Vilfredo Pareto (1848–1923) was an Italian engineer, sociologist and philosopher. He made several important contributions to economics, particularly in the study of income distribution and in the analysis of individuals' choices.

He was also responsible for popularising the use of the term elite in social analysis.

In 1893, he succeeded Léon Walras to the chair of Political Economy at the University of Lausanne in Switzerland where he remained for the rest of his life.

In political science and sociology, elite theory is a theory of the state that seeks to describe and explain power relationships in contemporary society.

The theory posits that a small minority, consisting of members of the economic elite and policy-planning networks, holds the most power —and that this power is independent of democratic elections.

Through positions in corporations or on corporate boards -and influence over policy-planning networks through financial support, positions with think tanks or policy-discussion groups- members of the elite exert significant power over corporate and government decisions.

The basic characteristics of this theory are that power is concentrated, elites are unified, non-elites are diverse and powerless and elites' interests are unified due to common backgrounds and positions.

Elite theory opposes pluralism.

Counter-elites frequently are emerged from excluded groups. A major problem, in turn, is the ability of elites to co-opt and negotiate with counter-elites.

Vilfredo Pareto (1848–1923), Gaetano Mosca (1858–1941), and Robert Michels (1876–1936), were cofounders of the Italian school of elitism, which influenced subsequent elite theory in the Western tradition.

• Power lies in position of authority in key economic and political institutions.
• The psychological difference that sets elites apart is that they have personal resources, for instance intelligence and skills, and a vested interest in the government; while the rest are incompetent and do not have the capabilities of governing themselves, the elite are resourceful and strive to make the government work. For in reality, the elite would have the most to lose in a failed state.

Pareto emphasized the psychological and intellectual superiority of elites, believing that they were the highest accomplishers in any field.

He also extended the idea that a whole elite can be replaced by a new one and how one can circulate from being elite to non-elite.

Robert Michels developed the iron law of oligarchy where, he asserts, social and political organizations are run by few individuals.

• Need for leaders, specialized staff and facilities.
• Utilization of facilities by leaders within their organization.
• The importance of the psychological attributes of the leaders.

Floyd Hunter uses the elite theory to analyze power in small communities. Hunter looks for the "real" holders of power rather than those in obvious official positions.

He mapped hierarchies and webs of interconnection within the city—power relations between businessmen, politicians or clergy.

This type of analysis was also used in later, larger scale, studies such as that carried out by M. Schwartz examining the power structures within the sphere of the corporate elite in the United States, at The structure of power in America: The corporate elite as a ruling class(New York: Holmes & Meier).

In his controversial book Who Rules America?, the professor G. William Domhoff researched local and national decision making process networks seeking to illustrate the power structure in the United States. He asserts that an elite class that owns and manages large income-producing properties (like banks and corporations) dominate the American power structure politically and economically.

James Burnham early work The managerial revolution sought to express the movement of all functional power into the hands of managers rather than politicians —separating ownership and control.

Many of these ideas were adapted by paleoconservatives Samuel T. Francis and Paul Gottfried in their theories of the managerial state.

Burnham described his thoughts on elite theory more specifically in his book The Machiavellians, which discusses, among others, Pareto, Mosca, and Michels.

Robert D. Putnam -political scientist at Harvard University- saw into the development of exclusive knowledge among administrators a mechanism that strips power from the democratic process and gives it to the specialists who will influence the decision process. "If the dominant figures of the past hundred years have been the entrepreneur, the businessman, and the industrial executive, the ‘new men’ are the scientists, the mathematicians, the economists, and the engineers of the new intellectual technology."

In 1995 he published Bowling alone: America's declining social capital in the Journal of Democracy in which Putnam argues that the United States has undergone an unprecedented collapse in civic, social, associational, and political life since the 1960s, with serious negative consequences.

In 2000, he published Bowling alone: The collapse and revival of American community, a book-length expansion of the original argument, adding new evidence and answering many of his critics. Though he measured the decline of social capital with data of many varieties, his most striking point was that many traditional civic, social and fraternal organizations –typified by bowling leagues– had undergone a massive decline in membership while the number of people bowling had increased dramatically.

In his book Top down policymaking, Thomas R. Dye -professor of government- argues that U.S. public policy does not result from the "demands of the people", but rather from elite consensus found in Washington, D.C. An elite based on non-profit foundations, think tanks, special-interest groups, and prominent lobbying and law firms.

George A. González writes on the power of U.S. economic elites to shape environmental policy for their own advantage. In his work Energy and Empire: The Politics of Nuclear and Solar Power in the United States, González demonstrates that economic elites tied their advocacy of the nuclear energy option to post-1945 American foreign policy goals, while at the same time these elites opposed government support for other forms of energy, such as solar, that cannot be dominated by one nation.

In his 1995 book Golden Rule: The Investment Theory of Party Competition and the Logic of Money-driven Political Systems, the political scientist Thomas Ferguson analyzes how elites seek to influence politics by "investing" in the parties or policies they support through political contributions and other means such as endorsements in the media.