The exchange rate between money and power represents a singularity in the system. At the singularity, money is no longer a relevant performance indicator. Good regulation exists to keep us outside of the event horizon, where the rules of capitalism still apply.
“Jungle capitalists” love to talk about how regulation is anti-capitalist because capitalism is a jungle and everyone should compete on merits, not with protections. They love to pretend that the only regulations in play are the ones holding corporations back, while those same corporations love to use their wealth to regulate against competition. There is no corollary in the jungle analogy. The jungle analogy breaks down when money can be converted into power to prevent competition. This is an unchecked, positive feedback loop: a singularity in the system. Indeed, regulation must exist to keep us outside of the event horizon of this singularity, not against capitalism, but rather to protect it.
1 ▸ Money → Power: a measurable phase-change
| Evidence | Key result | Why it matters |
|---|---|---|
| US policy study (N ≈ 1,800 issues) | Economic elites + business lobbies exert decisive influence on federal legislation; median-voter preferences have “little or no” impact. | Shows a tipping point where wealth converts directly into rule-making power. |
| Global corporate-control network (43,000 TNCs) | A core of 147 firms controls ≈ 40 % of the value of all trans-nationals through cross-shareholdings. | Extreme concentration gives a tiny ownership cluster systemic veto power—money ceases to be a mere market signal. |
| Cross-country panel (World Values Survey, 1990-2020) | Greater income inequality is statistically linked to higher political polarisation. | Polarisation is the social fallout of wealth-power feedback. |
Interpretation: once wealth concentration passes a structural threshold, it behaves like a “singularity”: political gravity bends so sharply that normal price-signal dynamics (competition, innovation) break down.
2 ▸ Beyond the Threshold, More Money ≠ More Performance
| Study | Finding |
|---|---|
| Kahneman & Deaton (1 M US respondents) | Emotional wellbeing plateaus around $75 k annual income; extra dollars add status, not day-to-day quality of life. |
| Follow-up PNAS replication (2022) | Confirms a flattening point for roughly one-third of the population; for the rest, wellbeing rises only mildly with further income. |
Implication: after basic security and social standing are met, additional money offers diminishing—or zero—utility. At the societal “event horizon”, capital accumulation still grows but no longer tracks human welfare or productive output.
3 ▸ Regulation keeps the system outside the event horizon
| Regulatory lever | Empirical support |
|---|---|
| Progressive taxation | OECD meta-analysis: labour-tax progressivity is the single most robust lever for cutting disposable-income inequality. |
| Wealth taxes / redistribution | IMF & OECD find that redistributive transfers raise long-run GDP by boosting aggregate demand and social stability. |
| Financial & labour rules | Cross-section study shows inequality undermines the effectiveness of regulation; conversely, well-designed regulation dampens the inequality–power spiral. |
These findings align with the black-hole metaphor used by economists and policy writers: unchecked concentration produces a self-reinforcing field that erodes market signals, democratic accountability and ultimately economic performance.
Synthesis
- Money converts to political gravity once concentration passes empirically observable thresholds.
- Utility plateaus for individuals far below those wealth levels, so continued accumulation stops functioning as a performance metric.
- Antitrust, progressive tax and transparency rules act like the outer “event horizon”: they dissipate excess gravity, keeping capitalism in a region where prices, competition and innovation still operate.
References
- Gilens, Martin, and Benjamin I. Page. Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens. Perspectives on Politics 12 (3), 2014, 564-581.
- Vitali, Stefania, James B. Glattfelder, and Stefano Battiston. The Network of Global Corporate Control. PLoS ONE 6 (10), 2011, e25995.
- McCarty, Nolan, Keith T. Poole, and Howard Rosenthal. Income Inequality and US Political Polarization, 1947-2006. In Polarized America: The Dance of Ideology and Unequal Riches, MIT Press, 2016.
- Kahneman, Daniel, and Angus Deaton. High Income Improves Evaluation of Life but Not Emotional Well-Being. Proceedings of the National Academy of Sciences 107 (38), 2010, 16489-16493.
- Killingsworth, Matthew A. Experienced Well-Being Rises with Income, Even Above $75 000 per Year. Proceedings of the National Academy of Sciences 118 (4), 2021, e2016976118.
- Cingano, Federico. Trends in Income Inequality and Its Impact on Economic Growth. OECD Social, Employment and Migration Working Paper 163, 2014.
- Ostry, Jonathan D., Andrew Berg, and Charalambos G. Tsangarides. Redistribution, Inequality, and Growth. IMF Staff Discussion Note SDN/14/02, 2014.
- OECD. In It Together: Why Less Inequality Benefits All. OECD Publishing, 2015.