People in power are often corrupt, and the more power they have the more corrupt they are.
Given that both ancient and modern history is replete with examples of absolute power, it is surprising that the earliest known reference to this sentiment is in a speech by British Prime Minister William Pitt who, in 1770, noted that "unlimited power is apt to corrupt the mind of those who possess it."
It was more than a century later, in 1887, that another British politician, John Dalberg, 1st Baron Acton, coined the expression as we know it today.
Acton, a Catholic historian, politician and writer, opposed the concept of papal infallibility that had been defined dogmatically at the First Vatican Council of 1869-1870, which had been called in response to the rise in contemporary thinking, including rationalism. The concept of the Pope as infallible was not new, but apparently it wasn't until this Council that Papal infallibility became a dogma of the Church. To quote The Catholic Encyclopedia (Vol. 7, 1910), "Infallibility means more than exemption from actual error; it means exemption from the possibility of error."
Acton opposed this thinking and, in 1870, traveled to Rome to lobby unsuccessfully against it.
In April 1887, he summarized his thoughts in a letter to fellow scholar Mandell Creighton:
But if we might discuss this point until we found that we nearly agreed, and if we do agree thoroughly about the impropriety of Carlylese denunciations and Pharisaism in history, I cannot accept your canon that we are to judge Pope and King unlike other men, with a favourable presumption that they did no wrong. If there is any presumption it is the other way, against the holders of power, increasing as the power increases. Historic responsibility has to make up for the want of legal responsibility. 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 or the certainty of corruption by authority. There is no worse heresy than that the office sanctifies the holder of it. That is the point at which the negation of Catholicism and the negation of Liberalism meet and keep high festival, and the end learns to justify the means. You would hang a man of no position like Ravaillac; but if what one hears is true, then Elizabeth asked the gaoler to murder Mary, and William III of England ordered his Scots minister to extirpate a clan. Here are the greatest names coupled with the greatest crimes; you would spare those criminals, for some mysterious reason. I would hang them higher than Haman, for reasons of quite obvious justice, still more, still higher for the sake of historical science.
Acton may have taken inspiration from the French poet and politician Alphonse Marie Louis de Prat de Lamartine whose essay, France and England: a Vision of the Future (published in English in 1848) includes: "It is not only the slave or serf who is ameliorated in becoming free... the master himself did not gain less in every point of view ... for absolute power corrupts the best natures."
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