The Class-Domination Theory of Power

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April
2005

NOTE: WhoRulesAmerica.net
is largely based on my book, Who Rules America?, first published
in 1967 and now in its 6th
edition
. This on-line document is presented as a summary of
some of the main ideas in that book.

Who has predominant
power in the United States? The short answer, from 1776 to the present,
is: Those who have the money have the power. George Washington was
one of the biggest landowners of his day; presidents in the late
19th century were close to the railroad interests; for the Bush
family, it was oil and other natural resources, agribusiness, and
finance. But to be more exact, those who own income-producing property
– corporations, real estate, and agribusinesses – set
the rules within which policy battles are waged.

While this
may seem simple and/or obvious, the reasons behind it are complex.
They involve an understanding of social classes, the role of experts,
the two-party system, and the history of the country, especially
Southern slavery. In terms of the big world-historical picture,
and the Four
Networks theory of power
advocated on this site, money rules
in America because there are no rival networks that grew up over
a long and complex history:

  • No big church,
    as in many countries in Europe
  • No big government,
    as it took to survive as a nation-state in Europe
  • No big military
    until after 1940 (which is not very long ago) to threaten to take
    over the government

So, the only
power network of any consequence in the history of the United States
has been the economic one, which under capitalism generates a business-owning
class that hires workers and a working class, along with small businesses
and skilled artisans who are self-employed, and a relatively small
number of independent professionals like physicians. In this context,
the key reason why gold can rule, i.e., why the business owners
who hire workers can rule, is that the people who work in the factories
and fields were divided from the outset into free and slave, white
and black, and later into numerous immigrant ethnic groups as well,
making it difficult for workers as a whole to unite politically
to battle for higher wages and better social benefits. This important
point is elaborated on toward the end of this document in a section
entitled “The Weaknesses of the Working Class.”

Moreover, the
simple answer that gold rules has to be qualified somewhat. Domination
by the few does not mean complete control, but rather the ability
to set the terms under which other groups and classes must operate.
Highly trained professionals with an interest in environmental and
consumer issues have been able to couple their technical information
and their understanding of the legislative process with timely publicity
to win governmental restrictions on some corporate practices. Wage
and salary workers, when they are organized or disruptive, sometimes
have been able to gain concessions on wages, hours, and working
conditions.

Most of all,
there is free speech and the right to vote. While voting does not
necessarily make government responsive to the will of the majority,
under certain circumstances the electorate has been able to place
restraints on the actions of the wealthy elites, or to decide which
elites will have the greatest influence on policy. This is especially
a possibility when there are disagreements within the higher circles
of wealth and influence.

Still, the
idea that a relatively fixed group of privileged people dominate
the economy and government goes against the American grain and the
founding principles of the country. “Class” and “power” are terms
that make Americans a little uneasy, and concepts such as “upper
class” and “power elite” immediately put people on guard. Americans
may differ in their social and income levels, and some may have
more influence than others, but it is felt that there can be no
fixed power group when power is constitutionally lodged in all the
people, when there is democratic participation through elections
and lobbying, and when the evidence of social mobility is everywhere
apparent. So, it is usually concluded by most power analysts that
elected officials, along with “interest groups” like “organized
labor” and “consumers,” have enough “countervailing” power to say
that there is a fluid, “pluralistic” distribution of power rather
than one with rich people and corporations at the top.

Contrary to
this pluralistic view, I will try to demonstrate how rule by the
wealthy few is possible despite free speech, regular elections,
and organized opposition:

  • “The rich”
    coalesce into a social upper class that has developed institutions
    by which the children of its members are socialized into an upper-class
    worldview, and newly wealthy people are assimilated.
  • Members
    of this upper class control corporations, which have been the
    primary mechanisms for generating and holding wealth in the United
    States for upwards of 150 years now.
  • There exists
    a network of nonprofit organizations through which members of
    the upper class and hired corporate leaders not yet in the upper
    class shape policy debates in the United States.
  • Members
    of the upper class, with the help of their high-level employees
    in profit and nonprofit institutions, are able to dominate the
    federal government in Washington.
  • The rich,
    and corporate leaders, nonetheless claim to be relatively powerless.
  • Working
    people have less power than in many other democratic countries.

Before running
through this list, it is first necessary to define the term “power”
and to explain the “indicators” of power that are used to determine
who has it. Later other concepts will be introduced as they are
needed. They include “social class,” “upper class,” “corporate community,”
“interlocking directorates,” the “policy-planning network,” the
“power elite,” the “special-interest process,” the “candidate-selection
process,” and a few others. All of these concepts are necessary
in order to understand the nature and operation of the “power structure”
in the United States.

Power and
Power Indicators

Power is one
of those words that is easy to understand but hard to define in
a precise manner. We know it means “clout” or “juice” or “muscle”
or “the ability to make things happen.” We know it comes from words
implying the ability to act in a strong, compelling, and direct
way, but we also know that power can be projected in a very quiet
and indirect manner.

By “power”
I mean “the capacity of some persons to produce intended and foreseen
effects on others” (Wrong, 1995). This is a very general definition
that allows for the many forms of power that can be changed from
one to another, such as economic power, political power, military
power, ideological power, and intellectual power (i.e., knowledge,
expertise). It leaves open the question of whether “force” or “coercion”
is always lurking somewhere in the background in the exercise of
power, as many definitions imply. However, to say that power is
the ability to produce intended and foreseen effects on others does
not mean it is a simple matter to study the power of a group or
social class. A formal definition does not explain how a concept
is to be measured. In the case of power, it is seldom possible to
observe interactions that reveal its operation even in a small group,
let alone to see one “social class” producing “effects” on another.
It is therefore necessary to develop what are called “indicators”
of power.

