Are Concentrations of Power And Wealth Bad?

There have been a number of article recently on the concentration of power and wealth, most of them highly critical.  A concentration of power in the hands of professional politicians and their revolving-door lobbyists; or the accumulation of wealth at the top promote inequality and are corrosive elements in a popular democracy.

However, the tendency to accumulate, protect, defend, and increase both wealth and power are at the core of human society.  A quick review of European history with its parade of kings, emperors, Popes, and courtiers illustrates this well.  English kings since William I conquered and acquired lands, and each successive monarch built on the wealth and power of his predecessor.  Through wars, shifting allegiances, and international skullduggery, the English kings held on to and increased their realms.

      William the Conqueror (William I)

The kings knew well that power begets power and wealth begets wealth.  As kingdoms grew, keeping parochial interests and courtly ambitions in check was paramount because keeping the authority of the king and his vast treasures assured at least a certain longevity.  Of course there were clueless kings, and brutal and bloody fights for accession and succession are well known; but each new king, regardless of his legitimacy, ascended to the throne with the same ambitions.  He might be a philosopher king like Richard II, poetically reflecting on his fate and the loneliness of the monarchy, but most were well aware of the benefits and rewards of a powerful, unchallenged monarchy.

France, Spain, and the Vatican were no different, and all vied for power for centuries, all trying to establish supremacy and European hegemony.  Queen Isabella was every bit as powerful as Elizabeth I and the Holy Roman Emperor was no slouch. 

                  Queen Isabella

One does not have to look far beyond Europe to note the power, empire, and wealth of Eastern monarchs.  The Shahs of Persia were wealthy beyond imagination and through diplomacy and arms spread the mantel of empire both east and west.  The dynasties of Egypt and China concentrated wealth and power for thousands of years.  For millennia ‘the people’ had nothing.  They were slaves, serfs, indentured servants, or peasants.  It wasn’t until the 18th century that any idea of popular democracy emerged.

The history of the United States is no different. The earliest settlers were eager to acquire the vast, uncharted, fertile lands they found when they landed at Jamestown, and their descendants never looked back. Landowners like King Carter of the Northern Neck of Virginia played his colonial cards right, benefitted from favors from English aristocratic rulers, and built a vast empire. 

When tobacco finally leached the last bit of nutrients from the soil of Virginia and North Carolina, landowners picked up and moved west, settled the Mississippi Delta and made millions from cotton. Businessmen in the North set up and dominated the lucrative Three-Cornered Trade, and made millions more from whaling, fishing, and ice-harvesting.  Before long the Robber Barons emerged, and the Rockefellers, Vanderbilts, and Carnegies had amassed extensive industrial and financial empires.

The fact that today’s One Percent own or control 20 percent of the nation’s wealth is not news at all.  The CEOs of American multinationals have profit and wealth in their veins.  They come from the same line of aggressive, entrepreneurial businessmen who built the railroads, explored the country’s oil reserves, and financed the second generation of the Industrial Revolution.  The Steve Jobs and Bill Gates of the world, often thought of as visionary entrepreneurs and philanthropists are cut from the same cloth.  Both men were ruthless businessmen, challenging the competition at every turn, making canny investments, working the tax laws to their favor, and amassing corporate empires not seen since the days of Standard Oil. 

Every American has the expansion of wealth in his blood.  I know as small businessman in Mississippi who has built his small BBQ business from selling ribs from the back of a pickup to managing a 10-restaurant chain.  He could have stopped at two or even five, for his profits from these very successful and popular restaurants were more than he could have dreamed.  Yet, he kept expanding.

A close friend of mine worked for a Washington non-profit company which specialized in International Development.  Despite the no-profit, no-loss restrictions and government regulation, the CEO built the company from a 5-person, two-contract organization into one of the biggest US Government contractors.  He didn’t have to expand so ambitiously since neither he nor his officers benefitted from the expansion since government contractor salaries are fixed; and there were none of the profit-sharing, stock-option benefit plans enjoyed by for-profit companies.  Yet, he felt that he had to increase his and the organization’s power and influence exponentially. As a good American businessman, he had set no limits on growth.  He only knew that he could not stop.

