Does wealth equal power?

by on December 30, 2011 at 2:43 am in Political Science, Uncategorized | Permalink

That request was the first on the list and it came from Ezra Abrams, who wrote:

Wealth is equal to raw naked power: the power to fund PACs; the power to endow university chairs to influence people; the power to tear down neighborhoods and erect shopping malls. to what extent does the increase in wealth and income of the upper x% (relative to median or some other broad measure) mean that too much power is concentrated in the hands of too few people one amusing example is from Kahnemann’s thinking fast and slow. Small schools show the best results b gates poured money into small schools However, what gates didn’t realize is that this is a small numbers artifacts; small schools show the best and worst results cause with a small school you can deviate from the mean …there you have raw naked power having a huge influence on educational policy

I disagree with most of that.  The scholarly literature suggests that campaign finance reform doesn’t matter as much as people think.

The big banks control our government less than some critics have suggested.

Academics are quite liberal/democratic, yet college students seems to be slightly more conservative than the American public as a whole.  The major impact of endowed chairs is to cement the roles of Harvard, Princeton and comparable schools as intellectual leaders.

Bill Gates influenced computer operating systems a good deal, but since he earned his money I’m not sure he has had a big impact on final outcomes.  (The anti-malaria campaign may yet pay off.)  He also has moved away from the “small classroom” idea, after he viewed the data.  Fiscal pressures — not pressures from the wealthy — probably mean the idea will lose out anyway.

There are several reasons why wealth does not translate into power so easily.  First, effective philanthropy is extremely difficult to achieve, especially if that philanthropy is trying to counteract prevailing social trends.  Nor should it be assumed that non-profits are always the drivers of change.  Second, the wealthy in groups do not always coordinate very effectively, to say the least.  Each is used to being in charge (remember when the Lakers had Karl Malone and Gary Payton as well as Bryant and O’Neal?)  Third, many of the very wealthy choose to consume ego rents rather than effectiveness.  Fourth, “democracy” and “the market” control large chunks of modern life, and it is hard for outsiders to commandeer those processes.  Most of the major functions of government are there because people want them to be there, for better or worse.

The best way to think about wealth and power is with some ideas from Harry Eckstein.  There will be, for reasons of spontaneous order, a general concordance between the status and influence of groups in the broader world, and the power of those groups when it comes to government.  American economic policy, for instance, really is more pro-business than in much of Europe, and that does stem from the more commercial nature of our republic.  That said, the ability of the rich at the margin to control policy through intentional acts, either individually or in groups is much overrated.

Wealth does protect you from the depredations of others, such as being treated very badly by the police or legal system.  In this defensive sense wealth can give you a good deal of power.

Overall the quality of argumentation and evidence on this topic is extremely low.

Addendum: Iceland, by the way, doesn’t want the money of the Chinese billionaire.

Rahul December 30, 2011 at 3:18 am

What if you own a newspaper, TV Station, or a magazine? NYT / Washington Post / Fox / Murdoch etc.?

Andrew' December 30, 2011 at 3:26 am

Have you seen “The Invention of Lying”?

I haven’t.

anonymous... December 30, 2011 at 4:01 am

Old media still has a role to play, but its influence is far less than it used to be.

Adrian Ratnapala December 30, 2011 at 8:46 am

Like Abrams’ first two examples, Rahul’s is a case of wealth buying an opportunity to try and convince others. You could argue that the wealthy have more such opportunities than others, but it still isn’t “equal to raw naked power”.

TallDave December 30, 2011 at 10:00 am

It’s not clear that actually works very well.

Rupert Murdoch gained power and wealth from Fox News’ success, because (like Limbaugh in radio before him) he filled a center-right programming niche that CBS/NBC/CNN/MSNBC/ABC were under-serving.

Al Gore, otoh, seems have gotten nowhere with far-left Current, which doesn’t seem to have an audience, and Pinch Sulzberg has squandered the NYT’s reputation to the point he needed a bailout from Carlos Slim.

All these things are subject to the whims of the market. Only when you have monopolistic control of a medium can you really move opinion with media.

Glen December 30, 2011 at 12:59 pm

I really would not consider Current TV to be a far-left network, in that they aren’t Marxists or calling for some sort of revolution. It’s a pretty lucid station with an “American liberal” position, or “Progressive” position

TallDave December 30, 2011 at 1:06 pm

Calling for violent overthrow of the U.S. gov’t would be more properly labelled “extremist.”

TallDave December 30, 2011 at 10:06 am

BTW, did you notice what happened with Newsweek? They actually turned down a buyout offer from NewsMax (which is apparently doing relatively well) and took less money from someone else so they could stay leftist.

Conservative media is in an odd position, they seem to benefit from the general self-selection of left-liberals into the media, sort of like being the only people serving alcohol in an area where everyone else considers it morally wrong.

JWatts December 30, 2011 at 11:36 am

“they seem to benefit from the general self-selection of left-liberals into the media,”

+2

Twice as many Americans self identify as conservative vs liberal and yet the bulk of TV News programs lean to the left. This makes the fewer right leaning outlets much more valuable.

CBBB December 30, 2011 at 1:33 pm

You mean all those Military-Police-Authoritarian-Banker-Corporate Executive-Worshipping news shows that lean to the left?
I think the REAL problem is that too many partisan extremists are way too sensitive and take any TINY bit of criticism of the right as LEFT-LEANING. I’ve almost never seen a left-leaning TV show on any mainstream network.

TallDave December 30, 2011 at 1:43 pm

That doesn’t explain media trends very well. Decades of Pew polling can’t be wrong.

CBBB December 30, 2011 at 2:52 pm

Sure they can – depends what kind of questions the polls are asking

TallDave December 31, 2011 at 10:05 am

Media workers consistently describe themselves as well to the left of the electorate. Given that it’s exactly same question to both groups, it’s extremely unlikely they’re wrong.

CBBB December 30, 2011 at 1:34 pm

Yeah NEWSWEEK is leftist hahahaha okay buddy.

TallDave December 30, 2011 at 1:43 pm

They used to be more centrist, but now they’re pretty reliably left-leaning.

CBBB December 30, 2011 at 1:49 pm

If your definition of Left-leaning is pro-Democrat that’s not at all the same thing. By any reasonable standard the Democrats are a right-wing party.

TallDave December 30, 2011 at 1:52 pm

I think you have a very different view of “reasonable standard” than the median American.

msgkings December 30, 2011 at 1:55 pm

By ‘any’ reasonable standard? So only standards that put the Reps on the far right, the Dems on the right, and what, the Marxists in the center is ‘reasonable’?

M’kay…

Who’s on the left under these reasonable standards?

msgkings December 30, 2011 at 1:56 pm

Have to +1 with TallDave on this.

CBBB December 30, 2011 at 2:01 pm

There is no major left-wing party in the US. Just because two parties exist doesn’t mean ONE is left-wing and ONE is right-wing. They can both be on one side or the other. The Democrats are on the left compared to the Republicans I suppose but in practice they’re mostly identical – very different RHETORIC but in terms of governing only minor differences and most of those have to do with social issues.
Perhaps Newsweek takes a favourable view of Democrats but since Democrats often support right-wing positions I hardly call supporting Democrats to mean “being on the left”.

CBBB December 30, 2011 at 2:02 pm

There’s a WHOLE lot of space on the spectrum between the Democrats and Marxists.

msgkings December 30, 2011 at 2:07 pm

OK, CBBB, so who’s on the left then? In that big space between Marxists and Dems?

CBBB December 30, 2011 at 2:17 pm

I don’t know of any US political party on the left. I think those terms left and right are not really useful in reality – I think that there are insiders and outsiders and within either two groups I suppose there are people with left-wing views and people with right-wing views but within the insider group at least, the differences of opinion are more muted (this is why you get all these outlets like Newsweek, Washington Post, etc. bemoaning the lack of bipartisanship). That’s the real dichotomy in politics. Both political parties are “insiders” – or least the party establishment is. Wealth is a great way to become an insider which is why wealth is one of the keys to power.

