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Chapter 7: The Corporate Class |
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| Link | The Corporate Class: Social Power | Link | |||
| Link | The Corporate Class: Economic Power | ||||
| The list of the largest US corporations is called the The USA 500 | Link | ||||
| The list of the largest corporations in the world is called the The Global 500 | |||||
| Corporations | |||||
| Banking | |||||
| JP Morgan Webpage | Link | ||||
| Link | The Corporate Class: Political Power | ||||
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Table 5 - 3 The Convergence of Occupation,
Bureaucratic & Property Divisions of Class Categories
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| Class Categories | Occupation | Bureaucratic Authority | Property Relation |
| Upper Class | High | High | Owner |
| Corporate Class | High | High | Nonowner |
| Middle Class | High to Mid-Level | Mid-Level | Nonowner |
| Working Class | Mid-Level to Low | Low | Nonowner |
| Lower Class | Low | Low | Nonowner |
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Link | |||||
| Review of Stratification | Link | |||||
| Review of Class Analysis | Link | |||||
| Link | Table of Nine Classes in the Modern Industrialized Nations ( Primarily the US ) | |||||
| Link | The Convergence of Occupation, Bureaucratic & Property Divisions of Class Categories | |||||
| There are SIX Bases of power of the Upper & Corporate Classes:
1. Control of major means of production (corporations) 2. Size of major corps 3. Intercorporate network 4. Influence in politics 5. Power of the middle, working and lower classes is weak 6. Legitimation process: how we come to accept dominance |
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| The Upper Class in America experienced little loss of power after WW2
while it lost power in Germany & Japan |
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| Mills believes that the enlargement & centralization of
the means of production
has given elites greater influence over more people than at any time in history |
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| The Corporate Class' power lies in control of the major means of production, not ownership | ||||||
| $$, Status & Power are all shared between the Upper Class, the
Corporate Class
& even to some extent w/ the Upper Middle Class |
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| While there is some degree of Class Unity for the Upper Class,
there is significantly less for the Corporate Class. Yet there are still strong social & especially economic forces which create & maintain unity |
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| The Corporate Class participates less in common schools & clubs than do the Upper Class | ||||||
| But the primary fracture among the Upper Class, Corporate Class or any class is competition | ||||||
| The social currents that divide the Middle and Working Classes
also divide the Corporate Class,
but effect the Upper Class to a lesser extent |
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| The diversity of the Corporate Class, who are drawn from the Middle
& Lower Classes,
has reduced the cohesion & conformity of the exclusive schools & clubs & even the Social Register, thus breaking down barriers among the classes |
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| One can often visibly determine the difference between the Upper Class & the Corporate Class | ||||||
| The Corporate Class may be thought of as a class for EIGHT reasons:
1. common economic interests 2. they possess unity 3. there is intra-class organization 4. they can recognize class interest 5. they have the means to dominate the economic & political system 6. their power lies not in ownership of means of production, but control 7. the Corporate Class may have intra-class competition, but they also have common interests, views, values which they pursue 8. defined as group holding key positions of authority in major corporations |
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Link | |||||
| Does the Upper Class's Ownership equal Economic Control?
A study by US Senate Committee on Govt. Affairs in 1978 ( SCGA ) examined many of these issues 13 of top 122 corps were controlled by one family & in 1989 the top 1% owned 47% of all stock 73% of all bonds 53% of all trusts |
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| There has been a Managerial Revolution | ||||||
| The Managerial Thesis holds that
1. The Upper Class & the Corporate Class each hold about half of all stock 2. The Corporate Class wield more power because a. Corporate Managers are "insiders" b. Interlocks given Corporate Managers network power |
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| Corporate Size is steadily increasing | ||||||
| There are FOUR fundamental types of corporations:
1. industrial 2. transportation 3. communications 4. finance ( banks & insurance companies ) |
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| The list of the largest US corporations is called the The USA 500 | Link | |||||
| The list of the largest corporations in the world is called the The Global 500 | Link | |||||
| The largest 100 corporations control over 75 % of all assets in 2000 | ||||||
| Bigger does not necessarily mean better: In the US, economic
productivity, R & D spending, &
share of world market all declined in 70s & 80s |
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| Market Control, oligopolies and oligopsonies allow 3500 people
( the economic elites )
to control over half of the nations corporate assets |
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| An analysis of corporate interlocks found that 21 investors
controlled half
of the top 5 Board voting positions |
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| There were 12,345 banks in the US in the 1990's & a small number wield an enormous amount of power | Link | |||||
| The Morgan Bank has 1 of top five votes in half of top 122 corps | ||||||
| JP Morgan Webpage | Link | |||||
| Some corporations are more tightly clustered into cliques than others,
but banks are usually at or near the center of these power blocks |
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| Banking & the financial industry is becoming globalized, thus creating a global elite | Link | |||||
| The concept of Interlocking Directorates holds that
the linking of two or more corporations through at least one of their board members increases power, control & networking of both corporations There are direct & indirect interlocks |
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| The structure of the Corporate Class is one of Interlocking Directorates
