Studying the Power Elite: Fifty Years of Who Rules America? 113810695X, 9781138106956

Table of contents :
Cover
Title
Copyright
Contents
List of Contributors
Acknowledgments
SECTION ONE Setting the Stage, Providing Context
Introduction: Situating Who Rules America? Within Debates on Power
1 Who Rules America? Through Seven Editions and Fifty Years: Still More Accurate Than Alternative Power Theories
SECTION TWO Larger Perspectives and Research Agendas
2 Domhoff, Mills, and Slow Power
3 The Life and Times of Who Rules America? and the Future of Power Structure Research
4 Institutions, Policy-Planning Networks, and Who Rules America?
SECTION THREE The Policy-Planning Network in Action
5 The Policy-Planning Network, Class Dominance, and the Challenge to Political Science
6 Who Rules America? And the Policy-Formation Network: The Case of Venture Philanthropy
7 Corporate Interests and U.S. Foreign Policy
SECTION FOUR The Power Elite and Their Opponents
8 Who Challenges the Power Elite? Labor Factions in 20th-Century America
9 Who Rules the Roost?
10 “Fairness” in Presidential Economic Policy: Disagreements Among Upper-Class Elites
Index

Citation preview

Studying the Power Elite

This book critiques and extends the analysis of power in the classic, Who Rules America?, on the fiftieth anniversary of its original publication in 1967—and through its subsequent editions. The chapters, written especially for this book by twelve sociologists and political scientists, provide fresh insights and new findings on many contemporary topics, among them the concerted attempt to privatize public schools; foreign policy and the growing role of the militaryindustrial component of the power elite; the successes and failures of union challenges to the power elite; the ongoing and increasingly global battles of a major sector of agribusiness; and the surprising details of how those who hold to the egalitarian values of social democracy were able to tip the scales in a bitter conflict within the power elite itself on a crucial banking reform in the aftermath of the Great Recession. These social scientists thereby point the way forward in the study of power, not just in the United States, but globally. A brief introductory chapter situates Who Rules America? within the context of the most visible theories of power over the past fifty years—pluralism, Marxism, Millsian elite theory, and historical institutionalism. Then, a chapter by G. William Domhoff, the author of Who Rules America?, takes us behind the scenes on how the original version was researched and written, tracing the evolution of the book in terms of new concepts and research discoveries by Domhoff himself, as well as many other power structure researchers, through the 2014 seventh edition. Readers will find differences of opinion and analysis from chapter to chapter. The authors were encouraged to express their views independently and frankly. They do so in an admirable and useful fashion that will stimulate everyone’s thinking on these difficult and complex issues, setting the agenda for future studies of power.

Studying the Power Elite Fifty Years of Who Rules America?

G. WILLIAM DOMHOFF and Eleven Other Authors John L. Campbell Ronald W. Cox Richard W. Lachmann Clarence Y.H. Lo Beth Mintz Joseph G. Peschek Robert J.S. Ross Daniel J. Schneider Michael Schwartz Kathleen C. Schwartzman Judith Stepan-Norris

First published 2018 by Routledge 711 Third Avenue, New York, NY 10017 and by Routledge 2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN Routledge is an imprint of the Taylor & Francis Group, an informa business © 2018 Taylor & Francis The right of G. William Domhoff to be identified as the author of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging-in-Publication Data A catalog record for this book has been requested ISBN: 978-1-138-10695-6 (hbk) ISBN: 978-1-138-10699-4 (pbk) ISBN: 978-1-315-10128-6 (ebk) Typeset in Avenir and Dante by Apex CoVantage, LLC

Contents

List of Contributors Acknowledgments

vii x

SECTION ONE

Setting the Stage, Providing Context Introduction: Situating Who Rules America? Within Debates on Power G. William Domhoff 1 Who Rules America? Through Seven Editions and Fifty Years: Still More Accurate Than Alternative Power Theories G. William Domhoff

1 3

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SECTION TWO

Larger Perspectives and Research Agendas 2 Domhoff, Mills, and Slow Power Robert J.S. Ross 3 The Life and Times of Who Rules America? and the Future of Power Structure Research Richard W. Lachmann and Michael Schwartz 4 Institutions, Policy-Planning Networks, and Who Rules America? John L. Campbell

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70

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Contents

SECTION THREE

The Policy-Planning Network in Action

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5 The Policy-Planning Network, Class Dominance, and the Challenge to Political Science Joseph G. Peschek

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6 Who Rules America? And the Policy-Formation Network: The Case of Venture Philanthropy Beth Mintz

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7 Corporate Interests and U.S. Foreign Policy Ronald W. Cox

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SECTION FOUR

The Power Elite and Their Opponents 8 Who Challenges the Power Elite? Labor Factions in 20th-Century America Daniel J. Schneider and Judith Stepan-Norris 9 Who Rules the Roost? Kathleen C. Schwartzman 10 “Fairness” in Presidential Economic Policy: Disagreements Among Upper-Class Elites Clarence Y.H. Lo

