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A New Corporate World of Privilege and Prerogative
Here is an update on a famous 1950s book by C. Wright Mills called 'The Power Elite' which can help us understand corporate power today and its influence in government.
By Stanley Aronowitz
Editor's Note: I have written a commentary called Corporate Conspiracy Theories in Pastoral Consciousness on why I am presenting the article below. The article is part of series, The Power Elite Revisited and is titled there "The Decline of the Public". I highly recommend the other articles as well.
From the publication of The Power Elite in 1956 to his last book The Marxists, published posthumously in 1962, Mills’ project looked forward to the creation of a New Left, nestled deeply in the American grain of populism—a more egalitarian society marked by radical democracy—but not the American celebration to which many 30s radicals had given their enthusiastic approbation.
Almost all of Mills’ writing had a political intent. The New Men of Power and White Collar, beyond exploring the social and political dimensions of their subjects, were steps in Mills’ project of finding and evaluating potential agents of social change. In this respect The Power Elite, the third volume of his trilogy on social structure, continues the project. But with this book there is a fundamental difference compared to the others. The ‘top’ of the giant corporations—mainly financial—the political directorate and the military are the real decision-makers of society and generally understand themselves as nationally powerful people. A decade after he began work on the labour leaders, he finds them ‘integrated’ into the dominant institutional orders; rather than viewing them, or them viewing themselves, as independent social actors leading a potential army of regime changers, the labour leaders and their organisations have become ‘dependent variables’ of the three major institutional orders of power. ‘The United States now has no labour leaders who carry any weight of consequence in decisions of importance to the political outsiders now in charge of the visible government’. Like fractions of the fading ‘old’ middle class (mainly but not exclusively farmers), the unions, once insurgent, had settled after the war for places in what Mills terms the ‘middle levels’ of power. As for the various strata of white collar employees—the New Middle Class—Mills concludes that, far from forming a new pole of economic and political power, they constitute a primary base for the emerging mass society: slaves of consumerism, fragmented by occupational hierarchies and differential credentials, alienated from themselves as much as their work, and even more powerless than unions.
Readers of The Power Elite are treated to a rich, detailed, historically adumbrated discussion of the military and economic elites. Mills distinguishes between the Very Rich and the Corporate Chief Executives but argues that they are not ‘two distinct and clearly segregated groups’. The rich are the original property owners and the chief executives are ostensibly high salaried employees under the direction of a Board of Directors which, in the largest corporations, often appears as a cross-section of the economic elite, not only of the particular firm. But it terms of both power and material wealth salaries do not exhaust the income of the chief executives. They also receive bonuses, often in the form of stock options, and these in time place them among the Very Rich. But for Mills the distinction falls away when decisions are made. Both groups collaborate in making them. In this respect Mills is no adherent to the once pervasive theory, first enunciated in 1932 by Berle and Means, that property ownership no longer defines economic power in the ‘modern’ corporation. Mills’ view is that the corporate rich, an amalgam of the traditional property owners and the Chief Executives, constitute a reorganisation of the propertied class, along with those of higher salary, into a new corporate world of privilege and prerogative. What is significant about the managerial reorganisation of the propertied class is that by means of it the narrow industrial and profit interests of specific firms and industries and families have been translated into the broader economic and political interests of a more genuinely class type. Now the corporate seats of the rich contain all the powers and privileges inherent in the institutions of private property.
Similarly, when Mills addresses the military and its ascendancy into national power he provides a history and taxonomy of what he calls the Warlords. In his account, the Warlords became ascendant only under specific conditions, but have not been powerful throughout American history. According to Mills the nation was ‘underpinned’ in the late eighteenth century and the nineteenth century by ‘citizen militas’ who proudly bore arms in the defence of the republic: ‘Historically democracy in America has been underpinned by the militia system of armed citizens at a time when the rifle was the key weapon and one man meant one rifle as well as one vote’. But with the development of technologically sophisticated weapons, this system was replaced by the professional army which, as Max Weber contended, ‘monopolised the means of violence’. For Mills this shift was a vital nail in the coffin of genuine democracy. The consolidation of the military as a professional bureaucracy led by an oligarchy paved the way for military ascendancy, everywhere in the world, no less in the United States.
An ambiguity in Mills’ analysis comes when we look at the third wing of the power elite: The Political Directorate. As we have already seen most professional politicians and the institutions they control have been relegated to the middle level of power. So, perhaps with the exception of the President of the United States, and some key members of his cabinet that interact with the military and economic orders, the political directorate appears not to be distinct from the military or the large corporate elites. As Mills notes, the political institutional order is populated largely, if not exclusively, by ‘outsiders’:
As types party politicians and political bureaucrats are the professionals of modern government, if only in the sense that their careers are spent mainly within the political orbit. But not all men who are in politics are professional politicians either in the party sense or in the bureaucratic sense. In fact, today the men at the political top are much less likely to be bureaucrats, and rather less likely to be party politicians than political outsiders.