Now in terms of the Democrats not being on the left – if you ignore the rhetoric what in terms of actual policy have they pushed through that’s all that left-wing? If all you can come up with is a few token tax rate increases I think this proves my point.

TallDave December 30, 2011 at 2:25 pm

It might be true that along some theoretical left-right construct Newsweek and the MSM generally are to the right of some point one might choose to call the center, but in terms of the center of the U.S. electorate, they are probably best described as inhabiting the center-left.

msgkings December 30, 2011 at 2:26 pm

Which is it CBBB? If ‘left and right’ aren’t useful as terms, how can I illustrate the Dems support for leftist ideas? What in your mind is an idea of the ‘left’? Besides higher taxes, since you conceded that.

Once you tell me what ‘left’ means to you I can show you where the Dems are more in favor of those ideas, and thus are the ‘left’ party in this country.

Just because they haven’t been able to enact much of their agenda doesn’t mean they aren’t ‘left’. Maybe as a Canadian our checks and balances and arcane stuff like the Senate filibuster aren’t as apparent to you.

CBBB December 30, 2011 at 2:41 pm

Well for the Democrats to be considered a left-wing party they’d have to support left-leaning ideas more often then they support right-leaning ideas. But both parties are largely devoid of any real political philosophy – ESPECIALLY the Democrats. They are largely corporatist machines for extracting money from a shifting alliance of donors and returning favours with the goal of perpetuating their political life.

In terms of policies – Obama’s entire foreign policy largely follows the Bush policies (and he’s been lavishly praised by Dick Cheney amongst others for this). This is an area where there are not many checks-and-balances for the President if he REALLY wanted to pursue a different set of policies.
The War on Drugs has been continued to executed judiciously, Obama initially signaled he would respect State level drug legislation involving medical marijuana – this has totally been reversed.
Obama has absolutely no problems signing the Defense Authorization Act, SOPA, extending the Patriot Act or any other kind of authoritarian power-grab.
On all of these issues he could have tacked a different course.
Even the healthcare plan came out of the Heritage Institute – and Obama never really wanted a public option or medicare buy-in (the 1 or 2 senators who would constantly pop-up to say they were against these pieces of the act were only doing their duty to the President so he would not have to personally reject the public option).
Hell the guy appointed Tim Geithner and Larry Summers to important positions.

In almost every policy decision Obama has taken what were essentially Republican positions 5-10 years ago, but the Republicans can’t be seen to agree with the Democrats (how would they get elected then) so they are constantly forced to more further and further “right” to maintain some kind of distinction.

TallDave December 31, 2011 at 9:46 am

Shrug. People on the right said the same thing about Bush when he was elected.

CBBB December 30, 2011 at 2:09 pm

In fact come to think of it, the very existence of magazines like Newsweek are testaments to the power of wealth. The wealthy are able to use the media to pump out reams of paper and endless hours of television in order to create the illusion that there are two distinct political parties with divergent and fundamentally different political philosophies.

Andreas Moser December 31, 2011 at 2:02 pm

If you own a newspaper or a TV station, you still have only one vote in November. Just like me with my little blog.

anonymous... December 30, 2011 at 4:38 am

In an odd way, lack of wealth sometimes equals power in modern society. The Occupy Wall Street protesters, for instance, don’t care about having an arrest on their record, have plenty of free time for full-time street theater, have no careers or reputations to jeopardize, and are judgement-proof. Just try for a moment to imagine the reverse: say, people in suits occupying a campus to disrupt the lectures of radical professors.

Rahul December 30, 2011 at 8:09 am

Maybe that’s only an expression of of “numbers equal power”. Just so happens that the “lack of wealth” cohort is large.

Anthony December 30, 2011 at 10:46 am

In the words of Janis Joplin, “Freedom’s just another word for nothing left to lose.”.

msgkings December 30, 2011 at 12:01 pm

‘Freedom’ is, but ‘power’?

Is ‘anonymous’ really trying to shine us onto the idea that the OWS folks have more ‘power’ than wealthy people? Now we’re just giving different definitions to words. At which point conversation becomes impossible.

Anonymous December 30, 2011 at 12:33 pm

The OWS protesters are wealthy — only the very wealthy can skip work for months and not starve.

msgkings December 30, 2011 at 12:47 pm

I’ll nominate this post for dumbest of the week. Unless you were joking. Please be joking.

JWatts December 30, 2011 at 3:23 pm

You could make the argument that the majority of protestors were very wealthy. Certainly by world standards, but even by US standards in living memory. Let’s face it, OWS protestors don’t bear a lot of resemblance to the workers marching with Cezar Chavez.

Complaining about having $80,000 in debt which no one can force you to pay back, after spending the first 26 years of your life in school and in many cases never having worked at anything harder than a household chore is pretty wealthy. How many of the OWS protestors have ever actually gone hungry? How many have ever picked vegetables for weeks on end for minimum wage?

Jonas December 30, 2011 at 7:36 am

I agree, wealthy people as individuals are not that powerful in influencing society. Particularly at the margins, what an individual wealthy person wants can easily be balanced off against another individual wealthy person or group. But as a class, they definitely have a lot of power to drive society and mainstream ideology. I remember reading some study that found that government policy is much more sensitive to the preferences of the wealthy than the less well off, in cases when they diverged.

Tom December 30, 2011 at 8:32 am

How much of that is that the preferences of the wealthy tend to be more productive than those of the poor, and make more sense to move on?

TallDave December 30, 2011 at 9:55 am

That would seem to fail badly at explaining how the powerless poor receive a massive transfer of wealth from the powerful wealthy via the income tax and social programs.

Anthony December 30, 2011 at 10:49 am

Not really. The very wealthy, in general, prefer that the (not powerless) poor receive a massive transfer of wealth from the moderately wealthy, and others who may threaten the position of the very wealthy.

TallDave December 30, 2011 at 11:23 am

So they’re willing to pay a larger portion of their income to ensure a smaller portion is paid by others, because those others represent some sort of unspecified threat which paying a smaller portion of their income somehow offsets?

It’s much more sensible to simply conclude that in a democracy with a large, intrusive gov’t, the numerous poor are more powerful than the few rich.

msgkings December 30, 2011 at 12:03 pm

Uh, no, both of you are missing the obvious point. The powerful rich throw some money at the more numerous poor to keep guillotine makers’ order books light.

TallDave December 30, 2011 at 12:49 pm

But again, that’s extortion, which would mean the poor are more powerful than the rich.

msgkings December 30, 2011 at 1:08 pm

Yes, those lucky duckies and their power. It’s a wonder more rich folks don’t give it all away to get in on that extortion racket.

http://en.wikipedia.org/wiki/Lucky_duckies

TallDave December 30, 2011 at 1:16 pm

It’s a wonder that people don’t voluntarily give away 100% of their income to avoid being forced to give away a smaller percentage? Um, no.

msgkings December 30, 2011 at 1:20 pm

But think of the POWER!

TallDave December 30, 2011 at 1:24 pm

Those people can just run for office as Democrats. It’s not hard to leverage that power to your advantage without giving up wealth.

msgkings December 30, 2011 at 1:29 pm

Now I’m confused…the poor are powerful, because of their ‘extortion’ of the rich. A rich person becoming a Demo pol is still powerless before the mighty poor folks.

TallDave December 30, 2011 at 1:30 pm

Sorry if the word “leverage” is confusing you.

JonF December 30, 2011 at 7:06 pm

It’s not extortion because the rich are giving the money more-or-less voluntarily (collectively that is, through the government which they control, not individually). It’s more along the lines of building a levy to protect against a flood-prone river. The river is demanding the levee, but it’s the sensible thing to do just in case it overlows its banks.
If the poor were demanding the money on pain of violence, they’d be demanding a heck of a lot more.

