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Read: D&Z 4
capitalism vs.
pluralism
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The Corporation:
Cornerstone of the Contemporary Elite
In Chapter Three Dye and Zeigler lay out the foundation for describing
the elite. The primary source of elite/ mass difference has
historically been economic influence, identified historically in terms of the
individual wealth of people like Andrew Carnegie, John D.
Rockefeller, and Andrew Mellon
(and don't forget about Bill Gates!!) . In this section we explore a
fundamental change in the contemporary elite.
Power in America has shifted from those individuals who control the
economic resources of society to those who have control over technological
and organization expertise (See! Don't forget about Bill Gates!).
The
Richest People in America
The bar keeps getting
higher. A net worth of half a billion dollars just
qualifies you for the bottom end of The Forbes 400 in its 17th year.
The stock market is down 1% since we ran our numbers last year, but the
price of admission to the 400 still rose more than 5%. In short, the
creation of wealth continues apace in America even without an ebullient stock market.
Consider this: Today
nearly half the members of the 400 are billionaires. On top of our list for
the 5th straight year is Bill Gates, whose estimated $58 billion fortune jumped $18 billion in the past
year. Remarkably that doesn't stand as the biggest single-year gain. That
belongs to . . . well, Bill Gates, whose net worth
increased $21 billion in last year's compilation. Even in a flat market,
Microsoft stock continued to climb. This company, barely 23 years old, this
fall became the nation's biggest company by market
value.
In all, 10 people on
the list sport 11-figure net worths; that is,
over $10 billion. Half of these are the heirs of
Wal-Mart founder Sam Walton. If Sam were alive today, he would have
a net worth of $55 billion, in spitting distance of Gates' fortune.
This year 37 new
members join the ranks. Yes, there are highfliers like Amazon.com's
Jeffrey Bezos and Yahoo!'s
Jerry Yang and David Filo.
But not all of the
new members are here because of Internet fortunes.
Tops
among the newcomers is
telecommunications investor Donald Sturm,
estimated at $1.7 billion. Pleasant Rowland made the cut after she sold her
doll company to Mattel for $700 million. The television production team of
Marcy Carsey and Tom Werner, creators of Cosby
and Roseanne, join, as do John and Peter Sperling,
who sell degrees to working adults.
Wendy McCaw nearly made the grade after her divorce from telecommunications billionaire Craig McCaw. On the flip side, divorce cost David Price his
membership. Such is life in a community property state like California. Netscape's James Clark dropped out as the
market value for his Web browser company dwindled. We suspect other
Internet founders will have similarly short stays in the club.
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Power has thus shifted to positions in organizations which control technology and resources (See!
Don't forget about Bill Gates!).
The growth of this technological and managerial elite is due to the corporation. (See! Don't forget about MicroSoft!)
MicroSoft vs. The Department of Justice
Corporations have become the most powerful "people" in America!!!
This may sound weird since corporations aren't people but
institutions, but you are wrong.
For all intents and purposes, corporations are people and are entitled
to the rights associated with personship (except
voting).
Corporations were declared to be persons in:
Bank of Augusta v. Earle (1839)
Some
argue that they (corporations) are "superpersons".
Corporations
are permitted to issue stock and thus disperse their ownership. (Your
probably own some!). While you as an individual are held accountable or
responsible for your behavior, that is not true of
the corporation! Stock
owners have "limited liability" for corporate decisions. In
effect, they are only liable up to the investment in their stocks.
How
are corporations held accountable/ responsible?
If,
as pluralism maintains, everyone should be a "rationally calculating
actor", what happens when there is no real punishment for the social
consequences of your behavior?
Ever
heard of the Pinto decision?
This
discussion reflects what is often called "hyperpluralism"?
Evidence to accept
the hyperpluralist argument would include:
1)
power enjoyed by a relatively small group
2)
the group having an inordinate amount of power through the control of
"one of the the assets of power" (in this
case it would be economic assets)
3)
the group would utilize its control of economic assets to dominate the
political system
4)
the political culture would reflect economic cultural views/terms
In
regards to #1:
According
to Dye and Zeigler, the contemporary elite in America comes from the boardrooms
across America. Rather than thinking that power is
dispersed throughout the economic system (as market capital theory suggests),
D &Z argue that economic power is concentrated in a relatively small
number of large corporations and banks. The power is wielded not by the
masses, owners, stockholders, etc. but by the
managers of these large-scale enterprises.
The
power of these elites is further magnified by the system of interlocking
directorates in which top elites typically hold several corporate
directorships simultaneously.
In
regards to #2:
According
to D & Z, the 50 largest corporations control nearly 60% of all
industrial assets
and the 50 largest banks control two-thirds of all banking assets.
This
institutional
wealth is far more important than private (individual) wealth
In
regards to #3:
Let's
look at contributions to political candidates in the recent election:
Contribution counter
In
regards to #4:
While
we've explored this a little in the last section of the class, we'll explore
this more when we look at public opinion in America!
Here
are some quotes you might find interesting:
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American
society proclaims the worth of every human being. All citizens are
guaranteed equal justice and equal political rights....As American
citizens, we are all members of the same club.....Yet at the same time, our
institutions say "find a job or go hungry," "succeed or
suffer." They prod us to get ahead of our neighbors economically
after telling us to stay in line socially. They award prizes that
allow the big winners to feed their pets better than the losers can feed
their children....Such is the double standard of a capitalist democracy,
professing and pursuing an egalitarian political and social system and
simultaneously generating gaping disparities in economic well-being."
Arthur Okun, Equality
and Efficiency: The Big Tradeoff
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"The
fierceness of the political struggles in American history has often been
misleading; for the range of vision embraced by the primary contestants in
the major parties has always been bounded by the horizons of property and
enterprise. However much at odds on specific issues, the major political
traditions have shared a belief in the rights of property, the philosophy
of economic individualism, the values of competition; they have accepted
the economic virtues of capitalist culture as necessary qualities of
man...American traditions also show a strong bias in favor of egalitarian
democracy, but it has been a democracy in cupidity rather than a democracy
in fraternity".
Richard Hofstader, The
American Political Tradition
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Thus
capitalism and democracy have always commanded broad support as the
authoritative values of the nation's political culture. They
determine in large measure what kinds of arguments about public affairs
Americans find fair, reasonable, and attractive, what kinds they do not,
and what kinds of arguments one dares to make (or is better advised not to
make). The values of the two traditions serve, in effect, to
legitimate some issues and delegitimate
others. They may mute or soften conflicts reflecting deep-seated
differences by denying credibility to their respective spokesmen, or they
may create and perpetuate conflicts that might not otherwise exist.
And, in the long run, they can nourish some kinds of political change and impede
others".
McCloskey and Zaller
The American Ethos
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How
do these quotes confirm the notion of "the American
National Character"?
The Values of the Contemporary Elite
1) individual liberty
2) private property
3) limited government
4) due process of law
5) strong defense
6) opposition to socialism and
communism
7) liberal and public-regarding
social welfare programs
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