The Iron Law of Oligarchy

From "The Trouble With Elections: Everything We Thought We Knew About Democracy is Wrong," Chapter 15.2

White River Valley Electric Co-operative Board

All large membership organizations that seek to govern themselves democratically (co-operatives, nonprofits, unions, home-owner associations, worker-owned enterprises, etc.)  face perennial problems. Key among these is, how can an organization maintain member interest in matters of organizational governance year after year, and avoid elite or management “capture?” The path to a solution requires understanding that the nearly exclusive reliance on elections as the tool for selecting governing bodies is incapable of remedying the problem. The problems of apathy, self-selection bias, and rational ignorance (discussed previously), plague both election-based systems, as well as open participation direct-democracy attempts at democracy.

Early in the 20th Century, German sociologist Robert Michels examined what happened within organizations that intended to be internally democratic.  His study of political parties revealed an apparently unstoppable tendency towards elite control. His landmark analysis, published early in the twentieth century, Political Parties: A Sociological Study of the Oligarchical Tendencies of Modern Democracy, has come to be known as the “iron law of oligarchy.”

 He asserted that any organization, regardless of intent, will sooner or later develop an internal “ruling class.” This governing elite may consist of paid staff, or an elected board of directors. Even if these elite members share the goals of the general membership, they will also develop interests uniquely their own, which include preservation of their role as leaders. In many cases the interest of this governing elite may veer away from the original interests of the membership that created the organization, until the original purpose becomes lost in a forgotten history.

Michels argued that the driving force of this dynamic was that all large and complex organizations use a division of labor. Division of labor in turn leads to specialization, and, according to Michels, specialization leads to oligarchy. Because of their focused attention to the internal workings of the organization the elite can magnify their power. This may be done through control over the flow of information to members, or control over the decision-making rules, combined with low participation rates and indifference among members. As Michels wrote, “the apathy of the masses and their need for guidance has its counterpart in the leaders’ natural greed for power.” Member non-participation is often blamed on “apathy.” That term can connote a certain moral failing by those members, just as the term “ruling class” can connote sinister motivation on the part of the subset that takes the reins. Let’s set aside these connotations and recognize that ordinary members have other commitments in their life, which may be more pressing than the workings of their union or co-op.

The managers of the would-be democratic organization may simply feel the need to step in and fill the vacuum of decision-making created by uninterested members. Oligarchy can arise by default, rather than usurpation by power-hungry managers or elected elite. Everyone may wish that the organization were more democratic.  It can be the design of the governance system that is at fault rather than necessarily the moral flaws of a staff, or board, or general members. In other cases, though, the ruling class enjoys elevated salaries, psychological rewards or other privileges and prerogatives that drive them to effectively oppose true democratization of the organization. Michels argued that the goal of representative democracy free of elite domination was virtually impossible. Elections and other trappings of democracy were a mere façade. Examples that run counter to this view frequently come from unions or associations in crisis, when members are motivated to give full attention. Even if members occasionally reassert control during some organizational crisis and resulting mobilization, generally an oligarchic elite (perhaps a replacement one) eventually ends up holding power. Perpetual crisis — an association rife with factionalism or suspicion of distant leaders — is not an acceptable price for maintaining member involvement and democracy.

Michels identified a powerful tendency, but I and others, such as Thomas Diefenbach, argue it falls short of an “iron law.” The tendency to oligarchy is shaped by institutional design and other factors. A key is to allow a division of labor but avoid specialization in the key domain of decision-making, through the use of regular rotation by means such as sortition. This requires rejecting the hegemony of the concept of expert leadership — the belief that there are typically certain difficult-to-learn skills or character traits that make for uniquely superior leaders, and the belief that such leaders are essential or inevitable. If such people do exist in certain organizations and circumstances, they should be advisors rather than deciders. 

Even if one accepts the more limited definition of democracy in which the members aren’t expected to self-govern, but merely monitor and sanction their leaders, normal attention and detailed knowledge of leader performance is almost always inadequate. A contributor to the momentum towards oligarchy is the simple fact that the members have other life issues to attend to, and it is completely unrealistic to hope that all, most, or even many members will give the attention needed to maintain a meaningful democracy, even for the relatively short duration of an election. The issue of rational ignorance, which I have brought up repeatedly, rears its head yet again. The problem of rational ignorance is multiplied in the cases of non-governmental democracies, especially if a person is a member of more than one would-be democratic association — for example, a member of a food co-op, a union at one’s workplace, a credit union, and a number of charitable associations, each seeking the engagement and attention of the member. The small minority of members of an organization who are deeply engaged may bemoan the “apathy” of the other members, but no amount of cajoling or mobilization tactics will overcome the reality that members have a limited amount of time and attention they are willing to offer on an ongoing basis, year after year. 

Perhaps we need a different term than “oligarchy” to describe a system that is non-democratic, but in the absence of would-be oligarchs. Democracy requires more than formal equality of members. It is also more than the nominal “consent” of the governed. Democracy requires that decisions track with the decisions that would be made if somehow all members were fully informed and participating. Sortition is the tool that can achieve this. But even then, the tool must be wielded appropriately, as it would be a serious mistake to simply select a board of directors by lottery.