Who Rules America? The Triumph of the Corporate Rich

273 Pages·2013·1.4 MB·English

by  G. William Domhoff

WHO
R U L E S
AMERICA?
THE TRIUMPH OF
THE CORPORATE RICH
SEVENTH EDITION
G. WILLIAM DOMHOFF
University of California, Santa Cruz
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WHO RULES AMERICA? THE TRIUMPH OF THE CORPORATE RICH,
SEVENTH EDITION
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Library of Congress Cataloging-in-Publication Data
Domhoff , G. William.
Who rules America? : the triumph of the corporate rich /G. William Domhoff , University of California,
Santa Cruz.—Seventh edition.
pages cm
Includes bibliographical references and index.
ISBN-13: 978-0-07-802671-3 (alk. paper)
ISBN-10: 0-07-802671-7 (alk. paper)
1. Elite (Social sciences)—United States. 2. Power (Social sciences)—United States. 3. Social
classes—United States. 4. Corporations—Political activity—United States. 5. United States—Politics
and government. I. Title.
HN90.E4D652 2014
305.5'20973—dc23 2013008437
Th e Internet addresses listed in the text were accurate at the time of publication. Th e inclusion of a
website does not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill
Education does not guarantee the accuracy of the information presented at these sites.
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Contents
Preface vi
Introduction x
1
Power and Class in America 1
What Is Power? 1
Th e Social Science View of Power 2
Th ree Power Indicators 4
What Is a Social Class? 8
Social Class According to Social Scientists 10
A Guide to What Follows 13
2
Th e Corporate Community 16
Th e Unexpected Origins of the Corporate Community 18
Th e Board of Directors 20
Th e Corporate Community 22
Th e Director Network as a Leadership Group 28
Th e Corporate Lawyers 29
From Small Farms to Agrifood Businesses 31
Small Business: Not a Counterweight 33
Local Businesses Form Growth Coalitions 36
Structural Power and Its Limits 39
3
Th e Corporate Community and the Upper Class 42
Is Th ere an American Upper Class? 44
Prepping for Power 46
Social Clubs 50
iii
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iv CONTENTS
Th e Feminine Half of the Upper Class 57
Dropouts, Failures, and Change Agents 59
Continuity and Upward Mobility 60
Is the Upper Class an Economic Class? 62
Th e Upper Class and Corporate Control 65
Where Do Corporate Executives Come From? 69
Th e Assimilation of Rising Corporate Executives 70
Class Awareness 72
4
Th e Policy-Planning Network 74
An Overview of the Policy-Planning Network 76
Corporate Interlocks with Th ink Tanks and Policy Groups 79
Foundations 81
Th ink Tanks 88
Th e Mixed Role of Universities in American Power Confl icts 91
Th e Policy-Discussion Groups 93
Th e Committee for Economic Development 98
Th e Liberal-Labor Policy Network 102
Th e Power Elite 104
Th e Policy-Planning Network in Perspective 106
5
Th e Role of Public Opinion 109
An Overview of the Opinion-Shaping Network 110
Striving to Shape Opinion on Foreign Policy 120
Trying to Shape Opinion on Economic Policies 122
Th e Power Elite and Social Issues 125
Th e Role of the Mass Media 126
Attempts to “Enforce” Public Opinion 129
When Public Opinion Can and Cannot Be Ignored 130
6
Parties and Elections 132
Electoral Rules as Containment Strategies 132
Electoral Constraints and Voter Suppression in America 133
How Growth Coalitions Changed Electoral Rules 135
How Elections Nonetheless Matter 136
Why Only Two Major Parties? 137
Republicans and Democrats 140
Party Primaries as Government Structures 145
Th e Big, Not Determinative, Role of Campaign Finance 146
Th e Obama Donor Network: A Case History 151
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CONTENTS v
Other Corporate Support for Candidates 155
Th e Liberal-Labor Alliance in Electoral Politics 157
Th e Results of the Candidate Selection Process 158
But Th ere’s Still Uncertainty 161
7
How the Power Elite Dominate Government 162
Th e Role of Governments 163
Th e Special-Interest Process 164
Th e Policy-Making Process 168
Appointees to Government 174
Th e First Obama Administration 175
Supreme Court Appointments 177
Th e Liberal-Labor Alliance and Congress 181
Corporate Complaints of Impotence: Th eir Real Fears 186
Th e Limits of Corporate Domination 189
8
Th e Big Picture 192
Why are the Corporate Rich So Powerful? 194
Th e Transformation of the American Power Structure 197
Power and Social Change 202
9
What Do Other Social Scientists Th ink? 203
Pluralism 203
Historical Institutionalism 208
Th e Organizational State Perspective 212
Elite Th eory 214
Finding Common Ground 218
References 221
Index 245
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Preface
Th is new edition of W ho Rules America? is completely updated to capture the
full sweep of the dramatic changes that occurred in the United States during the
fi rst 12 years of the twenty-fi rst century. Th ese changes represent nothing less
than the triumph of the corporate rich that own and manage the relative handful
of large banks, corporations, agribusinesses, and commercial real estate develop-
ments that dominate the American economy and government. Th e new edition
draws on recent studies by sociologists, political scientists, and experts working for
public interest groups and government agencies to update information on corpo-
rate interlocks, social clubs, private schools, and other institutions that foster elite
social cohesion. It also contains new information on the tax-free charitable foun-
dations, think tanks, and policy-discussion groups through which the corporate
rich strive to shape public policy.