Index

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Contributors

G. William Domhoff is Distinguished Professor Emeritus and Research Professor at the University of California, Santa Cruz, where he has taught since 1965 after three years at California State University, Los Angeles. In addition to Who Rules America? The Triumph of the Corporate Rich, Seventh Edition (McGraw-Hill 2014), he has most recently authored or co-authored The Leftmost City: Power and Progressive Politics in Santa Cruz (with Richard Gendron, Westview Press 2009); Class and Power in the New Deal: Corporate Moderates, Southern Democrats, and the Liberal-Labor Coalition (with Michael J. Webber, Stanford University Press 2011); The Myth Of Liberal Ascendancy: Corporate Dominance from the Great Depression to the Great Recession (Routledge 2013); and The New CEOs: Women, African American, Latino, and Asian American Leaders of Fortune 500 Companies (with Richard L. Zweigenhaft, Rowman & Littlefield 2014). John L. Campbell is the Class of 1925 Professor, Professor of Sociology, and Chair of the Sociology Department at Dartmouth College, and Professor of Political Economy at the Department of Business and Politics, Copenhagen Business School. His most recent books are The National Origins of Policy Ideas: Knowledge Regimes in the United States, France, Germany and Denmark (Princeton University Press, 2014), The World of States (Bloomsbury Press, 2015), and The Paradox of Vulnerability, States, Nationalism and the Financial Crisis (Princeton University Press, 2017). Ronald W. Cox is Professor of Politics and International Relations at Florida International University. He has written or edited five books, including Power and Profits: U.S. Policy in Central America (University of Kentucky

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Press 1994), U.S. Politics and the Global Economy (with Daniel SkidmoreHess, Lynne Rienner 1999), and Corporate Power and Globalization in U.S. Foreign Policy (Routledge 2012). He is currently finishing Transnational Corporations and the New Globalization for Lexington Books. Richard W. Lachmann is Professor of Sociology at the University at Albany, State University of New York. He is the author most recently of States and Power (Polity 2010) and What Is Historical Sociology? (Polity 2013). He currently is writing a book entitled First Class Passengers on a Sinking Ship: Elite Privilege and the Decline of Great Powers, 1492–2015, which examines the decline of dominant economic and military powers in early modern Europe and the contemporary United States. Clarence Y.H. Lo is Associate Professor of Sociology and Director of the Peace Studies Program at the University of Missouri at Columbia. He is the author of Small Property Versus Big Government: Social Origins of the Property Tax Revolt (University of California Press 1995), co-editor of Social Policy and the Conservative Agenda (Blackwell 1998), and author of numerous articles on elites, the state, and right-wing social movements. Beth Mintz is Professor of Sociology at the University of Vermont. She is co-author (with Michael Schwartz) of The Power Structure of American Business (University of Chicago Press 1987) and is currently working on a book on the role of neoliberalism in the crisis in higher education. Her earlier research includes studies of the corporate elite; policy formation within the health care sector; and the intersection of gender, race, and ethnicity in U.S. labor markets. Joseph G. Peschek is Professor of Political Science at Hamline University in St. Paul, Minnesota. He is a former editor of the scholarly journal New Political Science. His most recent book, co-authored with William F. Grover, is The Unsustainable Presidency: Clinton, Bush, Obama, and Beyond (Palgrave Macmillan 2014). Robert J.S. Ross is a Research Professor at Clark University’s Department of Sociology and the Mosakowski Institute for Public Enterprise. He is the author (with Kent Trachte) of Global Capitalism: The New Leviathan (SUNY Press 1990) and Slaves to Fashion: Poverty and Abuse in the New Sweatshops (Michigan 2004); his recent commentary is found in American Prospect and Dissent. A former chair of the American Sociological Association Section on Political Economy of the World System, Ross was also Chair of the Clark University Faculty Assembly.

Contributors ix

Daniel J. Schneider completed his Ph.D. at the University of California, Irvine, in December 2016. While turning his dissertation, “Gendering Profession: Experiences of Nursing in the United States,” into a book, he is serving as a Lecturer in the Department of Sociology at Chapman University in Orange, California. His research focuses on race and gender in the areas of work, occupations, labor, and politics. He is the author of “Organized Labor and the Unionization of Hispanic, Filipino and Chinese Americans in the United States” in Labor Studies, 2015, Vol. 40. Michael Schwartz, Distinguished Teaching Professor of Sociology, Emeritus, at Stony Brook University in New York, has published extensively in the areas of network analysis, political structure and policy, social movements, political economy, and war and insurgency. Among his scores of articles and seven books are the widely acclaimed Radical Protest and Social Structure (Academic Press 1976), a pioneering work in historical sociology and social movement analysis; The Power Structure of American Business (with Beth Mintz, University of Chicago Press 1987), an award-winning analysis of American business structure; and War Without End (Haymarket Press 2008), a political-economic analysis of the origins and impact of the war in Iraq. His scholarship, journalism, and political commentaries on U.S. domestic and foreign policy have appeared in numerous academic, popular, and electronic outlets. Kathleen C. Schwartzman is Professor of Sociology at the University of Arizona in Tucson. She has written about the economic-political connection in Portugal, Cuba, South Africa, Mexico, and Brazil. Currently she is looking at the impact of China’s recent dominance in global garlic exports on Mexico’s rural economy. Schwartzman is the author of The Chicken Trail: Following Workers, Migrants, and Corporations Across the Americas (Cornell University Press 2013). Judith Stepan-Norris is Professor of Sociology and Vice Provost for Academic Planning at the University of California, Irvine (UCI). She previously served as a UCI Equity Advisor, and as Chair of the UCI Academic Senate, the ASA Political Sociology Section, and the ASA Labor and Labor Movements Section. She also served as Co-Editor of Contemporary Sociology and as Associate Editor of Social Problems. She is author (with Maurice Zeitlin) of Left Out: Reds and America’s Industrial Unions (Cambridge University Press 2003) and (also with Maurice Zeitlin) Talking Union (University of Illinois Press 1996).