TallDave December 31, 2011 at 9:16 am

I don’t think that logically follows, Jon. If the electorate voted to put someone to death because they didn’t like their opinions, it would still be murder, even if it was done constitutionally.

The mafia uses similar metaphors to make their extortion schemes seem more reasonable. “See, you’re just protecting yourself here buddy. This is a nice business and it’d be a real shame if something happened to it…”

They already get quite a lot. Remember, the poorest 5% of Americans live better than the richest 5% of Indians.

Jonas December 30, 2011 at 10:56 am

I would say that some point in the past, around the Great Depression and FDR, the wealthy concluded that some level of wealth transfer was in their interest. Keeps the republic running. Worthy goals imo.

TallDave December 30, 2011 at 11:18 am

So, the poor are extorting money from the rich? That makes them powerful.

msgkings December 30, 2011 at 12:04 pm

TallDave = Montgomery Burns? What kind of Dickensian nightmare are you pining for?

TallDave December 30, 2011 at 12:53 pm

Irrespective of whether social programs and progressive taxation are good things, their existence says something about the relationship of wealth and power.

Also, thanks to the productivity improvements largely wrought by the productive rich, no one goes hungry in the U.S. anymore, so thank them for getting us out of the Dickensian nightmare.

msgkings December 30, 2011 at 1:14 pm

I don’t begrudge anything, including the higher tax rates I pay as a high earner. Wealth is important and the productive should be compensated well.

But the standard libertarian trope of ignoring the necessity of a functioning (middle class) society for wealth creation, enjoyment, and safety is beyond disgusting.

TallDave December 30, 2011 at 1:18 pm

Yes, your vivid mis-imagination of what libertarians think is indeed disgusting.

msgkings December 30, 2011 at 1:21 pm

Weak. ‘I know you are but what am i’ rebuttal? You really are a child.

TallDave December 30, 2011 at 1:25 pm

On the contrary I didn’t rebut, I agreed. But I did enjoy the irony there.

8 December 30, 2011 at 7:48 am

The wealthy are powerful because of their productive ability. Ayn Rand gave the model of a true protest by the wealthy. Jesus also had some good advice.

Dan December 30, 2011 at 9:10 am

+1

byomtov December 30, 2011 at 10:07 am

Oh right.

Some wealthy people are productive, others aren’t. But the wealthy, productive or not, are powerful because they have money.

Andrew' December 30, 2011 at 2:30 pm

Wealth allows you to pay people to do stuff, but you don’t necessarily change their minds. Power is mainly being able to pay people to change the minds of others permanently with fast lead nuggets.

byomtov December 30, 2011 at 7:12 pm

You don’t change their minds? Gee, there sure is a lot of money spent on advertising, political and other, that tries to change people’s minds.

Are you claiming that all that money, spent by all those companies, all those candidates, all those organizations, is an utter waste.

mrpinto January 3, 2012 at 8:04 pm

A lot of it is, due to the equal and opposite force presented by the spending on the other side. If both sides pay the same $10MM for equally matched PR and ad buys, $20MM is spent, but the needle doesn’t move left or right.

It’s like a big isometric exercise. The parties are getting better at campaigning and they’re spending more doing it, but there are still two parties at the end of the day and they’re still roughly equal in power and influence.

anon December 30, 2011 at 7:48 am

It’s not wealth per se that seems to be the problem (although numerous demagogues would like you to believe that). It is the corrupting combination of power over wealth. As the scope and influence of laws and especially rules and the (growing) bureaucracies that promulgate, interpret and enforce those rules grows, the desire to influence those laws and rules grows.

Combined with the increasing sclerocity of the country and the growth of interest groups (and if you live in the US you are almost certainly a member of an interest group), the public focus is on the body that promulgates the laws that result in the rules, i.e., the legislature.

Mancur Olson talked about this in his books. See “The Logic of Collective Action”.

As Lord Acton said a long time ago, “Power tends to corrupt and absolute power corrupts absolutely.”

Concentrations of power tend to turn out badly. Witness the increasing criminalization of life and the increasing militarization of the police. See “the war on drugs” for an example of the first, and read Radley Balko for numerous examples of the second.

Slocum December 30, 2011 at 7:59 am

But the militarization of the police and the ‘war on drugs’ are certainly not examples where the preferences of the wealthy are foisted on an unwilling public. Unfortunately, they are broadly popular AND the interest groups pushing to maintain the drug war are not ‘the wealthy’ but rather those whose livelihoods depend upon it. Who opposed California’s failed prop 19 that would have legalized marijuana?

On the other side are the usual suspects: The California Narcotics Officers’ Association, the California Association of Highway Patrolmen, the California Police Chiefs Association, the California Correctional Supervisors Organization, the California Peace Officers Association, the California District Attorney Association, and local police associations. They are joined by all federal drug czars past and present, past and present DEA administrators, both California US senators and most of the congressional delegation, most newspaper editorial boards, the California Chamber of Commerce, Mothers Against Drunk Driving, the California Beer and Beverage Distributors (who chipped in $10,000 to Public Safety First, a political action committee created to oppose Prop 19), Californians for a Drug-Free Youth, DARE America, and other anti-drug organizations.

http://www.safeaccessnow.org/article.php?id=6136

aaron December 30, 2011 at 8:29 am

I think today, power determines wealth distribution more than wealth determines power distribution.

Laserlight December 30, 2011 at 8:44 am

+1

save_the_rustbelt December 30, 2011 at 9:12 am

For the past 30 years or so I have suggested my middle class friends try this experiment:
“Call your congressman’s office and leave a message for the Congress member to call you.”

Of course the phone message is screened, probably for the following:

1) elected official
2) major campaign donor
3) potential major campaign donor
4) lobbyist
5) major business leader
6) prominent lawyer, influential professional

None of my middle class friends have ever gotten a call back from a Congress member, most didn’t even get a call back from a staffer.

Many of my clients and colleagues were in the 2 – 5 categories, and they could get calls from a member of Congress.

Money talks. Loudly.

TallDave December 30, 2011 at 9:52 am

You left out 7) opportunity for indirect graft, which has THEM calling YOU. Just ask Pelosi.

The problem isn’t money in government, it’s government controlling the flow of money. The rentseeking opportunities are enormous — the revolving door from regulator to big-paying jobs at the regulated is nauseatingly corrosive, and it’s just insane that Congress is allowed to practice insider trading.

Rahul December 30, 2011 at 1:29 pm

What’s the legal situation about insider trading by judiciary? If I am ruling on an Exxon lawsuit tomorrow am I allowed to buy Exxon shares?

TallDave December 30, 2011 at 1:34 pm

AFAIK only Congress is exempt. The standards for the judiciary are generally much higher. I think what you describe would generally be prima facie grounds for removal of a judge — but perfectly legal for Congress.

Brett December 30, 2011 at 12:37 pm

That’s just getting a call back from a Congressman, though. It doesn’t mean that you’re going to get something, unless it’s a relatively obscure issue that no one else really cares about except you – and even then, that’s only if it doesn’t hurt him, and possibly involves a campaign contribution.

Chris December 30, 2011 at 9:14 am

Also, don’t forget that the Democrats had a massive edge in campaign spending in 2010, yet still lost,

Lavishly-funded GOP establishment types were also frequently defeated by tea party candidates with meager resources in primaries:

Chris December 30, 2011 at 9:20 am

Power comes from trust.

Rightly or wrongly, people trust the Supreme Court to enforce the Constitution, so they have a lot of power.
People trust the FDA to exclude dangerous drugs, so they get a lot of power.

People hate banks, and don’t trust them at all. That’s why Wall Street has lost the major legislative battles in recent years (Dodd-Frank / Sarbanes-Oxley), regardless of who controlled Congress.

