|
Links |
|
Links |
|||
|
|
Corporations | ||||
|
|
The Corporate Class: Social Power | ||||
|
|
The Corporate Class: Economic Power | ||||
|
|
Corporate Power | ||||
|
|
Banking | ||||
|
|
Govt Econ Policy | ||||
|
|
Market Concentration | ||||
|
|
Interlocking Directorates | ||||
|
|
The Corporate Class: Political Power | ||||
|
|
The Upper Class: Lobbying | ||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Links |
|
Links |
|||
| Review: Table of Nine Classes in the Modern Industrialized Nations ( Primarily the US ) |
|
||||
|
|
Table of the Convergence of Occupation, Bureaucratic & Property Divisions of Class Categories | ||||
| There are SIX bases of power of the upper & corporate classes | |||||
| An important question for social theorists is, "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 |
|||||
| Most social theorists believe that there has been a managerial revolution | |||||
| Despite the fact that the Upper Class owns the majority of commercial paper, Berle & Means, & Zeitlin believe that the upper class no longer control the corporations the way they once did because 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 wields more power because a. Corporate managers are "insiders" b. Interlocks give corporate managers network power |
|||||
| The Upper Class lost majority control of corporations because of the wider distribution of stock ownership | |||||
| Although the board may not represent the upper class as much as it once did, the new players on the board are frequently other corporate managers, i.e. the corporate class | |||||
| The corporate class owns the largest share of stock, nearly half, & the UMC, et al, have bought about 1 % | |||||
| Corporate size is steadily increasing | |||||
| In 1995 there were 202,000 industrial corporations in US | |||||
| 100 corporations control 75% of all corporate assets | |||||
| The list of the largest US corporations is called the The USA 500 |
|
||||
| The list of the largest corporations in the world is called the The Global 500 |
|
||||
| See Also: Corporations | |||||
| The largest 100 corporations control over 75 % of all assets in 2000
1950 40 % 1960 44 1965 47 1970 52 1980 55 1985 70 1993 75 |
|||||
| Bigger does not necessarily mean better: In the US, economic productivity, R & D spending, & share of world market all declined in the 70s & 80s, but in the 90s they met or exceeded international competition | |||||
| US had the highest rate of industrial fatal accidents
US workers have less influence in corporations than other industrialized nations US workers have fewer benefits than other workers US workers are the easiest to lay-off or down-size US corporate tax rate is lowest US has largest income gap btwn executives & workers |
|||||
| It is usually argued that the reason for bigger corporations is to increase efficiency, but research has shown that corporate efficiency is not significantly higher after a merger & that corporations have other rationales for merging | |||||
| Reasons for corporate growth are that they allow corporations to increase market share, destroy competition, increase control over suppliers, & influence the govt. | |||||
|
|
Market control, oligopolies and oligopsonies allow 3500 people ( the economic elites ) to control over half of the nation's corporate assets | ||||
| An analysis of corporate interlocks found that 21 investors controlled half of the top 5 Board voting positions in 11 banks, 5 investment companies, 4 insurance companies, by 1 family, the Kirby family | |||||
| There were 12,345 banks in the US in the 1990's & a small number
wield an enormous amount of power
In the 1990s, 30 banks controlled 52% of all assets In the 1990s, 50 banks controlled 52% of all assets |
|||||
| The Morgan Bank has 1 of the top five votes on the Board of Directors in half of top 122 corps | |||||
| JP Morgan Webpage |
|
||||
| The proportion of corporate stock held by industry or family is declining while the proportion of institutional investors are increasing | |||||
| And the concentration of control can go beyond that indicated by interlocking votes: just sitting on the board of several large corporations makes one an important networker | |||||
| While banks have a lot of influence, it's not independent influence, since they all own interest in each other | |||||
| Thus a few economic organizations control much of the economy | |||||
| Some corporations are more tightly clustered into cliques than others, but banks are usually at or near the center of these power blocks |