For research
purposes, power can be thought of as an underlying “trait” or “property”
of a social group or social class. It is measured by a series of
signs, or indicators, that bear a probabilistic relationship to
it. This means that all the indicators do not necessarily appear
each and every time power is manifesting itself. Research proceeds
through a series of “if-then” statements: “if” a group or class
is powerful, “then” it should be expected that certain indicators
of this power will be present. It is especially important to have
more than one indicator. Ideally, the indicators will be of very
different types so that any irrelevant components in them will cancel
each other out. In the best of all possible worlds, these multiple
indicators will point to the same group or class, increasing the
likelihood that the underlying concept has been measured correctly.

There are three
primary indicators of power, which can be summarized as (1) who
benefits? (2) who governs? and (3) who wins? In every society there
are experiences and material objects that are highly valued. If
it is assumed that everyone in the society would like to have as
great a share as possible of these experiences and objects, then
the distribution of values in that society can be utilized as a
power indicator. Those who benefit the most, by inference, are powerful.
In American society, wealth and well-being are highly valued. People
seek to own property, earn high incomes, to have interesting and
safe jobs, and to live long and healthy lives. All of these “values”
are unequally distributed, and all may be utilized as power indicators.

Power also
can be inferred from studies of who occupies important institutional
positions and takes part in important decision-making groups. If
a group or class is highly over-represented in relation to its proportion
of the population, it can be inferred that the group is powerful.
If, for example, a group makes up 10% of the population but has
50% of the seats in the main governing institutions, then it has
five times more people in governing positions than would be expected
by chance, and there is thus reason to believe that the group is
a powerful one.

There are many
policy issues over which groups or classes disagree. In the United
States different policies are suggested by opposing groups in such
“issue-areas” as foreign policy, taxation, welfare, and the environment.
Power can be inferred from these issue conflicts by determining
who successfully initiates, modifies, or vetoes policy alternatives.
This indicator, by focusing on actions within the decision-making
process, comes closest to approximating the process of power that
is contained in the formal definition, but it must be stressed that
it is no less an inference to say that who wins on issues is an
indicator of “power” than with the other two types of empirical
observations – value distributions and positional over-representation
– that are used as power indicators.

The decisional
(who wins) indicator is also the most difficult to use in an accurate
way. First, it is often difficult to gain access to decision-makers
to interview them, much less observe them in action. Second, aspects
of a decision process may remain hidden. Third, some informants
may exaggerate or play down their roles. Fourth, and not least,
people’s memories about who did what often become cloudy shortly
after the event. Those are some of the reasons why social scientists
often end up replying on written records about key decisions, but
they often are not available until years later. So we end up historians
as well as social scientists, or relying on historians for much
basic information.

In summary,
all three of the power indicators have strengths and weaknesses.
However, these weaknesses present no serious problem. This is because
each of these indicators involves different kinds of information
drawn from very different kinds of studies. The case for the power
of a group or class should only be considered a convincing one if
all three types of indicators “triangulate” on one particular group
or social class.

The Social
Upper Class

One good starting
point for the study of power in the United States, and the one I
have preferred as a sociologist (especially in the 1960s and 1970s,
when there was far less readily available information than there
is now) is a careful consideration of the small social upper class
at the top of the wealth, income, and status ladders. This is because
the social upper class is the most visible and accessible aspect
of the power equation. It is not necessarily the heart of the matter,
but it is nonetheless the best place to get a handle on the overall
power structure.

By a “social
class” I mean a set of intermarrying and interacting families who
see each other as equals, share a common style of life, and have
a common viewpoint on the world. This general definition is accepted
by most social scientists whatever their views on the distribution
of power. By the “social upper class,” hereafter to be called simply
“the upper class,” I mean that social class that is commonly agreed
by most members of the society to be the “top” or “elite” or “exclusive”
class. In various times and places Americans have called such people
the “high hats,” the “country club set,” the “snobs,” and the “rich.”
In turn, members of this class recognize themselves as distinctive.
They call themselves such names as the “old families,” the “established
families,” and the “community leaders.”

The upper class
probably makes up only a few tenths of one percent of the population.
For research purposes, I use the conservative estimate that it includes
0.5% to 1% of the population for determining the over-representation
of its members in corporations, nonprofit organizations, and the
government. Members of the upper class live in exclusive suburban
neighborhoods, expensive downtown co-ops, and large country estates.
They often have far-away summer and winter homes as well. They attend
a system of private schools that extends from pre-school to the
university level; the best known of these schools are the “day”
and “boarding” prep schools that take the place of public high schools
in the education of most upper-class teenagers. Adult members of
the upper class socialize in expensive country clubs, downtown luncheon
clubs, hunting clubs, and garden clubs. Young women of the upper
class are “introduced” to high society each year through an elaborate
series of debutante teas, parties, and balls. Women of the upper
class gain experience as “volunteers” through a nationwide organization
known as the Junior League, and then go on to serve as directors
of cultural organizations, family service associations, and hospitals
(see Kendall, 2002, for a good account of women of the upper class
by a sociologist who was also a participant in upper-class organizations).

These various
social institutions are important in creating “social cohesion”
and a sense of in-group “we-ness.” This sense of cohesion is heightened
by the fact that people can be excluded from these organizations.
Through these institutions young members of the upper class and
those who are new to wealth develop shared understandings of how
to be wealthy. Because these social settings are expensive and exclusive,
members of the upper class usually come to think of themselves as
“special” or “superior.” They think they are better than other people,
and certainly better able to lead and govern. Their self-confidence
and social polish are useful in dealing with people from other social
classes, who often admire them and defer to their judgments.

