Domhoff - Who Rules America Now?

excerpts from the book

Who Rules America Now?

by G. William Domhoff

Touchstone Books, 1983

The American Upper Class
The Control of the Corporate Community
The Shaping of the American Polity
The Power Elite and Government
Community Power Structures

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The American Upper Class

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TRAINING THE YOUNG

From infancy through young adulthood, members of the upper class receive a distinctive education. This education begins early in life in preschools that frequently are attached to a neighborhood church of high social status. Schooling continues during the elementary years at a local private school called a day school. The adolescent years may see the student remain at day school, but there is a strong chance that at least one or two years will be spent away from home at a boarding school in a quiet rural setting. Higher education will be obtained at one of a small number of heavily endowed private universities. Harvard, Yale, Princeton, and Stanford head the list, followed by smaller Ivy League schools in the East and a handful of other small private schools in other parts of the country. Although some upper-class children may attend public high school if they live in a secluded suburban setting, or go to a state university if there is one of great esteem and tradition in their home state, the system of formal schooling is so insulated that many upper-class students never see the inside of a public school in all their years of education.

This separate educational system is important evidence for the distinctiveness of the mentality and life-style that exists within the upper class, for schools play a large role in transmitting the class structure to their students. Surveying and summarizing a great many studies on schools in general, sociologist Randall Collins concludes: "Schools primarily teach vocabulary and inflection, styles of dress aesthetic tastes, values and manners."

The training of upper-class children is not restricted to the formal school setting, however. Special classes and even tutors are a regular part of their extracurricular education. This informal education usually begins with dancing classes in the elementary years which are seen as more important for learning proper manners and the social graces than for learning to dance. Tutoring in a foreign language may begin in the elementary years, and there are often lessons in horseback riding and music as well. The teen years find the children of the upper class in summer camps or on special travel tours, broadening their perspectives and polishing their social skills.

The linchpins in the upper-class educational system are the dozens of boarding schools that were developed in the last half of the nineteenth and the early part of the twentieth centuries, with the rise of a nationwide upper class whose members desired to insulate themselves from an inner city that was becoming populated by lower-class immigrants. Baltzell concludes that these schools became "surrogate families" that played a major role "in creating an upper-class subculture on almost a national scale in America.

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From kindergarten through college ... schooling is very different for members of the upper class from what it is for most Americans, and it teaches them to be distinctive in many ways. In a country where education is highly valued and the overwhelming majority attend public schools, less than one student in a hundred is part of this private system that primarily benefits members of the upper class and provides one of the foundations for the old-boy and old-girl networks that will be with them throughout their lives.

SOCIAL CLUBS

Just as private schools are a pervasive feature in the lives of upper-class children, so, too, are private social clubs a major point of orientation in the lives of upper-class adults. These clubs also play a role in differentiating members of the upper class from other members of society. According to Baltzell, "the club serves to place the adult members of society and their families within the social hierarchy." He quotes with approval the suggestion by historian Crane Brinton that the club "may perhaps be regarded as taking the place of those extensions of the family, such as the clan and the brotherhood, which have disappeared from advanced societies." Conclusions similar to Baltzell's resulted from an interview study in Kansas City: "Ultimately, say upper-class Kansas Citians, social standing in their world reduces to one issue: where does an individual or family rank on the scale of private club memberships and informal cliques."

The clubs of the upper class are many and varied, ranging from family-oriented country clubs and downtown men's and women's clubs to highly specialized clubs for yachtsmen, sportsmen, gardening enthusiasts, and fox hunters. Many families have memberships in several different types of clubs, but the days when most of the men by themselves were in a half dozen or more clubs faded before World War II. Downtown men's clubs originally were places for having lunch and dinner, and occasionally for attending an evening performance or a weekend party. But as upper-class families deserted the city for large suburban estates, a new kind of club, the country club, gradually took over some of these functions. The downtown club became almost entirely a luncheon club, a site to hold meetings, or a place to relax on a free afternoon. The country club, by contrast, became a haven for all members of the family. It offered social and sporting activities ranging from dances, parties, and banquets to golf, swimming, and tennis. Special group dinners were often arranged for all members on Thursday night, the traditional maid's night off across the United States.

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Sporting activities are the basis for most of the specialized clubs of the upper class. The most visible are the yachting and sailing clubs, followed by the clubs for lawn tennis or squash. The most exotic are the several dozen fox hunting clubs. They have their primary strongholds in rolling countrysides from southern Pennsylvania down into Virginia but they exist in other parts of the country as well. Riding to hounds in pink jackets and black boots, members of the upper class sustain over 130 hunts under the banner of the Masters of Fox Association. The intricate rituals and grand feasts accompanying the event go back to the eighteenth century in the United States, including the Blessing of the Hounds by an Episcopal bishop in the Eastern hunts.

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One of the most central clubs in this network, the Bohemian Club of San Francisco, is also the most unusual and widely known club of the upper class. Its annual two-week encampment in its 2,700 acre Bohemian Grove 75 miles north of San Francisco brings together the social elite, celebrities, and government officials for relaxation and entertainment. A description of this gathering provides the best possible insight into the role of clubs in uniting the upper class.

The huge forest retreat called the Bohemian Grove was purchased by the club in the 1890s. Bohemians and their guests number anywhere from 1,500 to 2,000 for the three weekends in the encampment, which is always held during the last two weeks in July, when it almost never rains in northern California. However, there may be as few as 400 men in residence in the middle of the week, for most return to their homes and jobs after the weekends. During their stay the campers are treated to plays, symphonies, concerts, lectures, and political commentaries by entertainers, musicians, scholars, and government officials. They also trapshoot, canoe, swim, drop by the Grove art gallery, and take guided tours into the outer fringe of the mountain forest. But a stay at the Bohemian Grove is mostly a time for relaxation and drinking in the modest lodges, bunkhouses, and even teepees that fit unobtrusively into the landscape along the two or three macadam roads that join the few "developed" acres within the Grove. It is like a summer camp for the power elite and their entertainers.

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As the case of the Bohemian Grove and its symbolic ceremonies rather dramatically illustrate, there seems to be a great deal of truth to the earlier-cited suggestion by Crane Brinton that clubs may have the function within the upper class that the clan or brotherhood has in tribal societies. With their restrictive membership policies, initiatory rituals, private ceremonials, and great emphasis on tradition, clubs carry on the heritage of primitive secret societies. They create within their members an attitude of prideful exclusiveness that contributes greatly to an in-group feeling and a sense of fraternity within the upper class.

THE DEBUTANTE SEASON

The debutante season is a series of parties, teas, and dances, culminating in one or more grand balls. It announces the arrival of young women of the upper class into adult society with the utmost of formality and elegance. These highly expensive rituals, in which great attention is lavished on every detail of the food, decorations, and entertainment, have a long history in the upper class. Making their appearance in Philadelphia in 1748 and Charleston, South Carolina, in 1762, they vary only slightly from city to city across the country. They are a central focus of the Christmas social season just about everywhere, but in some cities debutante balls are held in the spring I as well.

... Evidence for the great traditional importance attached to the debut is to be found in the comments Ostrander received from women who thought the whole process unimportant but made their daughters go through it anyhow: "I think it's passé, and I don't care about it, but it's just something that's done," explained one woman. Another commented: "Her father wanted her to do it. We do have a family image to maintain. It was important to the grandparents, and I felt it was an obligation to her family to do it." When people begin to talk about doing something out of tradition or to uphold an image, suggests Ostrander, then the unspoken rules that dictate class-oriented behavior are being revealed.'

Despite the great importance placed upon the debut by upper-class parents, the debutante season came into considerable disfavor among young women as the social upheavals of the late 1960s and early 1970s reached their climax. Although enough young women participated to keep the tradition alive, the refusal to take part by a significant minority led to the cancellation of some balls and the curtailment of many others. Stories appeared on the women's pages across the country telling of debutantes who thought the whole process was "silly" or that the money should be given to a good cause. By 1973, however, the situation began to change again, and by the mid-1970s things were back to normal.

The decline of the debutante season and its subsequent resurgence in times of domestic tranquillity reveal very clearly that one of its latent functions is to help perpetuate the upper class from generation to generation. When the underlying values of the class were questioned by a few of its younger members, the institution went into decline. Attitudes toward such social institutions as the debutante ball are one indicator of whether or not adult members of the upper class have succeeded in insulating their children from the rest of society.

MARRIAGE AND FAMILY CONTINUITY

The institution of marriage is as important in the upper class as it is in any level of America society, and it does not differ greatly from other levels in its patterns and rituals. Only the exclusive site of the occasion and the lavishness of the reception distinguish upper-class marriages.

The prevailing wisdom within the upper class is that children should marry someone of their own social class. The women interviewed by Ostrander, for example, felt that marriage was difficult enough without differences in "interests" and "background," which seemed to be the code words for class in discussions of marriage. Marriages outside the class were seen as likely to end in divorce.

The original purpose of the debutante season was to introduce the highly sheltered young women of the upper class to eligible marriage partners. It was an attempt to corral what Baltzell calls "the democratic whims of romantic love," which "often play havoc with class solidarity." But the day when the debut could play such a role was long past even by the 1940s. The function of directing romantic love into acceptable channels was taken over by fraternities and sororities, bachelor and spinster clubs, and exclusive summer escorts.

