The Problem of Plutocracy: Populism and Liberalism in Pareto’s Political Thought

• In Event: Historical Populisms and Contemporary Responses

Abstract

This paper offers a recovery of Vilfredo Pareto’s political thought. It argues that Pareto was neither the fierce defender of free-market capitalism and neo-classical economic principles, nor was he the proto-fascist elitist who many modern commentators demonize. Instead, I contend, Pareto was first and foremost a fierce critic of the ways in which representative government fosters plutocracy, and he sought to underscore the problematic connection between electoral institutions and capitalism. Pareto’s pessimistic orientation toward liberalism and his warning of “demagogic plutocracy” should be understood as an attempt to highlight how the marriage between unrestrained capitalist and electoral institutions undermines liberal safeguards and the fair and efficient market functionality that these systems sought to ensure. Pareto’s pessimism about liberalism’s ability to overcome plutocracy was misconstrued as a fatalistic endorsement of elite rule and disdain for democratic institutions.

The paper first addresses the reasons why Pareto is remembered as an “elite theorist” and why so many insist that the guiding element of his political thought was a partition between elites and masses, as opposed to the binary between speculators and rentiers—categories he employs far more frequently. I then look to his economic models and argue that his political thought qualifies and even purposefully undermines the finality of his economic laws. I close by recovering his critique of liberalism and “demagogic plutocracy” (the consolidation of populist complaint under a charismatic leader) and contend that this critique applies to our own historical moment marked by rampant plutocracy and populist outcry. By taking his political thought into consideration, I aim to convince readers that we ought to think of Pareto not as an elite theorist of democracy, but rather as a democratic theorist of elitism.

Author

• Natasha Piano, University of Chicago