The public sector – government – is no different.  Congressmen and Senators are in it for the longest haul possible; and despite repeated calls for term limits, no serious law has ever come up for debate.  Representatives have to run for office every two years, and thus begin their fund-raising from the day they set foot in the House Office Building.  If they are lucky, smart, and opportunistic, they can run the two-year span into decades.  The longer they stay in power, the more profitable contacts they have.  As they ascend through seniority to top Congressional committees, their power and influence increase.  They fight tooth and nail to retain and expand that authority and wealth.

               (Harry Byrd (D-W.Va.)

Power in Washington does not reside just in elected government but in the vast network of lawyers and lobbyists serving it.  Every elected official on Capitol Hill has a stable of staffers who in turn meet with the phalanx of interest group representatives who sell their products.  Most of these staffers once they leave the cloakrooms of official power, join the most influential law firms in the city and take their turn pushing products.  The Senators and Representatives, once they have decided that it is time to get off the electoral train, take positions on the board of directors of the country’s most powerful companies and advise them on how to win legislative battles in Washington.

President Eisenhower talked of the Military-Industrial Complex, and he privately admitted that he really should call it the Congressional-Military-Industrial Complex. Members of the Pentagon, Defense Department, military contractors, and K Street lawyers are all members of the same exclusive club.  Eisenhower became suspicious and wary of the Complex and its arrogation of power; politicians may talk a good populist game, but nothing ever changes. It’s in our blood.

Although it is not easy to counter the impressive power of this Complex, some public interest groups try.  The AARP has more than 37 million members and even though the country is hemorrhaging money because of Medicare and Social Security, little or no headway has been made in trimming the billions in health and social care for the elderly.  Every other group pales in comparison.  No matter how strident, insistent, and hectoring the Environmental Lobby can be, it simply doesn’t have the membership, the money, or the clout.  In other words, despite its best efforts, it has not concentrated enough wealth and power to make a difference.

Occupy Wall Street, a populist effort to expose the exorbitant wealth and abuse of power of The One Percent, failed miserably but predictably.  Most Americans don’t care that much who has money as long as they have plenty.  We don’t want to destroy or break up the One Percent as much as we want to crawl our way out of the bottom.  Our competitive adversaries are those just above us not way above us in the aerie.  The American Dream may be possible for only a few, but that does not diminish the desire to achieve it. 

Most people know that most of those at the top of the economic pyramid did not inherit their wealth but made it; and understand that companies or their officers do not simply sit on their money in savings accounts. They invest it, and while some of their activities are just paper transactions – i.e. do not ‘produce’ anything – most of the mergers and acquisitions, investments in real estate, energy, transportation, and high-tech are indeed productive. They provide the capital for economic growth.  Mitt Romney was criticized for his tenure on Wall Street because he ‘threw a lot of people out of work’.  He may have indeed done so, but acquisition of failing firms, trimming and honing them into more productive units and/or merging them with a more profitable enterprise produces wealth and eventually more jobs than were lost.

Most Americans also understand the nature of power and the importance of the consolidation of power.  While some voters may rail against seniority, most love it when their Congressman finally gets to chair an important committee and can send jobs their way. They are delighted that a local company has strong lobbyists in Washington so that punitive regulations can be cancelled or deferred.

In short, most of us are not bothered by the concentration of wealth either on Capitol Hill or on Wall Street.  We know that wealth and power are what motivate most of us, and we are not fussed by the Vineyard and Gstaad vacations, the Porsches and Jaguars, homes in Pacific Palisades or the Riviera.  We read about them in the beauty parlor and wish we could have some of that good life.

There is a limit to everything, and when the wealthy and powerful get too uppity, we fight to bring them down and then dance on their graves.  Politicians who lie, cheat, and fornicate are chased from office.  Investment bankers who have gotten caught with their hands in the till, are sent out of town on a rail, and locked up; but you have to be a Bernie Madoff who bilked his friends for millions or the Enron guys who had the biggest fuck you attitude on the planet as they built Ponzi and pyramid schemes all around the globe and assumed they would get out before anyone was the wiser to do serious jail time.  We cut the rich and powerful a lot of slack.

We don’t really hate or resent the One Percent.  We admire what they do and what they have done and more than anything, want to be like them.  We embrace politicians less warmly, but still vote them back in office if they use their accumulated power for our interests.  In short, we are just as venal and acquisitive as they are.  It is the American way.