The Silent Hand

How Power Surpasses Authority

We follow that leader who seems to have all the authority, sitting right up the corporate ladder. We fear him, but no matter how hard we think, we cannot put our finger on the reason why we do not respect him. Many fall into the trap of confusing their shiny badge of authority with the cutthroat influence of power. Think of that manager who’s been placed above others by a company chart; they bark orders, and their employees nod and agree, and comply but roll their eyes behind closed curtains. The manager’s influence evaporates into the air the moment the door shuts and they leave the room.

The confusion between power and authority seeps into many aspects of our lives. Genuine emotional investments aren’t made based on social status or societal power. They’re built on real inner power, such as self-confidence, self-steam, and self-respect. I’ve witnessed many couples who end up in the dark, hollow halls of a divorce attorney’s office, just because they thought that by marrying “up,” they’d be marrying a strong person who’s confident in their abilities and in their shared future. They thought they were going to be happy. They’d translated the higher social status of their spouse as “power”: He seemed so strong when we first met. He came off as shiny, cocky, confident. Little did they know, the director title, head of the regional office, deputy chief, and all the shiny ornaments were nothing but a fill of a position that had to be filled. Those titles were given to their thought-to-be-better half and could be easily taken from them.

Financial investments know no exceptions: investors who burn their greens and throw cash at ventures for the sole reason that a so-called “consultant” with a fancy title gives them a “go”. The authority beams with confidence, and when the venture’s house of card collapse, investors are left with nothing but a bag full of sorrow and a head bump big enough to make them realize that they were swayed by status rather than substance.

So what is this magnetic force called power?

In physics, power is the rate at which work is done. It shows how much effort, material, time, and energy is needed to complete a task. High power means a lot of work is done quickly. In simple terms, power can overcome limits like scarce resources or opportunity costs because the rules favor those with more power. For example, a powerful car accelerates quickly, doing a lot of work and using a lot of fuel in a short time. In economics, however, it’s different. We can’t achieve big results or reach great heights without putting in a lot of effort over a long time.

Historically, power was never about titles or positions. It was about the ability to influence, inspire action, and move without coercion. The most powerful leaders weren’t feared because they wore a crown or had an army backing them up. They could command because they were respected; they embodied admirable qualities such as courage, resilience, integrity, and loyalty. They were on the front lines, fighting alongside their men on the battlefields, giving their blood, sweat, and tears together with the Dukes, Knights, Generals, Sergeants, and Corporals, regardless of whatever title they held. Authoritarian leaders, on the other hand, were assigned and granted certain tools within a certain context. Take the king, for instance, who rules because of a lineage, and a leader who commands because people trust and respect him.

The history of mankind is littered with little men and women who clung, their slowly-turning-white knuckles gripping the castle of authority, only to watch it crumble. Kings and Queens, surrounded by pools full of foolish grand titles and elaborate ceremonies, built a distorted perception of reality but failed to not just see but truly look at their people and connect with them. Their reigns were short-lived, overthrown by those who understood the true meaning of power. Psychology adds an interesting angle to this. Humans, just like moths to a flame, are naturally dazzled by titles and status. Our entire perception of an average-looking person in an unremarkable outfit changes once we hear that they are a neurosurgeon. We inevitably assign value to titles and symbols of authority, often at the expense of logic. We’re not talking about judging a book by its cover here. We’re talking about judging a book by its title."

Physiologically, our brains are wired by billions of neurons that command us to respond to perceived authority. It’s less about substance and more about image: follower counts, hierarchy levels, well-crafted family status, unique last names, or educational badges such as "Dr." or, as I have recently learned about in Austria, “Magistra.” I am not just talking about the moth-to-the-flame situation but about how the flame has a deep-seated need to show the moths just how shiny, flickering, blazing, scorching, golden, and fiery it is. Sometimes that need is hidden behind insincere modesty: “Dr. Weinstein? Oh, please, call me David.” And then, two seconds later, they appear entirely incapable of exercising even a moment's restraint from talking about their diazepam-boring of a Ph.D. in some modern, fabricated, useless nonsense. This fatal attraction, our pull toward the flames of authority and status, and vice versa, the need to display it, clouds judgment and makes people susceptible to being influenced by gold-plated, insubstantial authority. Society has always been two edges of a sword: followers and leaders. Followers crave the comfort of following their leader, even if that leader’s authority is, empty, hollow, shallow, anything but real.

The thirst for status and authority has its roots in human psychology and is partly about survival. Throughout human evolution, aligning with a strong leader increased the chance of survival and thriving within a group. Those with authority were protectors and providers. Nowadays, in the modern context, this ingrained tendency still exists, even though the survival need has long vanished.

