Monday, 16 July 2012

Formula of the day: Power and corruption

Lord Acton once said that "power corrupts and absolute power corrupts absolutely."

Chairman Mao believed that "power comes from the barrel of a gun."

Put those two together, and "power and corruption come from the barrel of a gun." That speaks true of many a repressive dictatorship in recent history - Stalin's Russia, the Third Reich, Kim Il Sung, the Cultural Revolution, Idi Amin's Uganda, Pinochet's Chile, the Argentine Dirty War, Saddam's Iraq, Milosevic's Serbia, the Burmese military junta, Assad's Syria... you name it.

If power does indeed come from the barrel of a gun, then in this day and age, absolute power also comes from a barrel - the barrel of a financier's pen. A financier can, at the stroke of a pen, be more powerful than even the strongest military force.

Combine that with Lord Acton's most famous quote, and "absolute power and absolute corruption come from the barrel of a financier's pen." Given the recent Global Financial Crisis, and even more recent revelations of JP Morgan managing to "misplace" USD$2 bn, and Barclays' role in the LIBOR scandal, it's not far from the truth.

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