Democracy and finance

A fundamental tenet in this nation's (and the modern world's) history has been that power is in some sense best held in tension. Constitutional separation of powers here in the US, parliamentary powers in much of the rest of the developed world. But since this is a financial blog, let's look at economics. And for purposes of simplification think of things this way: financial power + political power = economic power. Here in the US, financial power has increasingly been concentrated in the hands of the few, while, in theory, political power has trended towards the many. Thus economic power has been in a healthy tension, or so the theory goes.

The Bank of England was formed in 1692 (concentrating financial power), and a century later the US emerged (dispersing political power). These two models have dominated political and economic thinking for 2-3 centuries now, and in more recent times the realities both created have accelerated - more political democracy on the one hand; more financial concentration on the other.

But both of these models and received wisdoms must now be questioned. Does centralized financial power + decentralized political power really work? Seems not such a large question to some of you out there, no doubt, but it is finally at the very center of international discourse, as things global and economic will be re-wired in the next 5 years....The moment is now. The question is how will the world respond?

If there's any really large historic question to be asked in the midst of this epic meltdown, it is the oldest, and one the Greek philosophers (and all subsequent) have tried to address: "What is the most perfect form of human governance?"Or, for you fancy folks, "what is the essence of human nature?" Got a good answer to that?

I've personally always been drawn to Plato's philosopher/king model (yup, undemocratic). Human society needs gifted, educated, and charismatic leaders to wield power in the interest of truth. Tho for sure that's rarely happened (Lincoln? Ghandi? PS - the flip side therof is Facists, hence the urgency of 'philosophy' eg dicovering the truth)

Much more on this to come, but get started here perhaps:, as politics 101 http://www.huffingtonpost.com/sanjiv-gupta/the-change-we-need-a-bank_b_173385.html

I, for one, believe that one long-term trend (financial concentration) is reversing as we speak. We will live for the next couple of decades in a world of much greater financial democracy (think, for example, local currencies and regional banks)

As for the second - political democracy - well, the jury is out. My fear is that the events du jour are so severe that they require (necessitate?) a concentration of political power, but one which is hard to unravel once formed....

Might the new tension become much more financial democracy vs ever-greater government power?