Andrew' December 30, 2011 at 9:43 am

The FDA trust thing fascinates me. It seems to me to come from a popular notion that there should be some conceptual mechanism to exclude dangerous drugs while not costing too much, and since the FDA nominally fills that role, that must be them. Same thing with TSA. Many government agencies appear to be spotted a lot of trust.

JWatts December 30, 2011 at 11:43 am

Why does it surprise you at all? By and large the FDA has (for a government bureaucracy) done a good job. Yes, it’s a government agency, but it actually produces a valuable service that’s plain to the entire population and it functions reasonably well. When you compare the FDA to the TSA, EPA or Dept of Education, I much prefer the FDA’s performance.

clayton December 30, 2011 at 11:58 am
CBBB December 30, 2011 at 1:18 pm

So if you’re wealthy you can just buy up all the media and build a new kind of trust. I’m sure Berlisconni’s long run in Italian politics had nothing to do with his media control.

TallDave December 30, 2011 at 9:48 am

I thought the new meme was wealth = evil.

Claudia Sahm December 30, 2011 at 10:29 am

TallDave your comment finally got me to google the word “meme” … I was taught to actually look words up (by a grumpy professor) that I don’t know the definition (made much easier by the Internet). I have seen this term a lot lately and only had a vague sense of the meaning. I didn’t like your equation, so I thought I should check the meaning of meme before responding.

Here’s a nifty definition from Malcolm Gladwell: “A meme is an idea that behaves like a virus–that moves through a population, taking hold in each person it infects.”

So I disagree with you that “wealth=evil” is a “new” cultural virus. Wealth (broadly defined…monetary, spiritual, intellectual, etc.) comes with power and responsibility. Groups that do a good job with that balancing act are largely left alone…groups that don’t get subject to scrutiny by others and sometimes regulation/reprimand.

But most importantly, I would argue that there is nothing “new” about this topic.

TallDave December 30, 2011 at 11:20 am

It’s the whole “rage against the 1%” thing.

JWatts December 30, 2011 at 11:46 am

“I would argue that there is nothing “new” about this topic.”

It’s had a recent resurgence with the whole Occupy Wall Street movement. So I’d say TallDave’s comment was reasonable. The fact that it was an old meme doesn’t preclude it from coming into vogue again and becoming a new meme.

Claudia Sahm December 30, 2011 at 12:12 pm

The degree of income/wealth inequality (and its “happy” dual mobility) is a valid topic for society to debate. Maybe economists are just more fascinated with this topic than others, but I have seen this topic debated in the economics literature since the 1980s via my grad school training, and my forays in economic history as an undergrad taught me that the discussions go much further back.

“Memes” are supposed to be like cultural genes (according to Wikipedia). My rudimentary understanding is that a gene which goes unexpressed or latent for awhile is not “new” gene when it gets expressed again.

TallDave December 30, 2011 at 1:02 pm

You may substitute the more precise “newly fashionable” for “new” if you like.

Claudia Sahm December 30, 2011 at 1:11 pm

Fine, TallDave. But my more important disagreement with your original comment is that most folks (even within the OWS) are NOT saying that wealth in the abstract is evil…it’s about the behavior of certain individuals and institutions in the recent boom-bust cycle. (The tails-I-win, heads-society-loses mentality.) Extreme statements like wealth=evil are too easy to discredit. There is a real debate going on about the distribution of wealth..its causes and consequences.

msgkings December 30, 2011 at 1:16 pm

TallDave and other hard libertarians are all about extreme statements. They are children.

TallDave December 30, 2011 at 1:38 pm

Claudia — They’re defecating on police cars as a form of protest. I don’t think they’ve quite parsed out the 1% meme to the degree you suggest.

msgkings — Yes, clearly the adult thing to do is to go around calling people names. You’re certainly elevating the discourse.

Claudia Sahm December 30, 2011 at 1:45 pm

TallDave, I am not a fan of using poop (verbal or physical) to communicate…seems like we agree on that point.

msgkings December 30, 2011 at 1:51 pm

Well, calling the recipients of social safety nets ‘extortionists’ was how the name calling got started here, but I’ll stand down.

I have a hunch you’re a last word freak anyway.

TallDave December 30, 2011 at 2:02 pm

“The powerful rich throw some money at the more numerous poor to keep guillotine makers’ order books light” was actually your ‘extortionist’ description of the social safety net.

msgkings December 30, 2011 at 2:08 pm

My you’re humorless. And my hunch was correct.

TallDave December 30, 2011 at 2:09 pm

BTW, note that I don’t agree at all that that’s why we have social safety nets (I think the notion the rich would be lynched en masse is somewhat silly), I’m just saying that even if that were the case it would argue the poor are actually the more powerful since they are receiving the tribute.

TallDave December 30, 2011 at 2:13 pm

Not at all, I was very amused by your objection to your own statement, as well as your ironic characterizations of people who disagree with you.

msgkings December 30, 2011 at 2:21 pm

It’s all right here in black and white pixels how lacking in humor you are, so typing ‘not at all’ is ineffective at best. It was clear to everyone but you that I wasn’t seriously suggesting mass murder of the rich is prevented by welfare payments(although in the libertarian paradise with no social safety net at all that might be more likely).

To reiterate, you consider the social safety net to mean the poor are powerful. Your definition of the word ‘power’ is amusingly different than the median American (to borrow your phrase upthread).

And now, The Last Word (TM), brought to you by TallDave…

TallDave December 30, 2011 at 2:37 pm

Sorry, no, you described extortion, humorously or not, so you can’t now hide behind the humorous angle to your comment to pretend the characterization you objected to wasn’t actually your own.

Yes, the fact the poor are able to effect a massive transfer of wealth to themselves suggests they have power through government — and the median American is much more concerned about the power of gov’t than of big business.

TallDave December 30, 2011 at 2:51 pm

Anyways, I think the funniest thing in the thread is that you keep characterizing libertarians as “childish” even as you ironically leaven your comments with various personal attacks on them.

I’m heading back to work, so you may enjoy that last word that you seem interested in.

kb January 2, 2012 at 2:09 am

TallDave: Please compare your “massive transfer of wealth” to the poor to the ongoing massive transfer of wealth to the merely powerful. In real numbers, please, not snarky quips. As soon as you stand up and also renounce all unjustifiable transfers of wealth from the poor and middle class to the well-off and well-connected, your other comments might actually ring true.

mrpinto January 3, 2012 at 8:23 pm

msgkings, TallDave’s hypothetical about extortion was… hypothetical. It appears that this nuance has gone clear over your head.

He wasn’t literally saying that the poor are super-powerful extortionists, just noting that taxes represent a non-voluntary transfer of wealth from the rich to the poor, and that the very fact of that transfer suggests that the poor do, collectively, possess some degree of power here.

Electoral power most likely. YOU suggested the guillotine, to which he replied that even if that hypothetical explanation were true, it would STILL confirm the claim that the poor were in possession of some amount of power. The power to guillotine those you don’t like is indeed a power.

After that, things descended. You failed to understand the hypothetical. Then you failed to understand that the poor, while collectively in possession of power, are not individually in possession of more than a rich person (thus the silliness of your suggestion that the rich join the poor by giving away their money). Then you quit even trying and just 1) assumed TallDave to be a libertarian and 2) proceeded to trash him and his libertarian ilk with generalizations.

This is the internet, so your behavior is pretty normal, but it should be pretty clear that you are the one acting childish here.

Danny December 30, 2011 at 10:12 am

The wealthy are powerful, but not often because they use their wealth to influence others. Sure, they do use their wealth to try to influence others, but they aren’t very good at that.