... there is evidence that the I continuity of families within the upper class is very great from generation to generation. This finding conflicts with the oft-repeated folk wisdom that there is a large turnover at the top of the American social ladder. Once in the upper class, families tend to stay there even as they are joined in each generation by new families and by middle-class brides and grooms who marry into their families.

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THE PREOCCUPATIONS OF THE UPPER CLASS

Members of the upper class do not spend all their time in social activities. Contrary to stereotypes, most members of the upper class are and have been hardworking people, even at the richest levels. In a study of the 90 richest men for 1950, for example, Mills found that only 26 percent were men of leisure.

By far the most frequent preoccupation of men of the upper class is business and finance. This point is most clearly demonstrated l through studying the occupations of boarding school alumni.

The feminine half of the upper class has different preoccupations I than those of men. Our study of a large sample of the upper-class women included in Who's Who in American Women for 1965 showed the most frequent activity of upper-class women to be that of civic worker or volunteer, which includes a wide range of welfare, cultural and civic activities. Second on the list was author or artist followed by a career in journalism, where upper-class women are involved in both the management and writing of newspapers and magazines. Finally, women of the upper class were found in academic positions as teachers, administrators, and trustees at leading boarding schools and colleges for women.

The most informative and intimate look at the preoccupations of the feminine half of the upper class is provided in Ostrander's interview study. It revealed the women to be people of both power and subservience, playing decision-making roles in numerous cultural and civic organizations, but also accepting traditional roles at home vis-a-vis their husbands and children. By asking the women to describe a typical day and to explain which activities were most important to them, Ostrander found that the role of community volunteer is a central preoccupation of upper-class women, having significance as a family tradition and as an opportunity to fulfill an obligation to the community.

... Quite unexpectedly, Ostrander also found that many of the women serving as volunteers, fund-raisers, and board members for charitable and civic organizations viewed their work as a protection of the American way of life against the further encroachment of government into areas of social welfare. Some even saw themselves as bulwarks against socialism. "There must always be people to do volunteer work," one said. "If you have a society where no one is willing, then you may as well have communism where it's all done by the government." Another commented: "It would mean that the government would take over, and it would all be regimented. If there are no volunteers, we would live in a completely managed society which is quite the opposite to our history of freedom." Another equated government support with socialism: "You'd have to go into government funds. That's socialism. The more we can keep independent and under private control, the better it is."

... Walter Lippmann, the only son of an upper-class family in New York, was an enthusiastic socialist as a Harvard undergraduate and the secretary to the reform socialist mayor of Schenectady in 1912. By 1915 he was back to the life that had been waiting for him and went on to be one of the most respected opinion leaders in the upper class for a 40-year period as a columnist, author, and adviser to presidents.

Our impressionistic evidence from a few individual cases suggests that even most of those who persist for a few years beyond college as social critics and radicals are gradually pushed back into their own class by their differences from members of other classes. Because they are unable to overcome the subtle effects of their socialization on their bearing and manner, there is often tension between them and their working-class allies, who become suspicious of their motives and envious of their backgrounds. In turn, the upper-class radicals become weary of being mistrusted and grow impatient with the hesitancy of the constituency they are trying to lead.

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... just 0.5 percent of all people in the United States own from 20 to 25 percent of all wealth ...

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Exhibiting high social status ... is a way of exercising power. It is a form of power rooted in fascination and enchantment. It operates by creating respect, envy, and deference in others. Considered less important than force or economic power by social scientists who regard themselves as tough-minded and realistic, its role as a method of control in modern society goes relatively unnoticed despite the fact that power was originally in the domain of the sacred and the magical.

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The Control of the
Corporate Community

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Most sectors of the American economy are dominated by a relative handful of large corporations. These corporations, in turn, are linked in a variety of ways to create a corporate community. At an economic level, the ties within the corporate community are manifested in ownership of common stock on the part of both families and other corporations, as well as in joint ventures among corporations and in the common sources of bank loans that most corporations share. At a more sociological level, the corporate community is joined together by the use of the same legal, accounting, and consulting firms and by the similar experiences of executives working in the bureaucratic structure of a large organization. Then too, the large corporations come together as a business community because they share the same values and goals-in particular, the profit motive. Finally, and not least, the common goals of the corporations lead them to have common enemies in the labor movement and middle-class reformers, which gives them a further sense of a shared identity.

Whatever the actual number of stockholders, systematic studies show that most of them own very little stock. Robert Lampman's studies using the estate-multiplier method for six different years between 1922 and 1953 estimated that the top 1 percent of all adults held from 61.5 to 76 percent of all privately held stock. Using the same method, James D. Smith found the percentage to be 51 percent for the top 1 percent in 1969.3 Smith's work also demonstrates that stock is even more dramatically concentrated within the hands of a few thousand major owners. One-twentieth of 1 percent of American adults have one-fifth of the corporate stock, and 0.2 percent have one-third of it. Sociologist Maurice Zeitlin makes this concentration more graphic by pointing out that "the Rose Bowl's 104,696 seats would still be half empty if only every American who owns $1 million or more in corporate stock came to cheer."

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... hundreds of very large corporations ... are privately owned by a family or group of families. The size and extent of such corporations is often overlooked in discussions of the modern corporation. In 1976 Forbes estimated that there were over 350 such companies with sales above $100 million a year. Then, too, in some manufacturing industries that are less concentrated, such as printing, furniture, and clothing, privately held firms account for over two-thirds of sales, and privately held firms are even more important in such non-manufacturing sectors as wholesaling, retailing, and construction. Moreover, the close relationship between ownership and control also holds for many large publicly held corporations that are just below the 200 or 300 largest firms; in most such firms, large percentages of stock are held by a few owners who also serve as directors and top managers.

The problem of the relationship between ownership and control thus arises only for the very largest of corporations in the corporate community. Little direct information on their owners was available between 1938, when a thorough government study v - ` conducted, and the 1970s, when new government studies and improvements in the laws on the reporting of ownership information again made systematic analysis possible. For the 30-year period between, studies by pluralists that took at face value the meager information provided by official sources often concluded that the role of big owners within corporations was declining. This conclusion could not be shaken by the many examples to the contrary that would emerge in the business press from time to time.

However, even within the large corporations where no large owners seem apparent at first glance, there are ways in which families or wealthy individuals in fact continue to play significant roles.

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CONCLUSION

The overall findings on stock concentration, overrepresentation of upper-class people, and the socialization of rising executives lead to the conclusion that the upper social stratum is a business class based in the ownership and control of large corporations. Contrary to the view that there has been a separation of ownership and control in large corporations, it seems more likely that there has been a gradual reorganization of the upper class into a "corporate rich" that includes top-level executives as well as major owners. Such was the conclusion of Mills from an examination of the data available in the 1950s, and it seems even more correct in the light of the information on ownership and on executive behavior that has been developed since that time:

The propertied class, in the age of corporate property, has become a corporate rich, and in becoming corporate has consolidated its power and drawn to its defense new men of more executive and more political stance. Its members have become self-conscious in terms of the corporate world they represent. As men of status they have secured their privileges and prerogatives in the most stable private institutions o' American society. They are a corporate rich because they depend directly, as well as indirectly, for their money, their privileges, their securities, their advantages, their powers on the world of the big corporations.

The fact that the upper class is also intertwined with the corporate community adds a second dimension to the nature of its cohesiveness. The cohesion is not only social, based on school and club affiliations, but economic, rooted in common stock ownership and most visibly manifested in the complex pattern of interlocking directorships that unites the corporate community and creates a dense and flexible communication network.

The societal power exercised by the corporate rich through the corporate community is considerable. Corporate leaders can 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.

One of the clearest statements of the way in which economic power influences government is by economist Charles Lindblom in an article entitled "Why Government Must Cater to Business." The crux 0 f this argument is that in "our kind of society" the "big tasks of shaping and doing" have been entrusted to businesspeople who cannot be "commanded to perform their functions." Instead, they have to be "induced," which means they have to be given whatever they want, generally speaking, if there is to be prosperity. Therefore, the main job of government officials, elected and appointed, is to cater to business. If they do not do this job, there will be economic difficulties that will lead people to desire new political leadership: "These ills are not only deeply distressing to the population as a whole, but suicidal for public officials. That is because political leaders lose their positions if they cannot maintain a relatively healthy economy."

As useful as this straightforward argument is in explaining one of the ways in which members of the corporate rich exercise power in America, it is not sufficient. It does not take into consideration the possibility that government officials might turn to nonbusiness constituencies to support new economic arrangements or that the voting public might elect leaders mandated to change the economic system. In other words, contrary to the shortsightedness of such pluralists as Lindblom, it is not only political leaders who face the possibility of losing their positions when the economy is in distress. In such situations, the business leaders may need government to protect their private property. As Bertrand Russell notes in criticizing the "undue emphasis on economics" in understanding power: "The power of the industrialist rests, in the last analysis, upon the lockout, that is to say, upon the fact that the owner of a factory can call upon the forces of the State to prevent unauthorized persons from entering it.