For research
purposes, the important thing about these social institutions is
that they provide us with a starting point for systematic studies
of power. For example, these class “indicators” allow us to determine
which economic and political leaders are and are not members of
the upper class. Put another way, class indicators allow us to trace
members of the upper class into the economic, political, and ideological
power systems of the society.

Starting with
these class indicators, we can show that the upper class is nationwide
in its scope. This is because there is “overlapping” membership
among the many social clubs around the country. A person from Chicago,
for example, might belong to clubs in New York, Boston, and San
Francisco, implying that he or she interacts with upper-class counterparts
in those cities. By comparing dozens of club membership lists, we
have been able to establish the “density” of this club network.
(See the pages on the
Bohemian Grove
for findings on social cohesion and a photo essay;
and for a wonderfully detailed and colorful portrait of what one
of these clubs is like, see this memoir
of going to the Links Club in New York City
, which is one of
the most central clubs in the social club/corporate executive network.)

Similarly,
the alumni lists of exclusive private schools reveal that their
students come from all parts of the country. The summer addresses
of those members of the upper class who are listed in in-group telephone
books called blue books and social registers show
that people from all parts of the country mingle together at secluded
summer resorts that have been upper-class watering holes for many
generations.

But here we
must enter our first caution. The class indicators are not perfect.
Some members of the upper class do not join clubs, or list in a
social register, or reveal their school affiliations in such sources
as Who’s Who in America that we have to rely on for much
our information. We cannot trace such people through the power system.
They are counted as not being upper class when they really are.
On the other hand, there are local, or scholarship children (often
people of color) at some prep schools who are not members of the
upper class, and some honorary members of social clubs are not upper
class. They are counted as upper class when they really are not.
In large-scale studies, these two kinds of mistakes tend to cancel
each other out, so in general we obtain an accurate picture. But
it is true that the class indicators could be wrong on specific
individuals. They are useful for group studies, not for identifying
individuals.

Cautions aside,
there is no doubt that there is a nationwide upper class in the
United States with its own distinctive social institutions, lifestyle,
and outlook. There is also no doubt that most of these people are
active in business or the professions, and that all of them are
very wealthy. Their great wealth is obvious, of course, from the
large sums that it takes to maintain their homes and their style
of life, but systematic studies also show that the wealthiest families
are part of the social institutions of the upper class. Combining
our studies with findings by economists on the wealth and income
distributions, it is possible to say that the upper class, comprising
0.5% to 1% of the population, owns 35-40% of all privately held
wealth in the United States and receives 12-15% of total yearly
income. In short, the upper class scores very high on the “who benefits”
power indicator.

The wealth
and income of members of the upper class certainly imply that the
upper class is powerful, but they do not demonstrate how power operates.
It is therefore necessary to turn to studies of the economy to gain
further understanding of the American power structure.

The Corporate
Community

Major economic
power in the United States is concentrated in an organizational
and legal form known as the corporation, and has been since the
last several decades of the 19th century. No one doubts that individual
corporations have great power in the society at large. For example,
they can hire and fire workers, decide where to invest their resources,
and use their income in a variety of tax-deductible ways to influence
schools, charities, and governments. The argument begins over whether
the large corporations are united enough to exert a common social
power, and then moves to the question of whether they are still
controlled by members of the upper class.

The unity of
the corporations can be demonstrated in a number of ways. They share
a common interest in making profits. They are often owned by the
same families or financial institutions. Their executives have very
similar educational and work experiences. It is also important for
their sense of unity that corporate leaders see themselves as sharing
common opponents in organized labor, environmentalists, consumer
advocates, and government officials. A sense of togetherness is
created as well by their use of the same few legal, accounting,
and consulting firms.

However, the
best way to demonstrate the unity among corporations is through
the study of what are called “interlocking directors,” meaning those
individuals who sit on two or more of the boards of directors that
are in charge of the overall direction of the corporation. Boards
of directors usually include major owners, top executives from similar
corporations or corporations located in the same area, financial
and legal advisors, and the three or four officers who run the corporation
on a daily basis. Several studies show that those 15-20% of corporate
directors who sit on two or more boards, who are called the “inner
circle” of the corporate directorate, unite 80-90% of the largest
corporations in the United States into a well-connected “corporate
community
.”

Most social
scientists agree that corporations have a strong basis for cohesion.
However, there is disagreement over their relationship to the upper
class. Some theorists, the pluralists, say that members of the upper
class used to dominate corporations, but not any more due to their
increase in size, the need for highly trained and specialized executives,
and the decline in family ownership. Thus, there is an upper class
of rich families with one set of interests and a group of professional
business executives who have their own interests and power base.
Members of the upper class have power based on their wealth, and
corporate executives have organizational power.

Contrary to
this claim of a division between owners and managers, I think there
is strong evidence for the idea of great overlap in membership and
interest between the upper class and the corporate community. The
wealthiest and most cohesive upper-class families often have “family
offices” through which they can bring to bear the concentrated power
of their collective stock ownership, sometimes placing employees
of the office on boards of directors. Then too, members of the upper
class often control corporations through financial devices known
as “holding companies,” which purchase a controlling interest in
operating companies. More generally, members of the upper class
own roughly half of all corporate stock . Then too, upper-class
control of corporations can be seen in its over-representation on
boards of directors. Several past studies show that members of the
upper class sit on boards far more than would be expected by chance.
They are especially likely to be part of the “inner circle” that
has two or more directorships. According to the “who governs” power
indicator, the upper class still controls the corporate community.
Thus, we can conclude that the upper class is rooted in the ownership
and control of the corporations that comprise the corporate community.
We can say that members of the upper class are for the most part
a “corporate rich” who continue to be involved in the business world
as investors, venture capitalists, bankers, corporate lawyers, and
top executives.