The real reason that the wealthy, as a group, are powerful is that the almost-powerful can very easily become powerful through the aid of a few wealthy people. Almost every elected politician out there has some multimillionaire/billionaire that they had to rely on to get elected. Almost every successful new venture out there has some rich guy to thank for giving them the chance. As a result, the almost-powerful seek out the aid of the wealthy, and they are willing to adjust a wide number of behaviors or positions to secure that aid. If you have ever seen this act in person, you would see how pathetic this looks. But pathetic as it is, the powerful always ascend from the ranks of the almost-powerful, as opposed to the completely powerless.

D December 30, 2011 at 5:29 pm

+1.
They may not have the power to cure malaria, but they certainly have a lot of power to keep their tax bill low. Not absolute power, but lots of influence.

will December 31, 2011 at 6:18 am

So just eliminate other forms of taxes and leave a capital gains tax? It will tax the wealth directly, and it will be immediately obvious what taxes are doing to the general public.

byomtov December 30, 2011 at 10:13 am

The scholarly literature suggests that campaign finance reform doesn’t matter as much as people think.

I don’t think that material, at least as presented in the linked post, says anything about the value of money in political campaigns. If money doesn’t matter, why all the super-PAC’s, continual fund-raising by politicians, etc.? Another question: suppose Mitt Romney had decided to run fro President, but was unwilling to spend millions of his own fortune, and rely on contributions instead. How do you think he would be doing?

Chris,

Also, don’t forget that the Democrats had a massive edge in campaign spending in 2010, yet still lost,

Lavishly-funded GOP establishment types were also frequently defeated by tea party candidates with meager resources in primaries:

“The race is not always to the swift, nor the battle to the strong, but that’s the way to bet.”

Danny December 30, 2011 at 10:59 am

“Another question: suppose Mitt Romney had decided to run fro President, but was unwilling to spend millions of his own fortune, and rely on contributions instead. How do you think he would be doing?”

Probably the same way Ron Paul, Michelle Bachman, Rick Santorum, or Rick Perry are doing it.

byomtov December 30, 2011 at 11:39 am

In other words, he’d have little chance.

JWatts December 30, 2011 at 11:48 am

Obama didn’t have millions. All of his competition was far richer. He won.

CBBB December 30, 2011 at 1:17 pm

I guess anecdotal evidence is okay when it helps the right kind of arguments.

JWatts December 30, 2011 at 2:05 pm

You are welcome to provide statistical evidence otherwise. In fact I would love to see it.

TallDave December 30, 2011 at 2:16 pm

Of course, he did break his oft-stated promise to abide by the public finance limits as soon as it became inconvenient.

Jan December 30, 2011 at 4:21 pm

True. It was an attractive position to take initially, but he would have been a fool to stick to it.

Marian Kechlibar December 30, 2011 at 4:41 pm

CBBB, given that there were only about ~30 presidential elections in a “modern” society (= less or more similar to the one today), there is not much room for statistics, and all observations will be “anecdotal”.

In my home country, the parties spending the most (sometimes, by far the most) money on campaigning lost bitterly several times since 1990. (Before, there were no elections).

byomtov December 30, 2011 at 7:14 pm

But he raised millions. It takes money to win – your own or someone else’s.

JoeDog December 30, 2011 at 10:39 am

Based on what evidence does the author conclude that college graduates are slightly more conservative than the country as a whole. According to Pew, liberals are the most educated political ideology: “[Liberals are] Predominantly white (83%), most highly educated group (49% have a college degree or more), and youngest group after Bystanders. Least religious group in typology: 43% report they seldom or never attend religious services; nearly a quarter (22%) are seculars. More than one-third never married (36%). Largest group residing in urban areas (42%) and in the western half the country (34%). Wealthiest Democratic group (41% earn at least $75,000).”

TallDave December 30, 2011 at 11:43 am

For the same reason blacks aren’t conservative even though 83% of liberals are white.

Generally, outside of the South having a degree makes it more likely you vote GOP.

http://www.jstor.org/pss/2778029

For instance, in 2008 Obama won college graduates by less than he won nongraduates, and by much less those who did not graduate high school.

http://en.wikipedia.org/wiki/Red_states_and_blue_states#Divide

JoeDog December 31, 2011 at 12:06 pm

Do contemporary definitions of “liberal” and “conservative” have the same meaning now as they did in the 1970s? What was Nixon? I’m on the liberal side but he pretty much passed a lot of legislature to my liking. The fact that he hated most Americans was very unbecoming.

From within the 2008 election data we also find that Obama crushed McCain among those with post-grad degrees by 18 points but I’m less inclined to make ideological assumptions based on voting patterns especially when the choices are Republican or Democrat.

JWatts December 30, 2011 at 11:51 am

“Based on what evidence does the author conclude that college graduates are slightly more conservative than the country as a whole.”

This is a great question. Not that I doubt it, but I’ve never seen any actual evidence either way. Does anyone have a source?

Jan December 30, 2011 at 4:33 pm

For college graduates, yes.

Diving further into the Pew data, the political typology with by far the highest proportion of constituents holding a post-grad degree is the “solid liberal” at 27%. Post-grad degree holders make up 15% or less of “libertarians,” “main street Republicans” and “staunch conservatives.”

Eric December 30, 2011 at 11:00 am

This is very naive.

CBBB December 30, 2011 at 1:56 pm

It’s not REALLY naive in the sense that as an economist Tyler’s main job is to sort of put out things like this that attempt to deflect criticism of the wealthy.

Nattering Nabob December 30, 2011 at 9:29 pm

This really can’t be said often enough. What Tyler is engaged in here is a species of trolling. And what he’s trolling – very successfully – is the entire public sphere.

CBBB December 30, 2011 at 10:15 pm

This is exactly right

will December 31, 2011 at 6:23 am

This is a blog. Sometimes things are not thought out to the same extent as an academic paper. Also as an Austrian, Tyler tends to follow his own logic to sometimes funny places. Feel free to post a detailed critique of things you read here. But keep your worthless comments to yourself, please.

Nattering Nabob December 31, 2011 at 8:37 am

Hit a nerve, have I?

Nattering Nabob December 31, 2011 at 9:55 am

er, has he?

This is a blog. Sometimes things are not thought out to the same extent as an academic paper… Feel free to post a detailed critique of things you read here.

What goes for a blog goes double for a blog-comment. Anyway, CBBB’s critique is perfectly clear to any disinterested observer.

mrpinto January 3, 2012 at 8:30 pm

I think it’s his job to prompt discussion. I think you’re reading more into Tyler’s motivations than are there, and more into his postings than is there. Things, they say, are never as good nor as bad as they seem.

The same is true here. The wealthy are powerful, but not as powerful as they seem. That seems like a reasonable statement, not some proof of a conspiracy that the economics class has hatched in order to hold down the noble CBBB.

Crenellations December 30, 2011 at 11:21 am

The Problem with the Karl Malone and Gary Payton Lakers was that Karl Malone got hurt right before the finals and was replaced by Samaki Walker. He and Gary did get to the finals.

Inapt example notwithstanding, I appreciate you offering a dollop of sound opinions with my morning coffee.

Ryan Cooper December 30, 2011 at 11:25 am

Hey Tyler, what do you think of Lessig’s new book on this subject?

