To put it in philosophical terms, is there a feasible world where a libertarian free human has absolute power but does not become totally corrupt?
Yes absolute power corrupt absolutely. In most developing countries of the world, some considered to be liberators leading the campaign against colonial masters later become dictators. Why? Because they enjoyed full support of their people and see that as a reason to continue in power for so long and got intoxicated power. So your state is not an over exaggerated one.
Yes absolute power corrupt absolutely. In most developing countries of the world, some considered to be liberators leading the campaign against colonial masters later become dictators. Why? Because they enjoyed full support of their people and see that as a reason to continue in power for so long and got intoxicated power. So your state is not an over exaggerated one.
Power always corrupts with advancement of time, and absolute power corrupts absolutely.
It was/ is/ will be true forever.
Power does corrupt even without being absolute.
Reminding Shakespeare, power is a disease, it makes people sick...
Absolute power makes people puff up. Formerly humble rulers have walked the arrogant path of corruption after sitting in the wheel of leadership for considerable time.
Not sure what you mean when you say "libertarian free human," Kirk. Libertarians, as far as I know, believe in just about no government regulations of any kind. An extreme version of today's US Republicans.
Anyway, I do not think it's possible for anyone with "absolute power" to avoid being corrupt. Having been given this "absolute power," the individual cannot help but believe that he/she has all the anwers, that everyone out there is only passively waiting for direction, and happy to receive that direction It's a bit of that same disease that afflicts any celebrity, where these individuals really believe that their celebrity status gives them credibility in other fields. You know, like movie actors who believe they can spout off about any and all causes, because we are all there willing to listen to their every word.
The mind can play funny games.
The above saying is a statement of fact in most African countries. Many African leaders rise to power with the promises of addressing the abnormalities that was prevalent before they assumed the position of leadership. But soon after they come to power the do worst than their predecessors. Examples of such leaders abound in the African continent. The include, Mabutu Sese Seko, Eyedema of Togo, Idi Amin of Uganda, Babangida of Nigeria, Abacha of Nigeria, Samuei Doe of Liberia, Mugabe of Zimbabwe, Tarlor of Liberia, among others.
Dear Kirk and readers,
In an ideal libertarian free human society, no one would have absolute power because the power of each individual necessarily would be checked and balanced by the countervailing power of others. In those circumstances, a strong rule of law and a cooperative or associative economy quickly would emerge as the most successful and stable methods of balancing competing interests. In philosophical terms, such a world could exist. At least in theory, it could continue indefinitely.
In practice, such societies almost do not exist. They seldom arise and, when they do, they tend not to persist for long.
Lord Acton's dictum is essentially correct.
Philadelphia, PA
Dear MacGregor & readers,
Like Manfredi, I'm left wondering what you may have in mind under the heading of the "libertarian free human." What does this mean, exactly? Again, what would it mean for such a person to have not merely power, but "absolute power"?
I am very sympathetic to Lord Acton's dictum, still, I would like to see some discussion here of the meaning of "power," "absolute power" and "corruption." These are very interesting concepts. I think we need to know, for instance, where to count the "power of persuasion." This would seem to contrast, significantly with, say, force and the threat of force in human relations and also with the organizing power of economic incentives --as in bribery for instance, or, more generally, in favoritism, cronyism, nepotism.
Again, we may need to know what to count as "corrupt." Is this a political concept, is the expectation that it will be defined in law? Is it instead a moral concept? To know what corruption is, it would seem, that though there are clear and obvious cases, like bribery of government officials in exchange for favors, we may generally need to know what the absence of corruption looks like. What is the uncorrupted person or state of affairs?
H.G. Callaway
Within the bounds of our experiences of how both others and ourselves use power one is compelled to agree that there appears to be a correlation between the possessing of power and the amount of harm the person possessing power causes. That being said, I wish to diverge slightly from the question and ask. . . "Is the observed problem of 'absolute corruption' a function of the nature of power itself OR is the problem a function of the frailty, duplicity, etc. of human nature?"
The very reason why during a triumph, the Romans had a slave standing behind the emperor and whispering to him from time to time the words "memento homo".
Once people get absolute power, with time, they lose human touch and begin to feel that they are gods.
I always liked Frank Herbert's perspective in Dune - power does not corrupt, it attracts the corruptible.
The notions of absolute power and absolute corruption are either hyperbole or incoherent.
in a letter he (John Dalberg-Acton) wrote to scholar and ecclesiastic Mandell Creighton, dated April 1887, Acton made his most famous pronouncement:
But if we might discuss this point until we found that we nearly agreed, and if we do agree thoroughly about the impropriety of Carlylese denunciations and Pharisaism in history, I cannot accept your canon that we are to judge Pope and King unlike other men, with a favourable presumption that they did no wrong. If there is any presumption it is the other way, against the holders of power, increasing as the power increases. Historic responsibility has to make up for the want of legal responsibility. Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority, still more when you superadd the tendency or the certainty of corruption by authority. There is no worse heresy than that the office sanctifies the holder of it. That is the point at which the negation of Catholicism and the negation of Liberalism meet and keep high festival, and the end learns to justify the means. You would hang a man of no position like Ravaillac; but if what one hears is true, then Elizabeth asked the gaoler to murder Mary, and William III of England ordered his Scots minister to extirpate a clan. Here are the greatest names coupled with the greatest crimes; you would spare those criminals, for some mysterious reason. I would hang them higher than Haman, for reasons of quite obvious justice, still more, still higher for the sake of historical science.[4]
https://en.wikipedia.org/wiki/John_Dalberg-Acton,_1st_Baron_Acton
notion is unclear. it is fact that if person has not leadership qualities and not an honest man then temptations bothers him to do corruption and get all benefits related to himself.
Good points, Cecilia. In the US, the term "libertarian" is applied mostly to the right wing version, more or less Ron Paul I suppose. To me, these are the extremists of the "small government and no regulations" mindset. Even to the point of not appreciating the problems that occur with monopolies.
They claim that government creates monopolies, with its regulations. Whereas, in many cases, such as utlities, it is basic Economics 101 that creates monopolies. It's called, return on investment (ROI). Without it, you have no business. You can't have multiple water and sewer companies, serving every neighborhood, as an obvious example. Some monopolies cannot easily be avoided. And, those cannot credibly self-regulate.
Anyway, not sure what this has to do with the main question, about power corrupting. (Or, as Daniel quoted an even more astute observation, power attracts the corruptible.)
By libertarian I believe you mean not pleasure-seeking but a human being who is relatively free to make his own choices. In Conrad's Heart of Darkness, there is the character Kurtz who sets out to Africa with philanthropic and altruistic intentions. But the power that he wields over them is so absolute that he turns into a savage monster. I don't think there is a better fictional example of the corrosive effect of power.
Absolute power in one hand should not exist. The separation of powers is a model for the governance of a state. The typical division is into three branches: a legislature, an executive, and a judiciary.
The world changed in the time that passed after Lord Acton made his comment on power and corruption. Today we have a division of power and a complex system of cross-checks. They work quite well in many cases, but not always. We can still hope (thinking like Sir Thomas More ...) that future power will be created by knowledge. The current ability to share information can be a key factor facilitating the emergence of well-defined global social awareness.
