Folly is set in great dignity, and the rich sit in low place. This is an instance of the error intimated in the preceding verse. A tyrannical ruler exalts incompetent persons, unworthy favorites, to "great heights", as it is literally—puts them into eminent positions.
"Folly" is abstract for concrete, "fools." And the rich sit in low place. "The rich" (ashirim) are not simply those who have wealth, however obtained, but men of noble birth; ἀρχαιόπλουτοι, as Plumptre appositely notes, persons of ancestral wealth, who from natural position might be looked upon as rulers of men.
Such men would seek eminent stations, not from base motives of gain, but from an honorable ambition, and yet they are often slighted by unworthy princes and kept in low estate. The experience mentioned in this and the following verses could scarcely have been Solomon's, though it has been always common enough in the East, where the most startling changes have been made, the lowest persons have been suddenly raised to eminence, mistresses and favorites loaded with dignities, and oppression of the rich has been systematically pursued.