The Dangers of Plutocracy

Today’s author, an American scientist writing in 1893, describes our current political crisis in eerily accurate detail. This essay would be appropriate if it appeared in today’s newspaper, and is simply amazing for  for something written 118 years ago. He tells us that our democracy—rule by the people—has been transformed into plutocracy—rule by the wealthy.

Later in this essay, he describes a new alternative form of government which he calls sociocracy—rule by society.

Lester Frank Ward (1841-1913)

The world, having passed through the stages of autocracy and aristocracy into the stage of democracy, has, by a natural reaction against personal power, so far minimized the governmental influence that the same spirit which formerly used government to advance self is now ushering in a fifth stage, viz., that of plutocracy, which thrives well in connection with a weak democracy or physiocracy, and aims to supersede it entirely. Its strongest hold is the wide-spread distrust of all government, and it leaves no stone unturned to fan the flame of misarchy. Instead of demanding more and stronger government it demands less and feebler. Shrewdly clamoring for individual liberty, it perpetually holds up the outrages committed by governments in their autocratic and aristocratic stages, and falsely insists that there is imminent danger of their reenactment. Laissez faire and the most extreme individualism, bordering on practical anarchy in all except the enforcement of existing proprietary rights, are loudly advocated, and the public mind is thus blinded to the real condition of things. … Thus firmly intrenched, it will require a titanic effort on the part of society to dislodge this baseless prejudice, and rescue itself once more from the rapacious jaws of human egoism under the crafty leadership of a developed and instructed rational faculty.

Under the system as it now exists the wealth of the world, however created, and irrespective of the claims of the producer, is made to flow toward certain centers of accumulation, to be enjoyed by those holding the keys to such situations. The world appears to be approaching a stage at which those who labor, no matter how skilled, how industrious, or how frugal, will receive, according to the “iron law” formulated by Ricardo, only so much for their services as will enable them “to subsist and to perpetuate their race.” The rest finds its way into the hands of a comparatively few, usually non-producing, individuals, whom the usages and laws of all countries permit to claim that they own the very sources of all wealth and the right to allow or forbid its production.

These are great and serious evils, compared with which all the crimes, recognized as such, that would be committed if no government existed, would be as trifles. The underpaid labor, the prolonged and groveling drudgery, the wasted strength, the misery and squalor, the diseases resulting, and the premature deaths that would be prevented by a just distribution of the products of labor, would in a single year outweigh all the so-called crime of a century, for the prevention of which, it is said, government alone exists. This vast theater of woe is regarded as wholly outside the jurisdiction of government, while the most strenuous efforts are put forth to detect and punish the perpetrators of the least of the ordinary recognized crimes. This ignoring of great evils while so violently striking at small ones is the mark of an effete civilization, and warns us of the approaching dotage of the race.

Against the legitimate action of government in the protection of society from these worst of its evils, the instinctive hostility to government, or misarchy, above described, powerfully militates. In the face of it the government hesitates to take action, however clear the right or the method. But, as already remarked, this groundless over-caution against an impossible occurrence would not, in and of itself, have sufficed to prevent government from redressing such palpable wrongs. It has been nursed and kept alive for a specific purpose. It has formed the chief argument of those whose interests require the maintenance of the existing social order in relation to the distribution of wealth. Indeed, it is doubtful whether, without the incessant reiteration given to it by this class, it could have persisted to the present time. This inequitable economic system has itself been the product of centuries of astute management on the part of the shrewdest heads, with a view to securing by legal devices that undue share of the world’s products which was formerly the reward of superior physical strength. It is clear to this class that their interests require a policy of strict non-interference on the part of government in what they call the natural laws of political economy, and they are quick to see that the old odium that still lingers among the people can be made a bulwark of strength for their position. They therefore never lose an opportunity to appeal to it in the most effective manner. Through the constant use of this argumentum ad populum the anti-government sentiment, which would naturally have smoldered and died out after its cause ceased to exist, is kept perpetually alive.

The great evils under which society now labors have grown up during the progress of intellectual supremacy. They have crept in stealthily during the gradual encroachment of organized cunning upon the domain of brute force. Over that vanishing domain, government retains its power, but it is still powerless in the expanding and now all-embracing field of psychic influence. No one ever claimed that in the trial of physical strength the booty should fall to the strongest. In all such cases the arm of government is stretched out and justice is enforced. But in those manifold, and far more unequal struggles now going on between mind and mind, or rather between the individual and an organized system, the product of ages of thought, it is customary to say that such matters must be left to regulate themselves, and that the fittest must be allowed to survive. Yet, to anyone who will candidly consider the matter, it must be clear that the first and principal acts of government openly and avowedly prevented, through forcible interference, the natural results of all trials of physical strength. These much-talked-of laws of nature are violated every time the highway robber is arrested and sent to jail.