Because there is no guarantee that the underlying population and government officials will accept the corporate viewpoint under all circumstances, it is necessary to consider the ways in which the personnel and the economic resources of the upper class and the corporate community are involved in an effort to shape the thinking of the American polity and to influence the federal government directly.

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The Shaping of the American Polity

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The effort to influence public opinion is considered necessary because average citizens do not automatically agree with the corporate community on every policy initiative. Their life situations as wage and salary earners with little or no wealth beyond a house and life insurance often lead them to see things in a light different from the corporate rich. Thus, trade unions, minority organizations, and women's groups, among others, can find independent bases of power within the general populace, and they often suggest policy alternatives opposed to those supported by leaders within the corporate community. To the degree that these groups might be able to hinder the adoption of corporate-favored policy suggestions, to that degree is it necessary for the opinion-shaping network to counter their influence.

However, for all the hundreds of millions of dollars spent each year in the effort to mold public opinion, the importance of public opinion in the functioning of the social system should not be exaggerated. The opinions of the majority on a wide range of issues have differed from those of the corporate elite for many generations without major consequences for public policy. To assume that differences in opinion will lead to political activity does not give due considerations to t he fact that people's beliefs do not lead them into opposition or disruption if they have stable roles to fulfill in the society. Routine involvement in a daily round of activities, the most important of which are a job and a family, probably is. a more important factor in social stability and acquiescence in corporate-supported policies than any attempts to shape public opinion. Contrary to what many Marxian analysts have claimed, what happens in the economy and in government has more impact on how people will act than what is said in the opinion-shaping process and the mass media.

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THE POLICY-PLANNING NETWORK

The policy-planning process begins in corporate board rooms, where problems are informally identified as "issues" to be solved by new policies. It ends in government, where policies are enacted and implemented. In between, however, there is a complex network of people and institutions that plays an important role in sharpening the issues and weighing the alternatives. This network has four main components-policy groups, foundations, think tanks, and university research institutes.

The policy-discussion organizations are nonpartisan groups, bringing together corporate executives, lawyers, academic experts, university administrators, and media specialists to discuss such general problems as foreign aid, tariffs, taxes, and welfare policies. In discussion groups of varying sizes, the policy-oriented organizations provide informal and off-the-record meeting grounds in which differences of opinion on various issues can be aired and the opinions of specialists can be heard. In addition to their numerous small-group discussions, these organizations encourage general dialogue within the power elite by means of luncheon and dinner speeches, written reports, and position statements in journals and books. Taken as a whole, the several policy-discussion groups are akin to an open forum in which there is a constant debate concerning the major problems of the day and the best solutions to those problems.

Foundations are tax-free institutions that are created to give grants to both individuals and nonprofit organizations for activities that range from education, research, and the arts to support for the poor and the upkeep of exotic gardens and old mansions. They are an upper-class adaptation to inheritance and income taxes. They provide a means by which wealthy people and corporations can in effect decide how their tax payments will be spent, for they are based on money that otherwise could go to the government in taxes. From a small beginning at the turn of the century, they have become a very important factor in shaping developments in higher education and the arts and they play a significant role in policy formation as well. The best-known and most influential are the Ford, Rockefeller, and Carnegie foundations.

Think tanks and university research institutes are nonprofit organizations that have been developed to provide settings for experts m various academic disciplines to devote their time to the study of policy alternatives free from the teaching and departmental duties that are part of the daily routine for most members of the academic community. Supported by foundation grants and government contracts, they are a major source of the new ideas that are discussed in the policy-formation groups.

No one type of organization within the network is more important than the others. Nor is any one organization or group the "inner sanctum where final decisions are made. It is the network as a whole that shapes policy alternatives, with different organizations playing different roles on different issues.

THE POLICY-DISCUSSION GROUPS

National-level discussion groups were first created at the turn of the century coterminous with the development of the corporate community. The group that was to be the prototype for all the rest, the National Civic Federation, had outlived its usefulness by World War I but the several groups that gradually replaced it-the Conference Board (1916), the Council on Foreign Relations (1921), and the Committee for Economic Development (1942) became even more important in their own right and have been functioning in tandem since the

The Council on Foreign Relations

The largest and best-known of the policy organizations is the Council on Foreign Relations (CFR). Founded by bankers, lawyers, and academicians who were fully cognizant of the larger role the United States would play in world affairs as a result of World War I, the council's importance in the conduct of foreign affairs was well established by the 1930s. The council has about 1,800 members, half from the New York area, half from the rest of the country. Before 1970 the members were primarily financiers, executives, and lawyers, with a strong minority of journalists, academic experts, and government officials. Since that time there has been an effort to include a larger number of government officials, including foreign-service officers, politicians, and staff members of congressional committees concerned with foreign policy.

... the council receives its general funding from wealthy individuals, corporations, and subscriptions to its influential periodical, Foreign Affairs. For special projects, however, it often relies upon major foundations for support.

... The council conducts an active program of luncheon and dinner speeches at its New York clubhouse, featuring government officials and national leaders from all over the world. It also encourages dialogue and disseminates information through books, pamphlets, and articles in Foreign Affairs. However, the most important aspects of the CFR program are its discussion groups and study groups. These small gatherings of about 15 to 25 people bring together business executives, government officials, scholars, and military officers for detailed consideration of specific topics in the area of foreign affairs. Discussion groups, which meet about once a month, are charged with exploring problems in a general way, trying to define issues and identify alternatives.

... Council leaders reacted to the large-scale international changes of the late 1960s and early 1970s by creating a new discussion organization called the Trilateral Commission, which included 60 members from Japan and 60 from Western Europe as well as American members. Its goal was to develop closer economic and political cooperation among the industrialized democracies in dealing with economic competition among themselves and with challenges from the underdeveloped countries. The council also launched a large number of its own research projects and discussion groups under the auspices of the 1980s Project to parallel the work of the Trilateral Commission.

The council is far too large for its members to issue policy proclamations as a group. Moreover, its usefulness as a neutral discussion ground would be diminished if it tried to do so. However, its leaders did help to mediate the dispute that broke out in the foreign policy establishment in the 1970s over the nature of Soviet intentions and the extent of its threat to United States interests. After holding several discussion groups and study groups on the topic, it created a special Commission on U.S.-Soviet Relations in the fall of 1980 that included representatives of both the Soviets-are-expansionists-and-dangerous view and the Soviets-can-be-worked-with view, at least to the degree that the latter view exists within respectable opinion. The discussants had worked in all recent administrations, Republican and Democrat, and they were chaired by the editor-in-chief of Time magazine. The report that emerged from these discussions was drafted by a specialist in international relations from a major Washington think tank. He had served as an aide to the National Security Council in the early 1970s. The 31-page report was distributed free of charge with the aid of a grant from the Ford Foundation and publicized in newspapers and magazines read by members of the power elite.

Time described the commission's recommendations as "tough-minded." The participants agreed that the Soviets were a "vastly more formidable foe" than had been thought a decade earlier and that their intentions were relentlessly hostile to Western interests. The report called for an even bigger defense buildup than either presidential candidate had advocated in the 1980 elections, and it branded the volunteer army a failure. Commentators during the early 1980s increasingly noted that foreign policy experts were once again basically in agreement in their overall view of the world situation. It is likely that the ongoing debate at the council and the report of its commission played a major role in maintaining dialogue between the opposing camps.

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The Committee for Economic Development

The Committee for Economic Development (CED) was founded in the early 1940s to help plan for the postwar world. The corporate leaders who were instrumental in creating this new study group had two major concerns at the time: (1) There might be another depression after the war; and (2) if businessmen did not present economic plans for the postwar era, other sectors of society might present plans that would not be acceptable to the corporate community. The expressed purpose of the committee was to avoid any identification with special-interest pleading for business and to concern itself with the nation as a whole: "The Committee would avoid promoting the special interests of business itself as such and would likewise refrain from speaking for any other special interests.... The CED was to be a businessman's organization that would speak in the national interest."

The CED consisted of 200 corporate leaders in its early years. Later it included a small number of university presidents among its members. In addition, leading economists and public administration experts have served as advisers to the CED and conducted research for it; many of them have gone on to serve in advisory roles in both Republican and Democratic administrations, particularly on the Council of Economic Advisors. Although there is an overlap in membership with the larger Council on Foreign Relations, the committee has a different mix of members. Unlike the council,, it has few bankers and no corporate lawyers, journalists and academic experts.

Like the council, the CED works through study groups that are aided by academic experts. The study groups have considered every conceivable issue from farm policy to government reorganization to campaign finance laws, but the greatest emphasis is on economic issues of both a domestic and international nature. The most ambitious of its projects have been financed by large foundations, but its general revenues come directly from its corporation members.

Unlike the CFR, the results of committee study groups are released as official policy statements of the organization. The statements are published in pamphlet form and disseminated widely in business, government, and media circles. Several of the statements bear a striking similarity to government policies that were enacted at a later time.

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The Conference Board

The Conference Board, founded in 1916 as the National Industrial Conference Board, is the oldest of the existing policy-discussion groups. It was originally a more narrowly focused organization, with a primary interest in doing research for the corporate community itself. During the 1930s and 1940s it drifted to an extreme right-wing stance under the influence of its executive director, who often denounced other policy groups for their alleged desertion of the free enterprise system. Only with the retirement of this director in 1948 and an infusion of new members into the board of directors did the organization move back into the corporate mainstream and begin to assume a role as a major voice of the corporate community. Further changes in the 1960s were symbolized by the shortening of its name to Conference Board and the election of a CED trustee as its president.