Dear Janusz and readers,
The division of power and the system of checks and balances which exists today existed also at the time Lord Acton wrote his dictum. At that time the U.S. Constitution was over a century old and Montesquieu's The Spirit of the Laws, which furnishes the U.S. Constitution's framework, was considerably older.
The capacity to marshal and deploy knowledge for the purposes of organizing and influencing has come to comprise the dominant means of projecting power.
In The Anatomy of Power (1983) J.K. Galbraith traces a historical evolution of the dominant means of projecting power from condign through compensatory to conditioned methods. The evolution essentially proceeds from use of force of arms through payment for services to more or less sophisticated means of persuasion other than means in the first two categories. Naturally each of three means of projecting power always has been in use, usually in various interlocking forms; e.g. an ancient prince or a contemporary mining company operating in a developing country may hire a private army both to perform military missions and to condition a population to obey the principal's authority.
The techniques developed by Edward Bernays in the 20th century to manipulate people at population-level are among the most outstanding achievements in the field of conditioned power. Networked artificial intelligence systems are apt to pose a still greater threat to human freedom. It is doubtful whether Sir Thomas More would have been much enamored of these methods of knowledge creating power.
It is an old time saying that power corrupt power & absolute power corrupt absolutely .It is in this line the person with power take undue advantage of his position of MAL practices to favor the person to give him the undue advantage by taking a bribe so to say corruption with this person & this cycle has been going on unless the Mal practicing found for his guilt .
This is my personal opinion
Dear Michael,
Thank you for your feedback. How do you fit into this pattern of interactions and control the profound theory of Elias Canetti described in the book "Crowds and power"? It is not always possible to know how power is created and where it will be channeled. Some additional details are presented in the speech of the Nobel Prize ceremony of 1981:
https://www.nobelprize.org/nobel_prizes/literature/laureates/1981/presentation-speech.html
and the book is available at:
https://archive.org/details/crowdspower00cane
Dear Janusz,
I am very grateful for the introduction to the work of Elias Canetti.
Canetti was a contemporary of Edward Bernays. Early in their respective lives each of Canetti and Bernays lived in Vienna. Each was Jewish. Each produced important works concerning mass psychology, in each case in connection with the work of Sigmund Freud. Whereas Bernays emigrated as an infant to the U.S. in 1892, Canetti experienced the National Socialist government is Austria, whereupon he emigrated to England in 1938, subsequently re-emigrating to Switzerland in 1972.
Bernays' substantive field was business consulting. Canetti's was chemistry, whereby his real interest lay in literature.
Bernays was a nephew of Sigmund Freud. He was instrumental in popularizing Freud's psychoanalytical works in the U.S., with significant social consequences for American society. Bernays' published numerous books on techniques for manipulating mass psychology, starting with Crystallizing Public Opinion (1923) and ending with Engineering of Consent (1955). His work is intensely practical. The question driving it is expressed in Propaganda (1928): "If we understand the mechanism and motives of the group mind, is it not possible to control and regiment the masses according to our will without their knowing it?”
Canetti was an idealist rather than a practitioner. The question driving him was to understand the nature and being of human crowds. In Masse und Macht (1960) Canetti posited four generally applicable characteristics of a crowd (my own translation from the German; it will differ from the published English translation):
While the motivations of Bernays and Canetti were quite different, each of them clearly recognized the peculiar susceptibility of crowds to manipulation by an agent who understands crowd behavior.
Philadelphia, PA
Dear Lusk & readers,
Very interesting comments on Bernays in particular--and we should recall the relationship between propaganda and mass marketing in 20th century history.
I recall here a comment of a very famous and influential philosopher who I once got to know. He said that for a philosophy to prevail, it must rest upon (or perhaps draw upon) something already prevalent. The point seems to be highly relevant to the character of the "power of persuasion." We want to be clear about the distinction between "persuasion" (or perhaps, "rational persuasion") on the one hand and manipulation on the other. This, of course, might bring up the ancient topic of demagoguery--discussed, from ancient times under the heading of rhetoric.
It seems that the contemporary problems of power and its abuse have much to do with the fact that rhetoric is now rarely taught, but marketing is very prevalently taught in the universities. Where does the topic of "demagoguery" come up in courses in mass marketing?
Moreover, the techniques of mass marketing have entered strongly into political campaigns. Mass advertising is often ignored, of course. But it obviously has its effects, and the marketeers in business often seem to run the show regarding products on offer. Using the techniques of mass marketing in political contexts will amount to a kind of manipulative propaganda; and the worst instances of this kind of thing have been prominent in the totalitarian systems of the 20th century. Perhaps strengthening the laws on false or fraudulent advertising would have some positive effect? Fraud is a kind of private corruption.
This is definitely part of this question. We want to know, in part, what "corruption" is, and it belongs to that question to ask whether corruption can be private--in a firm or a market, say. The illegality of "insider trading" of stocks and bonds is also of interest--trading on the basis of privileged, insider information.
H.G. Callaway
Absolute power breeds corruption. As Friedrich Nietzsche states, "whoever fights monsters should see to it that in the process he does not become a monster". The herd phenomenon, the fact that the general population likes to support and respect absolute rulers may develop in them a great love for brandishing their power in whatever ways they wish to. It is more the fear of losing their power which makes those with absolute power corrupt not the power itself.
It is definitely true. Throughout the history of human kind there are numerous example proving that absolute power corrupt absolutely. Consider the Egyptian Pharaoh, Ramesses who proclaimed himself God.
Dear H.G. and readers,
I was quite exercised by your remark that "fraud is a kind of private corruption". Despite its attractive aphoristic quality, I quickly concluded that there is no essential difference between public and private corruption.
In support of this conclusion, some counterexamples may be mentioned.
First, it is quite common for one sovereign government to defraud another sovereign government. In this category of cases it seldom is possible for a private citizen to be sure whether the apparently deceived sovereign actually was fooled or merely cooperated in the production of a common narrative for manufacturing the consent in relevant populations. The ghost of Bernays looms large in case of the seemingly deceptive means by which the U.S. induced the U.K., Canada, Australia and others to participate in its 2003 invasion of Iraq. It is highly unlikely that Her Majesty's government was deceived. The relatively hapless Australian government might have been deceived, but perhaps it was a fully complicit perpetrator and not a defrauded perpetrator-victim. Quite a number of people in Washington and Canberra must know the answer, but I do not.
Secondly, a broader exploration reveals that each of governments, corporations and individuals are apt to defraud each of the others, and may combine in in various coalitions in order to do so.
Thirdly, I am presently dealing with a Swiss case which illustrates a coalition of the kind just mentioned. It involves government agency A which pursues a debt claim on behalf of individual B against individual P in circumstances such that only individual Q possibly could have such a claim against P. It is a classical "fraud triangle". The question is whether P and Q should lodge a criminal information against A.
It turns out that there is no merit in approaching the Swiss prosecutor. The reason is not that A is a government agency. It is because attempted fraud is not a criminal offense known to Swiss law. Perhaps the pragmatic Swiss legislators recognize that attempted fraud is so common that it would be infeasible to attempt to prosecute every case which might be reported.