To update and extend information on the large fl ow of money from cor-
porations and foundations to think tanks, policy-discussion groups, and opinion-
shaping organizations, the new edition draws on the grants section of the
Foundation Directory Online for invaluable compilations. It presents new evidence
based on public opinion surveys that better demonstrates the continuing disjunc-
ture between the liberal policy preferences of low- and middle-income Americans
on a variety of economic and foreign policy issues, and the lack of responsiveness
to those preferences on the part of the federal government in Washington.
Th is edition contains a more detailed explanation, rooted in a new study of
archival records, of why the moderate conservatives within the corporate commu-
nity became more conservative on key economic issues in the late 1960s and early
1970s, setting the stage for the Reagan administration and the increasing income
inequality that developed from the 1980s onward. It also explains how the rise of
the civil rights movement and divisions within the liberal-labor alliance unexpect-
edly made possible the right turn by a more united corporate rich.
Th e new edition uses the replacement of Republicans with Democrats in
the 2006 and 2008 congressional elections and the election of Barack Obama
to the presidency in 2008 and 2012 to show that elections can register citizen
discontent with political decisions. It also pays attention to the huge spurt in
vi
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PREFACE vii
campaign fi nance made possible by court decisions and various loopholes in the
laws governing campaign fi nance, which make it possible for the corporate rich to
funnel billions of dollars in anonymous donations to political action committees
for attack ads. Although the corporate rich have always found ways in the past to
circumvent attempts to limit campaign donations and make them more transpar-
ent, the 2010 and 2012 elections took these practices to astronomical levels.
In an eff ort to make the book more accessible to those with no background
in the theoretical debates that animate the social science literature, all discussion of
alternative theories are confi ned to a new last chapter. Th is approach allows read-
ers to see how the empirically based argument unfolds without any brief critical
asides that may be confusing or distracting. Th is change also may make it possible
for readers to better form their own judgments about theoretical controversies
because they will have seen the full empirical picture. It also allows readers—and
instructors—to skip the fi nal chapter without missing any part of the argument
and evidence presented in the fi rst eight chapters.
As before, the book is supplemented by a website at whorulesamerica.net . It
includes a library of online articles and chapters, and links to methodological tools.
Th e key documents on the site are noted at appropriate points in the book to remind
readers that further analyses on particular topics are available. A document pro-
viding detailed information on “Wealth, Income, and Power” is regularly updated
as new information becomes available. Th e website www.whorulesamerica.net
also houses methodological information on how to do power structure research at
both the national and local levels, as well a list of social indicators of upper-class
standing that are useful for research on the top 0.3 to 0.5 percent of the adult
population that constitute the social upper class. Moving these resources from
the book to the Web made it possible to include more detail on methodology for
those who want to do their own studies and at the same time have more space
in the book for discussing substantive issues of immediate interest to those new to
the topic of power.
Th e lengthy discussions of the origins of the Social Security and National
Labor Relations acts of 1935 in previous editions also have been moved to
whorulesamerica.net, which allows for in-depth historical discussions of the ori-
gins, implementation, and aftermath of these major legislative landmarks, as well
as for a discussion of the eff orts to expand or eliminate them between the 1940s
and 2010. Th is change makes it possible to provide more focus within the book
itself on recent events, such as the legislative failures of the liberal-labor alliance
during the 2009–2010 session of Congress.
Several decades ago, there was far more information available on the upper
class than there was on the corporate community. Th at situation is now completely
reversed due to the huge increase in the information about corporations available
on the Internet, along with the increasing reluctance of the corporate rich to list
their private schools and social clubs in Who’s Who in America and other sources. It
therefore makes sense to stress even more than in past editions that the corporate
community and the upper class are basically two sides of the same coin, so there
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viii PREFACE
is less emphasis on members of the upper class “controlling” the corporate com-
munity and greater use of the concept of a “corporate rich” to express this basic
unity of corporation and class.
