What would a functional plutocracy look like?

Question

Let's say we have a city-state where top government offices are literally for sale; or rather, up for auction. There's a new purchase cycle every quarter, and a wealthy individual could bid on the office of Mayor or Sheriff, or what have you. Of course, someone else can try to outbid him (including the incumbent). Bidders could also solicit donations from ordinary people, in exchange for promises of specific policy actions, e.g. "I'll have the city re-pave your street if everyone donates 100 gold pieces to my bid for Mayor".

How could such a system be made to work ? Who would administer the auctions, and how can we prevent that person or organization from becoming the de-facto dictatorship ?

Let's assume that this is happening in a world with reasonable degrees of magic, but no cryptocurrencies or AIs or anything like that, so citizens would still have to trade their hard currency the old-fashioned way.

Answer 1

It wouldn't be much different from the way corporations are run now

@AlexP is right, you normally can't just buy the office of king because there is no "super-king" to sell it to you (and if there is, that would probably be feudalism, not plutocracy). You need to look at how societies form in general, specifically thinking what would cause a group of human beings to form a plutocracy. Likely they would be forming a plutocracy from either an oligarchic/monarchic society or a republic/democratic one, as a plutocracy the way you describe would probably need a functional system of hard currency, which wouldn't be present in a group of hunter-gatherers just becoming sedentary for the first time.

We already have examples of how a plutocratic society is run in the present day: corporations. Corporations start from pretty much nothing and form when individuals decide to pool their resources together to accomplish a broader goal, not that different from how societies and their governments form. In corporations things are kind of a weird mix between democracy and monarchy, with the person who can own or control the majority of shares dictating what happens to the company. A functional plutocracy wouldn't be that much different from a cyberpunk corpocracy, though it would probably be more open to participation as works like Shadowrun and Cyberpunk 2077 treat the corporations as shadowy pseudo-governmental overlords instead of examining how corporations actually run (i.e., regular people are never shown buying corporate stock, there is never any shake-ups in leadership due to changes in who owns the majority share, and the corporations are never beholden to their shareholders, which is kind of the point of a corporation).

In such a plutocracy, citizenship would be based by the number of shares in the country you own, as in owning >1 share makes you a citizen. Owning many shares would give your vote more power, but it wouldn't make you more or less of a citizen. From a political science point of view, this would mean that everyone that "bought into" the country therefore has an interest in seeing the country succeed. This is a kind of Heinlein-esque view of society, namely that only those willing to invest in society should be allowed to influence its policy (In practice this doesn't work, as can be seen in the early 20th century when the automotive barons bought up the railroads and deliberately ran them into the ground to make their cost-inefficient cars look better. Because they were so wealthy they could eat the loss).

Public positions would probably be determined by appointment by whoever is in power at the moment. "Buying" public positions is probably not a long-term feasible strategy, for the simple reason that it will never result in the most competent people getting the post (this is arguably true for politicians today, but you'll notice that public service jobs like police officers and EMTs require skill checks, and even public sector jobs require interviews and job skills). It really seems like it's only the "elected" jobs where any old idiot can get into them. As a result, most jobs would probably be determined by appointment, similar to the modern U.S. spoils system or how a lot of corporations work. In practice a lot of people would get jobs based on political connections and kickbacks creating a "good old boys" system, kind of how politics works today, keeping the plutocracy angle that you want.

Answer 2

People would bid for office like they bid for anything else.

Governmental entities take bids all the time. If I have a road building crew I will bid for government work, promising good construction, quick completion time and value for the money.

Bidding for offices would be the same. If I am bidding to be the dogcatcher I will promise to catch dogs humanely for X salary. A competing bid might be an individual who will save money and catch dogs possibly less humanely for 0.85X salary. Perhaps the governmental entity is mandated to accept a certain number of bids from red haired individuals. A red haired individual also promises to catch dogs humanely for X salary. I am a platinum blonde and fearing I will be outbid, lower my bid to 0.85X. Any government office could be bid for in this way.

You would not need to be a wealthy individual to bid for a government job. You could be an individual who needs the job! A wealthy individual might be able to underbid competitors - for example I make a bid for Comptroller and I will do it for a salary of $1 because I am rich, don't need the money and I love my city. Perhaps I think I can leverage the job such that I will make more money off of my other endeavors. Or maybe I really do love my city and I want to give back.

The governmental entity taking the bids for government office would evaluate the bids. Like they do! Perhaps the individual promising to catch dogs inhumanely for 0.85X has no background in that type of work. Perhaps the prospective comptroller has a history of civic participation and the skill set to do the job.

An office is an office. A person occupying that office carries out the responsibilities that come with. She might be paid, or not, and she might use the powers of the office in different ways, or not. The office holder might be elected, or appointed, or inherit the office, or bid for it, or be chosen by lottery or be hired for it off of Monster.com. There is nothing special about governmental offices.

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As as regards a functional plutocracy - there are many. If I am wealthy and interested in accumulating more wealth and flying my jets, I probably do not want to spend my time being comptroller. But if I see a way that decisions by the comptroller can further my interest, I can hire an individual with comptroller talents to make a low bid for the office. I assure this individual that once her bid is accepted, I will supplement her salary (or that of her son) with my funds in exchange for her consideration.

This is how the real world works now.

Answer 3

The bidding cycle is too short

The problem is a new auction every three months doesn't allow the winning bidder to actually do or achieve anything in the time available. Which might be fine if the person concerned is biding for the office of City Treasurer or Tax Collector and has the sole aim of stripping every coin he/she can get out of the Treasury but that aside its just a recipe for chaos.