In addition to discussion groups and the publication of a variety of statistical and survey studies, the Conference Board has been innovative in developing international policy linkages. In 1961, in conjunction with the Stanford Research Institute, a West Coast think tank, the board sponsored a week-long International Industrial Conference in San Francisco, bringing together 500 leaders in industry and finance from 60 countries to hear research reports and discuss common problems. The International Industrial Conference has met every four years since that time. Along with the Trilateral Commission and the "sister" committees that the CED has encouraged in numerous nations, the International Industrial Conference is one of the major institutions in an international policy discussion network that has emerged since the 1950s.

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Ultraconservative Policy Groups

The policy network is not totally homogeneous. Reflecting differences of opinion within the corporate community, there is an ultraconservative clique within the policy-planning network that has consistent and long-standing disagreements with the more moderate conservatives of the CED, CFR, and Conference Board. Historically, the most important of these organizations have been the National Association of Manufacturers and the Chamber of Commerce of the United States, but they were joined in the 1970s by the American Enterprise Institute, the Hoover Institution, the Institute for Contemporary Studies, and one or two other small groups.

It is the ultraconservative organizations that are most often identified with "big business" in the eyes of social scientists and the general public. The fact that they are generally nay-sayers who often lose on highly visible issues is one of the major reasons for the belief that the corporate community is not the dominant influence in shaping government policy. What is not understood is that those setbacks are usually at the hands of their more moderate and soft-spoken colleagues within the policy network and the corporate community.

The moderate conservatives and ultraconservatives have differed throughout the century on foreign policy, economic policy, and welfare legislation. Historically, the moderates have favored foreign aid, low tariffs, and increased economic expansion overseas, whereas the ultraconservatives tended to see foreign aid as a giveaway and called for high tariffs. Moderates came to accept the idea that government taxation and spending policies could be used to stimulate and stabilize the economy, but ultraconservatives have continued to insist that taxes should be cut to the very minimum and that budget deficits are the work of the devil. Moderates created some welfare-state measures, or they supported such measures in the face of serious social disruption; ultraconservatives have constantly opposed any welfare spending, claiming that it destroys moral fiber and saps individual initiative as well as costing them tax money and making it harder to keep wages down.

No one factor is readily apparent as the sole basis for the division into moderate conservatives and ultraconservatives within the corporate community and power elite. There is a tendency for the moderate organizations to be directed by executives from the very largest and most internationally oriented of corporations, but there are numerous exceptions to that generalization. Moreover, there are corporations that support policy organizations within both ideological currents. Then, too, there are instances where some top officers from a corporation will be in the moderate camp and others will be in the ultraconservative camp. However, for all their differences, leaders within the two clusters of policy organizations have a tendency to search for compromise policies due to their common membership in the corporate community and the numerous interlocks among all policy groups. When compromise is not possible, the final resolution of policy conflicts often takes place in legislative struggles in Congress...

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FOUNDATIONS

Among the many thousands of foundations that exist in the United States, only a few hundred have the money and interest to involve themselves in funding programs that have a bearing on public policy. They are of three basic types:

1. There are 26 general-purpose foundations with an endowment of $100 million or more that were created by wealthy families. Most of them are controlled by a cross-section of leaders from the upper class and corporate community, but there remain several ultraconservative foundations in the general-purpose category that are tightly controlled by the original donors.

2. There are dozens of corporate foundations that are funded by a major corporation and directed by the officers of that corporation. Their number and importance has increased greatly since the 1960s, especially in donations to education, medical research, and the arts.

3. Many cities have community foundations that are designed to aid charities, voluntary associations, and special projects in their home cities. They receive funds from a variety of sources, including other foundations, wealthy families, and corporations, and they are directed by boards that include both corporate executives and community leaders.

Upper-class and corporate representation on the boards of the large general-purpose foundations most involved in policy-oriented grants has been documented in several studies. In a study of the 12 largest foundations in the mid-1960s, for example, it was found that half the trustees were members of the upper class. A study of corporate connections into the policy network for 1970 showed that 10 of these 12 foundations had at least one connection to the 201 largest corporations; most had many more than one connection. There is also evidence of numerous interlocking memberships between foundations and policy associations. In 1971,14 of 19 Rockefeller Foundation trustees were members of the Council on Foreign Relations, with 4 of those members also serving as directors of the council. Ten of 17 trustees of the Carnegie Corporation, as the most important of four Carnegie foundations is named, were members of the council at that time, as were 7 of 16 trustees at the Ford Foundation."

By far the most extensive and revealing study of the relationship among foundations, policy groups, and think tanks was undertaken by sociologist Mary Anna Culleton Colwell, a former executive officer of a small foundation who also conducted lengthy interviews with foundation officials as part of her larger study. Starting with a sample of 77 large foundations for 1974, which included all 26 with over $100 million in assets, she found 20 foundations that gave over 5 percent of their total grants, or over $200,000, to public policy grants in either 1972 or 1975. These 20 foundations in turn led to a group of 31 recipient organizations in the policy-planning and opinion-shaping networks that received grants from three or more of these foundations.

The extent of the policy-planning network revolving around these core organizations was even greater than any previous studies had led social scientists to expect. Of the 225 trustees who served on the 20 foundations between 1971 and 1977,124 also served as trustees of 120 other foundations as well. Ten of the 20 foundations had trustee interlocks with 18 of the 31 policy-planning organizations and think tanks. The Rockefeller Foundation had the largest number of trustee interlocks with other foundations (34), followed by the Sloan Foundation, the Carnegie Corporation, the Ford Foundation, Rockefeller Brothers Fund, and the Russell Sage Foundation. The Rockefeller Foundation also had the largest number of trustee connections to the policy groups it finances (14), followed by the same five foundations named in the previous sentence. Moreover all six of these foundations tended to be involved with the same policy groups. These foundations, then, are part of the moderate-conservative portion of the network that includes the Council on Foreign Relations and the Committee for Economic Development as its most important policy groups.

Colwell's analysis also showed that another set of foundations, led by the Pew Memorial Trust, Lilly Endowment, and Smith Richardson Foundation, gave money to policy groups and think tanks identified with ultraconservative programs-the American Enterprise Institute, the American Economic Foundation, the Hoover Institution, the Foundation for Economic Education, and Freedoms Foundation. Unlike the large foundations in the moderate part of the network, all of the very conservative foundations are under the direct control of the original donating family. On the basis of tax records and interviews, Cowell concludes it is a "reasonable supposition" that many, if not all, of the ultraconservative organizations of nonprofit standing receive a very large percentage of their annual budgets from philanthropic foundations and corporations.

Foundations often become much more than sources of money that respond to requests for funding. Some foundations set up programs that are thought to be necessary by their trustees or staff. Then they search out appropriate organizations to undertake the project or create special commissions within the foundation itself. A few foundations have become so involved in a specific issue area that they function as a policy-discussion organization on that particular issue. This is especially the case with the Carnegie Corporation and its affiliates in the area of higher education. Their study groups, commissions, and fellowship programs have been central to the history of college and university development throughout the twentieth century. For example, the Carnegie Commission on Higher Education of the late 1960s and early 1970s spent $6 million and produced 80 books with policy implications for all aspects of higher education.

Similarly, the Ford Foundation became the equivalent of a policy group on the issue of urban unrest in the 1950s and 1960s. It created a wide range of programs to deal with the problems generated by urban renewal programs and by the large black migration from the South into the inner cities of the North. One of these programs, called the Gray Areas Project, became the basis for the War on Poverty declared by the Johnson Administration in 1964 in the face of serious urban unrest.

Foundations, then, are an integral part of the policy-planning process both as sources of funds and program initiators. They are not mere donors of money for charity and value-free academic research. In contrast to the general image that is held of them, they are in fact extensions of the corporate community in their origins, leadership, and goals.

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THINK TANKS AND RESEARCH INSTITUTES

The deepest and most critical thinking within the policy-planning network does not take place in the discussion groups, as many academicians who have participated in them are quick to point out. This claim may be somewhat self-serving on the part of professors, who like to assume they are smarter than businesspeople and bankers. However, the fact remains that many new initiatives are created in various think tanks and university research institutes before they are brought to the discussion groups for modification and assimilation by the corporate leaders. Among the dozens of think tanks, some highly specialized in one or two topics, the most important are the RAND Corporation, the Urban Institute, the National Bureau of Economic Research, Resources for the Future, and centers for international studies at MIT, Harvard, and Georgetown. The institutes and centers connected to universities receive much of their funding from foundations, but the larger and less specialized independent think tanks are more likely to undertake contract research for businesses or government agencies.

Some organizations are hybrids that incorporate both think tank and policy-discussion functions. They do not fit neatly into one category or the other. Such is the case with the Brookings Institution, one of the most important Washington-based organizations in the policy network. Formed in 1927 with the help of foundation monies, the Brookings Institution is directed by corporate executives, but it is not a membership organization. Although it conducts some study groups, particularly for government officials, it is even more important as a kind of postgraduate school for specialists in a wide range of policy areas. Employing a very large number of social scientists, it functions as a source of new ideas and consultants for policy groups and government leaders. Its economists in particular have been prominent as advisers to both Republican and Democratic administrations. In terms of common directors, its greatest overlaps are with the Committee for Economic Development, the Council on Foreign Relations, and the American Assembly. In addition, 60 percent of its trustees were foundation trustees in the early 1970s.

