Sunday, February 24

Who Rules America

A substantial number of Americans, some two-thirds, view the government as being "run by a few big interests looking out for themselves." The results of the University of Michigan's poll raises an important question, one which cannot be easily dismissed by pundits who try to cast an illusion of American democracy; a nation ruled "by the people for the people". Just who rules America? In his class relations study, Michael Zweig found that the majority of Americans are in the working class. So It should come as no surprise that 60% of Americans feel alienated from economic and political decision making when, as Zweig estimates, it makes up 60 percent of the U.S. workforce.

Modern capitalistic society is characterized by three main classes: an elite and small capitalistic class who own and manage large income-producing properties; i.e., corporations, banks, real estate and agri-businesses, a large working class who do not have their own means of earning a livelihood and must sell their labor power to earn an income, and a middle class of professionals, entrepreneurs, and managers that reside between the two. So just who rules America? Who are the "big interests looking out for themselves? They are as G. William Domhoff states are "the owners and managers of large income-producing properties; i.e., corporations, banks, and agri-businesses, along with the the managers and experts they hire".

The Social Upper Class
Michael Useem in The Inner Circle states, "The upper class consists of the social network of established wealthy families whose status is preeminent , whose culture and identity are distinct, and whose membership is closed to nearly all but those of proper descent". Generally speaking, wealth can be defined as the ownership of marketable assets such as stocks, bonds, and real estate. Income is the amount of wages, dividends and interest paid out to an individual yearly. The people commanding the greatest wealth and highest income are part of the upper class. The .5 to 1 percent of the population that makes up the upper class is also the .5 to 1 percent who owned 39.7 percent of the financial wealth in 2001.

Financial Wealth
Top 1 percentNext 19 percentBottom 80 percent

The upper class has it's own exclusive social institutions which include private schools, summer resorts and retreats, and social clubs and gatherings. Large and well known Ivy League schools such as Harvard, Yale, Princeton, Columbia and Standford are heavily populated and favored by the upper class in receiving distinctive education. As a result, social clubs also play a unique role in differentiating members of the upper class from other members of society. Membership into these clubs can range from a few to tens of thousands of dollars, as well as being subject to a rigorous screening process. The Links in New York, Pacific Union in San Francisco, Chicago Club in Chicago and the infamous Bohemian Club in San Francisco are a few social clubs with a high concentration of members from the corporate community. The 25 largest industrials have one or more directors as members in one or more of these clubs. Highlighting how the upper class is closely interwined with the corporate community.

The Corporate Community
The nationwide upper class is not only a social class but a economic class deeply rooted in the corporate community. G. William Domhoff states, "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". Chase Manhattan Bank has 45 such connections to other corporations and financial institutions, Wells Fargo Bank has 41 and General Motors 33.

Exxon, the world's largest oil company, contains a large concentration of "interlocking directors". For example, according to Endgame, James R Houghton is not only on the board on Exxon, but is also Chairman and CEO of Corning Inc, on the boards of MetLife, Inc, Corning Museum of Glass, Metropolitan Museum of Art, Pierpont Morgan Library, Harvard Corporation, member of Business Council and Council on Foreign Relations.


This highlights the fact that despite competition among the corporate community, there exists cohesion due to their opposition to the liberal labor coalition, anti-corporation and anti-globalization activists, leftists and environmentalists, which derives from their common goals and values and pursuit of profit.

The Policy Formation Network
The corporate community and upper class are supplemented by a wide range of nonprofit organizations such as think tanks, foundations, and policy discussion forums, which itself forms a policy formation network. These institutions play a critical role in creating debates over public policy and in shaping public opinion. The corporate community and upper class have the ability to dominate these organizations due to the fact they were founded by members of the upper class and are funded by large corporations. The Ford Foundation, the Rockefeller Foundation and the Carnegie Corporation are the most highly influential of foundations. Brookings Institute, The American Enterprise, Business Council, Business Roundtable and the Urban Institute are a few of the more important think tanks and policy groups. In fact, the Business Roundtable was highly influential on the corporate community victory of NAFTA. Policy discussion groups bring together directors, managers, government officials and other wealthy or influential people to discuss local and international issues, as well as political, social and economic issues. These groups frame the debate and set the terms for new economic, foreign and other policies.

So Who Rules America?
Despite competition among the corporate community and threats of hostile takeovers, there exists a cohesion rooted in a strong class consciousness which derives from profit motives and capitalist class interests. "Through open and direct involvement in policy planning, through participation in political campaigns and elections, and through appointments to key decision-making positions in government" the upper class are able to rule America and influence decisions affecting the bottom 80% of the population. This power stems from their great concentration of wealth which is derived from ownership and control of large income proudcing corporations. As Domhoff states allowing corporate leaders to "invest money where and when they choose; expand, close, or move their factories and offices at a moment's notice; and hire, promote, and fire employees as they see fit. These powers give them a direct influence over the great majority of Americans, who are dependent upon wages and salaries for their incomes. They also give the corporate rich indirect influence over elected and appointed officials, for the growth and stability of a city, state, or the country as a whole can be jeopardized by a lack of business confidence in government."

Suggested Reading:
Who Rules America by G. William Domhoff
The Inner Circle: Large Corporations and the Rise of Political Activity in the U.S. and U.K. by Michael Useem
The Founding Fortunes: An Anatomy of the Super-Rich Families in America. by Michael Allen
Top Down Policymaking by Thomas Rye
The Power Elite. C Wright Mills
Democracy for the Few Michael Parenti