I touched on this topic on a previous post here: https://forum.tezosagora.org/t/nash-equilibrium-and-governance/2637
I would argue that all democracies have an element of plutocracy whereby the people/entities with the most resources have undue influence. For example, in Russia you have the oligarchs and in the USA you have lobbyist. The question really is to what degree these large entities/people can influence their power for themselves at the cost of society. Assuming they want to sustain their power/status then it is in their interest to not overly exert their power which could lead to civil unrest jeopardizing their power/status. The ideal state is for them to act what’s in their best interest with as little harm to the masses/network. This is analogous to a parasite. The parasite that overly exerts its power will eventually kill its host and itself. A sustainable parasite will have a perfect resource usage equilibrium shared between itself and its host. Ideally, that parasite will also benefit its host (i.e., mitochondria).
In Tezos, if large bakers over exerted their power and harmed the masses, this could lead to a hard fork which could undermine their power and harm their wealth. I would argue it’s in the interest of large bakers to advocate for decentralization and to avoid overly exerting their power if they want to preserve their power. It is in their long-term financial interest to do what’s best for the chain and to avoid forks.
