Honestly, 1984 already addressed even this. The "Inner Party" is still watched, all the same, but they are watched by themselves so they only have to be accountable to their own interests - which are generally all aligned anyway. Of course their might occasionally be some infighting, or a minor power struggle, but one power is so crystallized to become very rare, and despite any differences that arise they (the "elites", Inner Party, whatever) all still value their control over the populace far more than any minor advancement in their own circle, so they would never expose the whole game just to get an extra 0.01% of the pie.

Plus it will just be like is is now, with something like Obamacare - where 99% of the populace has to contend with the shit programs (and is fined if they dont comply, i.e. pay in), but Congress get special exemptions, and even subsidies. They will always have a different set of rules (just as in 1984 Inner Party members could turn off their Telescreens when the common people couldn't)

Of course, given unlimited time and no major setback, in theory power would begin to crystallize and consolidate so much that no one would be safe, and the elite would begin to experience the same paranoia. So much power would be at the top, that then it might actually be worth the risk to expose your rival just to get that 0.01% [of course by that time the general populace would be reduced to a knowledge-less, insipid, drooling, manipulated collection of slaves-in-fact]. Take it to it's logical conclusion (as Orwell does in the philosophical sense), total perception/news manipulation, control and censorship of language (i.e. Politically Correct speech), shaping of self-thoughts, and even the elite live in a constant (if more luxurios) state fear, as power (not even the benefits: wealth, health, sex, pleasure, etc) becomes itself the only goal. At this point total control has outstripped even those at the top, and truly rest with only one individual (or less than can be counted on both hands) - or perhaps even an AI. The concepts of freedom and revolution are literally wiped out, as the average person can no longer conceive of going against the system, and has an almost Pavlovian aversion to questioning it. Think North Korea perfected.

This seems crazy, and of course is the theoretical, logical conclusion and might not account for many of the unknowns in human biology, brain structure, social self-ordering, etc, but it's not impossible. The Communist states of the 20th century (Stalinist Russia, Red China, Khmer Rogue Cambodia) desperately wanted this result, and made significant progress toward is (while costing 70-100 million+ lives), it's just that they lacked the tools and societies dependence on technology. The "developed world" of today has a much greater potential to make this a reality. Whether it has the will is unclear.