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Where economic power goes, political power will follow

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A J Maher

Democracy is not a one election abracadabra game - it is a cumulative process. Brexit and even Trump are both endings and beginnings. It is the end of the Blair/ Clinton era of triangulation and elections that produced the usual candidates and which secured the usual outcomes. It is the beginning of politics of paying attention to voters and not the Koch brothers in America or the man from the ministry in Brussels.
This is democracy acting as disrupter of a degenerate and decadent governing order and the voter reasserting herself as the final arbiter of policy.
Trump was the only outsider left standing in the US election so he was the unworthy beneficiary of this electoral reassertion of authority. That he was a profoundly flawed candidate was obvious (even in the middle west) but the fact that he was not a Clinton/ Bush/ Koch brothers establishment drone was, to tens of millions of angry American voters, a feature not a bug. They don't want, and they will no longer accept, business as usual. Their politicians will either pay attention or they will continue to lose elections to outlandish candidates.
For its part Brexit was an entirely comprehensible and rational assertion of the primacy of electoral power over the bogus claims of treaty prerogative. There is no democratic legitimacy for EU governance and its policy intrusions are no longer acceptable to the British voter. They have simply reasserted their ownership rights over a policy process that had been confiscated by the hired help.
For Buttonwood Democracy has a duty to support the ruling order in being. For my part I cannot conceive from where he acquired so bizarre a notion.
Democracy works because it is a peaceful way of flushing away an old and decrepit order and it is now, right under Buttonwoods appalled establishment gaze, performing precisely that essential hygienic function......

Sense Seeker in reply to A J Maher

Perhaps Trump is not a Koch brothers establishment drone, but he sure does their bidding. Tax breaks for the rich, deregulation, cripple EPA, appoint ultra-libertarians to the Supreme Court. You're fooling yourself if you think Trump is flushing away the establishment. He IS the establishment.

MagicMoneyFrog in reply to Barry0325

"as long as the overwhelming opposition to open borders among the lower and middle class is pooh-poohed:
According to Gallup polls only in 2017, only 35% of American want immigration in the USA to decrease (
According to PewGlobal 56% of Americans think that growing cultural diversity makes the USA a better place to live (
So no, there is no overwhelming opposition to "open borders" in the USA. And I can say from my experience practicing immigration law that the USA most certainly does not open borders.
I you can't blame the "elite" for gay marriage either since the majority of Americans (62% as found by PewGlobal) support gay marriage.

Chris Pyak

This is the challenge democracy has to face. How to preserve maximum individual freedom while ensuring that no one force gains overwhelming power? In Europe we need to make sure that individual citizens retain the biggest power. We have to remove artificial national boundaries, since they tend to strengthen the influence of the rich few. One example is the labour market:

Tom Meadowcroft

That's one way to look at it, but there are others. Economic power brings with it a certain amount of political power, but there are other sources of political power, the most important of which is fear. Fascism and Communism were existential threats to the democratic nations of the West. The fear of each created a great deal of political power to organize society in such a way as to counter the threat. The rich were willing to support social programs so that the poor and the bourgeoisie would thrive, leading to wealthy, powerful countries within which the rich could safely abide. The poor and the bourgeoisie, on the other hand, were content to let the rich remain relatively rich rather than overthrow the elite, the chaos of which would have opened the gates to the totalitarians.
Post cold war, the fear has greatly diminished. With no existential threats, the rich seek to increase their wealth at the expense of the bourgeoisie and the poor, as the need for a powerful home country with a supportive populace no longer seems necessary. Their wealth will protect them from today's very limited threats. The poor and the bourgeoisie are disappointed to see that the prize for winning the cold war was intense competition from a newly free world economy, an economy which benefits the rich much more than themselves. But their very numbers defeat them politically -- without the unifying fear, their political demands are many, varied, and diffuse, unlike those of the rich. The end of the politics of existential fear of Communism has caused the total political power pool to shrink, while the political power stemming from economic power has remained constant, allowing the rich to dominate.
Demagogues seek to create new fears to exploit politically, but sadly those fears often do not translate to political actions that benefit the populace (see Turkey, Venezuela, Russia, Hungary, Serbia, and now the US). The cold war was a productive period for the West because Communism was very scary, particularly for the rich, and also a really bad idea. The fear of Communism generated impressive political power, and that power was directed at avoiding and fighting Communism, which would have been good for the West even without the fear. We may need another philosophy as bad as Communism to unite the democratic world in fear and a productive political process, once again. And that, sadly, is the problem with the "End of History". We needed history to unite us, which Fukuyama talked about in the second half of the book about "The Last Man", which was about political diffusion leading to directionless politics. People paid less attention to that second half; it was much more downbeat. Great book, though.

