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Wednesday, December 10, 2014

How tycoons acquire influence

Tycoon is an English word having roots in Japanese. In Japanese the word taikun means ‘great lord’. Today it refers to powerful businessman. Sociologist debates as to who is more powerful, whether it is wealthy people or people in top echelon of institutions.
Top business people acquire influence through various tools. First of all they have wealth which is form of power. They can use it to purchase loyalties of important people. They can use it in legitimate and illegitimate ways to acquire influence.
 Donation to political parties in order to acquire influence over them is an important way in which business people build and maintain their influence. It was considered legitimate for a long time. But now this has been severely criticized by general public. The movement against the influence of 1% has brought attention to the unfairness of the system. The rich generally donates to all major political parties. In this way they access power through elected representative.
Other options are hiring and employing retired military and civilian bureaucrats. By hiring important people retired after serving in upper echelon of institutions they can get a sway over their former institution.
Many military generals served different corporate giants. Defense contractors in USA are notorious for hiring retired people to further their own interest. This leads to rise in military industrial complex. Defense contractors make use of their influence to make sale of their weapons and equipment. It is not only defense contractors that make use of retired personnel’s influence. Leading private equity firms also hire retired people for example David Petraeus has been hired by a private equity firm.
Other tools are controlling stock market, manipulating currency market, and manipulating money market. The most powerful of this market is bond market which has power to affect interest rate in the economy.
 Wealthy business moguls also acquire stakes in media corporations. Many billionaires have stakes in media corporations. They also throw their influence by using the leverage of advertisement owing to their status as clients of the media house. In this way they alter the content broadcast on media.

When public oversight makes it difficult to acquire influence the top one percent starts investing outside the system. This includes investing in and financing outlawed groups.