Acknowledgments

First and foremost, we thank our editor, Dean Birkenkamp, for suggesting this book after reading the original version of the first chapter. That version was prepared for the session on “Who Rules America, Who Rules the World: Three Generations of Power Structure Research,” organized and chaired by sociology professor Michael Dreiling of the University of Oregon, for the Meetings of the Society for the Study of Social Problems, Seattle, Washington, August 19–21, 2016. We also thank Dean for his ideas on the book’s format, and for pulling us together and keeping us on schedule. We also thank his editorial assistants, Amanda Yee and Tyler Bay, for coordinating many issues and keeping the book on track. In addition, we thank the outside reviewers for their positive reactions to the prospectus for the book, and for several of their ideas, including that there should be a short introduction that presents the main theories alluded to in this book in a concise and neutral fashion. In this context, G. William Domhoff thanks his long-time collaborator, social psychologist Richard L. Zweigenhaft, for several frank and critical readings of drafts on that introductory overview essay, which greatly contributed to its brevity and whatever clarity it may have.

Section One

Setting the Stage, Providing Context

Introduction: Situating Who Rules America? Within Debates on Power G. William Domhoff

The chapters that follow critique and extend Who Rules America? on the fiftieth anniversary of the year in which it was first published in 1967. These chapters present substantive analyses and debates, and thereby point the way forward in the study of power. In effect, they address current research and suggest new directions for future research by reassessing the arguments and evidence presented in a book that has been integral to the study of power for fifty years, and perhaps for more years to come. The chapters that use Who Rules America? as a springboard contain new information and fresh insights on topics ranging from the concerted attempt to privatize public schools, to foreign policy and the growing role of the militaryindustrial component of the power elite, and onward to the successes and failures of union challenges to the power elite, the ongoing and globalizing battles of one major sector of agribusiness, and the surprising details of how those who hold to the egalitarian values of social democracy were able to tip the scales in a bitter conflict within the power elite itself on a crucial banking reform in the aftermath of the Great Recession. To make the contents of these chapters more readily accessible for those who are new to the study of the social sciences, or who have not followed the details of the ongoing arguments concerning the distribution of power in the United States, this brief introduction situates Who Rules America? within the context of the theories of power that underlie the discussions in this book.

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Three of these theories preceded the book’s appearance, and one emerged in part as an alternative to it just over a decade after it appeared. It wasn’t until the first decade after World War II that American social scientists began to study the topic of power in a systematic fashion using rigorous methods. Their work was part of a widespread rapid growth in all forms of scientific inquiry in the postwar era. However, political activists, journalists, and interested onlookers had been writing about the efforts of power wielders and their opponents since the founding of the United States, and social scientists drew upon that accumulated body of information and ideas.

Two Opposing Theories When social scientists, mostly sociologists and political scientists, but some economists and social psychologists, first turned their attention to the study of the structure and distribution of power in the United States, they began with two very different theories, pluralism and Marxism, both of which have deep historical roots. Pluralism, which sees power as divided among competing interest groups and voluntary associations, and as constrained by the right to vote and the voice of public opinion, was the larger and more visible theoretical school of thought on power that emerged in this context. It traced its origins to early twentieth-century political science. Many aspects of pluralism fit with the democratic nature of the country, the ongoing arguments between Democrats and Republicans, and accounts in newspapers and history books chronicling the victories and defeats for businesses, unions, and voluntary associations in governmental arenas. In that regard, pluralism is consistent with the philosophy of liberalism that is pervasive in the United States, with its emphasis on the rights and liberties of individuals, and its wariness of large centralized governments. However, pluralism does not deny, and even emphasizes, that some groups may have more power on some issues than do others, and that individuals may be relatively powerless if they do not organize to make their voices heard. According to pluralism, the absence of a more hierarchal power structure in the United States is made possible by several factors, including the separation of ownership from the day-to-day managerial control of corporations that is carried out by well-trained hired executives, along with the lack of a large, unifying business association to bring together the many different types of businesses. Instead, corporations form narrow-interest groups, which sometimes disagree with one another. Put another way, corporate leaders in different sectors of the economy tend to stick to their own knitting, so they