Primitive government, when only brute force was employed, was strong enough to secure the just and equitable distribution of wealth. Today, when mental force is everything, and physical force is nothing, it is powerless to accomplish this. This alone proves that government needs to be strengthened in its primary quality—the protection of society. There is no reasoning that applies to one kind of protection that does not apply equally to the other. It is utterly illogical to say that aggrandizement by physical force should be forbidden while aggrandizement by mental force or legal fiction should be permitted. It is absurd to claim that injustice committed by muscle should be regulated, while that committed by brain should be unrestrained.

While the modern plutocracy is not a form of government in the same sense that the other forms mentioned are, it is, nevertheless, easy to see that its power is as great as any government has ever wielded. The test of governmental power is usually the manner in which it taxes the people, and the strongest indictments ever drawn up against the worst forms of tyranny have been those which recited their oppressive methods of extorting tribute. But tithes are regarded as oppressive, and a fourth part of the yield of any industry would justify a revolt. Yet to-day there are many commodities for which the people pay two and three times as much as would cover the cost of production, transportation, and exchange at fair wages and fair profits. The monopolies in many lines actually tax the consumer from 25 to 75 per cent of the real value of the goods. Imagine an excise tax that should approach these figures! It was shown in an earlier chapter (XXXIII) that under the operation of either monopoly or aggressive competition the price of everything is pushed up to the maximum limit that will be paid for the commodity in profitable quantities, and this wholly irrespective of the cost of production. No government in the world has now, or ever had, the power to enforce such an extortion as this. It is a governing power in the interest of favored individuals, which exceeds that of the most powerful monarch or despot that ever wielded a scepter.

What then is the remedy? How can society escape this last conquest of power by the egoistic intellect? It has overthrown the rule of brute force by the establishment of government.  It has supplanted autocracy by aristocracy and this by democracy, and now it finds itself in the coils of plutocracy. Can it escape? Must it go back to autocracy for a power sufficient to cope with plutocracy? No autocrat ever had a tithe of that power. Shall it then let itself be crushed? It need not.  There is one power and only one that is greater than that which now chiefly rules society. That power is society itself. There is one form of government that is stronger than autocracy or aristocracy or democracy, or even plutocracy, and that is sociocracy.

The individual has reigned long enough. The day has come for society to take its affairs into its own hands and shape its own destinies. The individual has acted as best he could. He has acted in the only way he could. With a consciousness, will, and intellect of his own he could do nothing else than pursue his natural ends. He should not be denounced nor called any names. He should not even be blamed. Nay, he should be praised, and even imitated. Society should learn its great lesson from him, should follow the path he has so clearly laid out that leads to success. It should imagine itself an individual, with all the interests of an individual, and becoming fully conscious of these interests it should pursue them with the same indomitable will with which the individual pursues his interests. Not only this, it must be guided, as he is guided, by the social intellect, armed with all the knowledge that all individuals combined, with so great labor, zeal, and talent  have placed in its possession, constituting the social intelligence.

Sociocracy will differ from all other forms of government that have been devised, and yet that difference will not be so radical as to require a revolution. Just as absolute monarchy passed imperceptibly into limited monarchy, and this, in many states without even a change of name has passed into more or less pure democracy, so democracy is capable of passing as smoothly into sociocracy, and without taking on this unfamiliar name or changing that by which it is now known. For, though paradoxical, democracy, which is now the weakest of all forms of government, at least in the control of its own internal elements, sociocracy is capable of becoming the strongest. Indeed, none of the other forms of government would be capable of passing directly into a government by society. Democracy is a phase through which they must first pass on any route that leads to the ultimate social stage, which all governments must eventually attain if they persist.

