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Middle-earth's "castes" were defined by metaphysical differences in each race from the others; for example, Elrond was greater than Bilbo not because of aristocratic privilege, but because he was inherently mightier and wiser by virtue of his elven nature.
Although I think it is a fruitless exercise--and probably unfair to Tolkien--to try to draw some conclusion about his socio-political beliefs from his highly fantastic fiction, it may still be telling that Tolkien identified himself most with the Hobbits, the "lowest" of all the free peoples.
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