True enough,
there are many top corporate executives who did not grow up in the
upper class. Most CEO’s of major corporations do not come from the
upper class. However, they are gradually socialized into the upper
class and its values as they move up the corporate ladder; indeed,
they are advanced on the basis of their ability to fulfill upper-class
goals of corporate expansion and profitability. In return, these
rising managers are given the opportunity to buy corporate stock
at below-market prices, paid very high salaries, and given other
“perks” that make it possible for them to join the upper class economically
as well as socially. The end result is a strengthening of the power
of the upper class, not a diminution of it.

How Government
Policy Is Shaped From Outside Government

The upper class
and the closely related corporate community do not stand alone at
the top of the power structure. They are supplemented by a wide
range of nonprofit organizations that play an important role in
framing debates over public policy and in shaping public opinion.
These organizations are often called “nonpartisan” or “bipartisan”
because they are not identified with politics or with either of
the two major political parties. But they are the real “political
party” of the upper class in terms of insuring the stability of
the society and the compliance of government.

Upper-class
and corporate dominance of the major nonprofit organizations can
be seen in their founding by wealthy members of the upper class
and in their reliance on large corporations for their funding. However,
dominance is once again most readily demonstrated through studies
of boards of directors, which have ultimate control of the organizations,
including the ability to hire and fire top executives. These studies
show that (1) members of the upper class are greatly over-represented
on the boards of these organizations, and (2) that nonprofit organizations
share a large number of directors in common with the corporate community,
particularly directors who are part of the “inner circle.” In effect,
most large nonprofit organizations are part of the corporate community.

All the organizations
in the nonprofit sector have a hand in creating the framework of
the society in one way or another, and hence in helping to shape
the political climate. The cultural and civic organizations set
the standard for what is beautiful, important, and “classy.” The
elite universities play a big part in determining what is important
to teach, learn, and research, and they train most of the professionals
and experts in the country. However, it is the foundations, think
tanks, and policy-discussion organizations that have the most direct
and important influences. Their ideas, criticisms, and policy suggestions
go out to the general public through a wide array of avenues, including
pamphlets, books, local discussion groups, mass media, and not least,
the public relations departments of major corporations. Their materials
also reach government through a variety of means that will be outlined
shortly.

It is worthwhile
to look a little more closely at the foundations, think tanks, and
policy-discussion organizations to show how they function as a “policy-planning
network.”

Tax-free foundations
receive their money from wealthy families and corporations. Their
primary purpose is to provide money for education, research, and
policy discussion. They thus have the power to encourage those ideas
and researchers they find compatible with their values and goals,
and to withhold funds from others. Support by major foundations
often has had a significant impact on the direction of research
in agriculture, social science, and the health sciences. However,
foundations also create policy projects on their own. The Ford
Foundation
, for example, helped to create a complex network
of advocacy groups and funding sources for Community Development
Corporations (CDCs) that provide housing and social services in
the inner city.

The role of
the think tanks is to suggest new policies to deal with the problems
facing the economy and government. Using money from wealthy donors,
corporations, and foundations, think tanks hire the experts produced
by the graduate departments of the elite universities. The ideas
and proposals developed by the experts are disseminated through
pamphlets, books, articles in major magazines and newspapers, and,
most importantly, through the participation of the experts themselves
in the various forums provided by the policy-discussion organizations.

The policy-discussion
organizations are the hub of the policy-planning network. They bring
together wealthy individuals, corporate executives, experts, and
government officials for lectures, forums, meetings, and group discussions
of issues that range from the local to the international, and from
the economic to the political to the cultural. New ideas are tried
out in weekly or monthly discussion groups, and differences of opinion
are aired and compromised. These structured discussion groups usually
begin with a presentation by the invited experts, followed by questions
and discussion involving all participants. Such discussion groups
may range in size from ten to 50, with the usual group having fifteen
to 25 members.

The many discussion
groups that take place within the several policy-discussion organizations
have several functions that do not readily meet the eye. They are
often overlooked by theorists – pluralists and state-autonomy
theorists, primarily – who do not believe that the upper class
and corporate community have the ability to develop overall policy
sophistication and thereby be in a position to influence the government.
First, these organizations help to familiarize busy corporate leaders
with policy options outside the purview of their day-to-day business
concerns. This gives these executives the ability to influence public
opinion through the mass media and other outlets, to argue with
and influence experts, and to accept appointments for government
service. Second, the policy-discussion organizations give members
of the upper class and corporate community the opportunity to see
which of their colleagues seem to be the best natural leaders through
watching them in the give and take of the discussion groups. They
can see which of their counterparts understand the issues quickly,
offer their own ideas, facilitate discussions, and relate well to
experts. The organizations thus serve as sorting and screening mechanisms
for the emergence of new leadership for the corporate rich in general.

Third, these
organizations legitimate their participants to the media and interested
public as knowledgeable leaders who deserve to be tapped for public
service because they have used their free time to acquaint themselves
with the issues in nonpartisan forums. The organizations thereby
help make wealthy individuals and corporate executives into “national
leaders” and “statesmen.” Finally, these organizations provide a
forum wherein members of the upper class and corporate community
can come to know policy experts. This gives them a pool of people
from which they can draw advisors if they are asked to serve in
government. It also gives them a basis for recommending experts
to politicians for government service.

