Can Power Corrupt You?

dan solinAdvisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

Dan's new book for millennials, Wealthier: The Investing Field Guide for Millennials, will be published on May 15, 2024, and available on Amazon.

“Power tends to corrupt and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority; still more when you superadd the tendency of the certainty of corruption by authority.”

--Lord Acton

This famous quote, penned by British historian Lord Acton in 1887, has stood the test of time as a warning about the dangers of unchecked authority. Although he was writing to a bishop about the perils of too much power being vested in one individual, his words ring true far beyond the ecclesiastical context.

The idea that power is inherently corrupting has been repeatedly proven throughout history. From politics to business to religion, there are countless examples of individuals who succumb to corruption and abuse their authority.

Examples in the Financial Industry

There is no shortage of examples of power and corruption in the financial services industry:

Bernie Madoff: Madoff was a prominent financier who ran the largest Ponzi scheme in history. As the founder of Bernard L. Madoff Investment Securities LLC, he had unchecked power over his clients' investments. He used this power to deceive investors and regulators, ultimately defrauding his clients of billions of dollars.