom it is voluntary, is grossly unfair…”^[5] For Winters, the Wealth Defence Industry is a specialised sector of the economy dedicated to protecting, preserving and growing the concentrated wealth of oligarchs (plutocrats) It comprises of professional and lawyers who create and deploy sophisticated legal and financial tool for wealth defence. Examples include offshore banking and shell companies, complex trusts and foundations, tax avoidance schemes, lobbying firms, and estate planning on a large scale.

Policy Capture

According to Duverger, a key feature of “plutodemocracy” is that policy formation is dominated by business coalitions and financial actors, whose views are disproportionately represented in legislative committees and executive advisory bodies. Grassroots demands—for example, on healthcare or environmental protection—are subordinated to the imperatives of capital accumulation.

Disproportionate Plutocratic Access to Democratic Channels

Wealthy individuals and firms in a pluto-democracy find it much easier to gain access to ministers and high-ranking civil servants than do ordinary citizens. Disproportionate campaign contributions, behind-the-scenes lobbying, and the sponsorship of think tanks ease the way. By contrast, ordinary citizens rely on underfunded NGOs (Non-Governmental Organisations, i.e., charities, social movements, etc.), whose voices rarely penetrate the corridors of power.

Control of the Mass Media

Plutocrats own or heavily influence the major newspapers, news broadcasters and social media platforms. These are used to promote what the Italian polymath, Vilfredo Pareto (1935), called “derivations.” These are the logical or pseudo-logical rationalisations, justifications, arguments, explanations or ideologies that people employ to justify or explain or disguise their actions and beliefs, which are more than often rooted in underlying sentiments or beliefs which Pareto termed "residues [x]."

Sophisticated Mechanisms of Political Socialisation

Beyond control of the media, plutocrats deploy what Duverger calls complex, “invisible” levers — including opinion polling, media framing, targeted advertising, think tanks, and expert commissions — to shape public attitudes and policy debates. This includes reputation management strategies. For example, plutocrats frequently use philanthropy to bolster their reputations by making large-scale donations to museums, universities, charities and hospitals, etc, thereby creating a perception of benevolence and social responsibility. This tactic simultaneously fosters an attitude of gratitude towards plutocrats among the masses, which counters potential accusations of greed.

De Facto Political Inequality

While every citizen in a pluto-democracy formally retains the right to vote and stand for office, plutocrats can leverage their immense wealth to secure disproportionate influence over government policy. This severely undermines a core democratic principle: political equality.

A Lack of Political Responsiveness

In a pluto-democracy, elected officials frequently turn a deaf ear to the demands and concerns of the people they are supposed to represent. Political responsiveness in a pluto-democracy is inherently low.

The Undermining of Majority Rule

Although governments remain formally accountable to voters, the structural advantages enjoyed by the wealthy often neutralise the will of the majority. In a pluto-democracy, it is the will of the few who usually prevail, undermining one of the key stones of democratic theory.

Right-Wing Political Bias

The politics of plutocrats is, unsurprisingly, right-wing. Plutocrats are about the money and the political ideology that gives them lots of it: Neoliberalism. Consequently, plutocrats tend to support right-wing political parties such as the Conservatives and Reform UK. The result of that support is not just a diminution of political equality and political responsiveness, but a baked-in bias in the UK’s political system, one that favours right-wing political parties.

If, after reading this chapter, you have seen the UK’s political landscape with newly opened eyes and concluded that the UK is not the real deal when it comes to democracy. It is ruled one step removed by an elite. Duverger is right: concentrated economic power inevitably translates into disproportionate political influence; then you are in good company. There is a raft of theories under the umbrella term “Elite Theory” that, in their different ways, from their different perspectives, argue that power is inevitably concentrated in the hands of a small minority, irrespective of formal democratic structures. Classical Elite Theories established the core proposition: elite dominance is an inherent, inescapable feature of complex social organisation, not merely a historical aberration. For Mosca (1858-1941), every society is divided between a ruling "political class" (the organised minority) and the ruled majority. This minority maintains power through organisation, resources, and the propagation of legitimising "political formulas." Pareto focused on the psychological characteristics of elites, arguing for a "circulation of elites" where cunning "foxes" (relying on persuasion) and forceful "lions" (relying on coercion) alternately govern. But the fundamental structure of elite rule remains constant. Michels (1876-1936), studying socialist parties, famously concluded that even organisations dedicated to equality inevitably succumb to oligarchy. The only wonder, really, is why Maurice Duverger is not included in the pantheon of Elite Theory theorists, classical or nouveau. It may simply be that, as a Francophone, his work never gained traction in the UK or the USA. We can only speculate. Of one thing I am sure, however: his work is underappreciated.