Are the boards of major corporations, and the elite and powerful more generally, too interconnected to fail?:
Power elites after fifty years, by Daniel Little: When C. Wright Mills wrote The Power Elite in 1956, we lived in a simpler time. And yet, with a few important exceptions, the concentration of power that he described continues to seem familiar by today's standards. The central idea is that the United States democracy -- in spite of the reality of political parties, separation of powers, contested elections, and elected representation -- actually embodied a hidden system of power and influence that negated many of these democratic ideals. The first words of the book are evocative:
The powers of ordinary men are circumscribed by the everyday worlds in which they live, yet even in these rounds of job, family, and neighborhood they often seem driven by forces they can neither understand nor govern. 'Great changes' are beyond their control, but affect their conduct and outlook none the less. The very framework of modern society confines them to projects not their own, but from every side, such changes now press upon the men and women of the mass society, who accordingly feel that they are without purpose in an epoch in which they are without power.
And a page or two later, here is how he describes the "power elite":
The power elite is composed of men whose positions enable them to transcend the ordinary environments of ordinary men and women; they are in positions to make decisions having major consequences. Whether they do or do not make such decisions is less important than the fact that they do occupy such pivotal positions: their failure to act, their failure to make decisions, is itself an act that is often of greater consequence than the decisions they do make. For they are in command of the major hierarchies and organizations of modern society. They rule the big corporations. They run the machinery of the state and claim its prerogatives. They direct the military establishment. They occupy the strategic command posts of the social structure, in which are now centered the effective means of the power and the wealth and the celebrity which they enjoy.
Mills offers a sort of middle-level sociology of power in America. He believes that power in the America of the 1950s centers in the economic, political, and military domains -- corporations, the state, and the military are all organized around networks of influence at the top of which stands a relatively small number of extremely powerful people. (It seems that Mills's description of the military is less apt today; perhaps not surprising, given that Mills was writing in the middle of the Cold War.) Power is defined as the ability to achieve what one wants over the opposition of others; and the levers of power are the great institutions in society -- corporations, political institutions, and the military. And the thesis is that a relatively compact group of people exercise hegemony in each of these areas. Moreover, power leads often to wealth, in that power permits firms and individuals to gain access to society's wealth. So a power elite is often also an economic elite.
The central thrust of the book stands in sharp opposition to the fundamental assumption of then-current democratic theory: the idea that American democracy is a pluralist system of interest groups in which no single group is able to dominate all the others (Robert Dahl (1959), A Preface to Democratic Theory). Against this pluralistic view, Mills postulates that members of mass society are dominated, more or less visibly, by a small group of powerful people in the elite. (See an earlier posting on power as influence for discussion of how power works.)
So what is Mills's theory, exactly? It is that there is a small subset of the American population that (1) possess a number of social characteristics in common (for example, elite university educations, membership in certain civic organizations); (2) are socially interconnected with each other through marriage, friendship, and business relationship; (3) occupy social positions that give them a durable ability to make a large number of the most momentous decisions for American society; (4) are largely insulated from effective oversight from democratic institutions (press, regulatory system, political constraint). They are an elite; they are a socially interconnected group; they possess durable power; and they are little constrained by open and democratic processes.
And, of course, there needs to be a theory about recruitment and the social mechanisms of steering given individuals into the elite group. Is it family background? Is it the accident of attendance at Yale? Is it a meritocracy through which talented young people eventually grasp the sinews of power through their own achievement in the organizations of power? We need to have an account of the social means of reproduction through which a set of power relations is preserved and reproduced throughout generational change.
What is interesting in rereading Mills's classic book today, is how scarce the empirical evidence is within the analysis. It is not really an empirical study at all, but rather a reflective essay on how this sociologist has been led to conceptualize American society, based on his long experience and study. The most empirical chapter is the section on chief executives of corporations; Mills provides an historical and quantitative narrative of the rise and consolidation of the corporation over the prior 75 years. But overall, there is quite a bit of descriptive assertion in the book; relatively little analysis of the social mechanisms that reproduce this social order; and very little by way of empirical validation of the analysis as a whole.