Situating Who Rules America? 5

are too divided to dominate government. Pluralists also point to the successes of non-business interest groups, such as labor unions from the 1930s to the 1980s, and environmentalists in the 1970s and thereafter, as evidence for their perspective. They also note that the various interest groups often align with one another in different ways depending on the issue at hand, thereby creating a fluidity in the power structure based on these shifting coalitions. In addition, pluralists emphasize that citizens have the power to exert at least some influence on the general direction of public policy by voting for the candidates and political parties that are most likely to represent their preferences. Citizens also have the freedom and capacity to create voluntary associations and pressure groups, including unions, to bring their influence to bear on elected officials. As far as the years since the 1980s, which have seen increasing income inequality and a declining percentage of private-sector workers in unions, most pluralists would agree that the largest financial institutions and corporations have enjoyed growing power and influence. But they also point out that reforms and social movements, such as those that occurred in the Progressive Era, the New Deal, and the 1960s, have followed previous periods of seeming corporate ascendancy. Although pluralism does not deny differences in power among groups, or that corporations have been the most powerful influence in some eras, all pluralists do strongly reject what Marxism insistently claims, namely, that “big business,” meaning the largest banks and corporations, has had far and away the most power in the United States since at least the 1870s. These large banks and corporations provide the basis for a “ruling class,” a class of corporate owners who dominate on the most important economic decisions and shape the political system so the few can profit at the expense of the many. Although the concept of a ruling class was marginal in the social sciences until the late 1960s, it always had visibility because it is an essential part of a much larger and all-encompassing theory that includes an account of how history inevitably unfolds, a critique of capitalism as an economic and social system, and a theory of power that emphasizes the overriding clash between social classes rooted in opposing economic interests as the primary determinant of how a society develops. Stated briefly, Marxism assumes that history begins when the creative aspects of human beings act upon nature to serve people’s needs by creating tools and machinery, which lead to more goods being produced than can be individually consumed, and hence to the potential for conflict over how to invest and distribute the surplus product. As the technologies of economic production develop, there is an increasing division of labor as well as increasing conflict over its ownership and control. The continuing improvement

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in the technological infrastructure of the economy constantly reshapes the relationship between owners and those who labor for them, which in turn reshapes the political system, organized religion, and ideas about the world. When the socioeconomic system reaches the highly productive stage of development called capitalism, the economic surplus is taken from workers in the form of profits through the seemingly fair social institution known as the “market,” which replaces the direct and coercive forms of appropriation used in earlier social systems, such as feudalism. As workers come to realize their common plight, which includes low wages, dangerous working conditions, and sudden layoffs, they join together to form unions and political parties. In the context of larger and longer economic crises, such as depressions or runaway inflation, they decide that they are capable of organizing a fairer and more humane social system. They join together to replace the capitalist system with a cooperative one called socialism, in which productive economic assets are owned by everyone. The market is replaced by democratic planning under the direction of the elected government, and guided as much as possible by direct citizen input through workplace and community organizations.

A New Alternative: Power Structure Research In 1956 sociologist C. Wright Mills crashed his way into this debate in a dramatic fashion with the publication of The Power Elite, which put forth a theory that stood between, and disagreed strongly with, the two reigning theories. According to Mills, who coined graphic phrases such as the “corporate rich,” “the warlords,” and “the higher immorality,” as well as “the power elite,” power is rooted first and foremost in the “command posts of major institutional hierarchies,” not interest groups and voluntary associations, as pluralists claim, or in the ownership and control of private property, as Marxists argue. All largescale organizations can become power bases as a result of the information and material resources their leaders control, along with the ability those leaders have to promote and fire underlings, form alliances with other organizational leaders, and overwhelm voluntary associations through a variety of methods. The Power Elite directed most of its criticisms toward the pluralists for allegedly underestimating the degree to which those who control the major institutional hierarchies in post-World War II America—big corporations, the executive branch of the federal government, and the military—are able to use their many resources to dominate Congress and ignore voters. More exactly, he claimed that industrial reorganization for military production, huge governmental expenditures, and growth in the size of the armed forces during World War II, along with some of the new laws and precedents necessary to

Situating Who Rules America? 7

deal with the Great Depression of the 1930s, had created the conditions for a new set of power arrangements that were ignored by pluralists. At the same time, in just a few sentences, he dismissed the Marxian view for what he saw as a single-minded emphasis on the economic system, private property, and class conflict, which he called “economic determinism.” Instead, he claimed that the governmental system (“political determinism”) and the military (“military determinism”) were equally important. However, Mills made up for this relative neglect of Marxist theory in a 1962 book entitled The Marxists, which provided a sustained critique of the main philosophical and historical tenets of Marxism, along with a catalog of the empirical mistakes he thought Marxists had made in their analyses of history. These mistakes included what he saw as a romanticized vision of the increasingly cautious union movement in the United States, which he had earlier studied (with mounting disappointment) for a 1948 book entitled The New Men of Power. In the context of the social movements of the 1960s, Mills’ ideas resonated with younger social scientists and political activists because his concepts and critiques freed them from the confines of the pluralist-Marxist debate and seemed to capture the spirit of the new possibilities that had opened up. This does not mean they were uncritical followers of Mills, or agreed with all of his theoretical and empirical conclusions. However, they admired his theoretical independence and appreciated the new space for rethinking that his work created. By the late ’60s and early ’70s, the most visible version of the new research directions Mills had inspired, called “power structure research,” was embodied in the book that provides the occasion for this book of critical essays, Who Rules America?, which was widely cited and extensively used in classrooms. The book is “Millsian” in spirit, but is based on new empirical studies of the various claims by pluralists, Marxists, and Mills, some of which led to conclusions different from those reached by Mills and the earlier theorists. The points of similarity and difference are developed further in the first chapter of this book. That chapter also provides additional context for understanding the essays by the other contributors. Drawing upon a variety of theoretical perspectives, they critique and expand upon Who Rules America?, with an eye toward future studies.

