There is a political marketplace in which individuals transact with each other to produce public policy, but access to the political marketplace is limited because high transaction costs prevent the masses from participating. This divides the population into two groups: the political elite and the masses. Many people have observed this division, but often have gone on to advocate giving more power, and eliciting more participation, from the masses. That is wishful thinking. This volume explains not only why that division exists, but why it must exist. Because political power necessarily rests with an elite few, the only way it can be constrained from being abused is within an institutional structure that requires elites to compete among themselves for power, so some within the elite check and balance the power of others.