The short term nature of the role has two significant effects I can think of. Firstly it significantly reduces the size of any likely bids for Office. I mean if you cant earn a million dollars (or whatever) in a particular public office in three months why would anyone put in a large bid?

Secondly what can anyone running a moderately sized City State achieve in three months? Most people would spend at least that long just getting to know the ropes. That and the fact that the permanent State employees (public servants) would tend to habitually ignore/delay acting upon instructions from whoever won the role in the sure and certain knowledge that they would most likely have a new boss in three months time. So why do anything he/she says? Just delay until they are gone.

Three, four or five years? Now that's a different story.

Answer 4

The hard part about making your system work would be keeping the standing government from changing the laws so that they don't have to spend their personal fortunes to hold offices.

If you just dropped 10 million dollars on becoming a senator, you don't want to have to do that again next election; so, it will be in your interest to change the laws. As an office holding member of government, wouldn't it be so much better if you just had to HAVE 10 million dollars, but then make other people do the actual spending of money to keep things going? That way, as a leader, you still prevent competition for you power by blocking anyone who does not have as much money as you, but you don't have to make yourself broke to do it.

As it turns out, this is what actually happened in many ancient city states. They were Plutocratic in the since that you had to have X amount of wealth to participate in Y aspect of government, but it was the poor instead of the rich who paid for everything that kept the the city state functional. This ensured that those in power stayed in power which is ultimately what defines a stable form of government.

The best way to make sure your system of government stays more or less stable is to give your people a constitution that says that the government may not create ANY taxes. Instead, make it so that the auctions for government positions actually create the treasury's revenue. A strong constitution is important here because your people need to believe that the constitution is more important than the actual human beings giving them orders. This way, if a politician proposes a law that levees an illegal tax or challenges the auction system, their actions are clearly treasonous, and they will be removed from power (either by act of law initiated by other leaders or by an angry mob if need be).

Answer 5

I think the most wealthy would rather control who had the position than do the work themselves. So a wealthy person might look around for the someone to stand for the office and fund them and/or the candidate might go out and solicit support for their run. Pretty quickly like-mind people would pool their money. So, not that different from the current system but the "campaigning" would be merely fund raising and promises to supports and there would be no need to convince the general public to actually vote for you.

Answer 6

Checks and Balances:

(insert double meaning here)

The key to making a plutocracy work in a modern world will be checks and balances. Much like our government, you would need multiple branches of government, each with their own unique way of influencing governance. I'm covering your specific question first, but I feel the overarching issues need a bit more comprehensive of an answer. One of the most critical aspects to your purchase of votes and positions is that taxation should be optional, giving society a strong motivating factor to accept people buying positions.

• Bureaucracy: A stable bureaucracy of competent, vetted employees would be essential to maintain stability. Here is where your positions come into play. These jobs could be bought initially, but only by those who can prove themselves minimally capable. You might have some jobs on a sliding scale, so a bureaucrat with really good scores could advance cheaply, needing little of his own money to get better paying jobs, while less qualified ones could still get ahead by throwing money at the thing. In a large bureaucracy, the structure of the system is such that the professional bureaucrats can make things work despite the influence of financial appointees. The protected, sliding scale jobs would be the ones where the most disruption of the system could occur. Efforts to eliminate the purchase of jobs would be rebuffed, because the government doesn't enforce taxation, and they really need the money. The best, most qualified bureaucrat could eventually become the CEO, with a vote by the taxpayers, subject to removal by the stockholders.

• Life, Liberty, and Property: You would need a good constitution. This system is rife with opportunities for one rich person to screw over all other rich/not so rich people, so protections to make sure that didn't happen would be critical - you don't want people to take your right to vote. I would suggest all taxation and seizure of assets is deeply optional. Personal rights should be shielded to stop others from blocking the ability to make money. I might also have some kind of guaranteed employment - the government will give anyone the chance to earn money by hard work and effort. Protections to keep anyone in government from (directly) profiting from their positions (except via a salary) would be very important to keep trust in the system alive.

• Please let me pay more taxes!: I would propose one branch of government controlled by whoever pays taxes. For every dollar you invest in the government, you get one year of voting rights. This could even be open to foreigners and other governments - after all, we can't silence money! With voluntary taxation, every buck is needed. It could be direct democracy (you register your dollar-vote, and need to weigh in on each issue) or some kind of representation (you give your dollar to an organization you trust to vote the way you want them to, making decisions for you). This might even mean foreigners can be more invested (pun intended) in your plutocracy than their own government. Imagine the rich people in another country lobbying your plutocracy to take over their own state to extend the benefits of good financial governance to all. Functionally, this would resemble the house of representatives.

• Shareholders: Then you can have shares of government stock. Stockholders own voting shares, and they vote in a separate body from the taxpayers. These would hopefully represent a more stable voting block, with steady hands buying stock to assure the volatility of taxpayers doesn't disrupt good governance. Stock would likely be very expensive and rarely change hands. In desperate times, this body could issue new stock to raise emergency funds, but dilute their very power base by doing so.

• Citizenship: Being a citizen means you have at least one share of stock. Non-citizens can still be residents of your country, but as employees only. They can become citizens by buying stock. If a citizen has to sell their stock, they either stop becoming citizens, or they could become wage-slaves: they essentially give up control of their stock (and it's voting rights) until they can earn enough money to buy their stock back. Protections to guarantee the right and opportunity to buy your stock back would need to be enshrined in the constitution.