With each turn of a page of our history book, one comes across fascinating chapters where power and authority played out in unexpected ways. Countless wars that could’ve been easily prevented were ini-tiated and prolonged by leaders who lacked true power. The populace, blinded by patriotic fervor and obedient to their leaders’ titles, marched forward. People died, suffered, lost, and they marched for-ward. Drought, famine, disease, poverty, and sorrow wove the tapestry of ruin and devastation through the country, yet they just marched forward: blindly, doggedly, religiously. The decision to seek war and march forward had nothing to do with strategic power but was more about maintaining the iron throne of authority. Those leaders, knowingly, wrote a tragic ending to yet another page of history that was, in hindsight, preventable and could’ve been very different.

Politics hasn’t been immune to the vastly spread virus of authority either. There have been many re-gimes where power was tenuous and authority was absolute. Strict rules were enforced by power-hungry leaders who expected blind obedience just because of the position they held. Yet, underground groups and silent movements who connected with people and listened carefully to their longings, hopes, and desires gained real power that emerged from collective will.

In this last chapter, I plan on taking you on a journey with me one last time as we tap into our inner sense of logic and recalibrate our internal compasses. This topic hits home for me. Power might be the last chapter, but I have been writing and rewriting and chocking back words and holding my tongue for years. The silent hand is about that ghost that's been haunting us every single time we were unfairly defeated in life by the “above”; it is about every time we've been told no for no apparent reason and have been stopped unjustly; at times in the name of cultural boundaries, at times in the name of natural resources, restrictions, and timing, and at times in the name of higher “authority” with no logic or reasoning behind it, whether that was a regime, or religion, or a nonsensical long tradition that served no purpose. The silent hand is about a fatal attraction to titles, rankings, and status that has swayed us toward paths we never quite understood; why we got into the car, started it, and drove down a road we later regretted taking. What was that silent captivation and attraction that we couldn’t put our finger on and couldn’t wrap our heads around the idea of “why” we said yes? Why did we bow and agree? Instead of being led by the “silent hand” of misplaced authority, we might as well focus on seeking and cultivating true power, both in ourselves and others. Time after time throughout history, our bias and captivation toward power have shaped our decisions in disastrous and peculiar ways. Speaking of history,

Let’s take one last walk down memory lane, shall we?

The East India Company (EIC) was a British joint-stock company founded in the 17th century to help facilitate trading in the Indian Ocean Region. It is known to be one of the largest and most successful private enterprises ever created, granted a trade monopoly and permitted to exercise sovereignty in the name of the (then) British Crown and government. Not long after its founding, the company gained control of most parts of the Indian Subcontinent and became the largest corporation in the world, with its own armies totaling about a quarter of a million soldiers; twice the size of the British army at the time.

The rise and fall of the EIC is a striking example of multiple nations’ bias under the influence of intimi-dating authority in the name of power. Wielding a kind of authority that rivaled entire nations and marching its private army across the entire subcontinent of India, the EIC was more than just a trading company. Sitting in their London offices, and biased by the illusion of control, company directors made one wrong decision after another. In 1770, when famine struck Bengal, the company failed to under-stand the severity of the situation. Instead of adjusting taxation and providing relief, the company ob-sessed over maximizing its profits, failed to act on time, and placed unearned confidence in the region’s ability to recover without any type of support or intervention. This all resulted in the exacerbation of the famine, causing millions of people to die. The very power “granted” to the company by the nations ignited the powder keg of their suffering.

The Theranos scandal is another chapter in our history book that highlights how biases toward per-ceived authority can lead to financial pitfalls. The company’s founder, Elizabeth Holmes, painted a pic-ture of a visionary entrepreneur reminiscent of Steve Jobs that allured many investors and media alike. High-profile board members, such as former U.S. Secretaries of State and seasoned business leaders, created an aura of credibility and authority for Ms. Holmes. Her charisma, authority as a board mem-ber, and the prestige of her associates cast a haze over the eyes of investors and blurred their vision to the point that they completely overlooked the lack of transparent data and never bothered to conduct thorough due diligence. This almost intimidating authority figure allowed Theranos to pocket massive investments despite unproven technology, which ultimately resulted in significant financial losses as the company’s claims were debunked.

Another honorable mention would be the Wirecard scandal in Germany. With its esteemed-as-innovative leader of a CEO, Wirecard was a leading fintech company. Many investors and regulators ignored numerous red flags, repeated warnings, and investigative journalism exposing accounting fraud based on what seemed to be their unconditional trust in the company’s renown and prestigious execu-tives, such as the assigned CEO, Markus Braun. The fraud was revealed in 2020: €1.9 billion was miss-ing. The company shattered into pieces overnight, leaving all shareholders and stakeholders with mas-sive losses.