Another New Theory: Historical Institutionalism The several rival theories that were dominant by the late 1960s contended vigorously into the 1980s on the basis of many new empirical studies and theoretical arguments. By that point, social scientists who didn’t find these

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theories satisfactory had developed a new alternative, historical institutionalism. Although institutional theorists of all types begin with a very general definition of an institution as a set of norms and customs, historical institutionalists put more stress on defining institutions as sets of social relationships that endure, which leads to an emphasis on formal rules and regulations, such as constitutions. They also emphasize that institutions develop in different ways in different countries in response to the historically specific issues that confront them. Thus this approach is inherently comparative as well as historical, but the focus for purposes of this book is on what they call the “American case.” Historical institutionalists also emphasize, based on comparative studies of governments in several different countries, that there are differences from country to country in the structure of the government and its degree of independence from the pressures generated by private organizations and institutions, which also can complicate relationships among nation-states. In the case of the United States, these factors have led to an independent role for at least some governmental institutions in the face of challenges by private institutions, which they believe is underestimated by earlier theories of the structure and distribution of power in this country. More specifically, historical institutionalists also note that the institutional structure of a government (e.g., whether it is parliamentary or presidential, centralized or decentralized) usually has a primary role in shaping the political strategies that are followed by non-state institutions, such as corporations and organized labor. Then, too, the existence of the presidency and the election of Congress on a state-by-state and district-by-district basis in the case of the United States help account for the strength of the two-party system. Historical institutionalists thereby bring the government-society relationship to the forefront, rather than starting with societal impacts on government, as is the case in pluralist and Marxist theories. They then emphasize that nonstate power actors have to adapt their institutional structures to mesh with the institutional structure of the government in order to be effective in realizing their goals. At the same time, historical institutionalists stress that the state elites inside the government are constrained by the already formed political institutions within it, and often have conflicts among themselves, as well as with institutionalized interest groups outside the state. Moreover, the historic lack of large administrative bureaucracies in the American government, and of planning staffs, both of which were comparatively small until World War II, created space for independent experts from outside of government to play important roles as advisors to various agencies of government. More recently, however, the federal government has developed several large-scale administrative

Situating Who Rules America? 9

agencies that provide the executive and legislative branches with independent expert advice, which has strengthened government’s independent role. When the government develops new spending programs or regulatory agencies, sometimes in reaction to social movements, these changes lead to new “opportunity structures,” which provide new possibilities for contending class-based organizations and other interest groups. As for the large-scale corporations given pride of place by Marxists and class-oriented power structure researchers, historical institutionalists claim that in the United States they are not as organized among themselves for historical reasons as they are in some Northern European and Scandinavian countries. This leads to a situation in which American corporations are primarily focused on their narrow business interests. In addition, they are in competition with one another for government support on many issues. For all these reasons, corporations are usually in a weaker position than the government. Like other private groups, businesses have to adapt their strategies and political organizations to fit with and take advantage of new opportunities created for them when governmental institutions change. By the same token, industry-specific unionizing attempts and the effort to create an overall union movement have had to adapt to the relatively independent and strong role for courts in relation to union organizing attempts because of strong laws concerning private property and markets, and to the constraints created by the strong two-party political system that is all but inevitable because of American electoral rules. According to historical institutionalists, policymaking is “path dependent” in the sense that it continues in directions that provide positive feedback based on the first steps that were taken, including on the resolution of conflicts with other institutions in a satisfactory way. Thus, policy decisions at key historical junctures place limits on what can take place at a later time, and the paths not taken are important in understanding the nature of a society’s power structure. In this view, timing is a significant factor in the outcome of conflicts.

What Is Power? How Is It Studied? Although this overview has identified several prominent theories that attempt to explain how power is distributed in the United States, it has not discussed what is meant by the term “power,” which in fact has no one definition that is generally agreed upon. Everyone realizes that the study of power concerns who gets what they want (“achieves their preferences”). They agree that the study of power includes the issue of how individuals, groups, classes, or government go about achieving those preferences (e.g., by winning elections,

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gaining appointments to important offices in the executive branch, influencing decision-making through interest-group lobbying, or organizing disruptive social movements). Based on these various considerations, power is therefore sometimes defined as the ability of an individual, group, class, or government to achieve its purposes by causing those who disagree with them to do something they might not otherwise do. This abstract definition fits with the intuitive sense that the powerful benefit in one way or another because of their ability to influence or coerce others. However, despite these shared intuitive understandings, there are many small but potentially significant differences in how theorists use and understand the concept of power. Rather than trying to provide one overarching formal definition in this introduction, it therefore seems prudent to let the various contributors’ understanding of power emerge within the context of their chapters. Moreover, the social scientists involved in the ongoing discussion of power do not simply debate about theories. They also argue about what methods are best suited for acquiring the accurate information that is necessary to test and improve any theory. Theorists therefore sometimes introduce new concepts and terminology that relate to their methods and findings. Once again, it seems the best course to have the authors discuss any methodological issues that may come up in their unfolding analyses. Hopefully, this quick overview will prepare readers for a lively set of essays through which they can develop their own ideas about how best to study power structures and power conflicts in the United States. Following an introductory chapter that discusses the gradual evolution of Who Rules America? over seven editions and fifty years, the first set of essays, consisting of three chapters, provides general perspectives, critiques, and research agendas for the future. The second set, also with three chapters, discusses the virtues and shortcomings of the “policy-planning network” that Who Rules America? claims to be essential in understanding how the power elite forges compromises and formulates policy perspectives, which are then brought to bear on governmental bodies at the national, state, and local levels. The third set of essays, once again containing three chapters, examines the several ways in which those who oppose much or all of the corporate agenda, meaning primarily labor unions and liberal policy and advocacy organizations that are closely aligned with the Democratic Party, are and are not successful in implementing their own agendas. Readers should not be surprised if they find differences of opinion from chapter to chapter. The authors were encouraged to express their views independently and frankly. They do so in an admirable and useful fashion that will stimulate everyone’s thinking on these difficult and complex issues.

