The idea of rule by those with the most social capital is explored by Cory Doctrow in his novela ‘Down and Out in the Magic Kingdom‘. It doesn’t end well, and also considers a future in which the amount of social capital — or ‘whuffie’ — each person has is easily polled as everyone is wired into the ‘net.
It’s not a meritocracy, we understand that those with the most social capital aren’t always the best to lead (nor do they wish to — as Stephen Fry often makes clear). It’s not democracy (although it has certain democratising features), as there isn’t a system — nor an equal voting footing (those with more social capital can push others into positions of power).
In societies (those online are the only in which we have seen movements toward this) where there is “rule” by those with the most social capital it can be seen from the outside almost a ‘mob rule’ (with those with social capital directing the mob). The Jan Moir protests are seen as ‘democracy’ or ‘mob rule’ — and as Paul Bradshaw says (in his first comment) “nothing inbetween”.
Influence by social capital can be seen as ‘mafia’s, cliques, etc — which baffles those ‘inside’ them as they aren’t necessarily knowingly exerting influence.
There’s real need for the study of this ‘system’ of rule — and it needs a term so we can distinguish it from others, so we can agree what’s happening and look at the effects. I’m going for whuffocracy — unless someone already has come up with a better one.