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That "Iron Law" Of Oligarchy Is Back To Haunt Us

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Headlined to H2 4/25/14

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That "Iron Law" Of Oligarchy Is Back To Haunt Us

By Danny Schechter

The word Oligarchy has finally come home.

For years, it was a term only used in connection with those big bad and sleazy Mafioso-type businessmen in Russia.

Russia had Oligarchs; we didn't. That became a big difference between the official narrative of what separated our land of the free and the home of the brave from THEM, the snakes in the shades and private planes, in the post-Soviet period.

Actually, I first heard the term oligarchy when I was studying labor history at Cornell a half a lifetime ago. We were taught about something called the "Iron Law of Oligarchy."

It was a concept coined by Robert Michels, a friend of sociology guru, Max Weber, way back in 1911. Here's how it was defined in that relic of another age: The Encyclopedia Brittannica:

"Michels came to the conclusion that the formal organization of bureaucracies inevitably leads to oligarchy, under which organizations originally idealistic and democratic eventually come to be dominated by a small, self-serving group of people who achieved positions of power and responsibility.  This can occur in large organizations because it becomes physically impossible for everyone to get together every time a decision has to be made."

So, oligarchies have been with us seemingly forever--it's an "iron law," says he-- but in current usage the term references the small elite--the 1% of the 1% that dominates economic and political decision making.

Every body on the liberal left is now discovering information spelled out in a number of studies that caught the attention of Bill Moyers and his writing colleague Michael Winship. They discuss the way governments become partial to oligarchs and insure that the rich rule:

"Inequality is what has turned Washington into a protection racket for the one percent. It buys all those goodies from government: Tax breaks. Tax havens (which allow corporations and the rich to park their money in a no-tax zone). Loopholes. Favors like carried interest. And so on. As Paul Krugman writes in his New York Review of Books essay on Thomas Piketty's Capital in the Twenty-First Century, "We now know both that the United States has a much more unequal distribution of income than other advanced countries and that much of this difference in outcomes can be attributed directly to government action."

According to the AFL-CIO," CEOs of major companies earn an average of 331 times more than their employees!" The NY Times reports America's middle class is "no longer the world's richest."

Asking if democracy can "tame" plutocracy, Bob Borosage of the Campaign for America's Future, cites another study: "A recent exhaustive study by Martin Gilens and Benjamin I. Page found that elites got their way not often, but virtually all of the time  (emphasis mine!) I guess the answer to his question re the possibility of "taming" plutocrats is, in the current moment, is a thundering NO."

Even the barons of business news admit that wealth is concentrated as almost never before, Here's Bloomberg:

"Just today, the world's 200 richest people made $13.9 billion. In one single day, according to Bloomberg's Billionaires Index... This is the Fed's "wealth effect," ... It's a construct that the Greenspan Fed conjured up out of thin air and presented to the incredulous American people as a valid economic theory. Bernanke then promoted it to the Fed's stated raison d'être. His theory: if we immensely enrich during years of bailouts, money-printing, and interest rate repression the richest few thousand people in the world, everyone would be happy somehow."

Adding critical fire power to this perspective, Eric Zuesse, cites the study to appear in the Fall 2014 issue of the academic journal Perspectives on Politics, that finds that "the U.S. is no democracy, but instead an oligarchy, meaning profoundly corrupt, so that the answer to the study's opening question, "Who governs? Who really rules?" in this country, is:

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News Dissector Danny Schechter is blogger in chief at Mediachannel.Org He is the author of PLUNDER: Investigating Our Economic Calamity (Cosimo Books) available at Amazon.com. See Newsdisssector.org/store.htm.
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Good luck with the media. They are part of the oli... by intotheabyss on Friday, Apr 25, 2014 at 4:24:49 PM
Importance of net equality ! ... by Charles Roll on Saturday, Apr 26, 2014 at 7:49:43 PM
Ooops! The correct term is "NET NEUTRALITY" ... by Charles Roll on Saturday, Apr 26, 2014 at 8:01:05 PM
If the economy was suffering from accumulated chr... by Lance Brofman on Saturday, Apr 26, 2014 at 12:32:49 PM
Easy to do:Sign the CREDO Action petition to prese... by Charles Roll on Saturday, Apr 26, 2014 at 8:06:39 PM