History holds plenty of examples where bowing down to authority has cost us more than just money. During the medieval Papal Schism of 1378, the Catholic Church, for nearly four decades, had not one, not two, but three popes simultaneously claiming divine authority. The absurdity of the chaos reached its peak as Europe found itself in a hedge maze-like patchwork of conflicting allegiances, with kings and other nobility aligning themselves with different popes. Ignoring the never-recovering and devastating impact on the Church’s credibility and on the faith of the faithful following, the leaders ignored the big picture for years, procrastinated resolving the schism, and protected their palace of power, which dragged the Church’s name into the mud, in the name of God.

The Charge of the Light Brigade during the Crimean War is another proof of how blind obedience and unquestionable loyalty to hierarchy can result in tragedy. It all started when a vague order from Lord Raglan to attack “retreating guns” was misunderstood by his subordinates as a command to charge directly into the heavily fortified Russian artillery positions. The subordinates knew that they were feed-ing themselves to the lion and jumping headfirst into a blazing fire, but their logic was overruled by the authority-driven orders they’d received. Their following of the misunderstood orders led to devastating casualties and catastrophic failure. Lord Lucan and Lord Cardigan were unable to see the intended tar-get from their position and interpreted the “guns” as the ones directly ahead in the valley instead of the retreating artillery Raglan had meant.

As hard as I try to wrap up the history section of this last chapter, didactic examples keep haunting me:

The reign of King George III during the American Revolution adds yet another nail in the coffin of fatal bias towards authority. Despite mounting evidence of economic self-sufficiency and growing unrest, King George III, biased by Britain’s divine right to rule, insisted on maintaining British control over the American colonies. He ignored the colonies’ demand for independence, and his government’s delayed actions and punitive response added fuel to the fires of the revolution. Britain ended up losing one of its most prosperous territories, thanks to the stubborn ignorance of the authority in power.

Authority, power, and confusing the two form a treacherous trio in human history. Whether it’s an empire ignoring drought and famine, a divided Church, or a military tragedy born of lack of communication and blind obedience, these history chapters repeat one truth: unchecked authority does not end well. As I turn each page of our history book, I can’t help but wonder:

Have we learned? Or have we simply mastered the art of hiding our biases beneath layers of modern sophistication?

The moral of these stories you ask?

As we come to the end of the chapter, it hit me: I have been giving examples and reciting history where authority’s been misused, misplaced, and abused, and I still haven’t distinguished the difference between the two. We no longer live in times of survival. What does this distinction mean in the modern context of hierarchy, namely corporate organizations? Have we truly evolved, or do we still wage battles of power and control, hidden beneath polished titles and conference room etiquette?

What is power? What is authority? Where does authority end and power begin? Must one fade for the other to rise? Why do we fear authority? Or power? Or both? Does fear stem from respect? Or does respect for authority always carry the shadow of fear?

What are they?

I believe we’ve all heard the old saying that with great power comes great responsibility. Responsibility towards an excellent source of influence that no one has ever been able to define as an object, reference, solid written law, or even raw material. It doesn’t fit in any already established box, and that is what distinguishes power and authority.

Power is the potential of an individual or an object to influence others and control their actions. Authority is the legal and formal right to give orders and commands and make decisions.

Power is a source of control, a chance for us to leave our influences on others. Authority is a sort of delegation granted to us; and that is precisely why it carries less responsibilities with itself – more people are involved; A written law controls it, not personal emotions and internal triggers. Power comes from who we are; resides in the person who uses it, whereas authority is a privilege given to us and lies in a post or position we hold, and not in ourselves. Power is flexible, dynamic. Authority is technical and static. Power cannot be accurately illustrated – it flows in every direction possible, whereas authority is defined in organizational charts, and of course, it flows downwards.

Power is a personal trait that can affect people in every single aspect of their lives. It can come from the inside, can be gained through hard experience and even failure. It takes years to build a reliable internal power that knows its function and timing. And it takes less than a few epsilons of a second to be put to misuse, where it serves no purpose of social construction, but rather more selfish agendas.

The Powerful are often not even fully aware of their power. One of the very odd characteristics of power is that it is denied to us. Usually from both sides, that is, even from the “rulers”. Sometimes the powerful ones even like to suppress this knowledge, because otherwise they would have to constantly deal with the question of their legitimacy.

Where there is power, fear is to be found. Those pushing their ways upwards, fear they’re missing out on potential connections. And those who have already reached the top, fear losing the privileges that come with power. So, the powerful hermetically seal off their area of responsibility, remain in a silo mentality, and guard their knowledge like a treasure instead of sharing it. The young generation, on the other hand, has long understood how poor you stay when you keep everything to yourself and how rich you get when you share.