Who Rules America? Through Seven Editions and Fifty Years: Still More Accurate Than Alternative Power Theories

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Introduction This chapter presents a substantive account of my writing and updating of Who Rules America? over the past five decades. It is the story of an ongoing eclectic search for an understanding of power by a researcher with a strong empirical bent and a preference for “middle-range” theories over Grand Theory. The chapter includes a focused argument that looks backwards and thinks forward as the story of the American power structure continues to evolve. It amends and extends a book that first appeared in 1967 and concludes with the somewhat bold claim that the seventh version, published in 2014, still provides the best starting point for those who want to understand the ongoing changes in the constant battle for power and dominance in the United States. The original Who Rules America? was drafted in the summer of 1965 after two years of detailed research, some of it carried out with the help of students energized by the early civil rights movement and the free speech movement. The manuscript was revised in style and content in the summer of

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1966. It was published in the late summer of 1967 after being downsized to fit the compact format of Prentice-Hall’s Spectrum Books series. The first sentence signaled the book’s use of concepts and methods borrowed from four different theoretical perspectives by saying it was “inspired by the ideas” of four “very different” social scientists. Those four social scientists are, in the order they appeared in that first sentence: sociologist E. Digby Baltzell, himself a member of the social upper class, who said he favored “an open-class” business system over a “classless socialism”; the iconoclastic Weberian leftist sociologist C. Wright Mills, whom I characterized as throwing “consternation into the ranks of orthodox radicalism” by “talking in terms of ‘elites’ and ‘institutions’ rather than ‘classes,’ and by rejecting the revolutionary role claimed for the working class as a ‘labor metaphysic’; economist Paul M. Sweezy, who had written one of the best books on Marxism by an American up to that time, as well as a chapter on “The American Ruling Class,” in which he was raised; and political scientist Robert A. Dahl, who published an article criticizing Mills for not using the proper methodology for studying power, and then wrote a celebrated book on the dispersion of power in New Haven, which he saw as America writ small because it “offered analogies with national politics that few other cities could provide” because of its “highly competitive two-party system” (Baltzell 1958; Dahl 1958; Dahl 1961, pp. v–vi; Domhoff 1967, pp. 1–3; Mills 1962, pp. 127–129; Sweezy 1942; Sweezy 1953). In mentioning Baltzell and Sweezy’s similar upper-class backgrounds, but opposing political views, I hoped to further signal that the book had an independent and apolitical orientation. The opening chapter then attempted to reinforce this point by stating the book is “beholden to no theory about the dynamics of history or the structure of society or the future of man” (Domhoff 1967, p. 3). I then borrowed Mills’ (1956) phrase “the power elite” and redefined it as the leadership group of the “governing class,” which is the more neutral term for the dominant class that I used at the time. More specifically, I said I agreed with Mills in “defining the power elite as those who have a superior amount of power due to the institutional hierarchies they command,” but differed from him by “restricting the term to persons who are in command positions in institutional hierarchies controlled by members of the upper class, or, in the case of members of the federal government, to persons who came to the government from the upper class or from high positions in institutions controlled by members of the upper class” (Domhoff 1967, p. 8). I knew that definition would be a big mouthful of words to digest all at once, but it gave me an opening to anticipate the likely objection that many American leaders are not from the upper class and that some members of the upper

Who Rules America? Through Fifty Years 13

class are not involved in governing. I had been alerted to that and many other likely criticisms by reading all the critics of Baltzell, Mills, and Sweezy, including their criticisms of one another as well as the pluralist critics of all of them. I chose to use the phrase “the power elite” to convey my belief that it is possible to create a theory based on both organizational and class-based concepts, and wrote that my definition of the power elite was similar to Baltzell’s (1964, p. 8) concept of “an establishment.” But redefining a very famous phrase proved to be problematic. Using concepts from both organizational and class theoretical perspectives created resistance among those social scientists who insisted that the two perspectives were antithetical, including many class-oriented theorists. It also led to the assumption that I must be a “Millsian,” even though I was critical of Mills on several different points, such as his overly large separation between the upper-class owners and corporate leaders, and his failure to include the political parties and policy-discussion groups in his analysis (Domhoff 1967; Domhoff 1968; Domhoff 1970b, Chapter 3). As part of a final chapter that anticipated and answered likely objections to the methodology and the interpretation of the empirical findings, the book concluded with the following three sentences, which were meant to remind readers of its independence from past theories: For ourselves, we conclude that the income, wealth, and institutional leadership of what Baltzell calls the “American business aristocracy” are more than sufficient to earn it the designation “governing class.” As Sweezy would say, this “ruling class” is based upon the national corporation economy and the institutions that economy nourishes. It manifests itself through what the late C. Wright Mills called the power elite. (Domhoff 1967, p. 156)

What Did Who Rules America? Have to Say? The empirical analysis began in Chapter 1 with evidence that there is a closeknit and cohesive social upper class. The fact that this social upper class is also a Weberian “status group” was dealt with in a footnote by using a quote in a social stratification textbook of that era, which tersely said that, “Here, obviously, we depart from the terminology of Weber in favor of ordinary English” (Domhoff 1967, p.  158, footnote 12; Kahl 1957, p.  12). The chapter was based on an analysis of the overlap of people on a variety of membership lists—in-group telephone books (the Social Register and other “blue books”), private-school alumni lists, and membership lists from private clubs,