Philadelphia, PA
Dear Lusk & readers,
It remains unclear to me that you do provide any counter-examples to the claim that fraud is a kind of private corruption. Instead you seem to amplify the idea that governments practice some pretty high-levels of corruption. However corrupt governments may be (I agree about collusion between the Bush administration and the U.K. government of the time--and the Iraq war.), it doesn't follow that there is no private corruption.
In any case, let's try out some definitions of corruption, and see how they go.
According to Merriam Webster,
Corruption is a matter of "dishonest or illegal behavior, especially by powerful people," --including bribery, of course, but also other "inducements by improper or unlawful means."
---end (sketch of) Webster's definition
Notice "dishonest or illegal." Morality comes in. The forms of corruption likely make up an unending list, and the law sometimes runs to catch up. New forms continually evolve, as the older forms are exposed; but then the older forms are continually rediscovered somewhere or some-when else, so that they never die away completely. They do, however, tend to become more subtle and covert --harder to detect under pressure of exposures.
Political scientist Michael Johnston (see his Syndromes of Corruption), says "Corruption involves abuse of trust, generally one involving public power for private benefit."
---end quotation
"Generally" (but not exclusively) "involving public power for private benefit."
But notice that "public power" has become quite pervasive. Do agencies, such as the universities, which benefit from large-scale public support, exercise "public power"? How about advertising on public issues by large military contractors? Is this an exercise (potentially corrupt), of "public power"? Going back a century or more to the Gilded Age, the Pennsylvania Railroad (once the largest corporation in the world) was a private corporation, created by the state. (After New York built the Eire Canal.)
Yet it was at the center of much 19th-century corruption, and regulation of the railroads, became a very large issue for the reformers. Are preferential pricing and tonnage rates not a kind of corruption? (As in favoritism to Rockefeller's Standard Oil?--ruining the competition) Or consider the British East India Company (or the Hudson's Bay company)--private firms or agencies of government? In any case they could effectively govern, looking first to their own profits.
Sometimes one will also find more limited definitions, e.g., political scientist, Samuel Huntington, in his Political Order in Changing Societies, p. 59:
Corruption is behavior of public officials which deviates from accepted norms in order to serve private ends.
---End quotation
But I submit that if the company treasurer embezzles funds, (or say, one partner in a partnership), then this trusted person "deviates from accepted norms in order to serve" particular private interests--not those defining the person's office and powers. Fraud is a kind of corruption, morally, even if not legally.
H.G. Callaway
Dear H.G. and readers,
Your claim that "that fraud is a kind of private corruption" involves the three elements: "fraud", "private" and "corruption"; it resolves into two distinct statements:
You did not claim that there is no private corruption; private corruption, after all, is commonplace. You claimed is that fraud is characteristically private (or that there is no public fraud).
My position is that I agree with 1 but disagree with 2. To establish my position, I provided counterexamples demonstrating instances of public fraud.
It totally depends on the motive and vision (if any) of the person concerned. There is no generalization, but in most cases uncontrolled power breeds corruption.
Dear Michael,
I am very pleased that my remarks have been relevant. Your answer is very well written and informative even for those who know the subject very well. It is true that Canetti was an idealist, but his insight into human nature was profound and led to many practical conclusions. The book: Auto da Fé (original title Die Blendung) is probably one of the best proofs.
I also have some additional remarks about the role of the crowds; In addition to being controlled, crowds influence people in positions of power. In this sense, the crowd is similar to an excitable medium with non-linear response characteristics. Reading Canetti, we can also conclude that the lower form of social organization, described as a pack, is just as important, especially as a seed of corruption; one can even conclude that corruption is the natural property of a pack. On the other hand, absolute power does not need to be corrupted at all. In this sense, Canetti puts a little doubt on the validity of the old dictum.
In the future, when social life migrates from Freud's sphere to Carl Jung's universe, these opinions could change.
Philadelphia, PA
Dear Lusk & Readers,
I do not hold that there is no public fraud. That claim also does not follow from saying the fraud is characteristically, or typically, private.
In consequence, I suspect we agree on the related questions. I've been particularly intent to argue that private fraud is a kind of corruption. It would follow from that, then, that corruption need not be (is not always) public or political. Of course, it often is, and these are the more prominent cases or instances.
I believe it is widely held that the public itself, in a given polity, may become so corrupt that it becomes incapable of making sufficient corrections. This is an argument often made about the fall of the Roman Republic. The extension of Roman power around the Mediterranean world produced sever factionalism, internal conflict and finally civil war in the Roman republic. Various powerful men used the resources of the provinces against each other. The citizens were unable to restore order, by the customary means, and the republic was then replace by the empire. The image I have of this is of the republic declining into a warring, or conflict ridden, oligarchy which was afterward replaced by submission to Augustus.
Private corruption facilitates political corruption.
Something similar may be going on in Russia at present.
By the way, how do you see the definitions of corruption on offer?
H.G. Callaway
In my opinion it cannot exist, the constraints of pleasure, of oneself, of pride, the well-being of oneself, the oppositions of others, political parties, etc... In History, we know the prophets David and Solomon who had great power. However, they continuously control themselves by the precaution of not moving away or deviating from God's instructions and religion, etc. ..
Dear H.G. and readers,
Apparently we agree on the meaning of "corruption".
Your sketch of the Webster's dictionary definition of corruption: "Corruption is a matter of "dishonest or illegal behavior, especially by powerful people", corresponds to my understanding of the meaning of the term. Nothing in the definition limits the scope of the concept to the public sphere. A characteristic, but not necessary, element of the phenomenon is that the malfeasor is in a position of power. The particular position which confers power could be public position or a private position.
If we consider the public-private distinction in relation to position power with J.K. Galbraith's framework, we notice that both public position power and private position power confer opportunities to wield the full gamut of condign, compensatory and conditioned power.
Fraud is a very specific form of corruption. It is a criminal offense involving obtaining unlawful enrichment for oneself or another by means of deception. It is clear that both public and private actors are capable of committing the offense. Fraud may be institutionalized, in which case it is not prosecuted. The U.S. and English fractional reserve banking systems are outstanding examples of institutionalized private fraud. "By deception thou shalt do war", the official motto of Mossad, points to a field of institutionalized public fraud.
I also agree with your observation that private corruption facilitates political corruption. Your illustration of the phenomenon by reference to the reconstitution of the Roman Republic as the Roman Empire seems correct to me.
The latter example should be taken to heart in light of contemporary events. Consider, for example, the continuing efforts by some parts of the U.S. military-industrial complex and of some parts of the official U.S. government to realize the essentially imperial objectives of the Project for an New American Century. A few commentators, such as Professor Michel Chossudovsky, write extensively on this subject. However, I do not detect much evidence that the public is attentive to the matter notwithstanding that a substantial proportion of the public knows about it. The public generally is not attentive in this respect because it is conditioned not to be attentive. According to the prevailing conditioning, "outrageous conspiracy theories" are not to be tolerated.
