The Iron Law of Oligarchy Lives

Almost 100 years ago, French author Robert Michels noted that despite their best intentions, socialist party organizations were developing into the same hierarchical structures as the conservative parties they opposed. He developed a theory called the iron law of oligarchy to describe this tendency. His thesis is seemingly robust, considering how well it describes political phenomena, but is also commonly ignored.

The Sunday Chron's Outlook section features yet another story--We all Bow to the Superclass-- that looks with surprise at a phenomena he calls inevitable:

We didn't elect them. We can't throw them out. And they're getting more powerful every day.

Call them the superclass.

At the moment, Americans are fixated on the political campaign. In the meantime, many are missing a reality of the global era that may matter much more than their presidential choice: On an ever-growing list of issues, the big decisions are being made or profoundly influenced by a little-understood international network of business, financial, government, cultural and military leaders who are beyond the reach of American voters.

In addition to top officials, these people include corporate executives, leading investors, top bankers, media moguls, heads of state, generals, religious leaders, heads of terrorist and criminal organizations and a handful of important cultural and scientific figures. Each of these roughly 6,000 individuals is set apart by their power and ability to regularly influence millions of lives across international borders. The group is not monolithic, but none is more globalized or has more influence over the direction in which the global era is heading.

Doubt it? Just look at the current financial crisis. As government regulators have sought to head off further market losses, they've found that perhaps the most effective tool at their disposal is what the president of the New York Federal Reserve Bank described to me as their "convening power" — their ability to get the big boys of Wall Street and world financial capitals into a room or on a conference call to collaborate on solving a problem. This has, in fact, become a central part of crisis management, both because national governments have limited regulatory authority over global markets and because financial flows have become so large that the real power lies with the biggest players — such as the top 50 financial institutions that control almost $50 trillion in assets, by one measure nearly a third of all assets worldwide.

6,000 people, the author tells us, dominate events in the world and ensure that government officials establish policies that focus on their self interest. He provides no historical context, so we have no way of knowing if 6,000--a figure I do not dispute--is more or less than the number of people who shaped world events in centuries and millennia past. He concludes by stating that the counterbalancing of this power should be a central focus of the current presidential campaign, though he is suspicious of whether a president can make much of a difference:

The next U.S. president will still be the most powerful person in the world because of his or her control of the nation's unparalleled military might and influence over our economic and political resources. But that influence is on the wane, for a number of reasons: the relative decline in the power of national governments; the relative rise in the power of others in the world's fastest-growing places; U.S. trade and fiscal deficits; and a third, geopolitical deficit arising from both damaged national prestige and what might be characterized either as Iraq fatigue or as having learned from the mistakes of the past several years.

None of this makes the decision that U.S. voters will make in November less important. Government still offers the average citizen the best means of counterbalancing the superclass or redressing growing inequality. And governments will have to play a key role in shaping the new regulatory frameworks and governance mechanisms that will be essential to a more balanced distribution of power in the global era.

But what it does mean is that "change" isn't just a slogan in this year's campaign. It's a reality that will redefine the landscape of power worldwide for U.S. presidents of the future.

Michels would call this arrangement inevitable and only circumstantially different than what has exited in previous moments in history. James Madison would agree that these interests are inevitable, but would add that the central task of a constitutional system is to ensure that this power is divided and made to counteract other forces.