A3 Internal Oligarchy

Topic

The starting point of this trajectory is legal-rational authority: unlike charismatic or traditional authority—which emerges from network centrality, perceived charisma, or an individual's accumulated credibility—legal-rational authority resides in an office rather than in the person holding it. A formal rule—such as an appointment, a contract, or an organizational chart—grants this authority to the office; the fact that authority resides in the office rather than the incumbent allows it to survive changes in leadership, persisting even when the person holding the position is replaced.

Because membership in a community organized around these offices is a contractual condition rather than a matter of free association, the legal-rational authority inherent in a specific office extends to entire communities built upon the same principle: corporations, armies, state bureaucracies, and institutional churches.

Formal organization emerges when the transaction costs of case-by-case coordination—whether via networks or markets—exceed the costs of coordination through authority within a hierarchy of offices; according to Ronald Coase’s argument, this is why such communities exist, rather than all coordination occurring through free negotiation.

Furthermore, within this hierarchy of offices, formal rules regarding rotation or election exist; in principle, these should ensure that effective control over the organization remains distributed according to those rules, renewing itself alongside the offices subject to rotation or election. However, when effective control of the organization becomes increasingly concentrated in a permanent minority within that formal hierarchy—contrary to the formal rules of rotation or election—internal oligarchization occurs. This is the "iron law" described by Robert Michels, a phenomenon that operates even within organizations of democratic origin that possessed rules for rotation or election from their very inception. Thus, internal oligarchization—occurring within the framework of the legal-rational authority that initiated this trajectory—serves to highlight that the very formal rule distributing an office among successive incumbents (whether through rotation or election) does not, in itself, guarantee that effective control of the organization is shared along with those offices; consequently, such control can end up becoming increasingly and permanently concentrated in a minority that the formal rules of rotation or election are no longer able to displace.

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