Philadelphia, PA
Dear Kausel, Lusk & readers,
I do not believe that the Internet has made the public significantly more attentive to possible corruption. On the contrary, there is a good deal of evidence that it has made the public more susceptible to corporatist mass-media manipulation. The complaints about foreign, internet-mediated, interference in domestic election campaigns is a case in point. Of course, the internet has made the public more attentive to the charms of adorable cat pictures, etc --and various other trivial matters. Crucial matters are often drowned in the floods of (often useless or distracting) information.
There is a positive side, of course, since it has proved possible for people with similar interests to find and communicate with each other. But it has not, apparently allowed for their effective organization. Consider the roles of electronic media in the chiefly ill-fated "Arab Spring."
Of course, we discount conspiracy theories which are often completely off the wall, empirically unsupported, and pretty wild. Much more plausible will be accounts of the same problems in terms of a chiefly uncoordinated confluence of various and distinct interests. No one planned the contemporary prevalence and power of the lobbying firms on K Street, for instance. Its more a matter of various actors, with quite distinct interests following a successful model of influencing legislation. Its the prevalence and intensiveness of this pattern which is problematic, even where there is nothing illegal in it. Much the same could be said for the untoward influence of large donors in election campaigns. No one planned and coordinated this. It arose quite naturally, as one might put it, as a consequence of the power of federal funding and favoritism. Its the extent and intensity of the influence which is problematic, especially since it tends to undermine public trust in government "for the people."
Regarding the consolidation of the financial markets, I recommend the following article from the Atlantic:
Simon Johnson, "The Quiet Coup":
See:
https://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/307364/
Have a look. The "Coup" runs from the Reagan administration, through the Clinton administration, and further. According to economist Johnson, we now have a "financial oligarchy" in place.
H.G. Callaway
BTW, Lusk, I don't believe for a moment that fractional reserve banking is intrinsically fraudulent. This is an old economic theory gone too far. Neither is extensive financialization of the economy intrinsically fraulant. But the latter is the much larger problem --and does engender corruption. Much of this came out in the 2008 financial crisis.
Absolute power corrupt the persons making them dishonest and immoral
Philadelphia, PA
Dear Kausel & readers,
Thanks for your comments.
I don't quite see that the public has got over corporate-media manipulation. There still seems to be a good deal of hype going around, about one theme or another.
Even if you suppose that the problem of foreign media influence was "created" by the media (or if you suppose it has been genuine--and plausibly not just in the U.S.) in either case, you have a problem of media manipulation by large and powerful actors. The point stands, independent of estimates of the Russians' role in various campaigns.
In spite of promises made to the electorate, I do not see that Congress is responding much to the problems of the kinds of people we think of as the Trump and Sanders voters. We still have a great deal of dysfunctional deadlock. What we have seen to this point is big tax cuts for corporations and little attention, better disregard, of growing debt. Of course we have also seen much hoopla regarding border control and tariffs. I see chiefly old "wedge" issues.
In many ways, the present administration is simply playing the media game--and often seems at a loss to understand what is going on. We see many executive orders and little legislation to address evident problems. However, the media monopoly of the Clintonites and the "go-go" globalization advocates has been broken. Unemployment is down.
I thought you might have more to say on the topic of corruption --and the article from the Atlantic. What of Johnson's "Quite Coup" and "financial oligarchy"? The term "oligarchy" implies corruption, by the way.
H.G. Callaway
Dear H.G., C. and readers,
No one claimed that fractional reserve banking is "inherently" fraudulent - and for good reason, too. Fractional reserve banking no longer fulfills all of the elements of the criminal offense of fraud. There are two reasons for this: institutionalization and conditioning.
One element of fraud is unlawful enrichment. In many jurisdictions, it is a criminal offense to operate a pyramid selling scheme, being a particular form of fraud. Supposing the legislature of such a jurisdiction were to amend the law so as to provide that it is permissible to operate a pyramid selling scheme. From the moment that amendment takes effect, operating a pyramid selling scheme no longer would be fraudulent, since the enrichment thereby yielded no longer would be unlawful. The Federal Reserve Act of 1913 is precisely such a law. It institutionalized fractional reserve banking in the U.S.
Another element of fraud is deception. Especially since the Global Financial Crisis borrowers in financial markets have become aware of - or have been "conditioned", to use J. K. Galbraith's terminology - to accept the fraudulent mechanism. To the extent that a borrower is advised in advance that the lending bank will deliver nothing of value in exchange for the borrower's promise to make a series of "repayments" of the putative principal and interest payments based on the putative principal, the borrower is not deceived. Without deception, the offense of fraud is not complete.
Fractional reserve banking necessarily causes periodic financial crises or collapses. It is during such crises that fractional reserve banking is most profitable for a commercial bank - provided that it has a reasonably strong balance sheet - and correspondingly most catastrophic for borrowers. Precisely such situations at macroeconomic level are the business focus of the Bretton Woods institutions.
Would you please specify the "old economic theory" to which you refer? I am also curious to know in which respect you say I "go too far" in criticizing the fractional reserve banking system.
It is nowadays commonplace and even fashionable to deplore financialization of the real economy. Financial regulators persist in permitting emission of derivative financial products so complex that neither the emitting institutions, the market participants nor the regulators themselves are capable of accurately quantifying the corresponding market risk. The main regulatory approach is to promulgate regulatory rules of corresponding complexity. The result - and presumably the goal - is that it frequently is impossible to determine whether or not an emitting institution's financial products comply with applicable law. The ensuing proliferation of vastly complex and intractable regulatory issues serves as a theatrical property for distracting electorates from the simple underlying problem: i.e. the fractional reserve banking system.
First, I agree with Karl Pfeifer that talk of absolutes in political theory is incoherent. But the relation of power to corruption is a real and important issue. I had always taken for granted that there is a definite relation until I stumbled upon the book "A Cloud Across the Pacific: Essays on the Clash between Chinese and Western Political Theories Today," by Thomas A. Metzger. It has been more than decade since I read some parts of it, but if memory serves, Metzger makes the point that Chinese political theory did not begin with the standard view in the West, namely that humans are inevitably prone to corruption unless law or other external agent restricts individual behavior. The Chinese view is that a leader who follows the teachings of Confucius can overcome ordinary human frailty through disciplines and practices to cultivate wisdom. The wise ruler then stands above corruption and thus above the need for law. Whereas Western political philosophy has focused on the need to construct a fence made of laws and countervailing power around the ambitious ruler, the Chinese approach has been to emphasize self-cultivation through reflection. Without claiming that the Chinese model worked perfectly from the Tang to the Qing dynasties, the civil service there was probably less corrupt than the court of any Western ruler. Thus, the aspirational quality of Chinese thought should not be dismissed as being naive, just because it does not align with Western cynicism. Perhaps a better system would be a balance between the two. At a minimum, the Chinese view suggests we need tor rethink our most basic premises.
Not in all cases,it depends on the orientation of the personality that is involve
In the political realm, there is no such thing as absolute power. Even the most totalitarian dictator cannot dictate every thought and action of his subordinates. There is similarly no such thing as absolute corruption. It's completely inappropriate to use the word 'absolute' in relation to human institutions, making Acton's statement hyperbolic. The most charitable interpretation of it might be that the less limitation there is on political power, the more probable it becomes that it will be abused.