Furthermore, in discussing the upper class in relation to power, the empha-
sis is on the social cohesion that is generated among the corporate rich by virtue
of their participation in long-standing prestigious social institutions, such as prep
schools, exclusive social clubs, debutante balls, and elite retreats. In this regard,
the new edition continues to emphasize that the social institutions of the upper
class also have a role in the power equation through the socialization of the newly
rich and their children. Th ey instill feelings of pride and superiority in members
of the corporate rich, which can be useful in generating deference on the part of
ordinary citizens.
Th ere have been some slight changes in the wording of key phrases. I now
refer to the “corporate-conservative alliance” and the “liberal-labor alliance” as the
main rivals in the electoral arena, because the term “alliance” seems more accurate
than “coalition,” the term I previously used. Th is change also makes it possible to
reserve the term “coalition” for the two key voting coalitions in Congress since at
least the New Deal, the “conservative coalition” and the “spending coalition.” From
the late 1930s into the 1990s, the conservative coalition, which most often formed
on issues having to do with progressive taxation, unions, and government regula-
tion of business, had great strength in both of the main political parties. But since
the 1960s the Southern members of the coalition have gradually moved into the
Republican Party, with that process nearing completion in the early 2000s. Th is is
an important point because it means that the Democratic Party of today is a very
diff erent party than it was in the past, although it is also still true that the party
has a conservative congressional fringe that sides with the Republicans in limiting
unions and weakening government regulations, and still depends upon antiunion
corporate moderates for a signifi cant percentage of its funding.
As for the spending coalition in Congress, it is and always has been located
almost entirely within the Democratic Party. Historically, it delivered govern-
ment subsidies for plantation owners in the South in exchange for their support
for infrastructure and subsidies that were sought after by landowners and real
estate developers in urban areas across the nation. In more recent decades it has
expanded its spending goals to include a wide range of educational and social
insurance programs.
Although this book does not go into great historical detail or provide all
the examples and scholarly references that it could, it does not in any way sim-
plify or omit key ideas and concepts. It defi nes basic terms in an eff ort to make
the book highly accessible to those who are new to the topic. Sometimes it uses
familiar terms for concepts that have slightly diff erent labels in the social sci-
ences. It is therefore an in-depth but accessible scholarly presentation that pro-
vides new research fi ndings and theoretical insights. More details on many of the
issues discussed briefl y in this book are provided in other books I have authored
or co-authored, which also contain citations to the thousands of important studies
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PREFACE ix
by social scientists and historians that make a book such as this possible (e.g.,
Domhoff 2013; Domhoff and Webber 2011; Gendron and Domhoff 2009). In
that regard, this book off ers a gateway into the impressive array of scholarship on
power in the United States that has been produced by hundreds of historians and
social scientists since the end of World War II.
In closing this new preface, I want to extend my deepest thanks to the sev-
eral colleagues around the country who gave me information and feedback that
made it possible to fi nish this revision in a timely fashion. I am grateful to Amel
Ahmed for helping me to better understand her exciting new fi ndings on elec-
toral rules as containment strategies; to Mary Hendrickson, Linda Lobao, and
James MacDonald, the latter a member of the Economic Research Service at the
Department of Agriculture, who provided me with information and feedback on
farming and agribusiness; to David Knoke for his succinct characterization of the
organizational theory of the state; to Jeff Manza for answers to my questions on
voting and elections; to Craig Reinarman for his insightful perspectives on the
Supreme Court; to Benjamin Page for valuable references concerning the impact
of public opinion; to Peter Phillips for information on social clubs; to Walter
Goldfrank for useful editorial comments; to Adam Schneider for his help with
tables and fi gures; and to Joel Domhoff for his research work. I am also grateful
to Richard L. Zweigenhaft for sharing new research fi ndings with me and for his
many editorial suggestions on several of the early chapters. I am grateful to the
reviewers who provided valuable feedback: Greg Andranovich, California State
University, Los Angeles; Nicholas Archer, Middlesex County College; and Kelsey
Kretschmer, Southern Illinois University.
Most of all, I want to thank Cliff ord Staples, Department of Sociology,
University of North Dakota, for providing me with his rich new fi ndings from his
extensive network analyses of the relationships among the 500 largest corpora-
tions and the major foundations, think tanks, and policy-discussion groups, which
I have cited at several places in Chapters 2 and 4. His work provides a far more
solid and convincing basis for demonstrating how the corporate community and
policy-planning network connect with government than anything that has existed
in the past. I also thank him for his very helpful editorial suggestions on several
sections of Chapters 2 and 4.
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