The political outsider is a man who has spent the major part of his working life outside strictly political organisations, and who—as the case may be—is brought into them, or who forces his way in, and who comes and goes in the political order. He is occupationally framed by non political experience.
This statement is consistent with Mills’ argument that ‘Within American institutions the centre of initiative and decision has shifted from the Congress to the executive’ whose key players are not political professionals, but outsiders.
The key words here are ‘initiative and decision’. With the decline of the national power role of the professional politician comes the alteration in the role of the political parties which are 'his' home. The parties remain the vehicles of national elections, but do not control the activities or the policies of the officials whose legitimacy derives from them. As for the individual voter—the ultimate ideal sovereign of democratic societies—under conditions where the public is all but dissolved, she is far removed from centres of decision, even though required to confer consent on those occupying decisive positions of national power. And even if Congress remains, at least constitutionally, the necessary institution of consent of the broad policies of the executive, it has lost its role as the main source of initiative and decision, especially in the epoch when the global rather than national politics is the main centre.
It is no accident that the chapter on the political directorate is the shortest compared to two chapters on the military and three on the corporate orders. One may conclude that in the United States, economic and political power is situated elsewhere than with either the public, or the professional politicians. Thus the political institutional order, composed as it is by those whose ‘working life is occupationally outside’ the traditional political institutions such as parties and legislatures, can only be understood by reference to the economic and military, for it is here, Mills believes, that genuine national power rests. For this reason Presidents Kennedy and Johnson tapped the head of the Ford Motor company, Robert McNamara, to lead the Pentagon during a period of intensifying military expeditions. Ford was a major military contractor but, more to the point, Robert McNamara was an important member of the Corporate Elite with close ties to the military. Nor is it unusual to find outsiders like Generals George Marshall and Colin Powell as heads of the State Department, or Donald Rumsfeld as the wartime Secretary of Defense. Powell, who probably accepted the appointment believing he would have a major role in the conduct of foreign policy, unfortunately discovered his position systematically undermined because the conduct of foreign affairs had, since the 1940s, shifted away from State Department jurisdiction to Defense.
Nor would it be surprising to trace the occupational origins of those appointed by a succession of presidents to the economically crucial Department of the Treasury. Even before Roosevelt appointed Morgenthau, the preponderance of Treasury Secretaries have been bankers, including Presidents of Federal Reserve Boards. And although President Clinton’s White House Chief of Staff was a long-time congressman, and Obama’s first Chief of Staff was a seasoned Chicago politician who was a congressman as well, the key players in both administrations are former corporate executives who ‘come and go’ in and out of the political system (Robert Rubin in the Clinton administration; Henry Paulson in George W. Bush’s administration). Or, as in the case of Zbigniew Brzezinski and Henry Kissinger, who served as both National Security Advisor and Secretary of State, both Democrats and Republicans have employed intellectuals whose field is national security (when the posts are not occupied by ex-Generals).
Beyond ideology, there are practical motives for the power elite to try to win the loyalty of intellectuals, both scientific and technical, and humanists. Technology has become the bread and butter of business as much as war. But humanists—those trained in literature, philosophy and history—have, in addition to scientists and engineers, been among the pioneers of new technologies associated with communications such as cybernetics and other electronic innovations. We are familiar with the phrase ‘knowledge is power’ but Mills was sceptical of the assertion that the bearers of knowledge were fated to occupy high positions in the power arrangements of US society. Instead, he argued that even as industry, the military and the state increasingly relied on expertise, especially those who possessed scientific and technological knowledge, the power elite was in a position to buy knowledge and employ those who possessed it, and thereby placing them in a subordinate position. The growing importance of information technology had, by the 1950s, provided major incentives to the giant corporations to engage actively in education.
Indeed, the military and the corporations engaged with it have taken pains to support and sponsor defence-related research in institutions of higher education. Funds for scientific and technological research and education have emanated directly from the military budget and less directly from the National Defense Education Act which, during the Cold War, provided huge sums not only for the training of scientists and engineers, but also humanists and social scientists. Similarly, the involvement by large corporations in financially supporting the work of key basic and applied research universities at a time when public funds have tended to be insufficient to fund the work of technologists as well as scientists, inevitably compromises the autonomy of knowledge and its producers.
