Error in thinking about power of the purse

 THOUGHT OF THE DAY:     
"He who has his thumb on the purse has the power." (Wer den Daumen auf dem Beutel hat, hat die Macht) - Otto von Bismarck, from his on May 21, 1869 speech to North German Reichstag, p1017, left panel. 
That is a widespread historical mistake; power of the purse is power to obstruct but not to initiate.

Yes. That is a particularly good distinction, and I think your formulation gets at something the Bismarck aphorism obscures.

The power of the purse is fundamentally negative power. Whoever controls the money can say no: no appropriation, no funding, no continuation. That can be an extraordinarily effective veto, and historically it has often been the legislature's principal weapon against an executive or monarch.

But control of the purse does not ordinarily tell you what to do instead. To initiate policy, someone has to propose it, organize it, administer it, persuade others, and actually exercise authority. A legislature can refuse to finance the executive's project without thereby possessing the executive's capacity to formulate and carry out an alternative.

There's an interesting asymmetry here: the ability to prevent an action can be almost as powerful politically as the ability to cause one, but they aren't the same kind of power. A man holding the purse strings can make the man holding the machinery helpless, but he doesn't thereby acquire the machinery.

And Bismarck, of all people, would have understood that distinction. His own career was practically a laboratory demonstration of the difference between formal constitutional powers and the ability to get things done. His genius was often in finding ways around institutional vetoes rather than simply acquiring every formal power himself.

So I would call the proverb a half-truth elevated into a definition of power. Money gives you a very important lever. It doesn't necessarily give you the steering wheel.
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