If the management elite and the workforce understand themselves as “we up here“ against “them down there”, then the change is inevitable. In such a context, the administrative supervisors are the lesser evils. Above all, human resources are wasted on a large scale, because a scenario of threats, intrigue, resentment, and mania as a means of control builds up. The focus is on the inside; a lot of energy goes into attack and defense. Everyone is busy with extensive security measures. There is little room for customer concerns.

The power hustle and bustle at management level is highly unproductive and wastes valuable time that no one has nowadays. It also creates a high level of bureaucracy, which makes the company’s dynamic cumbersome, although agility is urgently needed. Besides, the boss’s misused authority, mistaken for power, dries up the valuable initiatives. In a way, that the right employees with high potential learn that their opinion does not count. And they leave the company in droves. With the remaining mediocrity, the challenges of the future will certainly not be met.

Those holding a high status instruct without asking. And the ones below them listen without saying anything. And when the “lower ones“ do speak, their comments are irrelevant. Most superiors continuously need signs of power and, at the same time, signs of devotion to be sure of their sovereignty at all times. The submissive use their lower voice, stutter, have a deceptive look, bow their head sideways, make themselves small, wear a fake smile, give a timid apology, awe, pity. Such signs should only mean one thing: RED Flags!

The weak bosses, who need to watch for their status, are in need of some “tinsel.“ They discredit others to hide their smallness. One thing is obvious: Those who make their employees small and humiliate them will not be able to expect anything significant from them! And those who cannot praise will find that there will soon be no more praiseworthy achievements in their field – because people reinforce behavior for which they receive attention, recognition, and appreciation.

When they are not appreciated, people commit themselves without commitment!

Wherever power is secured with hierarchy, powerlessness and blind obedience is to be seen. Unreflective yes-sayers are dangerous for every company or society. They cover up unfair practices and do not even reveal derailed morals. Therefore, an iron law should be introduced urgently: “Contradict your superior!“ Ask questions! Question their authority if need be! Don’t be Lord Lucan and Lord Cardigan. Speak up!

Authority is only recognized by the up-and-coming young generation, the digital natives, when deeds justify it. Institutionalized authority “ex officio” is immediately questioned. And the classic status symbols, the “crutches of power,” have lost much of their radiance. Companies that act in a highly hierarchical manner are irrelevant to talented millennials and Gen Z.

True power of a boss, in a modern context, would mean that the “silent hand” doesn’t need to be constantly present or relevant. They don’t need to remind you of their title. The aura of their power burns your skin without them even being around. They can afford to be sick, aren’t scared to be distant, hold their employees accountable for their wrongdoings, and are the first to apologize when they’re the ones in the wrong. They are heard without raising their voice, followed without pulling their following, respected without being feared, and loved, despite being “the boss.”

I would address my father as “Sir” instead of using the informal “you.” I would stand up as he entered the room and wait five seconds after he was done talking, just to avoid running the risk of ever interrupting him or his scattered thoughts, teaching me how to change a tire on my own and jumping directly into five years before the Iranian Revolution. That man passed away many years ago. He is not around anymore, yet I hear his voice every moment as I go about my day, and I know how a lady’s supposed to behave, walk, talk, dress, work, what her work morals shall be, and what her boundaries shall look like.

True power is about leaving influence, even after you’re gone. To this day, I still don’t know if I feared my old man or respected him; or both.

We all get a slightly negative feeling about the term “power,“ whereas power could be a constructive force that provides the foundations for a life worth living together, that is, law and order. But when the term power comes up, it usually carries a negative connotation, a bad image.

Power is a dazzling phenomenon that triggers highly ambivalent feelings, fantasies, and evaluations. It is devalued, damned, even demonized, and yet it fascinates us.

We both admire and envy those who exercise it.

Last Note: Read the paragraph about Authority and Power again, and flashback on your life. Was every rule implied, forced on us with authority or power? Was there ever a time when things didn’t quite make sense or didn’t seem fair? And how did the ones responsible and in charge handle our questions? With a hat? Or a reference to an article of a paragraph in the civil code?

Was that all a pattern of narcissistically disturbed personality of the ones in power, or the struggle for power?

Beyond The Numbers is a monthly newsletter that aims to delve into the human side of finance, exploring emotions, psychology, and biases that influence our financial decisions. My name is Sadaf Poursheikhani, and I am a behavioral economist, passionate about dissecting investor psychology. Join me as we uncover the hidden secrets of the financial world.

Disclaimer: I would like to remind readers that this newsletter is based on scientific studies, my own research, and personal opinions. It does not reflect the views of any organization, and I am not providing financial advice. Rather, the aim is to shed light on the emotional side of the market and provide insights into how emotions can impact financial decision-making.