However, there is also a psychological insight in Acton's dictum if we think of it in terms of *thinking* absolutely - in other words, maintaining a belief (in this case about one's power, or about those one has power over) to which no possible alternatives are considered apart from the negation of that belief. Those who *believe* in their power absolutely are also corrupted by it into not considering the humanity of others and treating them in an entirely instrumental way that short-circuits moral reflection. I do think Acton was onto something, but its political application is a crude placeholder for one that can be more precisely expressed in psychological terms, and then applied to politics in a more complex and adequate form.
Philadelphia, PA
Dear Cobb, Oyenuga & readers,
Regarding the history of Chinese political thought, I recommend reading Fukuyama's account in his Political Order and Political Decay (2014), e.g., Chapter 24, "The Struggle for Law in China," and Chapter 25, "The Reinvention of the Chinese State." He has much to say, generally, on Chinese political history, and much of this is positive.
Of course, there is a long tradition of "self-cultivation" in the West, too --the attainment of the virtues is a central theme of Aristotle's Ethics. This leads him to the concept of "aristocracy," ("rule by the best") though he warns in the Politics, that oligarchy is a degenerate, or deviant (one might be tempted to translate the Greek by "corrupt") form of aristocracy, in which self-interest and selfish ends pre-dominate, and the common good is ignored. As a corrective to this danger he puts forward the idea of a society dominated by the middling sorts. One recalls that western aristocracies have often attempted to rule chiefly in their own self-interest. Given the centralized power of the contemporary Chinese state, there would seem to be some similar danger of a "new class."
"Personality" does matter, or, I would prefer to say character matters. In a way, this is just to say that we prefer, say, honest bureaucrats or politicians, to merely self-regarding people in powerful offices. These would presumably be people focused on the common good and not on their own self-advancement. However, as is well known, I believe, centers of power tend to attract unscrupulous people, too.
I would think, by the way, that the classical reference of the idea of "absolute power," is the idea of "absolute monarchy." This was surely an object of criticism of liberals like Lord Acton.
H.G. Callaway
Dear Calloway, Oyenuga and others
The role of "self-interest" in Aristotle is both intriguing and challenging. For example, Aristotle appears to suggest that self-interest should moderate the use of power within the household (Politics, Book III.iv.5 - Loeb edition) where he states the following. "Authority over children and wife [and over the whole household, which we call the art of household management] is exercised either in the interest of those ruled or for some common interest of both parties, — essentially, in the interest of the ruled, as we see that the other arts also, like medicine and athletic training, are pursued in the interest of the persons upon whom they are practised [sic], although incidentally they may also be in the interest of the practitioners themselves."
Dear H.G and readers,
In his famous dictum, Lord Acton particularly inveighed against the situation in which an office conferring power purportedly renders the incumbent infallible.
While Lord Acton was intensely interested in liberty and also in freedom, I have not detected any particular evidence that he was a liberal. It would be more correct to say that he was deeply Christian and devoutly Catholic.
Prior to the Glorious Revolution and even prior to Magna Carta, i.e. before the royal power of English Kings was trammeled by constitutionalism, however rudimentary, English freemen considered themselves to be free notwithstanding that they were the subjects of an "absolute" monarch. English Kings ruled by divine right, placing them in a position analogous to that of the Pope. At least in theory, an English King was checked and balanced by God Almighty; hence there was no need for His Majesty to be checked and balanced by a parliament and constitutional courts.
Lord Acton's particular horror was reserved for the doctrine of papal infallibility, which he strenuously opposed. To illustrate in today's profane terms, this doctrine has much the same character as an officers' mutiny in which the mutinous officers purport to claim that their commissions furnish them with power to usurp the authority of the Commissioner.
------- You wrote -------
"I would think, by the way, that the classical reference of the idea of "absolute power," is the idea of "absolute monarchy." This was surely an object of criticism of liberals like Lord Acton".
Philadelphia, PA
Dear Mutter, Lusk & readers,
It is not, of course, that uncorrupt rulers have no proper self-interest. On the contrary, we can understand Aristotle's Ethics as a program for "happiness" (eudaimonia) and well being (its almost literally "good spiritness"). But the etymology is less important than understanding the virtues and how they are acquired.
He argues that we attain to the best life by means of self-constraint which is required to moderate the passions in accordance with the development of reason and a proper understanding--say of the character of our choices and habits. To attain to the virtues, one must first resist the extremes to which one is most inclined. His ethical ideals then enter into his political ideas with the warning that aristocracy, "rule by (virtuous) the best" tends to degenerate into oligarchy; and Aristotle hardly distinguishes "oligarchy" from corrupt plutocracy --rule by the rich (who are always few) for their own benefit alone --and which ignores the common good. I think people would say, in contemporary terms, that in the "degenerate" forms, greed takes over from "our better angels." In contemporary democracies, the prevalent view is that the people themselves are the best judge of their own interests, and that is one reason why we are generally skeptical of aristocracy. Aristotle saw clearly that a large and prosperous middle class was need to check the power of the rich few. He calls such a system "polity."
That Lord Acton was Catholic does not show that he was not a liberal. "Liberal Catholic" is no contradiction in terms. Of course, there was a grand international reaction against the Pope declaring himself "infallible" --"in matters of faith and morals." (This was in the late 19th century, a particularly conservative Pope, as I recall.) This included some Catholic reaction. Acton didn't think much of un-checked kings, either. I am not convinced that Acton was no liberal. However, the question could presumably be settled by text or quotation. The fame of the dictum has much to do, I suspect, with the British Protestants saying, in effect, "See even the great Catholic agrees!" But whoever liked the dictum or didn't in past centuries, it stands on its own legs.
Basically, in evaluation of the dictum, we need to ask whether power always corrupts. Recall, Acton says, "Power corrupts, and absolute power corrupts absolutely." But are there any conditions under which power doesn't corrupt? We have already seen an Aristotelian suggestion.
H.G. Callaway
First, what does it mean to have "absolute power"? Did Stalin have absolute power? Hitler? Idi Amin? Saddam Hussein? Either Assad? Any of of the "Dear Leaders" of North Korea?
Second, why would anyone desire or aspire to "absolute power"?
Third, does it really matter whether an individual is a libertarian or any other label/belief? Doesn't it come down to A LOT more than that? Human characteristics/moral fiber, et al: pettiness, fears, drives, animosities, jealousies, hopes, aspirations, understanding/lack of understanding of others and their aspirations/fears, etc.
Fourth, feasible? Purportedly anything s feasible, but...
Fifth, it is a question that raises a purely theoretical issue and thus must result in conjecture and little more.
Cecilia, as always, the press is hopeless, as of 2016 at least. Trump did not create today's immigration policy, no one in his right mind would suggest wide open doors should be the rule, and it is simply wrong to conflate Trump and the Republican party, or Trump and Republicans in Congress.
In general, when an adult breaks the law and gets hauled off to jail, do we (a) also jail the dependent minors, or (b) let the adult off scott free, because he/she has dependent minors?
This is what it's all about. What would the popular press suggest? For example, would they suggest immediate deportation, adult and dependent minors? Without time for any type of hearings?