JPC December 30, 2011 at 12:25 pm

I think the recent example of MF Global is instructive in this regard. Corzine and Co were able to persuade the CFTC to allow the commingled use of customer account funds with the trading accounts of the firm under certain conditions – ie the purchase of sovereign bonds. It’s a preposterous argument. This type of regulatory change would never be possible without “rich and powerful” people lobbying for it, who also have the ability to provide jobs for the regulators (or their friends or their family members) in the future (aka “regulatory capture”). I think this episode alone disproves Tyler’s argument pretty effectively. I think the way to describe it is that wealth is self reinforcing when combined with government partnership. [BTW – I am intimately familiar with the details of this particular case.] If Tyler is unfamiliar with the sad history of Fannie and Freddie, or the bailout of the banks, I suggest he read it again. [Side issue – even Lo missed the Econ 101 point of the small marginal utility of the equity options lost by bank executives versus the 25 million in cash upfront vis a vis their risk taking, and he bungles the leverage argument. Walls Street 100 – Academics 0 again] We could also delve into the ability of wealthy people/corporations to obtain much better representation in legal matters. Is Tyler making his argument with a straight face? NB – this does not imply that there are effective countermeasures to this condition [save perhaps much smaller government and radically simplifies regulations] , only that it plainly exists.

athEIst December 30, 2011 at 12:45 pm

Jonas December 30, 2011 at 10:56 am
I would say that some point in the past, around the Great Depression and FDR, the wealthy concluded that some level of wealth transfer was in their interest. Keeps the republic running. Worthy goals imo.

And ~fifty years is about long enough to forget it.

Jameson December 30, 2011 at 1:01 pm

“yet college students seem to be slightly more conservative than the American public as a whole”

I’m skeptical of this claim.

TallDave December 30, 2011 at 1:10 pm

I assume he either means “people who were at some point college students” or “college students as opposed to people the same age who do not attend college.” It does seem very unlikely college students are more conservative than the population as a whole.

CBBB December 30, 2011 at 1:14 pm

This is plainly ridiculous Tyler – the idea that money has little influence on politics or what sort of issues politicians focus their time on when in office. So incentives matter – except when it comes to politics and power that is, then money has little influence – look away look away no need to pay attention to the man behind the curtain.

TallDave December 30, 2011 at 2:14 pm

Studies strongly suggest campaign contributions actually follow those likely to win election much more than they shape electoral outcomes.

CBBB December 30, 2011 at 2:20 pm

Which is evidence that wealth creates power. I mean why would money flow to likely winners?

TallDave December 30, 2011 at 2:39 pm

Rather, it suggests power draws wealth. That’s why libertarians are for smaller gov’t.

CBBB December 30, 2011 at 2:43 pm

But WHY would the wealthy give their money to a politician then?

TallDave December 30, 2011 at 2:46 pm

To curry favor with Leviathan, and seek rents.

CBBB December 30, 2011 at 2:49 pm

So in other words to buy power to buy power from the government to use against people or groups with less money or who didn’t buy power.
I mean you can say “well this is because of big government” but – okay that doesn’t take away from the fact that given today’s system money gets you power

CBBB December 30, 2011 at 2:54 pm

Although in a libertarian system money and power would be WAY more closely coupled.

Jan December 30, 2011 at 4:40 pm

Under a libertarian system, there would still be lawmakers and campaigns and, if the libertarians got their way, even fewer checks on campaign finance. I don’t see how this would reduce the incentive to buy off politicians. Lawmakers will still have the power to do what they do now–respond, rationally, to contributions with favors.

CBBB December 30, 2011 at 4:42 pm

I guess the idea would be that lawmakers would be much more constrained so buying a lawmaker wouldn’t help you as much. However in a libertarian system you wouldn’t need to go through the political system in order to convert your money to power.

TallDave December 31, 2011 at 9:29 am

CBBB — I think what you’re missing here is the cause and effect. Rational actors will always seek rents, and more so when rentseeking is more rational. The larger and more powerful the gov’t, the more rational a choice it is to acquire rents. Larger and more powerful gov’t creates more power, which draws wealth to exploit it.

The libertarian solution is to make rentseeking less rational. In a libertarian system, the system is set up to skew the scales such that is more rational to acquire wealth by providing value, and less rational to acquire them through rents, than it would be in today’s system. We’d have more Googles and less Solyndras.

Jan — There would be less incentive to seek rents, because gov’t officials would be less able to provide them. But more to the point, we would criminalize insider trading for Congress, and address the even greater rentseeking opportunities through corporate patronage, perhaps by (as some notable libertarians have suggested) taxing at 90% the next ten years of income over $100K for major public officials leaving the public sector.

steve December 30, 2011 at 1:37 pm

Wealth can translate to power in a relative sense. But, Bill Gates doesn’t control so much as 1% of the wealth in America. Individual congressmen control more even if it is not their own, as do millions of consumers each adding a small increment. While not as powerful individually, consumers rule in the end.

Dredd December 30, 2011 at 1:52 pm

Some of the old adages were observations of reality: “money talks and bullsh*t walks” … “power tends to corrupt …”, “1% – 99%”, for examples.

msgkings December 30, 2011 at 1:58 pm

1% – 99% is an ‘old adage’?

CBBB December 30, 2011 at 2:25 pm

How about this old adage:
In this country, you gotta make the money first. Then when you get the money, you get the power. Then when you get the power, then you get the women.

msgkings December 30, 2011 at 2:30 pm

+100 for the Scarface quote!

And I’m with him (and you). Wealth does = power. And not just in this country.

That seems almost axiomatic. I guess it depends on how you define words like ‘power’.

CBBB December 30, 2011 at 2:47 pm

Yeah you have to have a VERY twisted definition of power to pretend that being wealthy doesn’t imply greater power.

JWatts December 30, 2011 at 3:36 pm

Does Wealth = Raw Naked Power? No. That would imply a direct and linear relationship.

Does wealth enhance power? Certainly. But to argue that an American with $1,000,000 in net wealth has equal power than 1,000,000 Americans with $1 in net wealth is also wrong. It’s not a linear relationship in the US and not even close.

CBBB December 30, 2011 at 3:44 pm

No I don’t agree Money = Power in a direct way like this. There is not a well-ordered mapping of money to power. However there’s a pretty strong relationship between having money and having increased influence on virtually all aspects of life. Conversely it’s increasingly difficult to have any influence if you don’t have a lot of money or access to a lot of money in some way (which usually involves agreeing to use your influence on behalf of your financial backers).

Although in your example I would argue that the American with $1 Million has (typically) MUCH MORE power then the 1,000,000 Americans with $1 – those 1 million are not going to be as coordinated as the single person.

JWatts December 30, 2011 at 3:56 pm

“However there’s a pretty strong relationship between having money and having increased influence on virtually all aspects of life.”

I don’t think anyone believes that having money doesn’t enhance influence. Indeed, that is a primary reason why people acquire money in the first place. However, increasing influence is NOT the same thing as having ‘raw naked power’, which was the original assertion.

“Although in your example I would argue that the American with $1 Million has (typically) MUCH MORE power then the 1,000,000 Americans with $1 – those 1 million are not going to be as coordinated as the single person.”

And that’s pretty much indicates that you don’t really think about matters very deeply. Your average American College student has less than $1 in net worth. One million of them have far more influence than your average retired dentist, who has more than $1 million in net worth.

CBBB December 30, 2011 at 4:13 pm

I think you’re twisting things around JWatts,

I’m actually not entirely sure what Tyler’s post is supposed to be about – he asks “Does Wealth Equal Power” but in the post contents doesn’t look to me like he’s arguing about some kind of raw, absolute power – but how much influence do the wealthy have.
You’re also moving your discussion from a million abstract people with $1 to a million college kids with a net-worth of $1 or less, not quite the same. But this gets back to what kind of power we’re talking about which isn’t totally clear from Tyler’s post.
Is it some light “influence” – then okay maybe a million college kids have more (although if they’re not coordinate they could just end up cancelling out each other which isn’t going to happen with the one dentist). In the real world the million college kids aren’t going to be coordinated or organized or following the same goals so their numbers are irrelevant the vast majority of the time.
In a more every-day cases a small group of wealthy people are going to be able to coordinate themselves much better to extract much more meaningful powers and benefits then some huge group of uncoordinated poor people.
Of course this is the typical “economist” type argument – switch between fuzzy definitions – is it relative power or absolute power? Is it influence or raw power” and switch back again when one line of arguing isn’t working – you can prove any ridiculous thing that way.