Several hybrid organizations function in specialized issue-areas. The Population Council was established in 1952 to fund research and develop policy on population control. Relying at the outset on large personal donations from John D. Rockefeller III as well as grants from the Ford and Rockefeller Foundations, it helped to create population research institutes at several carefully selected universities in different regions of the country that would aid in giving respectability to this area of concern. It also held conferences and publicized findings that showed that population growth was a major problem. Working closely within several other organizations, including the Population Reference Bureau and International Planned Parenthood, it had enormous success in popularizing its policy suggestions and having them implemented at both the national and international levels, as a detailed case study demonstrates. The step-by-step fashion in which the population groups proceeded, including the establishment of research institutes and spreading information through the mass media before approaching government, is a classic example of the policy network in action.

Resources for the Future was founded about the same time as the Population Council, with primary funding from the Ford Foundation. In part concerned with population because population growth puts pressure on resources, it has become one of the power elite's major sources of expertise on environmental issues. Its leaders share an informal coordinating role in this issue-area with the Conservation Foundation. Both work with the National Audubon Society, the National Wildlife Federation, and Nature Conservancy in attempting to infuse an environmental consciousness into the corporate community. At the same time they try to moderate the more militant demands of the middle-class environmental movement.

Two organizations, the American Law Institute and the American Judicature Society, join with committees of the American Bar Association in dealing with problems within the issue-area of the law. The focus of the American Law Institute is on such general areas of law as tax law or the penal code. Its goal is to write model acts for state legislatures to consider, or to propose revisions in areas of the law through its written documents of restatement and clarification. The Judicature Society, on the other hand, is more specifically focused on the functioning of the court system, proposing methods to improve or streamline the administrative procedures of the judicial process. As one aspect of this interest, it is concerned with the processes by which state and federal judges are selected, and it attempts to influence standards of judicial conduct

The leadership of the American Law Institute and the American Judicature Society comes primarily from the corporate lawyers who also play the dominant role within the American Bar Association. However, this is not exclusively the case with the Judicature Society. Its chair in 1981, for example, was an economist who heads the Henry Luce Foundation and serves as a director of the Council on Foreign Relations, New York Telephone, Bristol-Myers, American Express American Can, and Chemical Bank.

There are hybrid organizations in other specialized areas as well, including farm policy, municipal government, and the arts. In each case, many of their expert members and directors are part of the larger policy organizations as well. There is hardly a think tank of note that does not include directors from the Committee for Economic Development or Conference Board, or the Ford, Rockefeller and Carnegie foundations. In the case of the larger Council on Foreign Relations, the overlaps are of course even more numerous.

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THE OPINION-SHAPING PROCESS

The opinion-shaping process involves a wide range of organizations and methods through which members of the power elite attempt to influence the beliefs, attitudes, and opinions of the general public. In order to prevent the development of attitudes and opinions that might interfere with the acceptance of policies created in the policy formation process, leaders within the opinion-molding process attempt to build upon and reinforce the underlying principles of the American belief system. Academically speaking, these underlying principles are called laissez-faire liberalism, and they have their roots in such great systematizers of the past as Locke, Hume, Montesquieu, Adam Smith, and the American founding fathers. These principles emphasize individualism, free enterprise, competition, equality of opportunity, and a minimum of reliance upon government in carrying out the affairs of society. Slowly articulated during the centuries-long rise of the capitalist system in Europe, they arrived in America in nearly finished form and had no serious rivals in a nation that did not have a feudal past or an established church.

Popularly speaking, these values are known to most citizens as plain "Americanism." They are seen as part of human nature or the product of good common sense, not as just another belief system that may or may not have any more validity than the dozens of others that have been developed by nations and peoples around the world. Americanism, including the all-important component of patriotism that is a fanatical constant in all tribes and nations, is the world view or ideology, of the United States. If Americans can be convinced that some policy or action can be justified in terms of this emotion-laden and unquestioned body of beliefs, they are likely to accept it. Thus the organizations that make up the opinion-shaping network strive to become the arbitrators of which policies and opinions are in keeping with good Americanism, and which are "un-American," meaning foreign and treasonous at the very least. These organizations struggle to define for everyone what policies are in the "national interest" and to identify those policies with Americanism.

One of the most important goals of the opinion-shaping network is to influence public schools, churches, and voluntary associations. To that end, organizations within the network have developed numerous links to these institutions, offering them movies, television programs, books, pamphlets, speakers, advice, and financial support. However, the schools, churches, and voluntary associations are not part of the network. Rather, they are relatively autonomous settings within which the power elite must constantly contend with spokespersons of other social strata and with critics of the economic system. To assume otherwise would be to overlook the social and occupational affiliations of the members as well as the diversity of opinion that often exists in these institutions of the middle and lower levels of the social hierarchy.

Operating at the center of the opinion-shaping process are many of the same foundations, policy-planning groups, and think tanks that are part of the policy-formation process.

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Shaping Opinion on Foreign Policy

The opinion-shaping network achieves its clearest expression and greatest success in the area of foreign policy, where most people have little information or interest and are predisposed to agree with top leaders out of patriotism and a fear of whatever is strange or foreign. Because so few people take a serious interest in foreign policy issues, the most important efforts in opinion shaping are aimed toward a small stratum of highly interested and concerned citizens of college-educated backgrounds.

The central organizations in the shaping of opinion on foreign policy are the Council on Foreign Relations and the Foreign Policy Association. However, the council does very little to influence public opinion directly. It publishes Foreign Affairs, the most prestigious journal in the field, and occasionally it prints pamphlets on major issues that can be used by other discussion groups. However, these efforts are primarily for consumption within the foreign-policy establishment. For local elites, the council sponsors Committees on Foreign Relations in over 35 cities across the country. These committees meet about once a month or on the occasion of the visit of a special dignitary to hear speakers that are usually provided by the council or the government. The aim of this program is to provide local leaders with the information and legitimacy in the area of foreign affairs that makes it possible for them to function as opinion leaders. A 1951 report by the council on these committees explained their role as follows:

In speaking of public enlightenment, it is well to bear in mind that the Council has chosen as its function the enlightenment of the leaders of opinion. These in turn, each in his own sphere, spread the knowledge gained here [Committees on Foreign Relations] in ever-widening circles.

The most important organization involved in shaping upper-middle-class public opinion on foreign affairs is the Foreign Policy Association, based in New York. Forty-two percent of its 74-person governing council were also members of the Council on Foreign Relations in 1972. Although the association does some research and discussion work, its primary focus is on molding opinion outside the power elite a division of labor with the Council on Foreign Relations that is well understood within foreign-policy circles. A council director of the 1930s wrote that the FPA had "breadth of influence," whereas the CFR had "depth"; he went on to say that "anyone with the slightest experience in such matters knows that you must have policy-making individuals and groups working closely in a government" as well as "the support of the electorate" made possible in part by organizations that function "as channel-ways of expression." More bluntly, a retired president of the council explained to historian Laurence Shoup that the council and its Committees on Foreign Relations attempt to reach top-level leaders, whereas the Foreign Policy Association attracted the "League of Women Voters type."

The association's major effort is an intensive program to provide literature and create discussion groups in middle-class organizations and on college campuses. It sponsors a yearly Great Decisions program that prepares thematic discussions each year for groups around the country. It publishes a Headline Series of pamphlets for use in discussion groups, and it attempts to place its material on radio programs and into extension courses. It works closely with local World Affairs Councils to provide speakers and written materials, and it compiles foreign-policy briefings that are sent to all incumbents and candidates for Congress.

The council and the association, in turn, are linked to other opinion-molding organizations influential in foreign affairs. Perhaps the most important of them is the United Nations Association, which attempts to build support for American involvement in that organization.

... even on foreign policy there are limits to the shaping of public opinion. Opposition to both the Korean and Vietnam wars grew consistently as the number of American casualties continued to mount. Vehement sentiment in the case of the Vietnam War helped to limit presidential alternatives in the late 1960s, and the constant complaints between 1975 and 1980 from foreign-policy leaders about the "post Vietnam syndrome" attested to the effects of a lingering antiwar sentiment on foreign-policy options.

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Advertising and Public Opinion

Advertising is usually thought of in terms of the efforts used by corporations to sell specific products, but it can be used to sell the corporations and the economic system as well. Many corporations 'attempt to sell the free-enterprise system through what is called institutional advertising. Instead of talking about their products, they tell what they have done to benefit local communities, schools, or service organizations. Other corporations promote a good image by providing funds for local charities, donating services to community organizations, or sponsoring programs on public television. The quiet sponsorship on public television is especially useful in revealing the image-building efforts that motivate such sponsorship. A sociological study of donors to the public broadcasting system in the 1970s showed that the biggest donors were those companies that were having the most problems with the general public or regulatory -bodies, especially oil companies and pharmaceutical companies.

