The Power of Money in Market Economies

In his unapologetic defense of market economies, Martin Wolf promotes the idea that these economic systems produce the most equal societies. He states, “Wealthy people have more influence over the life of a democracy than do the majority of its citizens. But, compared to the power and influence that accrued to the wealthy in traditional societies, the power of today’s wealthy is highly circumscribed. Politicians have more power and intellectuals more influence than men with big cheque books,” (Wolf, 54). Wolf may be correct that today, wealth alone does not justify or permit the exertion of overt physical control over other individuals; however, he vastly underestimates the degree to which wealthy individuals and corporations exert power indirectly through politicians themselves.

Although the rise of market economies coincided with a decline in the unconcealed power of wealth, economic changes alone cannot account for the more equal society that we enjoy today. Institutions played a major role in promoting and enforcing social and economic protections that limit the gap between society’s most advantaged and disadvantaged. In the United States, workplace, environmental, and other regulations did not simply evolve from a market economy. Instead, they emerged as measures that appeased opponents of unchecked industrialization. These changes often limited the autonomy of the market. In many cases, financially powerful interests stood in fierce opposition to such changes. Although these equalizing factors developed within and alongside market economies, they emerged as inorganic restraints on that system.

Wolf acknowledges that the rule of law is a necessary component of a market economy; however, he takes for granted that this will always exist to check potentially malign corporate interests. Wolf seems to create clear distinctions between politicians and corporate interests. He contends that the unparalleled recognition of politicians as leaders in our society reveals that they are more powerful than “men with big cheque books,” (Wolf, 54). As we have seen recently in the United States, however, corporate power can manifest itself through politics. Following the Citizens United Supreme Court ruling, corporations are unlimited in the quantity of funds that they can contribute toward political speech. With this political speech comes pressure and, thus, power. Corporations’ political influence did not develop overnight. In 1872, for example, congressmen, bribed by railroad funds, allowed contracted companies to fraud the government out of tens of millions of dollars in the now infamous Crédit Mobilier scandal. Critical intellectuals, whom Wolf dismisses as unnecessarily cynical about corporate influence, were crucial in exposing this and other scandals on behalf of society.

Corporations and their accounts maintain a significant influence over affairs under a market economy. The power of wealthy individuals may be more limited today than under feudalism, as Wolf likes to point out; however, this is due in large part to the construction of regulatory systems that keep these interests in check. If, as Wolf points out, the Justice Department is vital to ensuring that Bill Gates is not exploiting competitors or consumers, then it is important to ensure that similar safeguards are in place as markets continue to expand and integrate beyond national borders. As in the past, these limitations may, to a degree, impede market freedom; however, they are necessary to the continuation of the “morality of market economies” (Wolf, 53) that Wolf praises.