So how does it look today? To what extent is there a compact set of powerful people in contemporary America who have a disproportionate ability to bend the future to their interests and desires? One thing is strikingly clear: the concentration of wealth in America has increased significantly since 1956. Edward Wolff provides a summary graph for the percentage of wealth owned by the top 1% of wealth holders since 1920 in Top Heavy: The Increasing Inequality of Wealth in America and What Can Be Done About It. In 1955 the top 1% held 30% of the nation's wealth; from 1970 to 1980 this percent declined to about 22%; and from the Reagan administration forward the percentage climbed past its previous highs to about 38% in 2000. So plainly there is an economic super-elite in the United States. This is a group that benefits from durable privileges and inequalities of access to wealth and income.
But this isn't exactly what Mills had in mind; he was interested in a power elite -- a fairly compact group of people who had the ability to make fundamental decisions in the three large areas of modern life that he highlights. And though he doesn't say very much about this point, he implies that it is an interconnected group -- through interlocking directorships in corporations, for example. So how can we assess the degree to which contemporary society in the United States is run through such a system? Is there a power elite today?
In one sense it is obvious what the answer is. Corporations continue to have enormous influence on our society -- banks, energy companies, pharmaceutical companies, food corporations. In fact, the collective power of corporations in modern societies is surely much greater than it was fifty years ago, through direct economic action and through their ability to influence laws and regulations. Their directors and CEOs do in fact constitute a small and interlocked portion of the population. And these leaders continue to have great ability to determine social outcomes through their "private" decisions about the conduct of the corporation. Moreover, as we have learned only too well in the past year, there is very little regulative oversight over their decisions and choices. So the existence of a "power elite" is almost a visible fact in today's world.
But to get more specific -- and to make more precise comparisons over time -- it seems that we need some way of identifying and quantifying the idea of a sociologically real "power elite." One way of trying to do that is by making use of the tools of social network analysis. For example, here is a network graph of corporate America compiled by kiwitobes. What the graph demonstrates is that the boards of America's largest corporations are populated with directors who overlap substantially across companies; there is a high degree of interconnectedness across the boards of directors of major corporations. So this bears out part of Mills's thesis in today's corporate social reality.
But even more compelling would be a study that doesn't exist yet -- a social network map that represents something like the whole population of a community, linking individuals to the institutions in which they occupy a position of power. The vast majority of the population would exist in single points at the bottom of the map; most people don't have a position of power at all. But, if Mills is right, there will be a small subset of people who are interconnected through many relationships to institutional sources of power: memberships in boards, offices in corporations, directorships of banks, trustees of universities. And we might give our thought experiment one additional feature: we might look at snapshots of the same data for each generation identified by families. Now we have Mills's hypothesis in a nutshell: at a given time there is a small subset of the population who occupy most of the positions of power; and the probability is great that the sons and daughters of this group will occupy similar positions of power in the next generation. And in fact, it is perfectly visible in our society that the likelihood of occupying a position of power in one generation is highly influenced by the power status of the antecedent generation.
Regrettably, we don't have a direct ability to carry out this experiment. But we might consider a test case invoking an important decision and a large number of "stakeholders", large and small: the current effort to reform the health care system in the United States. Will this issue be resolved in a fully democratic way, with the interests of all elements of society being represented fairly in the outcome? Or will a relatively small group of corporations, political interests, and professions be in a position to invisibly block reforms that would be democratically selected? And if this is in fact the case, then doesn't that speak loudly in support of the power elite hypothesis?
With the advantage of fifty years of perspective, I think two observations can be made about Mills's book. First, he seems to have diagnosed a very important thread in the sociological reality of power in America -- albeit in a way that is more intuitive and less empirical than contemporary sociologists would prefer. And second, he illustrates a profoundly important ability to exercise his sociological imagination: to arrive at a way of looking at contemporary society that allows us to make sense of many of the observations that press upon us.
(Another important voice on this subject is G. William Domhoff, Who Rules America? Power, Politics, and Social Change (1967). Domhoff has a very nice web version of his theory on his web page.)