It’s The Power, Stupid

January 25th, 2011at 11:35am Posted by Eli

Kevin Drum explains it all to you:

The problem is that a system that generates enormous income inequality also generates enormous power inequality — and if corporations and the rich are allowed to amass huge amounts of economic power, they’ll always use that power to keep their own tax rates low. It’s nearly impossible to create a high-tax/high-service state if your starting point is a near oligarchy where the rich control the levers of political power.

I am, fundamentally, old fashioned about this stuff: I think of the world as largely a set of competing power centers. Economics matters, but power matters at least as much, and I think that students of political economy these days spend way too much time on the economy and way too little time on the political. This explains, for example, why I regret the demise of private sector labor unions. It’s not because I don’t recognize their many pathologies, or even the fact that sometimes they stand in the way of economic efficiency. I’m all in favor of trying to regulate the worst aspects of this. But large corporations have their pathologies too, and those pathologies are far worse because there’s no longer any effective countervailing power to fight them. Unions used to provide that power. Today nobody does.

My biggest quibble is that Drum seriously underestimates the importance of power.  We are at a point where solutions don’t matter, what’s best for the country doesn’t matter – the only thing that matters is what corporations that rule us will allow.  And as long as that is true, any kind of meaningful progress or reform is impossible.

Entry Filed under: Corruption/Cronyism,Economy,Politics


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