Absolute power is absolute corruption. No doubt about that absolutely!
Philadelphia, PA
Dear all,
for the sake of accuracy, I'm reposting below a note of Louis Brassard's, from 4 days back. Note "power tends to corrupt,..."
H.G. Callaway
Brassard wrote:
in a letter he (John Dalberg-Acton) wrote to scholar and ecclesiastic Mandell Creighton, dated April 1887, Acton made his most famous pronouncement:
But if we might discuss this point until we found that we nearly agreed, and if we do agree thoroughly about the impropriety of Carlylese denunciations and Pharisaismin history, I cannot accept your canon that we are to judge Pope and King unlike other men, with a favourable presumption that they did no wrong. If there is any presumption it is the other way, against the holders of power, increasing as the power increases. Historic responsibility has to make up for the want of legal responsibility. Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority, still more when you superadd the tendency or the certainty of corruption by authority. There is no worse heresy than that the office sanctifies the holder of it. That is the point at which the negation of Catholicism and the negation of Liberalism meet and keep high festival, and the end learns to justify the means. You would hang a man of no position like Ravaillac; but if what one hears is true, then Elizabeth asked the gaoler to murder Mary, and William III of England ordered his Scots minister to extirpate a clan. Here are the greatest names coupled with the greatest crimes; you would spare those criminals, for some mysterious reason. I would hang them higher than Haman, for reasons of quite obvious justice, still more, still higher for the sake of historical science.[4]
https://en.wikipedia.org/wiki/John_Dalberg-Acton,_1st_Baron_Acton
Philadelphia, PA
Dear Mazur,
Let me paraphrase Acton, to remove the rhetorical hyperbole:
Power tends to corrupt, and the greater the concentration (or consolidation) and extent of power, the greater is the danger that it corrupts.
H.G. Callaway
Dear Callaway,
The central message of Acton's letter is that most societies tend to diminish accountability on the most powerfull and those that can caused most arms while the justice is most hard on the poorers and the less powerfull. Acton says that we do just the opposite. I am of the same opinion. Take the case of the blood products infected with HIV-AIDS and the hepatitis C virus (HCV). Long after it was known that the blood was infected , higher authority of the red cross in many countries did not act and let thousand and thousand people died. In Canada, there were an inquiry and not a single person went to jail. In Sweeden, a lot of these people went to jail. In all societal power hieararchy, private or public or religious, etc, the top rank make harsh rules for the lower ranks and apply the discipline but it is very rare when the discipline is enforced in the higher ranks and that is usually where the corruption thrive because nothing prevent it. It should be just the opposite. This would mean that it would be dangerous to take higher responsibility positions. There is a large category of people, the sociopath that are attract to position of power and impunity, that would shy away from these positions if the impunity currently associated with them would be removed. People making mistakes by incompetences or greed in higher position should go systematically goes to jail and loose their properties.
'' I would hang them higher than Haman, for reasons of quite obvious justice, still more, still higher for the sake of historical science.''
I would start with the war criminals , the higher ranks that followed orders, those that gave orders, hiding in all nations.
Philadelphia, PA
Dear Brassard & readers,
A case in point is the great subprime mortgage, financial meltdown of 2008. I know of cases where the small-time corruption was prosecuted, but it is often complained that no corporate chiefs were held legally responsible. The financial corporations, themselves were bailed out, individual mortgage holders often lost their homes.
Have a look at the text (linked above), and repeated here, cvp.
Simon Johnson, "The Quiet Coup":
See:
https://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/307364/
The "Coup" runs from the Reagan administration, through the Clinton administration, and further. According to economist Johnson, we now have a "financial oligarchy" in place.
"Oligarchy" implies corruption--or at least the danger of it.
H.G. Callaway
Dear H.G.,
Simon Johnson's apologia on his IMF career is interesting, so far it goes.
At a more fundamental level, I would be glad is you would respond to the related request I made in this thread two days ago, namely: Please specify the "old economic theory" to which you refer in connection with your claim that I "go too far" in criticizing the institution of fractional reserve banking. I also would like to know on what grounds you object to my views on fractional reserve banking.
Philadelphia, PA
Dear Kausel & readers,
The kind of oligarchy in question is what is sometimes called a "tame oligarchy," which contrasts with a "warring oligarchy." In a "tame oligarchy" the actors are not continually in a state of open public conflict, and they have established their positions, generally, in accordance with law. This does not imply, of course that there is no danger of abuse of accumulated power.
What we are looking at in the Johnson article are some of the consequences of the repeal, under President Clinton, and some later developments under Bush II, of the Great Depression-era, FDR banking laws and regulation. This was a decision in favor of very large banks, developed through take-overs and consolidations, which were thought to be needed for globalized competition. The idea was, partly, that if the Europeans, have gigantic international banking firms, then we need to have them, too. But this amounted to a very large concentration of economic power in comparatively few hands. (I think that in some ways, we are not as good at regulation.) The Dodd-Frank legislation afterward attempted new regulation. However, there has also been a significant financialization of the U.S. economy, meaning that a larger share of total GNP comes from finance. Many fear the consequences of financial firms, "too big to fail," --meaning they would substantially take the entire economy down with them, and would therefore require very-large scale bailouts of the sort we saw following the 2008 crash. Its a "moral hazard" of bigness.
Looking back to the progressive era, at the start of the 20th century--but which we might see as culminating with FDR's policies--the basic division was between those who wanted to allow gigantic concentrations, "trusts," and "monopolies," and regulate them, and those who wanted to break up the larger firms into smaller, mutually competing firms. One danger in bigness, of course, is "policy capture." Insisting on smaller units, in contrast, is a kind of "divide and conquer" policy of big finance, in the public interest.
A further danger of great financial concentrations is that there may be undue or inappropriate influence on investment policies. The big firms may hold too much power over other businesses, or, they may unduly favor speculative foreign investments and international financial markets, in contrast to the evaluation of the economic basics of prospective domestic borrowers. We might also expect that wealth may be increasingly concentrated on the coasts, (say, New York City, San Francisco, Charlotte, to the neglect of (so-called) "fly-over" America. We notice here in the city, that following the Clinton "reforms" and the wave of consolidations in finance, the larger, hometown based banks of Philadelphia, which originated and developed in the city were gone.
H.G. Callaway
I was lucky to hear from and observe the respect that the lawyer Heráclito Fontoura Sobral Pinto had in my parents generation. He fought both comunism, as devoted catholic and the generals in the military dictatorship. Many times honour and power was offered him, he declined and always used his influence to the commom good. examples are rare I know, but they exist. The rule is to abuse power
https://www.youtube.com/watch?v=K2ZDZya3fS0
Jacques Ellul describes the difficulty of responsibility in a technological society (2.41 minutes) .
Philadelphia, PA
Dear Brassard & readers,
Yes, Jacques Ellul is an interesting thinker. I've had some discussions of his work --some years back: The theme was technological imperatives. As I recall, this has much to do with people jumping on the bandwagon of, let us say "the next big thing," whatever it may be. The idea of our need to take responsibility was largely rejected in those discussions. "A.I." say, is inevitable, to update the theme, "so you might as well get aboard."
