IN Part (I) of this instalment published last week, we explored the intricate relationship between power, access to power and wealth generation, explaining how these elements can create a divide between those who thrive and those who struggle.
Power and access to power facilitate not only just personal wealth, but also the ability to shape industries, policies and societal norms, creating pathways for generational wealth creation.
This week in Part (II) of the same instalment, we explore the currency of power and wealth accumulation, the interconnection of power and wealth, the mechanisms of wealth accumulation and its consequences, systemic exclusion and generational poverty and the merits and demerits of seeking power.
Power, wealth accumulation
In contemporary society, power and wealth are often intertwined, functioning as a currency that shapes lives and communities.
Understanding the dynamic relationship between these two elements reveals how they contribute to social structures, influence behaviours and perpetuate cycles of inequality in certain groupings and cycles of wealth creation in others.
Power, defined as the ability to influence or control, acts as a mechanism through which individuals or groups can accumulate wealth, thereby, reinforcing their status and influence in society.
Power, wealth interconnection
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Wealth accumulation is not merely a function of financial savviness or entrepreneurial prowess. It is to a large extent, deeply rooted in the possession of power and the access to it.
Individuals or entities with power can manipulate circumstances to create opportunities for wealth generation. This connection is evident in various spheres, including politics, business, and social networks.
Political power, economic policies
Political power allows individuals to shape laws and regulations that directly impact economic opportunities. Politicians with influence can enact policies that favour certain industries, grant tax breaks, or allocate public funding to specific sectors.
For instance, a politician who has strong ties to the tech industry may implement regulations that benefit technology companies, facilitating their growth and, in turn, enhancing the wealth of those connected to this sector.
Conversely, individuals without political connections may find themselves at a disadvantage, unable to navigate the complexities of a system designed to favour the powerful.
According to October 2023 figures, the second largest industry in the United States is the healthcare and social assistance sector employing approximately 20 million second to government that employs approximately 22 million people.
The third largest is the retail sector, including the restaurant industry, employing approximately 15 million people. Numbers employed signifies the power of that sector.
As a result, lobbyists are permanently stationed in Washington to influence policies that affect industries with large representation in terms of employment numbers.
This might mean that sectors of the economy without that kind power lack the necessary influence and might not necessarily have powerful lobbyists in Washington influencing politicians on policy decisions.
Business power, market control
In the business realm, power dynamics play a critical role in determining, who succeeds and falters. Large corporations wield significant economic power, often dominating markets and influencing consumer behaviour.
They can engage in practices, such as price-setting, monopolisation, and lobbying for favourable legislation.
In Zimbabwe, Econet wields that kind of power, as it is one of the largest and most reliable tax payers.
These actions not only enhance their wealth, but also create barriers to entry for companies such as MTN, a South African telecommunications company that has wanted to set up in Zimbabwe for the longest and for smaller competitors that include Telecel.
Entrepreneurs and small business owners lacking access to capital and networks may struggle to establish themselves in a market where power dynamics are skewed in favour of established players.
Social power, networking
Social capital consisting of relationships, networks, and social connections, serves as a form of power that can facilitate wealth accumulation. Individuals embedded in influential social networks can access resources, information, and opportunities that are not available to others.
For example, individuals, who attend elite educational institutions often forge connections with powerful alumni, opening doors to lucrative job opportunities and partnerships.
Those, who have gone to Eaton, Cambridge and Oxford in the United Kingdom and Ivy League universities, such as Harvard, Stanford, New York University, Yale and others are known to harvest later on, post university, from the pool of this social capital.
This social power can create a feedback loop: As individuals accumulate wealth, their social status rises, further enhancing their networks and opportunities and excluding those who had no access to these exclusive institutions.
In Zimbabwe, there is no empirical evidence that those, who attended elite schools harvest from their pools of social capital. It might be true for white folk, but perhaps not necessarily for black folk.
What is known, however, is that attendees from missionary school boarding schools such as Gokomere, Kutama College, St Ignatius, St Augustines, Bonda Mission for Girls, Monte Cassino School for Girls, among others, are increasingly benefitting from “lower order” social capital, social power and networking associated with having attended these schools.
