I continually hear people talking about "economic power" and conflating it with political power. This is especially common when calling for regulation of business. However, the two are such fundamentally different things, that even using the term "power" for both is misleading. It is akin to comparing the control of a master over a slave and my control over my bladder, as both are "control". Then again, explaining the difference may be worthwhile, especially as explaining exactly what political power is may be a handy reminder for those who think the government should be more involved in everyday life.

First, let us look at the more innocuous "power", economic power. Economic power amounts to nothing more than control over your own property and your own labor. It may also include similar power delegated to you by others, for example the property rights executed by a board of directors on behalf of the shareholders, but, excluding such complexities, economic power is nothing but control over your goods and body.

To make this a bit less abstract, let us look at specific applications. Economic power is, at the most basic, your ability to choose when and where to labor, whether to labor, and to what work you shall apply your efforts. As labor produces goods, economic power also extends to the control of those goods you own. The ability to consume those goods, or not, to give them away, to sell them, or to throw them away. As an extension of these abilities, economic power also includes the ability to trade and contract, to agree to trade goods, services or labor in exchange for the goods, labor or services of another.

And that is it. Economic power in a nutshell. It is the ability to work, to dispose of one's goods, and to enter into voluntary agreements concerning goods and labor. Nothing more. That is the entire scope of economic "power".

You will notice one feature of economic "power" that is often overlooked by those critical of business, it is in no way coercive. All aspects of economic "power" are voluntary. You can choose to work or not work, choose to hire or not hire, but you cannot force the other party to enter into a contract, only induce them through offering something they desire*. Economic "power" is solely power over yourself and your goods, any actions by others have to be obtained through persuasion or purchase**.

That is not true of political power.

Political power is much closer to what people think of as "power". In fact, political power is, at its most basic level, the power to kill. Yes, it finds other expressions, fines, expropriation, jails, but at its base, political power is the power to kill. Let us look at fines and see that they too are simply kinder expressions of this life and death power. Fines are imposed by the state. If you refuse to pay, they try to take goods, if you prevent them, eventually you will face arrest. If you refuse to allow them to take you, they will try to remove you by force. If you resist, you could be killed. In the end, that is the basis of all government power, the ability to kill citizens.

And that is why I argue for limiting government to such a narrow scope. The ability to kill is a very serious power, and should be only used for the most serious purposes. Protecting our rights from internal and external aggression, setting up tribunals to peaceably settle disputes between citizens, so they need not take recourse to a vendetta, and that is it. All of those are arguably important enough to maintaining society that using the power of life and death to enact them makes sense. On the other hand, anti-littering ordinances, day care, and sugar subsidies seem trivial uses of the power to kill. As PJ O'Rourke argued, it is a bit absurd to hold a gun to grandma's head and threaten to shoot unless she pays for the neighbor's babysitter. Yet, despite his comedic intent, he is right, that is what the use of political power to provide day care really means.

Some will disagree, and argue that much of politics is just about taxing and funding. However that is disingenuous. Just ask what happens if you refuse to pay your taxes, or even dispute the amount. Or look at the Soviet system which was nothing more but massive scale taxing and funding. Whatever the mechanism adopted, the truth is the one embodied in the Roman fasces***, the power of government is the power to kill, whether it is expressed in actual death, in imprisonment, in expropriation, or in simple fines. The power of the state rests on the headsman's axe.

And that is my entire point. It may be an effective rhetorical device to confuse political and economic "power", it may make it easier to argue for state intervention and may impress those who do not think things through, but look again at the descriptions above. State power is the power to kill, economic power is the power to work and trade. How can anyone in their right mind argue the two are in any way cognate? One is the ultimate in coercive power, the other the antithesis of coercion.

Please keep that in mind the next time someone denounces "big business" in the same breath as "big government". Think not about the "bigness", but about what that bigness means. Essentially it is as if they were to compare Wal-Mart to Dachau as both fulfilled their tasks in "big ways". Size alone is irrelevant, as is calling both "power", what matters is what that "power" really represents, and what that scale means for those involved. And too often that is ignored, and simple "bigness" and "power" is enough to support an argument.

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* I am sure some will respond with some variation of "a hungry man is not free", but the truth is no single firm controls the economy, so you always have options. In addition, as I explained in "Greed Versus Evil" and elsewhere, the free market tends to establish circumstances such that pay for labor closely matches your actual output, meaning that so long as you are willing to accept a reasonable rate of pay, you can find work. That fact alone means that no single employer can take advantage of a bad labor market to "force" employees into jobs. Only government meddling can create the circumstances which generate such chronic unemployment and defective labor markets.

** Coercive negotiations, such as use of eminent domain, are the creation of political power, not economic power. In a non-political environment, or in a true free market, a buyer must always convince all sellers, he cannot take recourse to the state to force hold outs to sell.

*** Roman officials of a certain stature and higher (those holding imperium - curule aediles, quaestors, praetors and consuls, proconsuls and propraetors, as well as masters of the horse and dictators when they existed) were preceded by a fixed number of lictors who bore fasces, the bundles of sticks around a headsman's axe, seen on the back of our dimes and Mussolini-era flags from Italy. The fasces symbolized the magistrate's ability to physically punish or even kill citizens.

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POSTSCRIPT

I hit on many of these topics before, though the one I recall at the moment is "Fear of the "Big"". If I should recall others, I will be sure to add links below.