But there is another set of motives for the emergence of what Martin Kenney, following the suggestions of Mills and Thorstein Veblen, termed the university/industrial complex. The elite is interested in guaranteeing its own continuity and survival. Its formation, in addition to inherited wealth, relies heavily on a select group of prep schools such as Choate, St. Mark’s, St. Paul’s, Groton, Andover, Lawrenceville and for women Brierly, and the Ivy League universities and a few others such as Stanford. Mills notes that becoming a Harvard, Yale or Princeton graduate is taken by corporate executives as a sign of candidature for entrance into the elite just as the high military officer corps is recruited, overwhelmingly, from the three main military academies: West Point, Annapolis and the Air Force Academy. We might add that of the many professional schools that train business executives, Harvard, Yale, Columbia, the Wharton School of Pennsylvania and Stanford occupy a unique position. The law programmes of these institutions are remarkably parallel in rank and in terms of conferring elite status. So it is not only the ties of practical technological alliances that bind some universities to the power elite; it is also what Pierre Bourdieu was later to term the acquisition of various forms of intellectual and social ‘capital’ whose components go beyond the curriculum. The Harvard or Yale undergraduate and professional student typically acquires a set of values, attitudes and orientations that prepare them for being considered and considering themselves potential members of the power elite.
We need only consult the educational pedigree of leading members of the twentieth century’s political directorate, corporate executives and top military officers to see how much this observation obtains today. Roosevelt, and the two Bush presidents as scions of old money, attended Harvard and Yale respectively. None was a sterling scholar, but regarded their time in college as a kind of finishing school experience; it was not unusual for students of this background. The same was true for John F. Kennedy, rich but not old money, who was clearly a party boy while attending Harvard. Richard Nixon and Ronald Reagan were beneficiaries of wartime participation and celebrity, respectively and correspond to Mills’ designation that the power elite increasingly absorbs those types. Bill Clinton was a Rhodes Scholar and a Yale Law School graduate and Barack Obama graduated from Columbia and then Harvard Law School. In sum, for the past three quarters of century it may be argued that the formation of the power elite is a product of both new and old money on the one hand, and the fundamental role of certain education institutions in providing the markers needed by young ‘men’ to climb to the very top of the social structure. Corporate Executives, high military officers and members of the political directorate may hail from humble origins, but their entrance into the charmed circles of power must, with few exceptions, be certified by the tiny circle of elite universities and colleges.
Of course, large corporations operate their own training programmes, sometimes in concert with universities and colleges. So, graduation from these select schools is only a first step. As Mills points out, the fledgling executive does not get rewarded for his command of the technical knowledge needed to make products, the intricacies of finance or even to run a business. These functions can be performed by highly paid experts. What the candidate for the very top of the firm or the military service must learn is how to keep his head down while ‘charming’ the higher ups. The ticket to success in the powerful institutional orders is not to be innovative, imaginative or confrontational. Rising in the corporation or military requires the techniques of conformity. Those who perform the tasks of diplomacy, and are good at taking orders and carrying them out, may be selected for elite berths, but there is no clear road. Knowledge is, accordingly, not power.
The fundamental condition for the rise of the highly centralised Power Elite—and the submergence of the institutions of popular will—is, for Mills, the decline and virtual disappearance of the public. For Mills, democracy, which entails rough political equality for individuals, is not fulfilled by the practice of voting or, in modern societies, by representative institutions such as legislatures. In the chapter on Mass Society, Mills does not enter so much an ideological objection to liberalism as an historical judgment that apart from its legitimating function for the current set up – the doctrines of pluralism and individualism, for example—its description of the way we live now has been surpassed.
Mills assures us that America is not fully a mass society, nor was it ever mainly a community of publics. But he is plainly disturbed to discover that highly effective media of mass communication (later he is to term these ‘the cultural apparatus’), consumerism, the decline of voluntary associations that once afforded people the chance to articulate their concerns and views, and the segregation and isolation of large chunks of the population have combined to vitiate the chance that an ‘articulate public’ can challenge the power elite. Rejecting a connotation of conspiracy, the institutional trends that together contribute to making of the public a ‘phantom’ are a consequence of drift rather than motive. Equally important, his analysis of the demise of the Old Middle Class as an independent social and political force—the historical public in American life—and the failure of the New Middle Class to fill that space, prepared the ground for the massification process now in full swing.
If others were unable to let go of the illusion that this middle class can still save America, Mills is hard pressed to identify an alternative. His adoption of the thesis of mass society, however much it coincides with the conservative critique, is a direct consequence of the failure of two principal social formations which possessed everything to counter the trend – except political will: the labour movement and the bearers of enlightened knowledge and opinion, that is, the intellectuals. In the end Mills will turn to the intellectuals, despite his profound alienation from what he perceived as their collective capitulation and compromise with the prevailing set up.
 C. Wright Mills, The Power Elite (Oxford University Press, 2000) p.265.
 Ibid. p.262.
 Ibid. p.147.
 Ibid. p.178.
 Ibid. p.228
 Martin Kenney, Biotechnology: The University Industrial Complex (Yale University Press, 1988)
 Pierre Bourdieu, Jean-Claude Passeron, Reproduction in Education, Society and Culture (London: Sage, 1977)
Stanley Aronowitz is Professor of Sociology at the City University of New York (CUNY). This is an edited excerpt from his latest book, 'Taking It Big: C. Wright Mills and the Making of Political Intellectuals' (Columbia UP, 2012) The article was published on 08 December, 2012, at the New Left Project.
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