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private resorts, and vacation retreats. The analysis was enlivened by “a great many illustrations that appeared in the mass media” in an effort “to dispel any notion that the ‘real’ rulers of America are somehow behind the scenes rather than before the public each and every day,” but readers were reminded that the validity of the argument “is based upon the systematic data that are presented throughout each chapter” (Domhoff 1967, p. 3). These many analyses demonstrated to my mind that there is a nationwide social upper class; that is, overlapping social circles of intermarrying people who see each other as equals, live in the same expensive neighborhoods, and belong to their own exclusive set of private institutions. I saw all this as an extension of original research by Baltzell (1958), who had studied the history of the Philadelphia upper crust in detail and then used the interactions of its members with people at New England prep schools, university alumni gatherings, and summer retreats as evidence for the nationwide nature of this social class. I started with the social upper class for several reasons, partly based on the information that was available, and partly as a matter of presentation strategy. First, there was far better information on the social institutions of the social upper class at that time than there was on the ownership and control of corporations. Not only was there less information on corporations, which had to be pieced together from several sources, but there was also a mainstream (“pluralist”) consensus on the idea that the corporate “managers” were separate from the corporate “owners.” This separation supposedly reduced the possibility that there could be a dominant class because the upper class and the corporate leaders seemingly had somewhat different interests. (The idea of a separate managerial class, which almost totally disappeared by the 1980s at the latest, was incarnated in political sociology by Daniel Bell [1960], but there were many others who supported this cornerstone of pluralism, including the leading theorist in American sociology in the 1950s, Talcott Parsons [1960], as best seen in his critique of The Power Elite.) My thought was that I could deal with this claim much better if I was ready to show that these allegedly independent managers, with their supposedly more publicregarding concerns for the good of everyone, were in fact being assimilated into the social upper class with the help of their high salaries, lucrative stock options, and invitations to upper-class social and charitable events. I also figured it would be easier for readers to consider an analysis they might not want to hear if it started with something relatively visible and mundane, such as schools and clubs. I hoped that approach might reduce any tendency to label claims of concentrated power as a “conspiracy theory,” which I knew before I started was one of the ways that pluralists dealt with

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any implication that there is more hierarchy than they thought possible in a liberal democracy (because of the existence of voluntary associations, the importance of public opinion, and the right to vote). Although I thought the case for a social upper class was a strong one, I continually updated and strengthened it later with more finely grained studies of upper-class organizations and institutions. I wanted to be sure, to start with, as to which organizations could serve as “social indicators” of upper class standing for future studies of corporate directors and the trustees of nonprofit organizations. I did so by looking at the issue both quantitatively and through surveys of knowledgeable observers in several different cities (Domhoff 1970b, Chapter 1). Among other things, I used these social indicators to demonstrate that the world of celebrity had more overlap with the upper class than Mills (1956, Chapter 4) had concluded (Domhoff 1970b, Chapters 1, 3). I then approached the issue from another angle by studying the social institutions of “the feminine half of the upper class,” pointing out that these women had several important roles in a time of much greater male dominance, including during the Progressive Era, when women of the upper class worked with and put pressure on their male counterparts to improve wages and hours for women workers and workplace safety for all workers (Domhoff 1970b, Chapter 2). It was gratifying that other sociologists later extended and amended the study of women of the upper class, even while coming to very similar conclusions (Daniels 1988; Kendall 2002; Kendall 2008; Ostrander 1980; Ostrander 1984). I also did an in-depth study of one of the ubiquitous men-only social clubs with a nationwide membership, the Bohemian Club of San Francisco, which is unique among such clubs in that it also includes many middle-class “performing members.” These members provide musical and theatrical entertainment during the club’s two-week retreat in the second half of July in cabins and lodges in a pristine redwood forest seventy-five miles north of San Francisco. I was therefore able to demonstrate more fully a point that had been made by social psychologists in small-group experiments: social cohesion facilitates policy cohesion (Domhoff 1974b; Domhoff 2005a). Later I added flourishes that allude to various esoteric issues, such as rites of passage that temporarily remove the men from the profane world of business, as well as ceremonies of affirmation and renewal, all of which touch on the realm of collective effervescence, dramaturgy, and symbolic interactionism (Domhoff 2014, pp. 52–57; Durkheim 1912/1965; Vaughn 2006). The names and social institutions used in the chapter on the social upper class were one part of a larger database stored on five by eight cards, which also included corporate directors, trustees of foundations, think tanks, and