All caution and self-constraint are typically cast to the wind.
Not unrelated, I suspect is the famous thesis of the "inevitability of oligarchy," sometimes cast in the form of Robert Michels, "Iron law of Oligarchy"--from his book of 1911, Political Parties.
To resist the abuse of power, I think, one must take precautions, and this is inhibited by the tendency to go along, and the excesses of competitiveness--seeking out any possible advantage to get ahead. But more strictly, oligarchy is not inevitable, and technological imperatives can be resisted or moderated.
Where there's a will, there's a way. But as with the corrupting tendency of power, the will to resist is often absent, and the know-how, too. This includes social, organizational methods. The easiest thing to do is simply jump on the moving bandwagon--maybe finding out where it is going much later. Few want to take responsibility--to paraphrase Ellul. Why is it so difficult? Basically, to find out how to act responsibly, one must want to learn how, and, too often, other matters are pressing.
H.G. Callaway
In the history of my country - Poland - there are many examples, when too much power, also the desire to maintain the authority, destroyed the man who had this power.
Dear Callaway,
« Toute révolte, et particulièrement celle-ci, est un non crié contre l’état social, et celui-là est bien plus radical qu’un autre parce qu’il ne l’est pas seulement cette fois contre tel souverain ou telle Église, mais contre un monde qui tend à se constituer en système, technique, économique et finalement étatique, bureaucratique, militaire et policier, où rien n’échapperait à l’œil et à la main du Léviathan. Totalitarisme culturel dont le totalitarisme politique n’est que la conclusion plus ou moins nécessaire. Si celui-ci ne contrôle pas encore la totalité de l’espace-temps terrestre, celui-là est en train d’imposer un seul type de culture, de mode de vie et de pensée à la quasi-totalité de la planète. » Bernard CHARBONNEAU [1980]
My traduction:
''All revolts, and particularl this one, is a ''no'' to the social condition, and this one is more radical because it is not against a current state or current church, but against a world which tend to constitute itself into a system, technically, economically and finally as a state, a burocracy, military and police state, where noting would escape the eye or the hand of Leviathan. Cultural totalitarism whose political totalitarism is only a consequence more or less necessary. If this leviathan does not yet control the totality of of the time space on earth, is it imposing a unique type of culture, way of life, way of thinking on the whole planet.'' Bernard Charbonneau.
Many thinkers have warned us against the rise of a global totalitarism, a global leviathan on this planet. Tockqueville suspected some lurking totalitarism that would emerge from the democratic order, that would stem from a generalized apathy generated by confort and convenience and a hidden desire we have to be secured and protected and our fear to face the challenge of freedom. Lewis Mumford reviewed the whole human history from the rise of the first civilisation from the perspective of the rise of increasing totalitarian megamachines. I see a lot of common ideas with Ellul. I was impressed with the speech of the Dictator by Charly Chaplin and by his famous car factory scene in ''Modern Time''. Here we see the gradual instrumentalisation by the very apparatus supposed to serve us. I am particularly sensitive to the role of money and finance in human history from the first agrarian civilisation. The role of the religions for protecting societies against the market and money. Christianity in the west has been very effective for a thousand years. We see it being subverted gradually by money and the different phase of reformations that faciliate commerce and money. We see the re-apparition of slavery, one ultimate form of submission of human to economic ends. We see the modern democracy being put in place in the name of a collective will but from the very beginning serving powerfull financial banking interests at the root of all colonisation and the modern international trades. Wars always accelerated the rise of the megamachine and the demise of institutions protecting the dignity of human life.
the dystopian vision of the future that Mumford warned of:
"The beleaguered– even 'obsolete'–individual would be entirely de-skilled, reduced to a passive, inert, 'trivial accessory to the machine.' Technical surveillance and limitless data-collection—'an all-seeing eye' (Panopticon)—would monitor every 'individual on the planet. Ultimately, the totalitarian technocracy, centralizing and augmenting its 'power-complex,' ignoring the real needs and values of human life, might produce a world 'fit only for machines to live in'" . .. "...I have been driven, by the wholesale miscarriage of megatechnics, to deal with the collective obsessions and compulsions that have misdirected our energies, and undermined our abilities to live full and spiritually satisfying lives." ...
"But for those of us who have thrown off the myth of the machine, the next move is ours: for the gates of the technocratic prison will open automatically, despite their rusty ancient hinges, as soon as we choose to walk out."
https://en.wikipedia.org/wiki/The_Myth_of_the_Machine
No human being will have absolute power of anything, and if there is one, then that is abuse of the term power. Power is a capability of doing things, and absolute capability is not of human. What we see in the human society, where there is what is called "absolute power" is an absolute powerlessness, an inability of those in power to see the sources of power.
In contemporary lexicography, "absolute power" = "an absolute capability to do things right" (abuse of terminology) impedes everything, thinking, reasoning and ultimately failing in solving problems society suffers from (absolute powerlessness of society).
Philadelphia, PA
Dear all,
Regarding the relationship between fraud and corruption, I would like to recommend the following TED talk, by Bill Black, on the practices (and lack of regulatory supervision) which brought on the 2008 financial crisis (this runs about 15 Min.):
https://www.youtube.com/watch?v=ClfBxWPkBKU
The talk is very well reasoned. Black had much experience in regulation, was involved in the late 1980's Savings and Loan regulation, and he is presently an academic in a Missouri university.
Notice in particular his concept of accounting "control fraud," in which the executives of the banking system set up incentives which put their own institutions at risk, thereby enriching themselves. The failure of the regulators is also quite amazing.
Comments invited.
H.G. Callaway
Philadelphia, PA
Dear all,
A bit more on the theme of "financial oligarchy" and Bill Black. See Black's interview with Bill Moyers, from 2009, just after the financial crisis of 2008:
https://www.youtube.com/watch?v=Rz1b__MdtHY
Its a complicated subject, of course; and Black has received only limited publicity for his views. Does he go overboard?
The video runs about 28 Min., and an advantage of it is Moyer's probing questions. The interview originally appeared on PBS and U.S. national public television.
Does "absolute" financial power corrupt "absolutely"?
H.G. Callaway
Philadelphia, PA
Dear all,
Perhaps the pages of the New Yorker, and an article (from 2009) by their writer George Packer will help in understanding what Black has been talking about.
You may need to read the full article, "The Ponzi State," or turn to Packer's later book, The Unwindinding, but I though the following short passage illustrates the character of the kind of "control" fraud Bill Black wrote about. The point here is to understand "accounting control fraud." Packer tells of what was uncovered by a Florida investigative reporter, named Van Sickler:
One night in December, Van Sickler took me on a tour of some of the abandoned and foreclosed properties that had once belonged to Sonny Kim’s real-estate empire. We stopped at an ill-lit corner in a mostly black slum of single-family houses called Belmont Heights, which is cut off from downtown Tampa by Interstate 4. Van Sickler—incongruous-looking in a dress shirt and dark slacks—pointed out a decaying two-story stucco house. Its windows were boarded up, and mattresses lay in the overgrown yard, near a “For Sale” sign. Van Sickler learned that Kim acquired the house in 2006 with a deed that was witnessed by a convicted drug dealer, then flipped it for the sum of three hundred thousand dollars, with the help of a no-money-down mortgage from a subsidiary of Washington Mutual Bank, which later foreclosed on the house. (Last year, WaMu went into receivership, after becoming the largest bank failure in American history.) According to mortgage-fraud experts, the straw buyer is typically paid a small slice of the flipper’s take and then disappears without moving in. When Van Sickler recently asked a real-estate agent about the house, he was told, “That’s selling for fifty-two thousand, but it can be yours for thirty-five thousand in cash.”