|
||||
| And banks cooperate as much as they compete: | |||||
| In 1984, a coalition of 16 banks, lead by Morgan Bank, who was the top stockholder in Continental Illinois Bank and Citibank, loaned $4.5b to Continental Illinois Bank & was guaranteed to be repaid by the govt, to prop up the bank | |||||
| Banking & the financial industry is becoming globalized, thus creating a global elite | |||||
| On average, corporate boards of directors have 12 people who control the corporation | |||||
| The board of directors has the authority to:
- hire & fire management - set broad policy - approve acquisitions/divestitures - bring initiatives to the stockholders, or not |
|||||
| Board members come from inside corporate management, outside the corporation but inside the corporate network, & from outside the network | |||||
| Compared to board members, most individual stockholders are widely dispersed & have minor amounts of stock | |||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Links |
|
Links |
|||
| - Project: Interlocking Directorates |
|
||||
| In advanced capitalism, most corporations are interlocked | |||||
| Interlocks, a.k.a., interlocking directorates, occur when corporate directors sit on the boards of several corporations, & thus interlock them together | |||||
| Interlocking directorates are an example of a powerful type of interorganizational relationship (IOR) where a member or members of the boards of directors or trustees of one org also serve on boards of other orgs | |||||
| Much of the upper class has been reduced to "investor status" while the corporate class wields even more power than their % of ownership indicates | |||||
| 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 corps | |||||
| There are direct & indirect interlocks among corps | |||||
| Direct interlocks occur when a board member sits on the boards of two or more corporations, linking them | |||||
| Indirect interlocks are two corporations tied by their board members through a third corporation | |||||
| Direct interlocks between competing corporations such as Wendy's & McDonalds are illegal, but both may own frozen food processing corporations | |||||
| The structure of the corporate class is one of interlocking directorates
giving unity & class consciousness in 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 mkt 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 |
|||||
| On average, corporate boards of directors have 12 people who control the corporation | |||||
| The board has the
- authority to hire & fire management - set broad policy - approve acquisitions/divestitures |
|||||
| Board members come from inside corp mgt, outside the corp but inside the corporate network, & from outside the network | |||||
| Compared to board members, most individual stockholders are widely dispersed & have minor amounts of stock | |||||
|
|
There are ELEVEN major effects of interlocking directorates
The effects of interlocking directorates are to: 1. reduce competition & generally increase cooperation 2. increases econ concentration 3. represent outside influences 4. share info: the business or envl scan: SWOT 5. provide unity ( like other networking devices ) 6. provide "coordination" in the economy 7. provide unity in corp dealings w/ govt 8. increases influence over govt 9. secure good relations w/ sources of capital 10. maintain or create mkt relations w/ other firms 11. provide another means ( in addition to stock control and credit ) for board influence ( used extensively by banks ) |
||||
|
|
Allen found that the top 250 corporations averaged 10 interlocks |
|
|||
| A study by US Senate Committee on Govt. Affairs ( SCGA ), 1978, found that each of the top 123 corps was linked w/ 62 others [This is the most recent, exhaustive, govt analysis] | |||||
| The SCGA found that the largest 13 corps had links w/ 70 % of other corporations | |||||
| In 1989 the top 1% of the population owned
- 47 % of all stock - 73 % of all bonds - 53 % of all trusts |
|||||
|
|
Allen demonstrates that interlocks create the possibility for financial corporate dominance |
|
|||
| The inner group of the corp class is made up of elite board
members & top corporate officers
The ELEVEN qualities of the inner group are that they 1. tend to have more positions on corporate boards 2. are more likely to be board members on large corps 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 corp interest in other institutions: foundations, universities, govt, etc. 7. like most interlocks, are accounted for by a relatively small number of people 8. tie large corps more closely together 9. represent one set of common interests in the political environment 10. are international players 11. are more able to speak for corp interests as a whole rather than just one corporation |
