29 October 2010 Comments Off on The Decentralization of Economic Power Can Occur Naturally

The Decentralization of Economic Power Can Occur Naturally

Economic power is a complicated concept. Whether it is access to capital, possession of items of wealth, income, or controlling shares in major companies, there are a variety of metrics that could be looked at as expressions of financial power. Economic power is also found in the nature of the market in question. Low prices for consumer goods, for example, create economic power for everyone. High protective tariffs might reduce economic power for a consumer and worker who is trapped in an economy where prices are high.

The status quo of economic thought, the same strand that failed to identify the housing crisis, has looked at economic power in terms of how much paper stock value a person might own. Possessions like homes and cars were considered wealth, even if they were financed by debt which is still unpaid. This distorted view of economic power is causing a deep sickness in the western world’s pursuit of economic health.

The real truth is, lowering tariffs and reducing state intervention into the economy causes a fast decentralization of economic power. Chamber of commerce industrial complexes tend to produce favors for connected corporations in exchange for regulatory authority. While the government gains the right to claim that they are “going after” the big corporations, in reality the favors they give in return will work to snuff out any competitor that wants to take down that company the right way. Competition is the ultimate regulator. Competition is the proper means of redistributing wealth. If you didn’t just come up with the brightest idea and the best product with the lowest price, don’t get too comfortable with that money.

It is the pricing mechanism of the free market which empowers humanity. Somehow a material from a mine in Africa is combined with slivers of wood in North America to make products to be purchased for mere coins at a store. This happens with no central plan. It is a natural phenomena. Low prices are the decentralization of economic power.

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