Historical basis of the economic power paradigm

Power is a common and critical phenomenon in economic operations. Power is the most important factor in resource allocation; power allocates market resources. We analyze this concept from a historical perspective.

Primitive society: the gradual formation of power relations

Power has become a widespread social phenomenon with the emergence of civilized society and interpersonal domination. Primitive society was a society without rules and a natural state without any restrictions. In such a state, to survive according to the requirements of intrinsic human nature, individuals had to adapt to nature and transform using their own capabilities. Initially, there were no affiliations and constraints among people because mandatory rules did not exist. Territorial interpersonal conflicts occurred gradually. Individuals with inherent advantages benefited from the conflicts or even seized property. A mechanism was required that could protect an individual’s property accumulated through labor. Moreover, communities needed to organize and assume command. The distribution of food demanded institutional rules, and the disputes within a group called for a just verdict. Objectively, an organization was necessary to protect interests in the form of a contract. Thus, tribe members handed over certain rights to the tribal clan in the form of a contract to reduce inequality by the power of the tribal clan. Chiefs and heads emerged. These leaders made decisions on the allocation of food and commanded the actions of the group. At this time, there was no authentic exchange relationship among people even if there was accidental exchange of goods. Therefore, the concept of power in society was relatively simple; the power structure was not an institution in the modern sense but manifested as rules under kinship.

Slave society: an absolute unbalanced power structure

During conflicts between primitive tribes, some prisoners were forced to become slaves. In some cases, the inability to repay heavy debts forced people into servitude. Gradually, society became unequal society—slave society. The differences in power structure between slaves and slave owners are the greatest compared with other societal power structures. Slave society’s absolute unequal power structure resulted in the highest possible reward for any investment made by a slave owner since slaves were forced to provide maximum labor. The absolute power structure determined that slaves were only an asset without legal rights. Slaves were not entitled to property. They could not control their labor and were forced to comply with their slave owner’s demands. Slaves had no qualifications with which to bargain with slave owners, and slave owners suppressed any rebellions. However, the costs of doing so were small compared with the wealth they amassed from slaves. Therefore, the absolute solidified power structure of slave society determined the social institution, which was an inflexible institution. Slave society opposed the adoption of new production methods to improve efficiency and prevented institutional change to reduce costs. When slaves, the assets of slave owners, became an unbearable cost, the slave trade emerged. As rebellions and uprisings by long-oppressed slaves increased in frequency, the violence shocked the foundation of slavery. As a result of this absolutely imbalanced power structure, armed uprisings were one way to change the institution.

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