The organizations
also serve obvious functions for the experts. First, presenting
their ideas and policies to these organizations gives them an opportunity
to have influence. Second, it gives them a chance to advance their
own careers if they can impress the upper-class and corporate participants.

The policy-planning
network is not totally homogeneous. Reflecting differences within
the corporate community, there are moderate-conservative and ultra-conservative
wings within it. Moderate conservatives favor foreign aid, low tariffs,
and increased economic expansion overseas, whereas the ultra-conservatives
tend to see foreign aid as a giveaway. Moderate conservatives tend
to accept the idea that governmental taxation and spending policies
can be used to stimulate and stabilize the economy, but ultra-conservatives
insist that taxes should be cut to the very minimum and that government
spending is the next thing to evil. Moderate conservatives accept
some welfare-state measures, or at least they support such measures
in the face of serious social disruption. Ultra-conservatives have
consistently opposed any welfare spending, claiming that it destroys
moral fiber and saps individual initiative, so they prefer to use
arrest and detention when faced with social unrest.

The reasons
for these differences are not well understood. There is a tendency
for the moderate-conservative organizations to be directed by executives
from the very largest and most internationally oriented of corporations,
but there are numerous exceptions to that generalization. Moreover,
there are corporations that support policy organizations within
both camps. However, for all their differences, leaders within the
two clusters of policy organizations have a tendency to search for
compromise due to their common membership in the upper-class and
corporate community. When compromise is not possible, the final
resolution of policy conflicts often takes place in legislative
struggles in Congress.

The existence
of the policy-planning network provides evidence for another form
of power possessed by the wealthy few: expertise on social and political
issues. It is an important complement to the naked economic power
possessed by the corporations.

The Power
Elite

Now that the
upper class, corporate community, and policy-planning network have
been defined and described, it is possible to discuss the leadership
group that I call the “power elite.” I define the power elite as
the leadership group of the upper class. It consists of active-working
members of the upper class and high-level employees in profit and
nonprofit institutions controlled by members of the upper class
through stock ownership, financial support, or involvement on the
board of directors. This does not mean that all members of the upper
class are involved in governing. Some are only playboys and socialites;
their social gatherings may provide a setting where members of the
power elite mingle with celebrities, and sometimes they give money
to political candidates, but that is about as close as they come
to political power.

Conversely,
not all those involved in the power elite are members of the upper
class. They are sons and daughters of the middle class, and occasionally,
the blue-collar working class, who do well at any one of several
hundred private and state universities, and then go to grad school,
MBA school, or law school at one of a handful of elite universities
– e.g., Harvard, Yale, Princeton, Columbia, MIT, Johns Hopkins,
University of Chicago, and Stanford. From there they go to work
for a major corporation, law firm, foundation, think tank, or university,
and slowly work their way to the top.

The idea of
the power elite intertwines class theory and organizational theory,
two theories which are often thought of as distinctive or even as
rivals. The basis for the intertwining of the two theories is to
be found in the role and composition of the boards of directors
that govern every large profit and nonprofit organization in the
United States. It is on boards of directors that the values and
goals of the upper class are integrated with those of the organizational
hierarchy. Upper-class directors insure that their interests are
infused into the organizations they control, but the day-to-day
organizational leaders on the board are able to harmonize class
interests with organizational principles.

It is important
to stress that I am not saying that all experts are members of the
power elite. People have to be high-level employees in institutions
controlled by members of the upper class to be considered part of
the power elite. Receiving a fellowship from a foundation, spending
a year at a think tank, or giving advice to a policy-discussion
organization does not make a person a member of the power elite.
It also may be useful to note that there are many experts who never
go near the policy-planning network. They focus on their teaching
and research, or work for groups that oppose the policies of the
power elite. In short, experts and advisers are a separate group
just below the power elite in the pecking order.

With the composition
of the power elite clearly stated, it is now possible to show how
it dominates the federal government in the interest of the upper
class and corporate community.

The Power
Elite and Government

Members of
the power elite directly involve themselves in the federal government
through three basic processes, each of which has a slightly different
role in ensuring “access” to the White House, Congress, and specific
agencies, departments, and committees in the executive branch. Although
some of the same people are involved in all three processes, most
leaders specialize in one or two of the three processes. These three
processes are:

  1. The special-interest
    process, through which specific families, corporations, and industrial
    sectors are able to realize their narrow and short-run interests
    on taxes, subsidies, and regulation in their dealings with congressional
    committees, regulatory bodies, and executive departments;
  2. The policy-making
    process, through which the policies developed in the policy-planning
    network described earlier are brought to the White House and Congress;
  3. The candidate
    selection process, through which members of the power elite influence
    electoral campaigns by means of campaign donations to political
    candidates.

Power elite
domination of the federal government can be seen most directly in
the workings of the corporate lobbyists, backroom super-lawyers,
and industry-wide trade associations that represent the interests
of specific corporations or business sectors. This special-interest
process is based in varying combinations of information, gifts,
insider dealing, friendship, and, not least, promises of lucrative
private jobs in the future for compliant government officials. This
is the aspect of business-government relations described by journalists
and social scientists in their case studies. While these studies
show that the special interests usually get their way, the conflict
that sometimes erupts within this process, occasionally pitting
one corporate sector against another, reinforces the image of widely
shared and fragmented power in America, including the image of a
divided corporate community. Moreover, there are some defeats suffered
by the corporate rich in the special-interest process. For example,
laws that improved auto safety standards were passed over automobile
industry objections in the 1970s, as were standards of water cleanliness
opposed by the paper and chemical industries.