---End quotation
See:
https://www.newyorker.com/magazine/2009/02/09/the-ponzi-state
By the way, you can find some of Van Sickler's writings on line. The chief question here is why the bank would make the mortgage loan on a house, often sight unseen, allowing Kim to buy for very small sums and then resell for $300,000? (Kim was later prosecuted and convicted, but the others, including those who approved the loan were not prosecuted.)
Part of the answer seems to be that the bank management was making large bonuses, by the volume of the mortgages made, and no on was checking on the qualifications of the buyer (often not even on the identity of the buyer) or the actual value of the property. The executives at the bank didn't want to slow down the process and could order the bank's accountants to ignore the details. Another part of the answer is that the banks did not plan on keeping the mortgages on their own books. Instead, groups of mortgages were packaged as mortgaged-backed "securities," and sold on to other investors in the large-scale finance markets. The firms selling such overvalued securities, included all the greatest banks and finance companies in the western world--both domestic to the U.S. and many foreign firms as well. No one really checked on the value or risks involved, including firms which "guaranteed" or insured the securities, until after the entire scheme began to fall apart in the crash of 2008.
Questions, does "absolute" financial" power produce "absolute" corruption? What is the character of these so-called "lords of creation" --running great international banks? If this is the institutional linch-pin of globalization, then what does this great consolidation of power promise the world? It appears that the regulators have either been "captured" --or, what is perhaps more plausible, they simply weren't able to keep up with the rush of transactions and events --too big, too fast.
H.G. Callaway
Excellent discussion was made by the members of RG. Still I am in a confusing state to deliver a suitable answer.
Not necessarily but the greater the concentration of power at the top the more likely someone will be seduced by it, a wise and enlightened dictator can achieve a remarkable amount to see it tore up by his heir. The biblical example of David, Solomon and Rehoboam is full of relevance - David was wise (most of the time), Solom became corrupt and his son Rehoboam destroyed the entire dynasty in one afternoon because he thought he was the man in charge.
Here is the tale of the Ring of Gyges, from the Republic, Book II
‘’ According to the tradition, gyges was a shepherd in the service f the king of Lydia; there was was a great storm, and an earthquake made an opening in the earth at the pace where he was feeding his flock. Amazed at the sight, he descended into the opening, where, among other marvels, he beheld a hoolow brazen horse, haing doors, at which he stooping and looking in saw a dead body of stature, as appeared to him, more than human, and having nothing on but a gold ring; this he took from the finger of the dead and re ascended. Now the shepherds met together, according to custom, that they might send their monthly report about the flocks to the king; into their assembly he came having the ring on his finger, and as he was sitting among them he chanced to turn the collet of the ring inside his hand, when instantly he became invisible to the rest of the company and they began to speak of him as if he were no longer present. He was astonished at this, and again touching the ring he turned the collet outwards and reappeared; he made several trials of the ring, and always with the same result-when he turned the collet inwards he became invisible, when outwards he reappeared. Whereupon he contrived to be chosen one of the messengers who were sent to the court; where as soon as he arrived he seduced the queen, and with her help conspired against the king and slew him, and took the kingdom.. Suppose now that there were two such magic rings, and the just put on one of them and the unjust the other; no man can be imagined to be of such an iron nature that he would satnd fast in justice.. No man would keep his hands off what was not his own when he could safely take what he liked out of the market, or go into houses and lie with any one at his pleasure, or kill or release from prison whom he would, and in all respects be like a God among men. Then the actions of the just would be as the actions of the unjust; they would both come at last to the same point. And this we may truly affirm to be a great proof that a man is just, not willingly or because he thinks that justice is any good to him individually, but of necessity, for wherever any one thinks that he can safely be unjust, there he is unjust. For all men believe in their hearths that injustice is far more profitable to the individual than justice, and he who argues as I have been supposing, will say that they are right. If you could imagine any one obtaining this power of becoming invisible, and never doing any wrong or touching what was another’s, he would be thought by the lookers-on to be a most wretched idiot, although they would praise him to one another’s faces, and keep up appearances with one another from a fear that they too might suffer inuustice.’’
‘’If Plato’s allegory of the ring is right, then we had better watch out. Anyone who gains power without accountablility is liable to use it unjustly. This particularly significant right now as the U.S. and U.K. governments are increasing the secrecy of their actions and gaining increased power over public information such as news, Secrecy is a form of invisibility, and for the purpose of power, as effective as a magic ring.’’
https://oregonstate.edu/instruct/phl201/modules/Philosophers/Plato/plato_dialogue_the_ring_of_gyges.html
Tolkien's hobbit and the Lord of the Rings is a similar tale on a ring of power providing invisibility. The Lord of the Ring, Sauron is invisible and is an eye over a watching tower. The theme of power and invisibility has many facets. Invisibility provides power, ability to deceive. Invisibility, ability to deceive corrupt by being individually and egoistically so profitable.
"Power tends to corrupt, and absolute power corrupts absolutely." It is a wise phrase of Lord Acton that comes to mind in the current circumstances. We have seen it in the successive absolute majorities, here and there, of the Popular Party, and we are witnessing it in the consequences that a newspaper shows us the decrepitude of a party that asks to be regenerated from the bottom up. It is not a question of promoting now the ingenuity of the new politicians will not be corrupted. But today they are new, different. That gives them a value in the new time. Sanchez, Iglesias, Rivera, have not had the opportunity to be corrupted; until now they have not touched power.
Veronica Roth is an author who writes fiction. She is quoted as having written the following in one of her books. “Knowledge is power. Power to do evil...or power to do good. Power itself is not evil. So knowledge itself is not evil.” With this thought at least three questions come to mind. First, "Is absolute power possible since it would be predicated on absolute knowledge?" Second, "What are the reasons or causes by which power corrupts (or is corrupted)?" Third, "If power itself is not evil, what mediating factors may prevent power from being/becoming a destructive tool?"
To clarify, I shared Ms. Roth's comment in an effort to demonstrate that there may be a line of thinking that saves us from the following syllogism.
Knowledge is power.
Power is corrupt (evil).
Therefore knowledge is corrupt (evil).
Philadelphia, PA
Dear all,
Please have a look at the following new question:
https://www.researchgate.net/post/What_is_oligarchy_Is_there_a_present_danger_of_oligarchy
Your comments and answers are invited.
H.G. Callaway
No, it does not! Because there is not such a thing as "Absolute Power". The same relates to "Absolute Corruption"
I hope that it might have controversial answers. Sometimes absolute power leads person to be autocratic & dictatorship which increase the level of personal corruption. On the other hand, when a rational person gets absolute power he or she can utilize this power to reduce corruption from society.
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