JWatts December 30, 2011 at 5:20 pm

“I think you’re twisting things around JWatts,

I’m actually not entirely sure what Tyler’s post is supposed to be about – he asks “Does Wealth Equal Power” but in the post contents doesn’t look to me like he’s arguing about some kind of raw, absolute power ”

That’s precisely what he was arguing. From the original post:
“from Ezra Abrams, who wrote:
Wealth is equal to raw naked power..”

Tyler’s response:
“I disagree with most of that. … The big banks control our government less than some critics have suggested. …There are several reasons why wealth does not translate into power so easily. … There will be, for reasons of spontaneous order, a general concordance between the status and influence of groups in the broader world, and the power of those groups when it comes to government.”

Tyler is clearly saying that Wealth IS NOT = Raw Naked Power. Nowhere does he say that Wealth doesn’t provide influence. Indeed, he explicitly states that it does.
“a general concordance between the status and influence of groups in the broader world, and the power of those groups when it comes to government.”

“You’re also moving your discussion from a million abstract people with $1 to a million college kids with a net-worth of $1 or less, not quite the same.”

If your argument was basically sound then it wouldn’t matter that one subset of the larger group derails it. The basic fact is that in modern American society large groups of people have greater influence than drastically smaller groups and that wealth, while influential, is not the fundamental determinant. Wealth is not a trump card. For that matter it wasn’t even the fundamental determinant in 18th century France.

“In a more every-day cases a small group of wealthy people are going to be able to coordinate themselves much better to extract much more meaningful powers and benefits then some huge group of uncoordinated poor people.”

Yes that’s true, and it’s also besides the point. You could just as easily say that a “small group of poor people can coordinate better than a huge group of uncoordinated poor people.” It’s axiomatic that a coordinated group is more coordinated than an uncoordinated group.

“Of course this is the typical “economist” type argument – switch between fuzzy definitions – is it relative power or absolute power? Is it influence or raw power” and switch back again when one line of arguing isn’t working – you can prove any ridiculous thing that way.”

There was nothing fuzzy about my definitions. You made a broad and unsupportable statement:
“Although in your example I would argue that the American with $1 Million has (typically) MUCH MORE power then the 1,000,000 Americans with $1″

And I countered with a specific case:
“Your average American College student has less than $1 in net worth. One million of them have far more influence than your average retired dentist, who has more than $1 million in net worth.”

That’s not fuzzy, that’s logical debate. If you create a set and then a subset that fits inside of your set is proven to be wrong, then your original set has been proven wrong.

CBBB December 30, 2011 at 5:45 pm

Okay,
It still looks to me that it’s merely an argument of degrees. Reading Tyler’s post on the Bank’s Not having much power is pretty unconvincing – a major argument is the SEC lawsuit against Goldman (but what actually changed because of that?…seems like that was just a lot of show).
The term “raw power” was probably an unfortunate term – Wealth might not be a trump card, but there are no trump cards and wealth is probably the closest thing there is to a trump card in life. I know Tyler Cowen’s usual trick, and this is an example – focus on one specific narrow issue and leave the implications unsaid; we focus on whether or not wealth = power but the implication is “since wealth != power no need to worry about the concentration of wealth. However, the arguments to why wealth doesn’t convert well to power seem to focus on the existence of countervailing forces which aren’t at all permanent and would vanish if wealth became more concentrated. I think everyone agrees that wealth is the basis of any meaningful power and this in itself is a problem and will only be exacerbated with increased concentrations of wealth.

msgkings December 30, 2011 at 2:31 pm

I will say a fair number of women allow you to skip the power step. The money is sufficient.

mulp December 30, 2011 at 3:00 pm

The most “powerful” universities are liberal well endowed institutions which indoctrinate students into a liberal redistributionist ideology by promoting the concept ideas should be free and not private property, and those that are most successful at this indoctrination create both the best graduates by way of transferring to them the free wealth of the best ideas, and then after these graduates have taken this free knowledge wealth as the foundation of their work which gives them the power of innovation take makes the most profit, the graduates continue the liberal redistribtuinist ideology by transferring wealth to the liberal redistributionists centers’ endowments.

The conservative pure-personal-interest institutions opposed to the liberal redistributionists focus on producing politicians who are fully committed to concentrating wealth in the hands of conservatives based on restricting knowledge distribution.

Unless you believe the politicians in US government today are more liberal, the conservative efforts at indoctrination have been very effective in transferring wealth from the middle class to the politicians and moving almost all of them from the 99% to the 1%, and often from the 99% to the 0.1%.

The liberal redistributionist universities grew out of the religious power tradition, especially the churches of Rome. In the liberal tradition of self criticism, the church of Rome instituted a policy of taking oaths of poverty which gave them the populist power of virtue combined with the power of vast wealth that they obtained by indoctrinating their favored secular partners to the virtue of charity patronage of the religious power centers.

Even the more secular universities and other endowed institutions reflect the liberal redistributionist ideology indoctrinated into even those parts of society that aren’t connected to the religious power centers, eg the Gates and Buffett families today and the Carnegie, Rockefeller, and Ford families. And liberal redistributionist ideology drove public policy on the laws for tax exempt foundations which forced the HHMI foundation to become a liberal redistributionist promoter in contradiction of Howard Hughes reasons for setting it up.

Note HHMI has recently adopted a liberal redestributionist policy of requiring all publish work be distributed for free instead of treated as private property to generate profit from the research for decades or centuries, with conservatives changing the intent of the US Constitution’s “limited time”.

JWatts December 30, 2011 at 3:40 pm

“The conservative pure-personal-interest institutions opposed to the liberal redistributionists focus on producing politicians who are fully committed to concentrating wealth in the hands of conservatives based on restricting knowledge distribution.”

That is pure leftist fantasy with little basis in fact.

maguro December 30, 2011 at 3:52 pm

Cool story, bro.

Bill December 30, 2011 at 3:52 pm

If wealth, income and the ability to contribute to political candidates

Does not create Political Power,

Then,

I have a modest proposal:

Let Foreign Governments Contribute to US Political Candidates.

Good idea? Why not?

maguro December 30, 2011 at 4:03 pm

I don’t see why not, as long as there’s mandatory disclosure.

Let the voters decide if they have a problem with Candidate X getting money from China or Saudi Arabia.

CBBB December 30, 2011 at 4:14 pm

No mandatory disclosure though – such as in the current system.

maguro December 30, 2011 at 4:25 pm

How is disclosure not mandatory under the current system? It certainly is at the federal level, at least.

CBBB December 30, 2011 at 4:27 pm

No it’s not, or at least it’s very easy to get around so it’s effectively not. Depends how you funnel the money to your campaign.

CBBB December 30, 2011 at 4:29 pm

Any way why would disclosure matter? Money doesn’t give you power so no matter how much money China gave some politician it wouldn’t affect his personal views and therefore whether the public knows or not wouldn’t make a difference. That’s what Tyler Cowen thinks any way.

maguro December 30, 2011 at 4:31 pm

Oh yeah, you can accept untraceable credit card donations, like Obama. Fair point.

CBBB December 30, 2011 at 4:37 pm

Sure like Obama – I don’t know why you threw that in there, I hate the guy too.
Also seems like a combination of PACs and 501( c)(4 )s can be used to fund candidates without requiring much disclosure.

msgkings December 30, 2011 at 5:59 pm

CBBB – pretty strong verbiage, ‘hate’ for Obama. Really, you ‘hate’ him?

Are there any American political figures you like? Honestly curious.

CBBB December 30, 2011 at 6:11 pm

Strong verbiage is what I’m here for. What post have I made that wasn’t over-the-top?

msgkings December 30, 2011 at 9:36 pm

OK, well do it your way then. Are there any American political figures you super duper love? I suppose ‘no’ could be the answer. Or rather, ‘hell no’.

