by Steven A. Ramirez, Professor of Law, Loyola University Chicago, School of Law
Too much power in too few hands presents dangers of despotism.
Americans traditionally deemed concentrated and unaccountable political power suspect. The United States Constitution reflects this suspicion by splitting sovereign power among state and federal governments, and then dividing it again between three co-equal branches that provide checks and balances against overreaching by any government official.
Yet, the Constitution fails to splinter concentrated economic power. While Congress may act to check economic concentration, in the end, brakes on economic concentration rise or fall based upon political negotiation. Congress cannot legislate a King; it may, however, permit financial consolidation to such an extent that big finance holds an unlimited claim on government resources.
Since 1978, bipartisan legislation created unprecedented economic concentration. Tax cuts led to the highest income inequality on record. Financial deregulation birthed the largest financial behemoths ever. Restraints governing managers of public corporations vanished, and CEO compensation soared. Predictably, as more wealth became concentrated in fewer hands, costs to organize to lobby lawmakers plunged.