How then, it may be asked, do democracy and sociocracy differ? How does society differ from the people? If the phrase “the people” really meant the people, the difference would be less. But that shibboleth of democratic states, where it means anything at all that can be described or defined, stands simply for the majority of qualified electors, no matter how small that majority may be. There is a sense in which the action of a majority may be looked upon as the action of society. At least, there is no denying the right of the majority to act for society, for to do this would involve either the denial   of the right of government to act at all, or the admission of the right of a minority to act for society. But a majority acting for society is a different thing from society acting for itself, even though, as must always be the case, it acts through an agency chosen by its members. All democratic governments are largely party governments. The electors range themselves on one side or the other of some party line, the winning side considers itself the state as much as Louis the Fourteenth did. The losing party usually then regards the government as something alien to it and hostile, like an invader, and thinks of nothing but to gain strength enough to overthrow it at the next opportunity. While various issues are always brought forward and defended or attacked, it is obvious to the looker-on that the contestants care nothing for these, and merely use them to gain an advantage and win an election.

From the standpoint of society this is child’s play. A very slight awakening of the social consciousness will banish it and substitute something more businesslike. Once [we] get rid of this puerile gaming spirit and have attention drawn to the real interests of society, and it will be seen that upon nearly all important questions all parties and all citizens are agreed, and that there is no need of this partisan strain upon the public energies. This is clearly shown at every change in the party complexion of the government. The victorious party which has been denouncing the government merely because it was in the hands of its political opponents boasts that it is going to revolutionize the country in the interest of good government, but the moment it comes into power and feels the weight of national responsibility it finds that it has little to do but carry out the laws in the same way that its predecessors had been doing.

There is a vast difference between all this outward show of partisanship and advocacy of so-called principles, and attention to the real interests and necessary business of the nation, which latter is what the government must do. It is a social duty. The pressure, which is brought to enforce it, is the power of the social will. But in the factitious excitement of partisan struggles where professional politicians and demagogues on the one hand, and the agents of plutocracy on the other, are shouting discordantly in the ears of the people, the real interests of society are, temporarily at least, lost sight of, clouded and obscured, and men lose their grasp on the real issues, forget even their own best interests, which, however selfish, would be a far safer guide, and the general result usually is that these are neglected and nations continue in the hands of mere politicians who are easily managed by the shrewd representatives of wealth.

Sociocracy will change all this. Irrelevant issues will be laid aside. The important objects upon which all but an interested few are agreed will receive their proper degree of attention, and measures will be considered in a non-partisan spirit with the sole purpose of securing these objects. Take as an illustration the postal telegraph question. No one not a stockholder in an existing telegraph company would prefer to pay twenty-five cents for a message if he could send it for ten cents. Where is the room for discussing a question of this nature? What society wants is the cheapest possible system.  It wants to know with certainty whether a national postal telegraph system would secure this universally desired object. It is to be expected that the agents of the present telegraph companies would try to show that it would not succeed. … But why be influenced by the interests of such a small number of persons, however worthy, when all the rest of mankind are interested in the opposite solution? The investigation should be a disinterested and strictly scientific one, and should actually settle the question in one way or the other.  If it was found to be a real benefit, the system should be adopted. There are today a great number of these strictly social questions before the American people, questions which concern every citizen in the country, and whose solution would doubtless profoundly affect the state of civilization attainable on this continent. Not only is it impossible to secure this, but it is impossible to secure an investigation of them on their real merits. The same is true of other countries, and in general the prevailing democracies of the world are incompetent to deal with problems of social welfare.

The more extreme and important case referred to a few pages back may make the distinction still more clear. It was shown, and is known to all political economists, that the prices of most of the staple commodities consumed by mankind have no necessary relation to the cost of producing them and placing them in the hands of the consumer. It is always the highest price that the consumer will pay rather than do without. Let us suppose that price to be on an average double what it would cost to produce, transport, exchange, and deliver the goods, allowing in each of these transactions a fair compensation for all services rendered. Is there any member of society who would prefer to pay two dollars for what is thus fairly worth only one? Is there any sane ground for arguing such a question? Certainly not. The individual cannot correct this state of things. No democracy can correct it. But a government that really represented the interests of society would no more tolerate it than an individual would tolerate a continual extortion of money on the part of another without an equivalent.

And so it would be throughout. Society would inquire in a business way without fear, favor, or bias, into everything that concerned its welfare, and if it found obstacles it would remove them, and if it found opportunities it would improve them.  In a word, society would do under the same circumstances just what an intelligent individual would do. It would further, in all possible ways, its own interests.

