Mosca and Pareto: "Elite Theory"

The Dying Myth of American Democracy

Excerpt:

Pareto distinguishes between two types of Capitalists which Socialist writers typically conflate he says writers have confused, and persist in confusing, under the term Capitalists. One, owners of savings and persons who live on interest from property. And two, promoters of enterprise, entrepreneurs. In reality, these two sorts of Capitalists often have interests that are diametrically opposed and stand in even greater conflict than the interests of the classes known as Capitalist and Proletariat.

From the economic standpoint, it is to the advantage of the man of enterprise, the entrepreneur, that the interest on savings and another Capital that he borrows should be the lowest possible. It is to the interest of the saver that it should be as high as possible. The promoter of enterprise profits when the goods he produces go up in price. While rises in the prices of commodities are of slight importance to him, he finds compensation in the profits netted by his own goods. But all such increases in price are to the loss of the mere saver. Tax imposts on the goods he produces do little harm to the entrepreneurs. In fact, they are sometimes an advantage in that they scare off competition. But they are always injurious to the consumer, whose income derives from lending of savings at interest. In general, the owner of enterprise can always pass on to the consumer the increase in cost that results from heavy taxes. The mere saver almost never can.

Pareto's careful consideration between the functions of the entrepreneur and the pure capitalist anticipates the Austrian School of Economics in interesting ways. The model of artificially low interest rates which cheap credit, high time preference, and immediate consumption adopted by Western governments since the second half of the 20th century has been to the advantage of promoters of enterprise and to the disadvantage of the owners of savings.

...and James Lindsey's Rebuttal @@ 

...James obviously doesn't understand Elite Theory

Orwell's Summary of Elite Theory (from 1st video):

1) Progress is largely an illusion. Democracy is impossible, though useful as a myth to deceive the masses.

2) Society is inevitably ruled by oligarchs who hold their position be means of force and fraud, and whose sole objective is power and still more power for themselves. No revolution means more than a change of rulers.

3) Man, as a political animal, is involved soley by selfish motives, except so far as he is under the influence of myths.

4) Conscious planned actions for the good of the community is impossible, since each group is simply trying to secure its' own advantage.

5) Politics is, and can be, nothing except a struggle for power.

6) Human equality, human fraternity are empty phrases.

7) All moral codes are "idealistic" conceptions of politics, all visions of a better society in the future lies, conscious or unconscious, covering the naked struggle for power.

Notice that there's no Lindseyian "should rule" in the above.  There's only "do rule".   It's the "Pareto Principle" (focus on the 20%...):

The Pareto Principle, also known as the 80/20 rule, states that roughly 80% of effects come from 20% of causes. This principle suggests that a small portion of inputs or efforts usually accounts for the majority of results or outcomes. It's a concept with broad applications, from business and economics to personal productivity and time management, highlighting the importance of identifying and focusing on the most impactful factors.

...the 20% who constitute "The de facto Elite"