... the most pervasive and longstanding use of advertising by the leaders within the corporate community and the opinion-shaping network can be seen in the functioning of the Advertising Council.

The Advertising Council is in some ways unique because of its prominence, massive resources, and wide range of concerns. In its major activities, however, it is typical of a wide variety of opinion shaping organizations that function in specific areas from labor relations, where they battle union organizers, to something as far removed as the arts, where they encourage the development of the arts as a booster to the morale of those trapped in the inner city. Those functions are basically three in number:

1. They provide think-tank forums where academics, journalists, and other cultural experts can brainstorm with corporate leaders about the problems of shaping public opinion.

2. They help to create a more sophisticated corporate consciousness through forums, booklets, speeches, and awards.

3. They disseminate their version of the national interest to the general public on issues of concern to the power elite.

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THE MASS MEDIA

The mass media-newspapers, magazines, television, and radio-are one outlet for much of the material generated by the organizations of the opinion-shaping network. Many social scientists believe that the media, and in particular television, play a large role in the shaping of public opinion. However, it seems more likely to me that they have a much more secondary role, reinforcing existing viewpoints and helping to set the outer limits of respectable discourse.

The mass media have a complex relationship to the upper class and corporate community. On the one hand, they are lucrative business enterprises owned by members of the upper class and directed by members of the corporate community who have extensive connections to other large corporations. On the other hand, editors and journalists, fortified by a professional code of objectivity and impartiality, have some degree of independence in what they report and write, and their opinions are sometimes at variance with those of corporate executives and policy experts. The result is a relationship between media and corporate community that is marked by tension, with corporate leaders placing part of the blame on the mass media for any negative opinions about business that are held by the general public.

... The growing rift between the corporate community and the liberal elements of the mass media led to a number of corporate initiatives in the late 1970s. In 1977, for example, the Ford Foundation sponsored an off-the-record, two-day conference between business and media representatives that was designed to air mutual grievances. Programs to teach "business reporting" were created at several universities with the goal of improving the skills and judgment of reporters. Finally, corporations led by Mobil Oil began to run advertisements on opinion pages in major newspapers, and in liberal weeklies and reviews. They presented the corporations' viewpoints in their own words on a variety of issues. By 1976 corporations were spending $140 million a year on such advocacy advertising.

For all the corporate community's complaints about specific stories, newspapers, or television stations within the mass media, the overall effect of the media efforts nevertheless tends to reinforce the stability of the present corporate system. First of all, as highly profitable companies whose primary goal is to sell advertising, their basic allegiance is to the corporate system. This is evidenced in the fact that their owners and directors play an active role in setting limits beyond which their reporters cannot go without facing reassignment, demotion, or firing. Then, too, editorial policies make a distinction between criticizing the system and exposing the wrongdoing of specific corporations, industries, or politicians. For example, the Wall Street Journal, perhaps the favorite newspaper of the corporate community and a fierce champion of the free enterprise system, has nonetheless published numerous stories exposing unacceptable behavior by corporate leaders and policy experts. Especially damning was a story in 1980 that showed that President-elect Ronald Reagan's top foreign-policy adviser, Richard Allen, a former fellow of the Hoover Institution, had worked as a paid consultant to Japanese corporations while serving as a government adviser.

Finally, the media reinforce the legitimacy of the social system through the routine ways in which they accept and package events. Their style and tone always takes the statements of business and government leaders seriously, treating their claims with great respect. In the area of foreign policy, for example, the media cover events in such a way that America's diplomatic aims are always honorable, corporate involvement overseas is necessary and legitimate, and revolutionary change in most countries is undesirable and must be discouraged whatever the plight of the majority of their citizens.

Whatever the exact role of the mass media, it should be clear that they are not the be-all and end-all of the opinion-shaping process that has been outlined in this section. In my view, the mass media are merely one dissemination point among many. They reach the most people, but the people they reach are those who matter least from the point of view of the opinion molders, and the message they provide is sometimes ambiguous besides.

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The Power Elite and Government

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... there is evidence that a two-party system discourages voting, for those in a minority of even 49 percent receive nothing for their efforts. In countries where single-member districts have been abandoned for proportional representation, voting has increased considerably. It is also the case that the percentage of people voting in the United States has decreased during the twentieth century even while it remains constant or increases in most European countries. Perhaps the major conclusion to be drawn about the political con- ~c sequences of the two-party system is not that it allows citizens to express their policy preferences but that it creates a situation where there is very little relationship between politics and policy. As Lowi concludes: "Majorities produced by the American two-party system are simply numerical majorities; they usually have no political content whatsoever."

In a system where policy preferences become blurred, the emphasis on the images of individual candidates becomes very great. Individual personalities become more important than the policies of the parties. This tendency has been increased somewhat with the rise of the mass media, in particular television, but it is a reality of American politics that has existed far longer than is understood by the many columnists and pundits who lament the "recent" decline of political parties. The executive director of a congressional watchdog organization, the National Committee for an Effective Congress, put the matter even more strongly well before the alleged deterioration of the parties become a media cliché:

For all intents and purposes, the Democratic and Republican parties don't exist. There are only individuals (i.e., candidates) and professionals (i.e., consultants, pollsters, and media advisers)."

It is because the candidate-selection process in the American two-party system is so individualistic, and therefore dependent upon name recognition and personal image, that it can be in good part dominated by members of the power elite through the relatively simple and direct means of large campaign contributions. In the roles of both big donors and fund raisers, the same people who direct corporations and take part in policy groups play a central role in the careers of most politicians who advance beyond the local level in states of any size and consequence. "Recruitment of elective elites," concludes political scientist Walter D. Burnham, "remains closely associated, especially for the most important offices in the larger states, with the candidates' wealth or access to large campaign contributions."

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BUT BUSINESSMEN FEEL POWERLESS

Despite these various kinds of objective evidence that the power elite has great power in relation to the federal government, many corporate leaders feel that they are relatively powerless in the face of government. To hear them tell it, the Congress is more responsive to organized labor, environmentalists, and consumers than it is to them. They also claim to be harassed by willful and arrogant bureaucrats who encroach upon the rightful preserves of the private sector, sapping them of their confidence and making them hesitant to invest their capital.

These feelings have been documented most vividly by David Vogel and Leonard Silk, one a political scientist, the other a business columnist for the New York Times. They were permitted to observe a series of meetings at the Conference Board in 1974 and 1975 in which the social responsibilities of business were being discussed. The men at these meetings were convinced that everybody but them was listened to by government. Government was seen as responsive to the immediate preferences of the majority of citizens. "The have-nots are gaining steadily more political power to distribute the wealth downward," complained one executive. "The masses have turned to a larger government."

Some even wondered whether democracy and capitalism are compatible. "Can we still afford one man, one vote? We are tumbling on the brink," said one. "One man, one vote has undermined the power of business in all capitalist countries since World War II," announced another. "The loss of the rural vote weakens conservatives." However, Silk and Vogel believe that businessmen in America are unlikely to go so far as to be fascists, even with their antidemocratic bias, because they are so antigovernment:

Even with their elitist, anti-populist, and even anti-democratic bias, however, few American businessmen can fairly be regarded as "fascist," if by that term one means a believer in a political system in which there is a combination of private ownership and a powerful, dictatorial government that imposes major restrictions on economic, political, social and religious freedoms. Basically, the anti-governmental mind set of the great majority of American businessmen has immunized them against the virus of fascism.

The fear business leaders express of the democratic majority leads them to view recessions as a saving grace, for recessions help to keep the expectations of workers in check. Workers who fear for their jobs are less likely to demand higher wages or government social programs. For example, different corporate executives made the following comments:

This recession will bring about the healthy respect for economic values that the Depression did.

People need to recognize that a job is the most important thing they can have. We should use this recession to get the public to better understand how our economic system works. Social goals are OK, provided the public is aware of their costs.

It would be better if the recession were allowed to weaken more than it will, so that we would have a sense of sobriety.

The negative feelings these business leaders have toward government are not a new development in the corporate community, as some pluralists have claimed in blaming the New Deal and the social programs of the 1960s. A study of businessmen's views in the nineteenth century found that they believed political leaders to be "stupid" and "empty" people who went into politics only to earn a living. As for the ordinary voters, they were "brutal, selfish and ignorant." A comment written by a businessman in 1886 could have been made at the Conference Board meeting in 1975: "In this good, democratic country where every man is allowed to vote, the intelligence and the property of the country is at the mercy of the ignorant, idle and vicious."

The emotional expressions of businesspeople, or anyone else, about their power or lack of it, cannot be taken seriously as power indicators. To do so, as Mills wrote, is to "confuse psychological uneasiness with the facts of power and policy," which are in the realm of sociology, economics, and politics, not subjective feelings and verbal protestations. But it is nonetheless interesting to try to understand why businessmen complain about a government they dominate. There are several intertwined aspects to the answer.

First of all, complaining about government is a useful political strategy. It puts government officials on the defensive and forces them to keep proving that they are friendly to business. McConnell makes the point as follows:

Whether the issue is understood explicitly, intuitively, or not at all, denunciations serve to establish and maintain the subservience of government units to the business constituencies to which they are actually held responsible. Attacks upon government in general place continuing pressure on governmental officers to accommodate their activities to the groups from which support is most reliable.