Policies of
concern to the corporate community as a whole are not the province
of the special-interest process. Instead, such policies come from
the network of foundations, think tanks, and policy-discussion organizations
discussed in an earlier section. The plans developed in the organizations
of the policy-planning network reach the federal government in a
variety of ways. On the most general level, their reports, news
releases, and interviews are read by elected officials and their
staffs, either in pamphlet form or in summary articles in the Washington
Post, New York Times, and Wall Street Journal.
Members of the policy-planning network also testify before congressional
committees and subcommittees that are writing legislation or preparing
budget proposals. More directly, leaders from these organizations
are regular members of the dozens of little-known committees that
advise specific departments of the executive branch on general policies,
making them in effect unpaid temporary members of the government.
They are also very prominent on the extremely important presidential
commissions that are appointed to make recommendations on a wide
range of issues from foreign policy to highway construction. They
also serve on the little-known
federal advisory committees
that are part of just about every
department of the executive branch.

Finally, and
crucially, they are appointed to government positions with a frequency
far beyond what would be expected by chance. Several different studies
show that top cabinet positions in both Republican and Democratic
administrations are held by members of the upper class and corporate
executives who are leaders in policy-discussion organizations.

The general
picture that emerges from the findings on the overrepresentation
of members of the power elite in appointed governmental positions
is that the highest levels of the executive branch are interlocked
constantly with the upper class and corporate community through
the movement of executives and lawyers in and out of government.
Although the same person is not in governmental and corporate positions
at the same time, there is enough continuity for the relationship
to be described as one of “revolving interlocks.” Corporate leaders
resign their numerous directorships in profit and nonprofit organizations
to serve in government for two or three years, then return to the
corporate community or policy-planning network. This system gives
them temporary independence from the narrow concerns of their own
organizations and allows them to perform the more general roles
they have learned in the policy-discussion groups. They then return
to the private sector with useful personal contacts and information.

As important
as the special-interest and policy-planning processes are for the
power elite, they could not operate successfully if there were not
sympathetic, business-oriented elected officials in government.
That leads us to the third process through which members of the
power elite dominate the federal government, the candidate-selection
process. It operates through the two major political parties. For
reasons to be discussed in a moment, the two parties have very little
role in political education or policy formation; they are reduced
to the function of filling offices. That is why the American political
system can be characterized as a “candidate-selection process.”

The main reason
the political system focuses on candidate selection to the relative
exclusion of political education and policy formulation is that
there can be only two main parties due to the structure of the government
and the nature of the electoral rules. The fact that Americans select
a president instead of a parliament, and elect legislators from
“single-member” geographical areas (states for the Senate, districts
for the House) leads to a two-party system because in these “winner-take-all”
elections a vote for a third party is a vote for the person’s least
desired choice. A vote for a very liberal party instead of the Democrats,
for example, actually helps the Republicans. Under these rules,
the most sensible strategy for both the Democrats and Republicans
is to blur their policy differences in order to compete for the
voters with middle-of-the-road policy views, or no policy views
at all.

Contrary to
what many believe, then, American political parties are not very
responsive to voter preferences. Their candidates are fairly free
to say one thing to get elected and to do another once in office.
This contributes to confusion and apathy in the electorate. It leads
to campaigns where there are no “issues” except “images” and “personalities”
even when polls show that voters are extremely concerned about certain
policy issues. You don’t raise unnecessary issues during a campaign,
one successful presidential candidate once said.

It is precisely
because the candidate-selection process is so personalized, and
therefore dependent on name recognition, images, and emotional symbolism,
that it can be in good part dominated by members of the power elite
through the relatively simple and direct means of large campaign
contributions. Playing the role of donors and money raisers, the
same people who direct corporations and take part in the policy-planning
network have a crucial place in the careers of most politicians
who advance beyond the local level or state legislatures in states
with large populations. Their support is especially important in
party primaries, where money is an even larger factor than in general
elections.

The two-party
system therefore results in elected officials who are relatively
issueless and willing to go along with the policies advocated by
those members of the power elite who work in the special-interest
and policy-planning processes. They are motivated by personal ambition
far more than they are by political conviction. Still, there are
some extremely conservative elected Republicans who often oppose
power elite proposals, claiming that such policies are the work
of secret communists or pointy-headed intellectuals out to wreck
the “free enterprise” system. There also are many Democrats from
blue-collar and university districts who consistently oppose power
elite policies as members of the liberal-labor coalition. However,
both the ultra-conservatives and the liberals are outnumbered by
the “moderates” of both parties, especially in key leadership positions
in Congress. After many years in Congress the elected liberals decide
to “go along to get along.” “This place has a way of grinding you
down,” explained one liberal Congressman of the early 1970s in a
classic summary of what happens.

Although members
of the power elite are far and away the most important financial
backers for both parties, this does not mean that there are no differences
between the two parties. The leadership levels have intra-class
differences, and the supporters tend to have inter-class differences.
The Republican Party is controlled by the wealthiest families of
the upper class and corporate community, who are largely Protestant
in background. The Democratic Party, on the other hand, is the party
of the “fringes” of the upper class and power elite. Although often
called “the party of the common person,” it was in fact the party
of the Southern segment of the upper class until very recently.
The power of the Southern Democrats in the party and in Congress
was secured in a variety of ways, the most important of which was
the seniority system for selecting committee chairs in Congress.
(By tradition, the person who has been on the committee longest
just about automatically becomes the chair; this avoids conflict
among members of the party.) However, the underlying point is that
the one-party system in the South and the exclusion of African-Americans
from the voting booth until the mid-1960s gave the Southern planters
and merchants power at the national level through the Democratic
Party out of all proportion to their wealth and numbers. Thus, it
is not necessarily the wealthiest people who rule. The nature of
the political system also enters into the equation. But the Southern
elites are not poor; they are only less rich than many of their
Northern counterparts.