CBBB December 30, 2011 at 9:39 pm

Why just American? They’re all clowns from Pretoria to Peoria.

msgkings December 30, 2011 at 11:47 pm

Another non-answer then, since you aren’t even reading my question. I will put down ‘none’.

CBBB December 31, 2011 at 12:19 am

I read your question, there isn’t any political figure I can think of that I like. American, Canadian, anything.

Bill December 30, 2011 at 10:02 pm

Maguro, So, you phrase response easily in terms of an adversary or country that is a monarchy–Saudi Arabia, China–what about Israel paying politicians, Britain, or Germany, or a country that wants foreign aid, or some military equipment produced in a members district, or some foreign businesses seeking access to US markets (ie, political contributions from large foreign corporations). See any issues? It should matter if money doesn’t matter. Afterall, wealth and contributions don’t matter. Or do they?

Floccina December 30, 2011 at 7:58 pm

I am rich and my business partners are rich and I feel pretty powerless politically.
I have been poor and I have been rich and rich is better but surprising not much better.

Bill December 30, 2011 at 10:43 pm

As a rich person, do you make political contributions, or do you refrain from futility?

Andreas Moser December 31, 2011 at 2:07 pm

Why powerless?
You have a vote, don’t you?

mrpinto January 3, 2012 at 8:37 pm

A vote is very little power indeed, and it’s the same vote he started with before he was rich.

Floccina December 30, 2011 at 7:58 pm

I am rich and my business partners are rich and I feel pretty powerless politically.
I have been poor and I have been rich and rich is better but surprising not that much better.

Bill December 31, 2011 at 8:20 pm

Flocinna, Ask yourself this question: in a democracy, if the denominator is n = size of citizenry, shouldn’t your power be 1/n?

jorod December 30, 2011 at 8:03 pm

People in the US have never had to deal with a real power grab by some individual or group. Maybe that’s why things are changing oh so slowly.

I am reminded of the Hunt brothers (?) who tried to corner the silver market. The government stopped them. Was that a good thing? If they wanted to try, why stop them?

The democrat takeover of the health care industry is probably the worst thing that has happened here. Cheap political, socialist power grab. But no one seems ready to take any strong action. Drown them in fairness and a little doublethink. And some late night legal razzle dazzle. It’s not about mandates, it’s about seizing a whole industry. What did Stalin say about killing a million people? The schemes of the socialists get grander and grander. And more people buy into them.. no pun intended. The real power is the ability to put people to sleep.

CBBB December 30, 2011 at 8:05 pm

Hahahaha just fucking ridiculous. This minor, weak-willed, pathetic health care “reform” is the WORST THING THAT HAS HAPPENED HERE hahahaha

msgkings December 30, 2011 at 9:40 pm

You deliver over-the-top, you’re going to get back over-the-top

CBBB December 30, 2011 at 9:44 pm

Well this guy is horning in on my turf

msgkings December 30, 2011 at 11:49 pm

It’s called returning fire.

mrpinto January 3, 2012 at 8:38 pm

Lol, socialist health care. Try quitting your job than showing up at the Doctor’s office. Do you actually know what was in the health care reform?

ken December 30, 2011 at 9:21 pm

Ken Boulding’s perspective on power is pretty useful. He thought about power in terms of economic power, destructive power, and integrative power. It seems reasonable that without integrative power, that is power through building social relationships using love, respect, trust, etc., is the most important as economic and military power cannot last long without it.

Claudia Sahm December 30, 2011 at 10:29 pm

Ken, thanks for the reading suggestion. I found the description and reviews on Amazon for his *Three Faces of Power* helpful too: http://www.amazon.com/Three-Faces-Power-Kenneth-Boulding/dp/0803938624/ref=sr_1_3?s=books&ie=UTF8&qid=1325301718&sr=1-3 Would be interesting to apply his framework to some of the debates in this post.

Andy December 30, 2011 at 10:47 pm

I suspect the wealthy are significantly more powerful in their ability to ruin individual lives. In any matter that has to be handled in civil court, the wealthy can outspend most other people and this works greatly to their advantage. They can often avoid verdicts against them simply by running out the clock, which makes it much easier to defame and defraud others.

Not saying this is common.

Beth January 2, 2012 at 10:02 pm

Andy mentioned, “I suspect the wealthy are significantly more powerful in their ability to ruin individual lives.”

While this statement defintely can be true, I was also under the impression that most of the wealthy are wealthy because they have pleased consumers and made their lives better. Their great wealth is evidence of that.

Winton December 31, 2011 at 4:10 am

I agree with Tyler’s last sentence. The quality of argumentation on this subject is extremely low!

Andy December 31, 2011 at 10:21 am

While money may not directly translate to power in political elections, money does have many distracting and distorting effects. In 2001, 10% of federal congressmen reported spending over half their time fundraising [1], which involves mainly speaking to the top .05% that is willing and able to give the maximum contribution to a campaign. I’d much rather these congressmen spend their time doing their job than talking to the super-rich. Even if it doesn’t directly warp policy to the 0.05%’s advantage, it’s still a huge distraction when congress has plenty of other complex issues to worry about.

[1] http://www.bsos.umd.edu/gvpt/herrnson/reporttime.html

Martin Brock December 31, 2011 at 11:19 am

The proposition “wealth equals power” could be misleading. Equality is a symmetric relationship, so this proposition is logically equivalent to “power equals wealth”. If wealth and power are not identical, a question seems to be settled, but this settlement could avoid a more specific question.

Wealth is one form of power, a subset of power. Power takes other forms, so the two are not identical. All power is not wealth, but all wealth is power nonetheless.

Wealth (title to property) entitles a proprietor to call upon the state (the monopoly of force) to enforce the proprietor’s exclusive, statutory right to govern the property or to enforce the right himself with the state’s consent (as the state’s agent). If “state” means “monopoly of force”, no other (lawful) enforcement of the right is possible.

Similarly, if I ask “does being a dog equal being a poodle”, the answer is “no”, but poodles are dogs nonetheless.

I’m not an anarchist, strictly speaking, myself. I support a minimal state, but we mustn’t pretend that we’re outside of this state when we’re really inside of it. A (classical) liberal must keep the state’s role foremost in his mind, precisely because he wishes to minimize this role.

jorod December 31, 2011 at 12:17 pm

In the early 1980’s people thought the Japanese were powerful economically speaking. We quickly unloaded all of our large real estate on them. Turns out, they were left holding the bag. When using money as power, be careful what you buy. Wealth can can quickly become illusory. Better to buy a Senator than a building.

Andreas Moser December 31, 2011 at 2:02 pm

Wealth still doesn’t give you more votes. Wealth might equal power, but is it really worse in a democracy than under other forms of government? A comparative analysis would be insightful.

The PolyCapitalist January 3, 2012 at 5:16 am

The big banks may or may not control the U.S. government less than some critics have suggested, but Professor Wyplosz suggests that the never-ending Eurzone shenanigans are all about protecting the banks:

http://www.voxeu.org/index.php?q=node/7487

ezra abrams January 3, 2012 at 6:47 pm

sad, but not surprised, at hhow little data and effort go into the 192 blog posts above
for instance, regarding wealth and political power, i thought someone might have made a start with
http://www.nvri.org/about/wealth.shtml
http://www.onthemedia.org/2010/oct/29/can-money-buy-elections-no/transcript/
or this http://en.wikipedia.org/wiki/Michael_Huffington#Electoral_history

Jacob AG January 5, 2012 at 5:43 pm

Professor Cowen, have you read Lawrence Lessig’s book on this issue? I’d be interested to know if you think his “quality of argumentation” is also very low. I haven’t read it, but I did hear him with Tom Ashbrook on On Point the other day, and I found it pretty compelling.

Would you mind writing a “quasi-review” of his book, like you did for “13 Bankers”? I’d love to read that.

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