However, it still seems surprising that corporate leaders would feel the need to resort to this tactic. This is especially the case given the evidence that bureaucrats who in any way speak out or criticize their elected or appointed superiors are removed from their positions, left with no duties, or otherwise punished in a dramatic and public way that is a clear lesson to other civil servants. Silk and Vogel suggest that part of the explanation might be found in the fact that so few civil servants are part of the upper class and corporate networks. They quote economist Edward S. Mason on the contrast between Western Europe and the United States on this point:

It is clear to the most obtuse observer that there is a much more distant relationship between business and government in the United States than, say, in Britain, or France or the Netherlands.... A British businessman can say, "Some of my best friends are civil servants," and really mean it. This would be rare in the United States.

In Western Europe, the government officials whom American businessmen vilify with the hostile label "bureaucrats" are part of the same old-boy networks as the business leaders due to common class background and common schooling. But such is not the case in the United States, where the antigovernment ideology tends to restrain members of the upper class from government careers except in the State Department. Because middle-class people who are not part of the in-group network staff the bureaucracies, the different method of domination that McConnell describes is necessary. It means that "tough-talking" members of the corporate community have to come into government as top-level appointees in order to "ride herd" on the "bureaucrats" in Washington. In other words, lack of social contact in a situation of uncertainty explains much of the hostile feelings toward bureaucrats whose great power exists more in imagination than in reality.

There also seems to be an ideological level to the businessmen's attitude toward government. In a perceptive discussion of "why businessmen mistrust their state," Vogel explains their attitude in terms of their fear of the populist, democratic ideology that underlies American government. Since power is in theory in the hands of all the people, there always is the possibility that someday "the people," in the sense of the majority, will make the government into the pluralist democracy it is supposed to be. In that sense, the great power of the ruling class is illegitimate, and the existence of such power is therefore vigorously denied. Another political scientist, James Prothro, studying businessmen's views during what are thought of as their halcyon days of the 1920s, nonetheless found the same mistrust of government. He reached conclusions similar to those of Vogel, conclusions that show that the hostility expressed by businessmen is not a response to "big government": "The conspicuous anti-governmental orientation of business organizations is itself an incident of the more basic fear that popular control will, through the device of universal suffrage, come to dominate the governmental process."

The expressions of anguish from individual business leaders concerning their powerlessness also suggests an explanation in terms of the intersection of social psychology and sociology. It is the corporate community and the power elite that have power, not individuals apart from their institutional context. It is therefore not surprising that specific individuals might feel powerless. As individuals, they are not always listened to, and they have to convince their peers of the reasonableness of their arguments before anything begins to happen. Moreover, any policy that is adopted is a group decision, and it is sometimes hard for people to identify with group actions to the point where they feel personally powerful.

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Community Power Structures

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... leaders within a local area join together as a community power structure because they share a mutual interest in increasing the value of their land, buildings, and other real estate through intensifying land use and creating population growth.

Community power structures attempt to achieve their growth aims by attracting the capital investments of corporations, state and federal agencies, and universities and research institutes. This need for outside investors creates a basis for cooperation between local landed elites and the corporate community.

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POWER STRUCTURES AS GROWTH MACHINES

A theoretical framework for encompassing the diverse and seemingly contradictory findings on power at the local level has been suggested by urban sociologist Harvey Molotch. Surveying the separate literatures on city development and community power structures, Molotch concludes that a community power structure is at bottom an aggregate of land-based interests that profit from increasingly intensive use of land. It is a set of property owners who see their futures as linked because of a common desire to increase the value of their individual parcels. Wishing to avoid any land uses on adjacent parcels that might decrease the value of their properties, they come to believe that working together is to the benefit of each of them: "One sees that one's future is bound to the future of the larger area, that the future enjoyment of financial benefit flowing from a given parcel will derive from the general future of the proximate aggregate of parcels," Molotch writes. "When this occurs," he continues, "there is that 'we feeling' which bespeaks of community."

The most typical way of intensifying land use is growth, and this growth usually expresses itself in a constantly rising population. A successful local elite is one that is able to attract the corporate plants and offices, the defense contracts, the federal and state agencies, or the educational and research establishments that lead to an expanded work force, and then in turn to an expansion of retail and other commercial activity, extensive land and housing development, and increased financial activity. It is because this chain of events is at the core of any developed locality that Molotch calls the city and its local elite a "growth machine."

The most important activity of a community power structure in this view is to provide the right conditions for outside investment-in Molotch's phrase, to prepare the ground for capital. However, this preparation involves far more than providing level and plentiful acreage with a stream running through it. It also involves all those factors that make up what is called a "good business climate," such as low business taxes, a good infrastructure of municipal services, vigorous law enforcement, an eager and docile labor force, and a minimum of business regulations. Molotch stresses that the local "rentiers" expend considerable effort in keeping up with the changing place needs of corporate capital:

To better understand the needs of capital, and hence to better prepare the ground for them, sophisticated rentiers may take business school courses, read relevant trade journals, make use of their social ties with local capitalists, foster studies at the local university, governmental, or planning agency, or, as is most common, use their own "good business sense." The point is that they maintain an attitude of constant alert to the needs of this dominant class.

Although the growth machine is based in land ownership, it includes all those interests that profit from the intensification of land use. Thus, executives from the local bank, the savings and loan, the telephone company, the gas and electric company, and the local department store are often quite prominent as well. As in the case of the corporate community, the underlying unity within the growth machine is most visibly expressed in the intertwining boards of directors among local companies. And, once again, the central meeting points are most often the banks, where executives from the utilities companies and the department stores meet with the largest landlords and developers.

There is one other important component of the local growth machine, and that is the newspaper. The newspaper is deeply committed to local growth so that its circulation and, even more important, its pages of advertising, will continue to rise. No better expression of this commitment can be found than a statement by the publisher of the San Jose Mercury News in the 1950s. When asked why he had consistently favored development on beautiful orchard lands that turned San Jose into one of the largest cities in California within a period of two decades, he replied, "Trees do not read newspapers."

However, the unique feature of the newspaper is that it is not committed to growth on any particular piece of land or in any one area of the city, so it often attains the role of "growth statesman" among any competing interests within the growth machine. Its publisher or editor is deferred to as a voice of reason.

Competing interests often regard the publisher or editor as a general community leader, as an ombudsman and arbiter of internal bickering, and at times, as an enlightened third party who can restrain the short-term profiteers in the interest of a more stable, long-term, and properly planned growth. The paper becomes the reformist influence, the "voice of the community," restraining the competing subunits, especially the small-scale arriviste "fast-buck artists" among them.

The local growth machine sometimes includes a useful junior partner-the building trade unions. These unions see their fate tied to growth in the belief that growth creates jobs. They often are highly visible on the side of the growth machine in battles against environmentalists and neighborhood groups. Although Molotch shows that local growth does not create new jobs in the economy as a whole, which is a function of corporate and governmental decisions beyond the province of any single community, it does determine where the new jobs will be located. For that reason it is in the interest of unions to help their local growth machine in its competition with other localities.

Those who make up the local growth machine are able to have it both ways. At the state and national levels they support those politicians who oppose, in the name of fiscal and monetary responsibility, the kinds of government policies that might create more jobs, whereas at the local level they talk in terms of their attempts to create more jobs. Their goal is never profits, but only jobs:

Perhaps the key ideological prop for the growth machine, especially in terms of sustaining support from the working-class majority, is the claim that growth "makes jobs." This claim is aggressively promulgated by developers, builders, and chambers of commerce; it becomes part of the statesman talk of editorialists and political officials. Such people do not speak of growth as useful to profits-rather, they speak of it as necessary for making jobs.

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The growth machine hypothesis leads to certain expectations about the relationship between power structures and local government. Rather obviously, the primary role of government is to promote growth according to this view. "It is not the only function of government," writes Molotch, "but it is the key one and ironically the one most ignored."

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URBAN RENEWAL AND THE GROWTH MACHINE

The most significant policy undertaken by a wide range of cities since World War II was that of urban renewal. Since 1954 urban renewal programs have changed the face of many downtown areas and displaced millions of low-income citizens. The programs have led to lawsuits, demonstrations, and sit-ins by liberals, university students, blacks, and senior citizens. If there is anything to the growth machine hypothesis, the origins of this program at the national level, and the implementation of it in different cities, should reveal the guiding influence of the growth machine, for what these programs do is to clear downtown land of low-income housing and small buildings so that central business districts and such major institutions as universities and hospitals can be expanded and enhanced.

The urban renewal program had its shaky origins in the Housing Act of 1949, but it did not get under way in a serious fashion until 1954, when the Eisenhower administration made several changes in the law. Our analysis of the events leading up to this legislation and the subsequent amendments reveals a conflict between two contending forces, one of which was rooted in local growth machines. The other was the liberal-labor coalition.