Ed Zimmer in reply to A J Maher

A J Maher: "For Buttonwood Democracy has a duty to support the ruling order"
I don't see him saying that at all! He's saying money is destroying democracy, which is very hard to argue against (which you certainly haven't). You see election of Trump as triumph of the electorate - ditto with Brexit. I see both as triumph of corporate interests (aka, money) wanting shake-up of governments' ever-rising regulations and taxes. Look at your legislators. in today's society, they NEED money (lots of money) to get elected to office (and remain elected). No longer does the recommendation of a few major newspapers/magazines carry the weight they once did. Now they need massive advertising through all the media (including social) telling the electorate what the (very-expensive) info-research firms tell them the electorate want to hear. That NEED for money translates directly into favoring the views of their major contributors - making the views of the electorate increasingly meaningless - hence "Where economic power goes, political power will follow".


Mr. Buttonwood is spot-on, but rather late to the party, by at least 50 years. Many of these changes were notable in the 60's as countries acquired wealth associated with the economic revival after WWII. Citizens had listened to, and obeyed, the ideology of their rulers, which then became a self-fulfilling prophecy. More free time, less responsibility, ruled by popular culture, a denial of the need for self-discipline, dumbing down of the education system, with the end result, that those who refused to be taken in by such nonsense, who isolated themselves and managed to become achievers, spreading that philosophy to their families. Bad luck followed those who were taken in by this rhetoric such as unemployed factory workers in the USA, coal miners in the UK etc.
I wonder if Mr. Buttonwood feels that the stated changes are good for strengthening society (there are too many people who don't add value to society) and whether this evolution will rebalance society in the long-term, leading to a meritocratic system? Achieving equality has been given, not earned.

scott0962 in reply to A J Maher

"Democracy works because it is a peaceful way of flushing away an old and decrepit order "

That's what democracy should be but looking at the entrenchment of incumbents and the wealthy elite in all levels of government its difficult to argue that is still what democracy is, at least not in the USA. Its even harder to make the case for democracy as a means of flushing away the old order in the UK where one whole chamber of Parliament is dedicated not to the elected representative of the people but to rewarding political cronies and the inherited elite.


There are two things that keep economic power within bounds: fear and solidarity. The growth of Socialist parties in Europe during the 19th century frightened Bismarck, of all people, into establishing the first comprehensive social insurance in the 1880s. Anarchist bombings and murders kept things on edge. But the threat of the International Working Class vanished in 1914, as the proletarians of each nation set to killing each other with enthusiasm. Yet within each country, the World Wars and the Great Depression encouraged solidarity, for everyone was at risk, regardless of class. This was encouraged in the US by the ongoing Draft, that mixed up everyone, and showed the smart guys that the tough guys weren't really dumb, but were smart in different ways, and showed the tough guys that the smart guys could be as tough as they were. The loss of those years of working together with people one would otherwise never meet may be the deepest wound inflicted by the Vietnam War. (As an aside, we have no idea what the long term effect of a professional army on democracy will be.) Once the USSR collapsed, there was far less sense of national solidarity, and the "wedge issue" came into its own as a way of wrecking economic solidarity between those on each side, despite their shared economic circumstances. So for several decades, there has been no force for national solidarity across classes, nor has there been reason for fear among those who have gathered to themselves an ever increasing proportion of the income and wealth of the nation.
If the majority finally feels that it is being abused, the threat of violence will recreate the fear among the haves that led to a more equitable economic distribution before. This is my guess as to how things will change, but I have no idea to what extent inequality will grow before it does. One friend insists, "So long as they've got their cable and their Bud Lite, they're not going to do a thing."


