The Real Elites vs. The Ruling Elites

0:00the real elites versus the ruling elites. By Ryan McMacon. Always and everywhere, political institutions are controlled by elites. It doesn't matter if the regime type is democratic or monarchical. It doesn't matter if there is a written constitution or not. All political institutions and certainly every sovereign state are run by a group of elites who control the means of coercion. The myth of rule by the people is precisely that, a myth. But this leaves a big question open. Who are the elites? Will Fredo Parado, that pioneer of Italian elite theory, convincingly suggest that elites are simply those people who are most skilled in their respective fields? Being skilled does not suggest any sort of virtue or beauty, of course, and we cannot assume

1:01that any member of the elite will be more moral or refined than any, say, middle-class mechanic. In the case of political elites, to be elite simply means to be the most effective at organizing and commanding political action. This can be done toward both virtuous ends or evil ends. The political elites excel at the gaining and wielding of political power, nothing more. In hereditary monarchies, for example, the monarch is a monarch because his ancestors were more effective at using violence and at stealing and killing than were their competitors. Their descendants are able to remain in the elite through effective political scheming to maintain their positions. In democracies, those who gain and maintain power are effective at deceiving the voting public and at curing favor with the ruling coalitions of various interest groups.

2:08They're not the elite because they are especially virtuous or well educated. They simply excel at cultivating the knowledge necessary to wield the power of the state against their enemies and against potential rivals. Economic elites versus political elites. There is, however, often confusion as to the difference between economic elites and political elites. One could say that economic elites are those who are most skilled at the management of property. Yet the nature of the economic elites depends largely on what type of regime exists within society. In a society that has a mostly market system, the economic elites are those who are most productive in the free marketplace. These are the people who are skilled at entrepreneurship, sales,

3:10logistics, investing, and all other aspects of a freely functioning market. In a mostly free society, the economic elites are free to spend most of their time on their activities in the marketplace and they are thus rewarded for spending their efforts in improving their own productivity. Moreover, all of society benefits from these sorts of economic elites. This is because rewards in the marketplace stem from delivering more goods and services to more people at a price that a growing number of people can afford. Things are different in a society where the economy is dominated by the state and thus by the political elite in such a society. The economic elites are those who are most skilled at using the power of the state to achieve success in the state regulated marketplace. In this case, the economic elites are those who are

4:17able to partner with the regime to obtain policies that benefit the elites through the manipulation and regulation of the market. These policies include bailouts, state-back monopolies, and an easy money-fueled financial system. In this system, the economic elites are able to maintain and enhance the positions and their wealth through effective political action and by serving the political elites instead of customers in the marketplace. When this happens, we cannot assume that the economic elites are there because they add value to society. Rather, the economic elites in this latter system are parasitical. They rely on the exploitation of others to maintain their positions and to expand their market share. One of the most dramatic examples of this can be seen

5:22in the response to the financial crisis that began in 2008. Had the marketplace been allowed to function, many large banks and other firms would have been bankrupted and their property repurposed by other more efficient owners and managers. Those new owners could have become a new economic elite. But thanks to the intervention of the incumbent political elites, failing firms were saved through the redistribution of wealth from the productive classes to hand-picked politically connected incumbent firms and owners. Thus, firms like Citicorp and AIG were bailed out, new regulations imposed, and firms like JP Morgan greatly expanded their market share. The Federal reserves mass purchasing of mortgage-backed securities rescued a large portion of the financial

6:22sector from insolvency. As a result, most of the economic elite we find in the financial sector owe their positions to political action rather than any actual skill in the marketplace. Sure, these people are fond of telling themselves that they are rich because the market values them so highly. In reality, they are successful because lobbyists have succeeded in propping up their firms and ensuring through constant monetary inflation growth in their portfolios. But this is just one example. In any society where the political elites are prolific spenders or engage in widespread regulation of the economy, the economy is continually distorted in a way as to favor the politically well connected at the expense of everyone else. For example, the economic

7:24elites who rely heavily on government contracts, for example, Elon Musk, Peter Thiel, the founder of Flock Safety at Al, are not in the elite because they are especially productive in a free market. They are in the elite because they are adept at seizing the property of taxpayers through the tax and spend mechanism. Note that in this interventionist system, the real economic elites, the people who would have risen to the top of an actually free economy, are crowded out and kept down by government action that favors certain firms. Who are these would be elites? We'll never know. And instead, we are left with our counterfeit billionaire class, which is elite, only in the skill at exploiting people who do real work in the private sector. Conclusion.

8:25Thus we have emerging of the economic and the political elite. Both types of elites generally rely on some sort of deception to buttress their claims. The political elite, for example, claim their positions by virtue of some sort of mandate from heaven, or a moral virtue, or because they allegedly reflect the will of the people. These are all lies, of course, but have nonetheless worked to fool and pacify the public for many centuries. Under a regime of economic interventionism, the economic elites rely on lies as well. They claim they are elites because they are efficient or hardworking or serve the customer. These are lies as well, since in the absence of a free or even mostly free market, the elites are in fact in their positions due to political maneuvering.

9:30They are in effect merely an extension of the political elite. The more interventionist the regime is, the more this is true. The really leads have always been those who receive the voluntary and free support of others through the private sector, or through other nonviolent means of interaction, through families, religious institutions, and other institutions of the private sector. On the other hand, those who become elites through the initiation of violence and through the looting of others have always been frauds and imposterous. For more content like this, visit Measys.org.