The transience of power

The powerful do not stay that way for long

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Readers' comments




We can simplify this even further.
The constant quantitative growth socio-economic system has no natural foundations.
It requires bubbles built on bubbles, constant credit injections, it is basically a giant Ponzi scheme necessitating constant expansion, new layers of consumers feeding from the bottom, or exploiting the same consumers more and more.
This system reached its peak and now started self-destructing as the basis of the pyramid is falling off, and as a result the top of the pyramid also collapses.
This is a very important lesson showing that in a natural, interconnected system we cannot push on with unnatural structures, that go against the natural laws.
Instead of exploiting everything for our own sake, we need to change ourselves and adapt to the system.


Yes, but... many CEOs who are ousted don't drop out of the cosy elite group at all, they simply get another CEO job at another company. So the fact that 80% of CEOs are dismissed prior to reaching retirement age absolutely does not imply that there is a lot of new blood coming into the executive suite. Yes, things are better than they were in the 1950s but not as good as the article implies.

WT Economist

This perspective confuses the power of corporations with the power of those who control them.

Corporations are becomming less powerful. Look at the limited returns to those who own them -- the shareholders. They can't even stop themselves from being pillaged by their top employees.

In fact no one can stop firms from being pillaged by their top employees. The de facto union of top business executives and directors has become far more powerful than ever, facing neither a government they don't control nor religious values that inhibit their behavior.

crdcal in reply to ZGHerm

I agree that the answers lie in the careful observation of natures' systems. All natural life can coexist as long as species develop traits that allow them to specialize on unique resources. Studies show that competition in nature is a negative condition because species cannot coexist if they have the same needs for survival and live within a natural system which has finite limits. Nature solves this through the process of adaptation.Groups of birds living in the same environment and competing for food will eventually develop small, intermediate and large beaks suited to specific foods within that environment in order to ensure that differing flocks can all survive in the same area although having to compete for resources. The tendency is always towards adaptation so that the greatest number can thrive. This is how humans will have to learn to survive, by adapting to the resources and developing traits that allow each group to specialize and contribute at the same time.


On the contrary power is going increasingly to those who are born into it. From Japan, China, Koreas, Singapore, Thailand, India , Africa, Europe, South America there is a stickiness in the business and the political class that family lineage is emerging as the most important criteria for access to social, economic and political power.

Matt Patches

"They also face a growing army of critics from outside. Even banks have been chided for sins such as interest-rate rigging (Barclays), money-laundering (HSBC) and illicit dealings with Iran (Standard Chartered)."

So are we to understand that HSBC not being criminally charged for laundering over 9 billion dollars is a sign that power is no longer being consolidated unfairly? These aren't sins, they are laws and failure to prosecute those responsible for breaking them sends exactly the opposite message of what the author would like us to believe. It's dark times when the mere chiding of multinationals for circumventing the law is used as an indicator of a changing power dynamic.


Only a couple of weeks ago following an article on the minimum wage here in TE, I made comments on the need for working class people to be paid a fair wage and got basted for my efforts. This article again confirms that the working class are being shafted, although it suggests that the composition of the '1%' is constantly changing, that really is no comfort for the majority of middle and working class people who are constantly struggling under the new tyranny.


And yet the criminal members of the executive class are not being prosecuted. So no, Naim doesn't really have a point there. They're still basically untouchable, and even when they get touched they get nothing more than a slap on the wrist.

Cool Beans

Hmmm, this article started off with a bang but then fizzled off into a confused analysis of power and its socio-economic implications. At the end of the day, the "populist" shtick of 1% ruling the world may not necessarily be accurate, but rising levels of inequality reflect that the "more, mobile, mentality" applies only to a select, educated, few. That is the problem. Shuffling around senior management, scolding the bigwigs, and trying to chisel away at the opaque structures of powerful institutions do not address broader questions of the distribution of power, and by extension material resources, education etc., in a more equitable fashion. Still, good of The Economist to be talking in this language more frequently.


Sic transit gloria mundi wouldn't be in Latin if the pole hadn't always been slippery. But what does it matter to most people that another suit steps into the same shoes? The King is dead. Long live the King!

Alex DeLarge

There are still a few hereditory dictatorships around, a category which includes monarchies. If power was transient, such a form of government could not exist. That some still do suggests that the internet is a necessary (but not sufficient) antidote to autarchy.

Absolute rulers must voluntarily cede power for a successful transition to pluralism, but they are called absolute because they do not cede anything voluntarily. Syria is an example: a hereditory dictatorship with a single aim - retention of absolute power.

The internet probably facilitated the Arab Spring, but Assad and his henchmen cling to power come what may, forcing ordinary people to take up arms to remove them. The internet may have encouraged Syria's revolution, but freedom still has to be won the old-fashioned way.


I can't help but think access to 'big data' has something to do with the evanescence of power; made possible by the internet. Never before has the average individual had access to so much data. Given the volume, variety and velocity of data, made available via the internet, business has started to recognize that decisions can now be based more on 'what you know' rather than 'what you think'. The latter typically fell into the hands of the HIPPO in the room. The days of the HIPPO (highest paid person's opinion) are dwindling. The former falls into the hands of the knowledge worker. Information is power.


The Economist staff sure love them some Zara. I imagine TE's office being a veritable live exposition of the Zara catalog :-)

Brian David Thomas

Its great that upstarts are challenging the establishment. Such challenges keep newer players eager to contest and today's major powers more keen to adapt and improve.
If there is a hidden consistency to The Economist, its the vital importance of competition to keep individuals and institutions at the top of their professional games.
This makes sense because a lot people investing in and reading The Economist have buckets of cash, as evidenced by their advertisements for 18K Swiss watches and time-share Gulfstreams. People facing competition constantly strive to perform at their peak levels and therefore make better investments than those coasting along and collecting paychecks.
For people with serious cash, these coast-along people are opportunities for loans and for social service programs, but not investments. And if I had money, I would rather be making productivity-boosting investments than consumer loans or buying government bonds.
So its a win-win for the investors and go-getters. The loser? The millions of Americans that want the security of a steady paycheck instead of the accepting the risks and rewards that come from growing the tiny into the mighty.
But more people should accept more risks, and the lesson that the established constantly cede power to the newcomers might spark some inner fires.
Thanks for the fine article, Schumpeter! :)

Alex DeLarge in reply to edwardong

Agree, power still gets handed from father to son, even in some so-called 'democracies'. But nepotism is becoming harder to pass off as meritocracy because, as this article states, the internet opens a world of ideas and competing opinions to anyone with an internet connection.


Things might be more turbulent in politics and business, but is that transience? I doubt it. Despite the crisis of 2007/08, few large banks have failed, many are larger, most are resuming the kinds of activities that brought on the crisis. The Tea Party in the US is not a grassroots movement. It has been quietly funded and organized in large measure by the major tobacco companies and the Koch brothers, and guided behind the scenes poltically by Libertarian conservatives such as former Congressman Dick Armey.



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