|||||
| In 1913 Sup Ct Justice Louis Brandeis warned that interlocks contain many evils, such as the suppression of competition | |||||
| Interlocks are seen as the means by which elites maintain their position & exercise societal control | |||||
| Interlocks, like any IOR, help orgs control uncertainties & are a valuable source of info | |||||
| In the basic form of an interlock, a an officer or member of the board of directors of one org is a member of the board of another org | |||||
| Another form of an interlock is where members of two orgs sit on the board of a third org | |||||
| Since orgs cannot merge w/ all orgs because of limited resources & fed merger restrictions, an interlocking board of directors is an indirect way to link orgs | |||||
| Interlocking directorates provide opportunities for collusion, co-optation, monitoring, legitimacy, career advancement, & social cohesion | |||||
| Financial instits are the dominant actors in the network set of interlocking directorates | |||||
| Commercial banks, & ins corps are the most likely to have their members of the boards of other types of orgs | |||||
| Some theorists conclude that the corp sys is dominated by a handful of NY fin instit | |||||
| In the past, railroads were at the center of the network set of interlocking directorates | |||||
| Railroads, telegraphy & coal corps were at the core of the network set of interlocking directorates in the past, circa 1886 to 1905 | |||||
| RRs were very powerful as the US industrialized & moved west | |||||
| Interlocks allow orgs to manage uncertainty in their envs | |||||
| Interlocks provide access to resources & can influence decisions | |||||
| Some orgs mandate an interlock w/ another org, thus lowering the autonomy of the latter org | |||||
| Interlocks are purposive for all the parties involved | |||||
| Orgs that are experiencing fin probs may seek out director from a bank, & conversely, banks seek out directors from corps that are expanding & may need capital | |||||
| Public orgs such as colleges also seek out interlocks from local political & community orgs | |||||
| Orgs in the public sector engage in the same kinds of interlocks through their boards | |||||
| Interlocks are affected by local ties through the interactions at upper class clubs, or the presence of corp headquarters | |||||
| In 1980, of the 797 largest US firms, only 62 had no interlocks & there were a large number of fin instits interlocked | |||||
| Interlocks are the most common in concentrated industries where monopolies exist or almost exist | |||||
| Highly interlocked firms have greater econ effectiveness | |||||
| Interlocks are used to prevent hostile takeovers | |||||
| The poison pill defense against a hostile takeover gives a network of stockholders, usually dev in relation to the interlocks of all involved corps, the opportunity to buy the corps stock at a discount | |||||
| W/ the poison pill defense, the option to buy discounted stock spreads rapidly through the network set & prevents the hostile takeover | |||||
| Some studies have found that interlocks do not constrain one another across industries, only w/in industries | |||||
| Social status w/in a community is imp for interlocks in that the socially elite individuals who are assoc w/ large corps are disproportionately more represented on other boards | |||||
| Orgs tend to interlock w/ those of equal social standing | |||||
| Both econ "clout & grace" contribute to the densest interlocks because these attributes make board members attractive to one another | |||||
| Some believe that the power of boards is limited, relying on the managerial thesis to support their view that mgrs, not boards are in control of corps today | |||||
| Often, the CEO & other top tier mgrs have more knowledge of the op of the org than do board members | |||||
| On the other hand, the board can replace mgt | |||||
| The presence of external influences was found to have little influence on a board or the mgt of the org | |||||
| But the board of a corp is the apex of pwr in the org & there is a natural jousting for power | |||||
| Top mgrs want to maintain their pwr & prefer a passive board while active boards want a mgt who will faithfully execute their directives | |||||