I do think Buttonwood should have mentioned Jeremy Corbyn in this piece; currently the polls are predicting that he will be the next Prime Minister. That does seem to undermine the case that the rich are behind political power in the UK at least.


Politicians will pay heed to those who give them the money to allow them to win the next election. That is the problem with the system and the reason for the numbers given.

WT Economist

In business, you have to lie to people and manipulate them to steal their money, because market transactions are voluntary. In government, you can use the threat or absolute fact of violence to rob people and abuse them.
In the United States, apparently that ease mades the political class lazy. So it was deposed by a private sector actor skills in lying and manipulation.
What will happen when people realize they have been lied to and manipulated I don't know. In our history there have been times when you could trust business and not the government, or the government if not business. Now, with all our institutions having been captured by the most selfish members of Generation Greed, you can't trust anyone.


The argument here is that wealth equals political power, and so rising inequality means the concentration of power in the hands of fewer (wealthy) people. But the ease of translating wealth into power varies.
In modern democracies, the political system becomes a driver of inequality when political donations and lobbying are unrestricted. Firms and donors can choose who succeeds in politics, and can ensure that wealth flows increasingly to themselves, worsening inequality and producing more wealthy donors. Conversely, restricting donations and lobbying can make it harder to buy influence, which obliges politicians to seek wider bases of support -- which may produce economic policies that will reduce inequality (a virtuous circle).
The important distractions are less the popular amusements of the day like Facebook or chariot races (n.b., by Juvenal's time, the republic was long dead) than the emotive cultural issues and economic red herrings used to bring in the necessary votes. When politicians are thoroughly dedicated to serving private interests, this drivel can build up into something beyond their ability to manage. Genuine political reform, ignored by major parties, becomes the key issue of populists -- and voters elect a toad to drain the swamp.

Ed Zimmer

The problem with this article is that it decries the problem but offers no potential solution. A solution (that I posted a few weeks ago) consisted of two simple rules: 1) No elected official is allowed to take outside money (for any purpose) or have direct outside business ownership. 2) No elected official is allowed to return to private practice. These can be seen as not impingements on personal freedom, but simply as requirements of the job. I would expect no loss of candidates - just a different set. These rules (and their enforcement) are probably not attainable - but any law(s) bringing us closer to that objective would be welcome.


I suppose this makes sense, if you're looking at things from an essentially Marxist ("economics is all") point of view. You might also say that what we're seeing is a reaction to the economic elite using their political power to radically alter our culture without consulting the people whose culture is to be so altered.
As long as people are being bankrupted and jailed for refusing to participate in gay marriages, and as long as the overwhelming opposition to open borders among the lower and middle class is pooh-poohed, I'll never believe in the good will of our elites. It's unfortunate that the reaction was Trump, but it was inevitable that there would be a reaction.


The income bottom third get no benefits from senators at all?? Unemployment, disability, food stamps, subsidized housing, affirmative action, social security and Medicaid cost a LOT of money. No, they don't provide a European level welfare state, but the poor in America get far more than than they pay in taxes.

Ed Zimmer in reply to CaptainRon

CaptainRon: By "private practice" I meant non-governmental work, eg, lobbying or legal practice taking advantage of the connections and inside-knowledge they had accumulated during their elected tenure. They could still find employment in government work. The intent of the rules is to discourage pursuing a career in "public service" as a means of wealth-building - rather do that in private practice, THEN move to public service.

CaptainRon in reply to Ed Zimmer

Your second solution goes way too far. You're telling someone that runs for public office that they are not able to make a living after they are no longer in office. We do certainly need to take the money out of politics, but you can't tell people they have to retire from life to serve the public.