The Role of Power in Economy, Government and Politics

My last blog post touched on how our country’s elite have a larger influence on public policy decisions than the majority of lower-class Americans. This is important for understanding today’s subject—the role of power in government, economy and politics—because the fact that we have a capitalist economy greatly impacts the role that power plays in these sectors of our country.

I believe that power is what ties together economy and government (As politics is defined by the Oxford American Dictionary as, “the activities associated with the governance of a country or other area, esp[ecially] the debate or conflict among individuals or parties having or hoping to achieve power” government and politics may be used interchangeably). As discussed in the previous post, although all eligible Americans can vote and these votes carry equal weight in elections, people with more money generally have more influence over public policy debate.

The Politics of Power States, “Capitalism does not simply distribute money and wealth unequally. It also distributes economic power unequally. Although globalization and technological change have increased competition and the pace of change, a small elite of corporate executives and large shareholders own and control the means of production, have power over the working lives of their employees, and make decisions that have far-reaching consequences for the entire society” (Katznelson, 59).

In America, economy and government interact with each other in a never ending cycle, which is fueled by power. How power is used is very important to this cycle, because it can dramatically affect the lives of people in our country in addition to the lives of people abroad.

The recession that began in 2008 is a good example of how the use of power in economy and government can affect everyone. During the 2008 recession, the government took over mortgage giants Fannie Mae and Freddie Mac to keep the economy afloat, but Treasury Secretary Henry Paulson refused to bail out Lehman Brothers investment bank. Following this announcement, the stock market plunged 500 points in one day and multiple other financial institutions also came close to declaring bankruptcy (Katznelson, 55). In 2007 and 2008, lending companies used their power over American citizens to try to turn a bigger profit, which eventually contributed to the economy’s drop into the recession (Katznelson, 55)

On the other hand, consider Franklin Delano Roosevelt’s New Deal. FDR spent billions of dollars during the Great Depression to try to aid the American people and bring the economy out of the depression. Perhaps even more powerful were his 30 “fireside chats,” which educated the people about the financial crisis and gave them confidence in their Commander in Chief (The New Deal, 2011).

Since economy and government revolve around power, how individuals with power in those sectors use it is very important, especially in a capitalist economy. The elite class of the country in a capitalist economy have huge influence, so maybe we should be asking, “How does the control of power in a capitalist system play a role in economy, government and politics?”


Sources:
Katznelson, Ira, Mark Kesselman, and Alan Draper. The politics of power: a critical introduction to American government. 6th ed. New York: W. W. Norton & Co., 2011. 2-12. Print.

"The New Deal." United States History. N.p., n.d. Web. 6 Feb. 2011.