Replacing the Logic of “Workplace Democracy” With the Iron Law of Oligarchy

by | Oct 18, 2022

The iron law of oligarchy is a political theory first developed by the German-born Italian sociologist Robert Michels in his 1911 book, Political Parties. It asserts that rule by an elite, or oligarchy, is inevitable as an “iron law” within any democratic organization as part of the “tactical and technical necessities” of the organization.

Michels’s theory states that all complex organizations, regardless of how democratic they are when started, eventually develop into oligarchies. Michels observed that since no sufficiently large and complex organization can function purely as a direct democracy, power within an organization will always get delegated to individuals within that group, elected or otherwise.

Book discussed: Why Managers Matter: The Perils of the Bossless Company

Dr. Peter G. Klein is Carl Menger Research Fellow of the Mises Institute and W. W. Caruth Chair and Professor of Entrepreneurship at Baylor University’s Hankamer School of Business.

About Keith Knight

Keith Knight is Managing Editor at the Libertarian Institute, host of the Don't Tread on Anyone podcast and editor of The Voluntaryist Handbook: A Collection of Essays, Excerpts, and Quotes.

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