The liberal-labor coalition was concerned with creating more housing for the poor. This concern manifested itself in terms of programs for public housing, subsidized housing, and the rehabilitation of slums. The coalition was opposed by downtown business interests, who were concerned with protecting real estate values and creating more space for the expansion of businesses and other large institutions. There was some overlap in the two camps, created by the many liberal planners who also shared some of the business perspective and the few farsighted businesspeople who were willing to grant the need for some housing programs within an overall urban renewal program. But at their cores the two groups were fundamentally opposed. The prohousing group saw the business interests as "the reactionary real estate lobby," which was embodied in the U.S. Savings and Loan League, the Mortgage Bankers Association, the National Association of Real Estate Boards, and the real estate committees of the Chamber of Commerce of the United States. Those in the real estate lobby called the public housing advocates "the housers" and often claimed their programs were socialistic or communistic.

The first federal legislation related to this conflict, the Housing Act of 1937, was a redevelopment program for low-income housing that provided federal aid to municipal housing authorities. While modest in size, there were 200,000 people living in these federally aided projects by 1941, and there was vigorous opposition to this liberal initiative from the real estate interests. Not only did it ignore their interest in downtown expansion, but it posed a mild threat to real estate values because the administrator of the housing authority preferred to build public housing on vacant land. By building outside of slum areas, the liberal director of the United States Housing Authority, a wealthy real estate owner from New York who knew the business well, was trying to deflate land values. As he later wrote:

It would indeed have been a betrayal of a public trust to allow the USHA program to become a means of bailing out owners of slums at "values" of three, five, or ten dollars a square foot when such fictitious values arose out of use of property in a manner which was dangerous to the health of tenants and detrimental to the well-being of the community. The USHA program accordingly was planned to enable local authorities to build some of their projects on low-cost land outside of slum areas.

It was about this time that downtown business interests and real estate developers, with the aid of economists and planners, began to develop their own plans for the inner city, partly to counteract the liberal housing program but also to find a way to clear expensive land for their own growth plans. As urban analyst Jeanne Lowe writes in her colorful history of urban renewal, which sometimes becomes an encomium to the pioneers in urban renewal:

Business interests, particularly downtown property owners and realtors, wanted a clearance and rebuilding program that would be on a more "economic" basis-that would allow private entrepreneurs to participate as developers; permit reuses other than public housing especially in centrally located slum areas; and let cities reap the higher tax returns which private developers promised. Equally important, these interests had come to accept the fact that in order to assemble land for feasible rebuilding, local government's power of eminent domain would be required to eliminate hold-out prices.

Even with the power of eminent domain, however, it was likely that the high cost of slum land would make it too expensive for those who wanted to renew and expand downtown areas. The answer to this financial problem was provided in the early 1940s by two economists, Alvin Hansen and Guy Greer. Their work was part of the large-scale postwar planning already under way in 1940-1942 under the auspices of three national-level policy-planning organizations, the Council on Foreign Relations, the Committee for Economic Development, and the smaller and more liberal National Planning Association. From the point of view of these organizations, urban renewal was one of several spending programs that might be utilized if economic depression returned after the war.

The general Greer-Hansen proposal for redeveloping the cities was very similar to one developed at the national level by planners at the Urban Land Institute, the national-level policy-planning organization of the real estates interests, but with one major difference. Hansen and Greer suggested that the federal government might have to pay much of the cost for buying and clearing the land instead of merely granting long-term loans, as in the Urban Land Institute plan. Local government was to pay the remainder of the cost, which was set at one-third when the act was passed several years later. The land would then be leased (under the Hansen-Greer plan) or either leased or sold (under the Urban Land Institute plan) to private developers at a lower price than the government had paid, a lower price that supposedly reflected the true earning power of the land when redeveloped. In other words, small property holders, mortgage holders, and slumlords would be bought out at a handsome price by the government, and the bigger real estate interests would be able to obtain the land at a reduced price that supposedly was necessary if they were to make a reasonable profit with non-slum structures. The difference was to be absorbed by the ordinary taxpayer.

Greer and Hansen realized that the new plan might be viewed by some as "a bail-out of the owners of slum properties and the lending institutions that held the mortgages." They therefore argued that "the social and economic mess" that had been left by "past generations" was something for which "society as a whole can be held mainly to blame." This rather general argument was not appreciated by such liberals as the U.S. Housing Authority administrator already quoted:

The high profits obtained from slum properties, the dogged insistence of slum-owners on their right to maintain housing which flagrantly violates human decencies, the high returns derived from this method of operation, and the high capitalized value placed on the properties- these are typical conditions throughout the country. In view of the facts the thesis that society is to blame for slum conditions and that there is moral justification for using the taxpayer's funds to bail out owners of the slums is hardly tenable.

The conservative real estate interests had different reservations about the program, but they were tempted by it. They were opposed in principle to federal interference, and they feared the guidelines that might be tied to any federal handouts, but they decided they could live with the basic proposal if certain changes could be made and the emphasis on housing kept to a minimum.

The Hansen-Greer proposal was included in new legislation introduced into the Senate in 1943, and a slightly different bill was introduced later in the same year by the Urban Land Institute. Hearings on the ideas contained in the two bills were first held in 1944-1945 before the Special Subcommittee on Post-War Economic Policy and Planning. In the legislative struggle that ensued, the prohousing interests were able to place a great emphasis on housing construction by introducing the requirement that residential areas that were cleared had to be returned to predominantly residential uses, with predominantly being eventually defined as over 50 percent. This requirement was vehemently opposed by the real estate lobby, but it was unable to have it removed. The lobby thus worked to block passage of the bill and was successful in doing so until 1949.

The bill as finally passed contained two important concessions to the real estate interests. They were introduced as amendments early in 1948 by a moderate Republican, Senator Ralph Flanders of Vermont, a major industrialist who was also one of the top leaders in the Committee for Economic Development. The first change mandated that federal money be given to the local community in one lump sum, which made it more difficult for federal agencies to monitor the local program in any detail. The second change allowed city-cleared land to be sold as well as leased to private developers. This concession, which had been part of the original Urban Land Institute proposal, was essential to leaders of the growth machine because it made it possible for private entrepreneurs, rather than the city, to realize the gains from long-term increases in land values. Liberals and moderates, fearing fiscal crisis for the cities, wanted to give them a more secure financial basis by letting them share in the profits of ownership, but the conservatives wanted no part of such a plan. They wanted all the profits, and they wanted city officials dependent on them.

Because the final bill still contained the strong emphasis on housing, the defeated real estate lobby moved to block its implementation through its strong influence with the Appropriations Committee in the House. It also suggested to local leaders that they lobby for passage of state legislation that would allow them to set up local redevelopment agencies that could compete with local housing authorities for federal grants. This plan by the Urban Land Institute, created in the mid-1940s, had been developed in anticipation of a possible defeat at the hands of the liberals at the national level.

The outbreak of the Korean War also contributed to the delay in starting the program, diverting money and attention away from the program. Then, too, developers were very leery that protests might flare up over programs that were going to tear down people's houses with no guarantee of where and when new ones would be completed. The result, as Lowe recounts, is that very few urban renewal programs of any consequences were in process by 1954. Put in this national context, Dahl's emphasis on local leadership in explaining delays in the New Haven program up to that point is muted considerably. "Redevelopment proved doggedly slow in getting started," Lowe writes, "in spite of the apparently attractive opportunity that Title I [of the Housing Act] presented to private enterprise and the cities themselves.... The pertinent fact here is that by 1954, few municipalities had been able to take a redevelopment project beyond its initial planning stage."

The advent of the Eisenhower administration in 1952 raised the possibility that the real estate interests could change the law to their liking, and their opposition to the program began to soften. The first step in this process was the creation of a presidential commission in 1953 that was dominated by bankers, savings and loan officials, and real estate and development leaders. When their suggestions, in the form of a commission report, were brought to Congress, there was little or no protest from any business groups, although conservative southern congressmen continued to register their disagreement.

The key change suggested by the commission was to create an exception to the rule that residential areas had to be restored to predominantly residential usages. The new provision allowed another 10 percent of urban renewal grant monies for a given project to be used for nonresidential uses. The commission also proposed that the program should encompass slum prevention as well as slum clearance. In practical terms, this made it possible for a plan to encompass areas that were not run down by claiming they would become slums if they were not part of the redevelopment program.

The combination of these two provisions freed local growth machines to move ahead with their plans. Requests for money burgeoned, and numerous programs got under way. The gradual enlargement of the exception rule made the program even more attractive. It was increased to 20 percent in 1959, to 30 percent in 1961, and to 35 percent in 1967. The real estate lobby had won a complete victory over the housers even though it took them a long time to do so. As urban sociologist Scott Greer succinctly summarized the legislative struggle between 1937 and the early 1960s, "the slum clearance provisions of the Housing Act of 1937 have been l ~ slowly transformed into a large-scale program to redevelop the central city."

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The differentiation between a national corporate community based in production and local growth machines based in land use, provides a more subtle, less monolithic picture of power in America. At the same time, it shows once again that the politics of America, at whatever level, is mostly business in one form or another.

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... dominant power in the United States is exercised by a power elite that is the leadership group of a property-based ruling class. Despite all the turmoil of the 1960s and 1970s, and the constant chatter about economic crisis that is ever with us, there continues to be a small upper class whose members own 20 to 25 percent of all privately held wealth and 45 to 50 percent of all privately held corporate stock. They sit in seats of formal power from the corporate community to the federal government, and they win much more often that they lose on issues ranging from the nature of the tax structure to the stifling of reform in such vital areas as consumer protection, environmental protection, and labor law.

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