| Since the corp scandals of the early 00s, i.e. Envron & WorldCom being the two largest corp scandals in hist, Congress has enacted legislation making directors more responsible, & more liable, for the ops of their corps | |||||
| The legislation enacted by Congress to limit corp corruption has served to increase the power & reach of boards | |||||
| Ornstein (1984) concluded that corp imperatives & class solidarity factors op in interlocks encouraging them to make decisions in the interest of the up class | |||||
| Kerbo & Fave (1983) found that an intercorp complex of major corps, w/ banks in a central coordinating position formed an inner group of the corp class that provides the human linkages | |||||
| Kerbo & Fave found that in the 1980 Congressional elections that corp contributions to PACs were based on ideological conservatism | |||||
| PAC contributions in 1980 were based on interlocks as structured by class wide rational actions | |||||
| Class interests are exercised through powerful orgs in mod society which are structured around interlocking directorates | |||||
| In 92 Mizruchi examined 1576 dyads among 57 large mfr firms & found that membership in the same industry was related to similarity of pol behavior | |||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Links |
|
Links |
|||
| - Supplement: Gates' Lobbying |
|
||||
| THE ACTORS IN THE POLICY PROCESS | |||||
There are many "Players' or actors in the policy formation
process, that lobby & produce policy documents
|
|||||
| Each policy actor has a direct role in making policy, & lobbying the other players | |||||
| Miscellaneous interest groups (e.g. envl groups, gun groups, anti- & pro- abortion, etc.) & the general public (& organized publics) have input through letters, phone, email, direct contact: spontaneous or "solicited" | |||||
| Interest groups & the general public (& organized publics) sometimes produce policy documents as do the "players" discussed above, but more often they simply lobby by voicing their opinion | |||||
| See Also: The Policy Formation Process ( Making Law ) | |||||
| See Also: Participants in the Envl Debate | |||||
| CONGRESSIONAL LOBBYING IS WHERE MOST LOBBYING OCCURS | |||||
| Congressional lobbying is a high stakes, risky "business" | |||||
| In the past, all Congressmen had safes in their offices where they kept the money lobbyists gave them | |||||
| Today, the distinction btwn lobbyist & contributor is wider; only that there is no quid pro quo | |||||
| In 1990, there were more than 6,800 congressional lobbying groups in the US, however most of them tend to represent certain groups of interests, such as Domhoff three key interest groups | |||||
|
|
Lobbyists are all registered: There are 8000 registered lobbyists in the mid 1990s |
|
|||
| In 2005, there were more than 14,000 registered lobbying groups in Washington, DC, averaging just over two employees each for a total over 30,000 lobbyists (many lobbying firms are small) | |||||
| In 2005, there were approximately 30,000 members of Congress & staff members, making the ratio of lobbyists to officials on the Hill nearly 1 to 1 | |||||
| In the early 90s the total value of earmarks added to bills was under $100 mm, while in 2005 the value was over $32 bb | |||||
| Because of corporate influence on govt, there is an inverse relation of corporate size & the amount of taxes paid | |||||
| ENVL LOBBYISTS PERFECTED LOBBYING FOR INTEREST GRPS | |||||
| Since the late 1960s, the envl mvmt developed lobbying & political tactics for interest groups, NGO's, etc. | |||||
| W/ the dawn of the envl mvmt in the 1960s, the envl mvmt first focused on passage of fed envl laws, e.g. lobbying Congress | |||||
| Today, the envl mvmt plays a greater role: | |||||
| a. in the implementation of envl regs | |||||
| b. court cases about the env | |||||
| c. w/ state laws, implementation & court cases | |||||
| INDL LOBBYISTS HAVE A VERY LONG RECORD OF LOBBYING | |||||
| Industry groups developed counter interest groups of lobbying & political tactics | |||||
| In the past, industry appeared to give up after the policy adoption stage, i.e. law making, only to come back during implementation | |||||
| Now, like the envl mvmt, industry struggles w/ policy at all levels | |||||
| Industry has attempted to keep the envl mvmt out of the rule making & implementation processes by limiting public access to rule making | |||||
| THE GOVT IS THE TARGET OF LOBBYING | |||||