giving unity & class consciousness to the Corporate Class through SEVEN processes: 1. Owning stock in several other corporations Banks & insurance companies own stock in many other corporations 2. Influencing major corporations & government 3. Establishing economic concentration 4. Dominating the market through establishing a large market share, oligopolies or oligopsonies 5. Creating networks of directors & managers at the corporate level 6. Magnifying the size of major corporations through interlocks 7. Ranks are more permeable than the old Upper Class, allowing more networking |
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| On average, corporate Boards of Directors have 12 people who control the corporation | ||||||
| There are ELEVEN major effects of Interlock Directorates:
1. reduce competition ( increase cooperation ) 2. increases economic concentration 3. represent outside influences 4. share information: the business or environmental scan: SWOT 5. provide unity ( like other networking devices ) 6. provide "coordination" in the economy 7. provide unity in corporate dealings w/ government 8. increases influence over government 9. secure good relations w/ sources of capital 10. maintain or create market relations w/ other firms 11. provide another means ( in addition to stock control and credit ) for board influence ( used extensively by banks ) |
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| Allen found that the top 250 corporations averaged 10 interlocks
SCGA, 1978: each of top 123 corps was linked w. 62 others 13 largest corporations had links w/ 70 % of other corporations |
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| The Inner Group of the Corporate Class is made up of elite board
members & top corporate officers
There are ELEVEN qualities of the Inner Group 1. tend to have more positions on corporate boards 2. more likely to be board members on large corporations 3. often represent large banks on corporate boards 4. belong to social clubs 5. have worked way up rather than starting at the top 6. represent corporate interest in other institutions: foundations, universities, govt, etc. 7. most interlocks are accounted for by a relatively small number of people 8. Inner Group ties large corporations more closely together 9. represent one set of common interests in the political environment 10. international player 11. more able to speak for corporate interests as a whole rather than just one corporation |
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Link | |||||
| The Upper & Corporate Classes, when compared to other interest
groups,
are better able to ensure its interests are advanced/protected because of the concentration of political power in the US There power may or may not advance/protect or inhibit the interests of the rest of the society Note, democracy is the worst form of government there is, except for every other kind. Winston Churchill |
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| An example of the power of corporations & the Corporate Class &
the Upper Class in government
is the Guaranteed Loans the govt. gives to businesses |
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| Another example of the political power of the Upper & Corporate Classes is the tax structure | ||||||
| Chart on Three Paradigms on the Elites | ||||||
| The acceptance of any one of these paradigms is constantly shifting | ||||||
| Functionalists believe that ( aka Structural-Functionalism
)
1. All societies have elites 2. Society only manifests those aspects which are necessary for the advancement/ preservation of society 3. Elites are more necessary as society becomes more complex because: - complex production systems need supervision - widely diverse populations need a unifying force |
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| Parsons believes that the critical theorists like CW Mills
have the facts right
( the elites do control the economy ), but draws the wrong conclusions Parsons agrees that the elites use their power for the pursuit of self-interest, but this helps society Parsons advocates a stronger govt: the functional equivalent of an aristocracy |
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| Keller, another functionalist, believes that the power of the
elites is functional for all of society because
members of society by virtue of their psychological identification w/ the rich allows them to also feel rich, honored, & admired. |
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| Baltzell et al believe that the elites should be lead by the
old Upper Class
because of their Protestantism: society needs elites who have moral responsibility; these serve to check the abuse of power |
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| Critical Theorists posit FOUR qualities of Upper Class Political
Power
1. A moral order of individual interest 2. People come to internalize individualistic points of view 3. Society is made up of a setting for conflict & domination: it is NOT an integrated whole united by the elite 4. When one group is able to dominate, it pursues its own interests, often to the detriment of society |
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| Mills, in The Power Elite, believes the elites use their power
for the pursuit of self-interest, which hurts society in general |
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| Critical theorists believe that there are NINE
consequences of the
competition/domination by the elite:
1. poverty 6. energy crisis 2. poor health 7. worker alienation 3. industrial accidents 8. war 4. pollution 9. lower productivity & less efficiency in industry 5. lower level of industrial technology as compared to other nations |
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| Pluralism is widely accepted & posits FIVE major points
about the role of elites in society:
1. Elites exist as a relatively unified class 2. Elites do not have free reign w/ government, economy, etc., but are major players w/in in 3. Elites do not have independent power because leaders must be responsive to many organized interest groups from below 4. Elites activities are restrained not by traditions of service & honor, but by the counter-pressures from organized groups below elite level 5. Elites political power is actually available to all classes limited by their inclinations, free time, ability, etc. |
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| Dahl, who is a pluralist, believes that political resources
are anything
that can be used to gain influence, such as: $$$, credit, control over jobs, control over information, group solidarity, time, numbers of people Dahl believes that political resources are dispersed unequally throughout society: no one group has total control nor is without access to some power |
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| Most of what we examined applies to industrial society, which has moved toward greater equality | ||||||
| Return to UVaWise Webpage | Link |
| Return to Dr. W's Webpage | Link |
| Return to Stratification Syllabus, Fall 2001 | Link |
| Return to Course Resource List | Link |
| Return to Stratification Review List | Link |