Elite Competition and the Iron Law of Oligarchy: A Tale of 14 Islands∗

We develop a model of oligarchy subject to elite competition. Even when all members of the elite share an economic interest in labor repression, competition for control of the state can drive a wedge between the incentives of old and new elites. Thus ‘the iron law of oligarchy’–that all elite members share an overriding interest in repressive institutions–can be bent in various ways. New elites may oppose repressive labor policies in order to maintain legitimacy among the citizenry, which in turn gives them power to coordinate popular revolt. They can leverage this power to extract rents from the old elite or initiate a democratic transition on their own terms. The old elite can forestall these moves by co-opting the new elite or inviting the intervention of an external power (e.g. colonial authority, domestic military). We test the model’s implications using detailed historical data on the “plantocracies” of 14 British Caribbean sugar islands in the 19th century, where the abolition of slavery intensified elite turnover and competition. ∗A previous version of this paper was circulated as “Autocracy as a Safety Valve for Democracy’s Elites.” We thank Melissa Dell, Stan Engerman, Fred Finan, Price Fishback, Morgan Kousser, Gary Libecap, Suresh Naidu, Adam Przeworski, Ken Shotts, Guido Tabellini, Francesco Trebbi, Dan Trefler, Stephane Wolton, and Alex Whalley for valuable discussions and comments on that previous version. Financial support from UCLA’s Burkle Center, Center for Economic History and Price Center are gratefully acknowledged. †University of California, Los Angeles, and NBER. ‡University of California, Irvine. “If we want things to stay as they are, they will have to change.” — Giuseppe di Lampedusa, The Leopard “In few places does the dead hand of the past lie as heavily on the present as in the Caribbean.” — Wallace (1977)