The Southerners
dominated the Democratic Party in alliance with the “ethnic rich”
in the North, meaning wealthy Jews and Catholics who were shunned
or mistreated by the rich Protestants. The businesses they owned
were often local or smaller than those of the Republican backers,
and they usually were excluded from the social institutions of the
upper class. These ethnic rich were the primary financial supporters
of the infamous “political machines” that dominated Democratic politics
in most large northern cities.

The alliance
between the Southern segment of the upper class and the Northern
ethnic rich usually was able to freeze out the policy initiatives
of the party’s liberal-labor coalition through its control of congressional
committees, although there was a time (1940 to 1975) when labor
unions had significant influence on the Democrats. When that alliance
broke down on certain issues because the machine Democrats sided
with the liberals and labor, then the Southern Democrats joined
with Northern Republicans to create the “conservative coalition,”
AKA “the conservative voting bloc,” wherein a majority of Southern
Democrats and a majority of Northern Republicans voted together
against the Northern Democrats. This conservative coalition most
often formed around the issues that reflect class conflict in the
legislative arena – civil rights, union rights, social welfare,
and business regulation. Legislation on any of these issues weakens
employers in the face of workers and their unions, so it is not
surprising that the conservative coalition is based on the shared
interests of Northern and Southern employers. This alliance won
far more often than it lost in the years between 1937, when it was
formed, and the 1990s, when it disappeared for the simple reason
that many of the Southerners had become Republicans.

Once the Voting
Rights Act of 1965 was in effect, the Democratic Party was slowly
changed because African-Americans in the South were able to vote
against the worst racists in the party primaries. The gradual industrialization
also was causing changes. As a result of these two forces, Southern
whites started to move into the Republican Party, which thus became
the party of wealthy employers in both the North and South. In that
context, the Democratic Party is slowly becoming what many always
thought it to be, the party of liberals, minorities, workers, and
the poor.

In summary,
the special-interest process, policy-planning process, and campaign
finance make it possible for the power elite to win far more often
than it loses on the policy issues that come before the federal
government. The power elite is also greatly over-represented in
appointed positions, presidential blue-ribbon commissions, and advisory
committees within the government. In terms of both the “who wins”
and “who governs” power indicators, the power elite dominates the
federal government.

However, this
domination does not mean control on each and every issue, or lack
of opposition, and it does not rest upon government involvement
alone. Involvement in government is only the final and most visible
aspect of power elite domination, which has its roots in the class
structure, the nature of the economy, and the functioning of the
policy-planning network. If government officials did not have to
wait on corporate leaders to decide where and when they will invest,
and if government officials were not further limited by the acceptance
of the current economic arrangements by the large majority of the
population, then power elite involvement in elections and government
would count for a lot less than it does under present conditions.

Why Business
Leaders Feel Powerless

Despite these
various kinds of objective evidence that the power elite has great
power in relation to the federal government, many corporate leaders
feel that they are relatively powerless in the face of government.
To hear them tell it, Congress is more responsive to organized labor,
environmentalists, and consumers. They also claim to be harassed
by willful and arrogant bureaucrats. These negative feelings toward
government are not a new development, contrary to those who blame
the New Deal and the social programs of the 1960s. A study of businessmen’s
views in the 19th century found that they believed political leaders
to be “stupid” and “empty” people who went into politics only to
earn a living, and a study of businessmen’s views during what are
thought of as their most powerful decade, the 1920s, found the same
mistrust of government.

The emotional
expressions of business leaders about their lack of power cannot
be taken seriously as a power indicator, for that confuses psychological
uneasiness with power. Feelings are one thing, the effects of one’s
actions another. But it is nonetheless interesting to try to understand
why businessmen complain about a government they dominate. First,
complaining about government is a useful political strategy. It
puts government officials on the defensive and forces them to keep
proving that they are friendly to business. Second, businessmen
complain about government because in fact very few civil servants
are part of the upper class and corporate community. The anti-government
ideology of the United States tends to restrain members of the upper
class from government careers except in the State Department, meaning
that the main contacts for members of the power elite within government
are at the very top. There is thus uncertainty about how the middle
levels will react to new situations, and therefore a feeling that
there is a necessity to “ride herd” on or “reign in” the potentially
troublesome “bureaucrats.”

There also
seems to be an ideological level to the business leaders’ attitudes
toward government. There is a fear of the populist, democratic ideology
that underlies American government. Since power is in theory in
the hands of all the people, there always is the possibility that
someday “the people,” in the sense of the majority, will make the
government into the reflection of pluralist democracy that it is
supposed to be. In a certain very real way, then, the great power
of the upper class and corporate community are culturally illegitimate,
and the existence of such power is therefore vigorously denied.
It is okay to be rich, and even to brag about wealth a little bit,
but not to be powerful or, worse, to flaunt that power.

Finally, the
expressions of anguish from individual corporate leaders concerning
their powerlessness also suggests an explanation in terms of the
intersection of social psychology and sociology. It is the upper
class and corporate community that have power, not individuals apart
from their institutional context. As individuals, they are not always
listened to, and they have to convince their peers of the reasonableness
of their arguments before anything happens. Moreover, any policy
that is adopted is a group decision, and it is sometimes hard for
people to identify with group actions to the point where they feel
personally powerful. It is therefore not surprising that specific
individuals might feel powerless.