Wealth accumulation mechanisms
Power functions as a currency that enables wealth accumulation through several mechanisms:
Access to resources: Those in positions of power often have preferential access to resources, including financial capital, information, and technology. For example, venture capitalists, who hold significant economic power, can dictate which start-ups receive funding. This access allows them to nurture companies that align with their interests, thereby increasing their wealth;
Influence over economic decisions: Individuals or groups with power can influence economic decisions at various levels, from corporate boardrooms to government agencies. For instance, as mentioned earlier, lobbyists representing powerful industries can sway legislation in their favour, creating economic advantages that lead to increased profits and wealth for their clients. This influence often translates to wealth accumulation, not just for the individuals involved but also for their families and future generations; and
Creating and maintaining systems of inequality: Power dynamics often perpetuate systems that favour the wealthy. For example, tax policies that benefit the rich — such as lower capital gains taxes, can exacerbate wealth inequality. Those with the means to navigate the complexities of tax law can exploit these policies to their advantage, accumulating wealth, while those without such resources struggle to make ends meet.
Wealth accumulation outcomes
The accumulation of wealth through power can have profound implications for society. When wealth becomes concentrated in the hands of a few, it can lead to social and economic disparities that hinder overall progress.
Communities with limited access to power often face systemic barriers that prevent them from achieving economic mobility.
This can perpetuate cycles of poverty, as generations remain trapped in a system that privileges the wealthy.
Conversely, when power is distributed more equitably, it can lead to a more balanced and inclusive economy. Diverse voices can contribute to policy-making and business practices that benefit a broader range of people.
This inclusivity can drive innovation, foster social cohesion, and create a more resilient economy.
Unfortunately, it is easier said than done. Power is taken, not given, and those who are empowered to take it, believe that the winner takes all.
Exclusion, generational poverty
The exclusion from power and access can have devastating effects on communities, particularly marginalised groups. When entire populations lack representation in political, economic, or social spheres, their interests are often overlooked.
This systemic exclusion can lead to policies that perpetuate inequality, such as inadequate education, limited job opportunities, and unfair taxation.
For example, in many developing countries, the concentration of power among small elite often results in the neglect of rural and impoverished areas.
The lack of investment in infrastructure and education in these regions limits the potential for wealth creation, trapping generations in a cycle of poverty. This exclusion, not only affects immediate economic conditions, but also has long-term implications for social mobility and community development. Zimbabwe is no exception to this reality.
Merits of seeking power
The three points listed below indicate the merits of seeking power.
Influence and change: Seeking power can enable individuals to effect meaningful change within their communities. Those in positions of power can advocate for policies that promote equity, access to resources, and social justice, potentially benefiting entire populations;
Economic opportunities: Access to power often leads to increased economic opportunities. Individuals, who can navigate power structures, can secure better jobs, funding for businesses, and partnerships that facilitate wealth creation; and
Network expansion: Engaging with power dynamics often leads to the formation of networks that can provide support, mentorship, and resources. These connections can be invaluable in fostering personal and professional growth.
Demerits of seeking power
The three points listed below indicate the demerits of seeking power.
Corruption and ethical dilemmas: The pursuit of power can lead to corruption and unethical behaviour. Individuals may prioritise personal gain over the welfare of their communities, perpetuating systems of inequality;
Exclusionary practices: The concentration of power can result in exclusionary practices that marginalise certain groups. Those in power may create barriers that prevent others from accessing opportunities, further entrenching social divides; and
Mental and emotional toll: The pursuit of power can be psychologically taxing. The pressure to maintain influence and navigate complex social dynamics can lead to stress, burnout, and strained relationships.
Double-edged sword
In a world where natural resources are adequate for the benefit of all, the disparity in wealth becomes even more pronounced when power dynamics are at play.
- Ndoro-Mkombachoto is a former academic and banker. She has consulted widely in strategy, entrepreneurship and private sector development for organisations that include Seed Co Africa, Hwange Colliery, RBZ/CGC, Standard Bank of South Africa, Home Loans, IFC/World Bank, UNDP, USAid, Danida, Cida, Kellogg Foundation, among others, as a writer, property investor, developer and manager. — @HeartfeltwithGloria/ +263 772 236 341.
