Arnold Kling | September 12, 2008
Politicians’ Power Dwarfs the Rich
There's no shortage of harping about the exorbitant incomes of America's superstar entertainers, CEOs, investment bankers, and others. But have you ever considered American excess in terms of political power?
As unseemly as it may be for America's wealthiest people to strive for more money, America's political class is far worse. They have a ridiculous excess of power, and yet they only want more.
Montgomery County, Maryland, for example, has an annual budget of $3.8 billion. This sum is under the control of a County Council with nine members. On an average per-politician basis, each County Council member controls just over $400 million a year in spending.
To put an annual spending figure of $400 million in perspective, consider this: if you had $8 billion in assets and earned 5 percent per year on those assets, that would give you $400 million in annual income. And few Americans have that much.
Can you name the members of the County Council in Montgomery County, Maryland? I can't name very many of them, and I live there. Still, getting elected to the County Council in Montgomery County, which is pretty far down the ladder in terms of political power in the United States, enables you to control more annual spending than the wealth of Donald Trump or Steve Jobs.
At the federal level, the budget is $3 trillion. If you divide that by 535 (the number of senators and representatives), then, on average, each legislator controls over $5 billion in spending per year. That is more than even the world's richest person could spend annually.
At this point, you may be thinking that this is not a valid comparison. It is misleading to compare legislative budgets with the wealth of Warren Buffett or Bill Gates, because legislators are spending money on all of us. They are not spending money on themselves.
But America's wealthiest people do not spend their money on themselves, either. They could not possibly do so. As smart as Warren Buffett and Bill Gates are, they cannot figure out how to spend all their money. They will end up giving most of it away.
What the superwealthy have that the merely wealthy do not have is more financial power. When it comes to deciding which causes are going to receive money, Bill Gates and Warren Buffett have more power than other people.
Which is exactly the power that politicians have.
Thus, the comparison between legislators and the superrich is actually quite apt. Both are able to exert an unusually large level of control over which causes receive money. Financially, wealthy people and politicians have the same type of power. The difference is that politicians have much, much more of it, by orders of magnitude.
The monetary comparisons only scratch the surface of the inequality and excesses of political power in the United States. Bill Gates might be said to control as much money as a member of the County Council where I live. But he does not have the power to, say, tell the people of the county where they can and cannot smoke, or to tell local businesses what wages they must pay their workers, or to decide whether a local concert venue will be devoted to folk music or to rock.
Wealthy people do not control the curriculum in our children's schools. Politicians do. Wealthy people do not set licensing requirements for everything from doctors to interior designers to hair stylists to manicurists. Politicians do.
Inequality and excess of political power are getting worse at a faster rate than inequality and excess of monetary income. Political power is far more concentrated and insulated from the voters than was the case 200 years ago.
I feel awkward and defensive when the subject of economic inequality comes up. The fact is that I cannot say that I feel comfortable with the levels of inequality and excess that exist in our society.
However, I am loathe to call inequality a problem that requires a government solution. I do not see how it solves the problem to take power away from wealthy people who have a lot of it in order to increase the power of politicians who have far more of it.
What the American people really should feel awkward and defensive about is the level of inequality and excess of political power. Those who want more and more power should be our biggest concern.
Arnold Kling (Ph.D., Massachusetts Institute of Technology) is an adjunct scholar with the Cato Institute.