A few phenomena that have a common thread running through them are:
- A board of directors of a corporation that wishes to dilute the voting power of the existing shareholders can issue new stock. As written in Investopedia, "Current shareholders sometimes view dilution as negative because it reduces their voting power."
- A government, legitimately or illegitimately, can stack a court with additional judges who are loyal to the government. According to the Wall Street Journal in 2015, "Venezuela’s lame-duck parliament on Wednesday rushed through 13 new Supreme Court justices, as President Nicolás Maduro’s allies sought to block the agenda of the incoming, opposition-controlled National Assembly."
- Intentionally or not, the issuance of more dollars (or any other currency) dilutes the spending power of the holders of that currency through inflation. As Ray Dalio said in a MarketWatch article, "Financially, the way it works is when the government needs to send out checks, it could either get the money from taxes or from borrowing. If it can’t get all the money it needs from borrowing, the central bank can print the money. That devalues the value of money."
Question: Is there an established name for this phenomenon of "power dilution" as I call it? I would be interested in knowing about any reference books or articles. Other examples as comments would also be interesting.
