Money or Power?

Money or Power, which would you choose?
This was a very interesting question that our strategy teacher asked us, which made me ponder. The point was to determine what kind of shareholders we would be: those that are interested in voting rights in a company, or those that are interested in dividends. I chose the latter category. But, in the absolute, which is more desirable, money or power? In a true economic spirit I tend to say money, because money can ultimately buy you power. But, on the other hand, once you have power, you can generate money. Which was exactly why the answers in the class were about 50-50. But let's make a pure analytic exercise and look at this in more depth:

How can we decide which of the two is the most desirable? If one can bring you the other, then the only relevant criterion is the sustainability of the respective positions. If by having power you can ultimately get money, and if by having money, you can ultimately get power, in the end you will achieve the same benefits. Therefore the only thing that can distinguish between the two is sustainability: for how long can you hold that position? Is any of the positions invulnerable, or less vulnerable?

Let's look at power first.
We'll assume you have absolute power over a rather large group of people, for example the power of a king over his people. The highest power you can have is to be the kind of the most populous nation, because a position of "king of the world" would not be sustainable on the long term. (Because one individual cannot hold this power for a long time due to limited rationality and huge control costs that the very large number of subordinates would imply. Eventually he would lose this power to newly formed groups of interest).
Therefore, as king, you have unlimited power over your subjects: you can make them do whatever you want them to do, you can take away from them anything they have (no property rights) and you have the right of life and death over them.

Under these circumstances, your power basically derives from 3 sources:
a) from fear: your subjects submit to your will because they fear you and the repercussions they might face if they disobey;
b) from love and respect: there will always be that group of people who are attached to the monarchy institution itself and therefore respect you as the king;
c) from interest: the other groups of power in your state have an interest in you being the king, and they allow you to have this power momentarily.

(Of course, you could have power over a small group of people through other means too, like physical strength, superior intelligence, seduction, etc.. but these do not hold for a much larger group.)

This leads us to believe that there are also three main ways in which you could lose power, corresponding to these sources of power:
a) if you fail to enforce your laws and punishments, people will stop fearing you, but in order to do this you need money to pay policemen and other law enforcers;
b) if there is a riot or a social movement against the monarchy, or if people start believing you are not worthy of being king, they will not love or respect you anymore and will try to overthrow you. In order to keep the power in this case you need to have money to pay a group to re-establish order and silence the rioters. This group should be large enough to stand up against all the crowd, and its members motivated enough (through money or interest) not to change sides;
c) if the interests of the other groups of power change and they no longer support you or want to overthrow you. The other groups of power can be thought of as the kings of the other smaller states, which, even if smaller, could rally to create a force bigger than yours. If they invade your country, you need to have sufficient money to pay an army large enough to stand against the enemy and well-enough equipped to win. (It is common knowledge that even since the middle ages, armies were made of paid mercenaries, and peasants were not usually called to arms except in the worst of cases.)

So basically there are several factors or changes in environment that could make you lose power, and in every case, the crucial factor that will help you keep your position is to have money.

Power needs money to be sustainable.

But, of course, power can be used to make money, for example by taxing your subjects or expropriating their valuable goods. But the amount that you can gather is limited to the total wealth of your people. Therefore, you are still vulnerable to those external groups who are richer than you.

Now, let's look at money.
Just like we did for power, we will assume you are, in the absolute, rich. You may or may not be the richest person on the planet, but you have access to an immensely huge amount of money. The question that arises is, therefore, whether money needs power to be sustainable. Can we make money and keep money without power? Luckily, the answer is simpler: YES. In order to make new money and keep the value of what you now have, it is sufficient to manufacture and sell a desirable good or product, have market share and make profits. You can even start at the very bottom of the social pyramid and still make huge money (look at Bill Gates or the Larry Page and Sergey Brin - perfectly normal citizens that now count among the richest people worldwide). In fact, in order to make money you require power at company level (ex: voting & management power) but you are not dependent on power at such a big scale as discussed above.

How can you lose money?
There are several major ways in which you can lose money:
a) your business loses clients, becomes unprofitable and runs into bankruptcy: in this case, in order to keep from losing money you need to change strategy, management or redirect your investment in another, more productive area;
b) somebody steals part of your money: but it can't steal all your money because normally you would keep at least part of your money well guarded in a secret account in the Cayman Islands :)
c) the government expropriates your assets and nationalizes your investment : to prevent this all you need to do though, is to diversify your investments geographically.
d) the economy in which you invested your money turns from a free market economy into a centrally planned economy. In this case no one can make any more profits. Here, so that you can stop losing the money, you need power, because it is the only way in which you can prevent this from happening or change back the system.

But the advantage of money is that it's free to move worldwide, and even if you might lose some money because you don't have power, you can still invest the remaining sum elsewhere and gain profits.

Therefore, money can be sustainable even without power.

Plus, money will allow you to gain power. By being able to finance your own political campaigns or to pay / offer benefits to the key groups of power, you can gain the power of president or even that of king (if you have enough money to pay for a "coup d'etat".)

So which would you choose now, money or power? And by the way any insights/additional comments are welcome; I'd love to get your opinion about this, it's one of those endless subjects for discussion that I love so much :)