Political power comes from a willingness of one person to cooperate with another simply because they agree on a goal. Economic power comes from someone having a sufficient quantity of resources that they can trade with other people to achieve a goal they may not agree on. These two types of power are fundamentally different. Economic power can be consumed. Political power cannot. Economic power is created by the slow process of wealth creation. Political power can be created in a moment by the action of a mob.
A wealthy person does not automatically have economic power. Simply buying something is not expressing one's economic power. You have to buy something whose value others do not agree with. For example, if you build an ordinary house in an ordinary location, you are simply buying a house. If you hire Frank Lloyd Wright to create Fallingwater, you are using your economic power to create something that perhaps nobody values but you.
If you believe, as I do, that the best society is created when power (of all stripes) is widely distributed, then you'll prefer economic power to political power. The process of exercizing economic power acts to redistribute it. Political power, however, tends to become concentrated. Look at the USA. Its Constitution was designed to specifically prevent the federal government from becoming a concentration of power, and yet it happened anyway.
There seems to be only one way to disperse political power: splitting up.
posted at: 13:20 | path: /economics | permanent link to this entry