I anticipate the objection that this is an ideal state of things, and that it has never been attained by any people, and to all appearances never can be. No fair-minded critic will, however, add the customary objection that is raised, not wholly without truth, to all socialistic schemes, that they presuppose a change in “human nature.” Because in the transformation here foreshadowed the permanence of all the mental attributes is postulated, and I have not only refrained from dwelling upon the moral progress of the world, but have not even enumerated among the social forces the power of sympathy as a factor in civilization. I recognize this factor as one of the derivative ones, destined to perform an important part, but I have preferred to rest the case upon the primary and original egoistic influences, believing that neither meliorism nor sociocracy is dependent upon any sentiment, or upon altruistic props for its support. At least the proofs will be stronger if none of these aids are called in, and if they can be shown to have a legitimate influence, this is only so much added to the weight of evidence.

To the other charge the answer is that ideals are necessary, and also that no ideal is ever fully realized. If it can be shown that society is actually moving toward any ideal the ultimate substantial realization of that ideal is as good as proved. The proofs of such a movement in society to-day are abundant. In many countries the encroachments of egoistic individualism have been checked at a number of important points. In this country alarm has been taken in good earnest at the march of plutocracy under the protection of democracy. Party lines are giving way and there are unmistakable indications that a large proportion of the people are becoming seriously interested in the social progress of the country. For the first time in the history of political parties there has been formed a distinctively industrial party which possesses all the elements of permanence and may soon be a controlling factor in American politics.

Though this may not as yet presage a great social revolution, still it is precisely the way in which a reform in the direction indicated should be expected to originate. But whether the present movement prove enduring or ephemeral, the seeds of reform have been sown broadcast throughout the land, and sooner or later they must spring up, grow, and bear their fruit.

For a long time to come social action must be chiefly negative and “be confined to the removal of evils that exist, such as have been pointed out in these pages, but a positive stage will ultimately be reached in which society will consider and adopt measures for its own advancement. The question of the respective provinces of social action and individual action cannot be entered into here at length, but it is certain that the former will continue to encroach upon the latter so long as such encroachment is a public benefit. There is one large field in which there is no question on this point, viz., the field covered by what, in modern economic parlance, is called  “ natural monopoly.” The arguments are too familiar to demand restatement here, and the movement is already so well under way that there is little need of further argument. As to what lies beyond this, however, there is room for much discussion and honest difference of opinion. This is because there has been so little induction. It is the special characteristic of the form of government that I have called sociocracy, resting as it does, directly upon the science of sociology, to investigate the facts bearing on every subject, not for the purpose of depriving any class of citizens of the opportunity to benefit themselves, but purely and solely for the purpose of ascertaining what is for the best interests of society at large.

The socialistic arguments in favor of society taking upon itself the entire industrial operations of the world have never seemed to me conclusive, chiefly because they have consisted so largely of pure theory and a priori deductions. Any one who has become imbued by the pursuit of some special branch of science with the nature of scientific evidence requires the presentation of such evidence before he can accept conclusions in any other department. And this should be the attitude of all in relation to these broader questions of social phenomena.  The true economist can scarcely go farther than to say that a given question is an open one, and that he will be ready to accept the logic of facts when these are brought forward. I do not mean that we must not go into the water until we have learned to swim. This, however, suggests the true method of solving such questions. One learns to swim by a series of trials, and society can well afford to try experiments in certain directions and note the results. There are, however, other methods, such as careful estimates of the costs and accurate calculations of the effect based on the uniform laws of social phenomena. Trial is the ultimate test of scientific theory thus formed, and may, in social as in physical science, either establish or overthrow hypotheses. But in social science, no less than in other branches of science, the working hypothesis must always be the chief instrument of successful research.

Until the scientific stage is reached, and as a necessary introduction to it, social problems may properly be clearly stated and such general considerations brought forward as have a direct bearing upon them. I know of no attempts of this nature which I can more warmly recommend than those made by John Stuart Mill in his little work On Liberty, and in his Chapters on Socialism, of which the latter appeared posthumously. They are in marked contrast, by their all-sided wisdom, with the intensely one-sided writings of Herbert Spencer on substantially the same subject ; and yet the two authors are obviously at one on the main points discussed.  This candid statement of the true claims of the laissez faire school is perfectly legitimate. Equally so are like candid presentations of the opposite side of the question. The more  light that can be shed on all sides the better, but in order really to elucidate social problems it must be the dry light of  science, as little influenced by feeling as though it were the  inhabitants of Jupiter’s moons, instead of those of this planet, that were under the field of the intellectual telescope.

The concept of Sociocracy has recently (2007) been reviewed and updated in a new book We The People by John Buck and Sharon Villines. It is a wonderfully complete resource, as well as my source for this essay.

More about Lester Frank Ward

More about Sociocracy