A plutocracy is a government which is ruled by the wealthy, or controlled by wealthy individuals. The term is usually used pejoratively, as it implies a lack of democratic freedom and social mobility. Numerous historical governments were plutocracies, controlled by an oligarchy composed of the wealthy ruling class, and some modern governments have been accused of being plutocracies, including the United States.

The term comes from the Ancient Greek ploutos, for “wealth,” and the suffix -kratia, for “ruler.” Many nations have experienced a state of plutocracy at some point, since wealth often comes with immense power, especially in the formative stages of a new country. Countries with valuable natural resources like oil and precious metals have also experienced government in the form of a plutocracy, as the entities which control these resources generally want to maintain conditions which are favorable to them.

An outright plutocracy governed by a handful of wealthy individuals is relatively rare in the modern era. However, the governments of many nations are obviously heavily influenced by wealth. Wealth buys political power, in the form of lobbying, campaign contributions, bribing, and other forms of financial pressure. Many nations have tried to limit the influence of the wealthy through laws controlling campaign finances and lobbying, but these laws can be difficult to define and enforce.

One of the hallmarks of a plutocracy is economic disparity. In nations where the wealthy control the government, the wealthy have a vested interest in retaining their wealth, and in promoting government policies which will enhance their situations. As a result, people without the power of money are unable to effect change in their governments. Economic inequality can lead to social unrest, as members of the lower classes rebel against the moneyed ruling upper classes.

Another common feature of a plutocracy, as mentioned above, is a lack of social mobility. Plutocrats tend to socialize and marry amongst each other, thus concentrating their wealth and making it difficult for people in the lower classes to break through. Rule by the wealthy is often associated also with ethnic disparities, in which members of the plutocracy have similar religious beliefs, ethnic backgrounds, and skin colors, while people with obvious physical differences remain trapped in the lower class.

Some people believe that a plutocracy is not a just system of government, since it does not promote the welfare of the population of as a whole. It tends to promote class disparity and systemic inequalities, a troubling trend in the eyes of many of these critics.