| In the rule making process, a person must show standing by showing continuing interest in a project or by showing a material interest | |||||
|
|
Participation is difficult due to short comment periods on proposed rules; usually 30 days | ||||
|
|
After Reagan's govtl downsizing of the govt, agencies & commissions are often ill equipped & under funded when it comes to implementing policy |
|
|||
|
|
Most govt agencies are ill equipped to handle public comment, & this is a place where social scientist are useful in govt. |
|
|||
|
|
Most govt. agencies are heavily lobbied at all stages of the implementation process & thus try to find "legal peace" among conflicting parties |
|
|||
|
|
Most people & agencies in govt. ( Congressmen & women, Reps, etc. ) all respond similarly to lobbying by seeking legal peace & compromise among the parties |
|
|||
| In seeking compromise, govt agencies often seek simply to end the conflict rather than finding the most just outcome that may reduce conflict, but not totally end it | |||||
| In seeking less than optimally just outcomes, & instead pursing legal peace, govt agencies are eschewing their responsibility to the greater good, ignoring the fact that they too are a player in the public policy formulation process & not merely a broker | |||||
|
|
The policy implementation is a slow, minutely focused, incremental process |
|
|||
|
|
Rules, procedures, etc. change, minutely, year by year, month by month, even day by day |
|
|||
| EXAMPLES OF LOBBYING ON ENVL ISSUES | |||||
| THE SALVAGE LOGGING RIDER | |||||
| In the salvage logging example, lobbyists lobbied over the definition of a dead tree |
|
||||
|
|
1994 was a big wildfire season & therefore in the fall of 1994 & spring & fall of 1995, salvage logging of the burned trees became a priority, which was strongly lobbied |
|
|||
|
|
As a result of lobbying, the Salvage Logging Rider ( SLR ) was passed after the devastating 1994 fire season |
|
|||
|
|
While there was considerable lobbying around the passage of the SLR itself, lobbying continued throughout the formation of the agency rules to implement the law as seen in the counting of "dead" trees, which may be salvage logged | ||||
| The players in the SLR policy debate developed policy because there was no "science" on determining when a tree is dead | |||||
| The players in the SLR policy debate knew that if you wait too long, dead trees cannot be harvested | |||||
| W/ the SLR there was approximately a 1 year window to salvage the burned timber before the wood became too rotten | |||||
| W/ the SLR FS personnel, loggers, & envlists argued about the criteria such as 'what % of each species of tree can be brown & it is still likely that the tree will survive?' | |||||
| In the SLR policy debate, 3 parties argued over actual measurement of brown needles on fire damaged trees | |||||
| W/ the SLR the FS, the logging corps, & the envlist went to court & a compromise was reached over how to define a dead tree | |||||
| Compromises in policy are often based as much on politics as science | |||||
| The implementation of salvage logging changed day by day as either logging corps or envl group members "worked w/" FS officials in the office or out in the field | |||||
| FOREST HEALTH | |||||
|
|
In 2002 & 2003, an example of a public policy debate included the proposed Forest Health Legislation | ||||
| In the 2002/03 proposed Forest Health Legislation, the public policy issue was whether the forest was overgrown because of wildland fire suppression | |||||
| Public policy explored whether the problem of forest health existed & how it could be fixed | |||||
| The solutions to forest health, whether the problem exists or not included burning, mechanical thinning, logging, some combination of the above | |||||
| The forest health public policy debate explored where should the problem be addressed, including in the WUI, in the back country, in particular areas chosen according to particular criteria, etc. | |||||
| The forest health public policy sought to define WUI, by for example, determining whether it included watersheds, rural zones, etc. | |||||
| Some players in the forest health public policy sought to exclude NEPA, public comment, & to include categorical exclusions ( CEs ) | |||||
| An example of a public policy debate included whether Microsoft is involved in accusations of monopolistic practices | |||||
| The example of the Microsoft public policy saw, for the first time, Microsoft "becoming involved in politics" by contributing $$$ to the Republican Party | |||||
The End
|