The Weaknesses
of the Working Class

There are many
democratic countries where the working class – defined as all
those white-collar and blue-collar workers who earn a salary or
a wage – has more power than it does in the United States.
This power is achieved primarily through labor unions and political
parties. It is reflected in more egalitarian wealth and income distributions,
a more equitable tax structure, better public health services, subsidized
housing, and higher old-age and unemployment benefits.

How is it possible
that the American working class could be relatively powerless in
a country that prides itself on its long-standing history of pluralism
and elections? There are several interacting historical factors.
First, the “primary producers” in the United States, those who work
with their hands in factories and fields, were more seriously divided
among themselves until the 1930s than in most other countries. The
deepest and most important of these divisions was between whites
and African-Americans. In the beginning, of course, the African-Americans
had no social power because of their enslavement, which meant that
there was no way to organize workers in the South. But even after
African-Americans gained their freedom, prejudices in the white
working class kept the two groups apart.

This black/white
split in the working class was reinforced by later conflicts between
craft workers – also called “skilled” workers – and industrial
workers – also called mass-production or “unskilled” workers.
Craft workers usually tried to keep their wages high by excluding
industrial workers. Their sense of superiority as skilled workers
was reinforced by the fact that they were of Northern European,
Protestant origins and the industrial workers tended to be Catholics
and Jews from Eastern and Southern Europe. Some African-Americans
were also found in the ranks of the industrial workers, along with
other racial minorities.

It would have
been difficult enough to overcome these divisions even if workers
had been able to develop their own political party, but they were
unable to develop such a party because the electoral system greatly
disadvantages third parties. Workers were stuck. They had no place
to go but the Republicans or Democrats. In the late 19th and early
20th centuries the craft workers often supported the Democrats,
while the recent immigrant industrial workers tended to support
the Republicans. Even when craft and industrial workers moved into
the Democratic Party en masse in the 1930s, they couldn’t control
the party because of the power of the wealthy Southern planters
and merchants.

Nor did the
workers have much luck organizing themselves through unions. The
employers were able to call upon the government to crush organizing
drives and strikes through both court injunctions and police arrests.
This was not only because employers had great influence with politicians
then, just as they do now, but because the American tradition of
law, based in laissez faire (free market) liberalism, was so fiercely
opposed to any “restraint of trade” or “interference” with private
property. It was not until the 1930s that the liberal-labor coalition
was able to pass legislation guaranteeing workers the right to join
unions and engage in collective bargaining. Even this advance was
only possible by excluding the Southern workforce – i.e., agricultural
and seasonal labor – from the purview of the legislation. Further,
the passage of the legislation had only limited impact because the
industrial unions were defeated almost completely in the South and
Southwest. Unions thrived in a few major industries in the North
in the years after World War II, but then their power was eroded
beginning in the 1970s as the big corporations moved their factories
to other countries or lost market share to European and Japanese
companies.

Given this
history of internal division, political frustration, and union defeat,
it is not surprising the American workers continue to accept the
highly individualistic ideology that has characterized the United
States since its founding. This acceptance in turn makes it even
more difficult to organize workers around “bread-and-butter” issues.
They often vote instead on the basis of social issues or religious
convictions, with those who are deeply religious, opposed to affirmative
action, or opposed to gun control voting for the avowedly anti-union
Republican Party.

Thus, it is
important not to confuse freedom with social power. Between 1962
and the 1990s there was a great expansion in individual rights due
to the civil rights, feminist, and lesbian-gay movements, but during
that time the ratio of a top business executive’s pay to a factory
worker’s pay increased from 41 to 1 to about 300 to 1. American
workers can say what they want and do what they want within very
broad limits, and their children can study hard in school so they
can go to graduate school and join the well-off professional class
as doctors, lawyers, architects, or engineers, but when it comes
to social power most Americans have very little of it if they are
not a part of the power elite.

Community
Power

Not all power
is wielded at the national level. For more on local power, click
here
.

Conclusion

The argument
over the structure and distribution of power in the United States
has been going on within academia since the 1950s. It has generated
a large number of empirical studies, many of which have been drawn
upon here. In the final analysis, however, scholars’ conclusions
about the American power structure depend upon their beliefs concerning
power indicators, which are a product of their “philosophy of science.”
That sounds strange, I realize, but if “who benefits?” and “who
sits?” are seen as valid power indicators, on the assumption that
“power” is an underlying social trait that can be indexed by a variety
of imperfect indicators, then the kind of evidence briefly outlined
here will be seen as a very strong case for the dominant role of
the power elite in the federal government.

If “who wins?”
on a wide range of government decisions is seen as the only valid
indicator of power, and if it is expected that the power elite must
win every time, which is the stance adopted by pluralist theorists
on the basis of a “strict positivist” view of how power must be
measured, then the argument presented here, based on a “soft positivism,”
will be seen as less impressive. That’s because those relatively
few of us who disagree with the pluralists have not yet had the
time and the resources to do enough case studies within the framework
of the special-interest and policy-planning processes to show the
full range of power elite dominance on policy issues. A good start
has been made in this direction, but it will take more to convince
the skeptics.

Reprinted
with permission from WhoRulesAmerica.com.

See also:
The
Left and the Right In Thinking, Personality, and Politics

References

Kendall, D.
(2002). The
Power of Good Deeds: Privileged women and the social reproduction
of class
. Lanham, MD: Rowman and Littlefield.

Wrong, D. (1995).
Power:
Its Forms, Bases, and Uses
(2nd ed.). New Brunswick: Transaction
Publishers.

December
4, 2010

 

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