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policy-discussion groups, and appointees to important positions in the executive branch of the federal government. I said all this was based on the “sociology of leadership method” (Domhoff 1967, pp.  6, 143–146), a phrase I borrowed from Baltzell (1964, p. 203). In essence, it means a study of “the social composition of leadership groups in order to determine whether or not the leaders come from any given socioeconomic class, ethnic group, or religious group,” which I claimed was similar to two of the three methods Dahl (1961) used in his study of New Haven (Domhoff 1967, p. 6). Within a few years, following a trail created by many others, I was putting this kind of database on computers and employing the techniques of network analysis to analyze them (e.g., Alba 1973; Bonacich 1972; Bonacich and Domhoff 1981; Domhoff 1975; Kadushin 1968; Salzman and Domhoff 1983; Sonquist and Koenig 1975). Thanks to sociologist Ronald Breiger’s (1974) seminal paper, which used the term “membership network analysis” to conceptualize a “two-level” network that included both people and institutions, we had a way to deal with the old claim that we were merely muckraking investigative journalists who allegedly only looked at the individual level of society. By the 1990s, and shortly thereafter with the full flowering of the Internet, there was more information on the corporate world than on the social upper class. Moreover, there was less information available on members of the upper class because younger generations were less likely to bother with the Social Register, which shrank in size. Then, too, the most prominent and visible members were less inclined to list their private schools and club memberships in various types of “who’s who” sources, at least partly in reaction to the public use of this information by advocacy groups looking for corporate leaders to single out because their prep schools and clubs did not admit Jews, people of color, or women. The third (and later) versions of Who Rules America? acknowledged this change in information availability by beginning with a chapter on “the corporate community,” as defined by all those corporations that shared directors (interlocks) with one another. The corporate-community chapter in the later versions was then followed by a chapter on “The Corporate Community and the Upper Class,” which turned out to be a better order in which to deal with the issue of the assimilation of new corporate managers as well as the assimilation of those who were newly rich through the founding of new businesses. It also provided a better way to bring in the key point that social cohesion contributes to policy cohesion; that is, social cohesion now could be seen as an add-on to the fact that the existence of a corporate community was generated by at least some common economic interests, despite the considerable competition that exists among rival businesses. At this point I also stressed that the competing

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corporations shared many common enemies, including organized labor, liberals, and environmentalists. This also allowed me to draw implicitly on the adage from social psychology that “the enemy of my enemy is my friend,” which is another powerful incentive for working together. In any case, the chapter on the corporate community and the upper class concludes that the corporate community and the upper class are two sides of the same coin, a melding of Weber’s (1998) separate concepts of an “economic class” and a “status group,” a theoretical point I originally brought into the picture through Mills’ obvious debt to Weber (Domhoff 1967, p. 4). For all the new detailed empirical evidence and examples in the original chapter on the upper class, it did begin with a major historical conclusion on what made the American power structure distinctive and unusually powerful. It said that the American upper class was unique because: . . . it alone grew up within a middle-class framework of representative government and egalitarian ideology, unhampered by feudal lords, kings, priests, or mercenary armies. Only the American upper class is made up exclusively of the descendants of successful businessmen and corporation lawyers—whatever their pretensions, few families are “old” enough or rich enough to forget this overriding fact. (Domhoff 1967, p. 12) Although I didn’t hammer on this point by elaborating or repeating, and stayed at the middle levels of theory for the next two decades, it helps explain, along with my skepticism about Marxist theory, why I was so receptive to Michael Mann’s (1986) four-network theory of power when it appeared. The idea that all power structures are based on four independent but intertwining organizational networks (the Ideological, Economic, Military, and Political networks, known as the IEMP model) was “music to the ears of those who analyze American power structures as networks of people and institutions,” and I added that it “is invigorating to have such a congenial theoretical home after all those years spent wandering in the empirical wilderness, surrounded on every side by pluralists, structural Marxists, and utility maximizers” (Domhoff 1990, pp. xviii–xix, 2). Theoretical flights of fancy aside for now, the original Who Rules America? next turned to the “control” of corporations, with “control” meant to imply “dominance,” which was defined as “the exercise of power,” and contrasted with “influence,” characterized as a weaker term “implying that a person can sometimes sway, persuade, or otherwise have an effect upon those who control from a position of authority” (Domhoff 1967, p.  11). In the case

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of corporations, control was first and foremost asserted on the basis of a “power indicator” that I call “overrepresentation,” which is simply the degree to which members of a social class hold many more positions of authority in an organization than would be expected by chance if members of all social classes had an equal opportunity to attain such positions. Thus, if the upper class includes at most about 0.5 percent of the total population, then the fact that 53 percent of the 884 people who served on the boards of directors of the fifteen largest banks, fifteen largest insurance companies, and twenty largest industrial corporations in 1963 were from the upper class is an overrepresentation by a factor of 106 (Domhoff 1967, pp. 51). Moreover, I assumed other social scientists knew that the “statistical significance” of any seeming deviation from chance is determined by the formula for the significance of differences between two proportions. The implicit statistical rigor of this indicator notwithstanding, it is also the kind of indicator that makes perfect intuitive sense to social scientists when it is used as an indicator of a lack of power, such as in the case of women, who are half the population and only a small fraction of the people in positions of power (e.g., Zweigenhaft 1975; Zweigenhaft and Domhoff 2006). It also makes intuitive sense in the case of African Americans, who are 12 to 14 percent of the population, but usually held less than 1 percent of the power positions until relatively recently; even now, African Americans are underrepresented by half or more in most power venues in the United States (Zweigenhaft 2016; Zweigenhaft and Domhoff 2003; Zweigenhaft and Domhoff 2014). However, pluralists rejected this kind of indicator when it came to the powerful, arguing that people in high positions may be just figureheads who don’t really “exercise” any power, or maybe they are just good competent folks who are in the positions they are in because they earned them (e.g. Dahl 1958; Matthews 1960; Matthews 1967; Polsby 1980). As far as pluralists are concerned, the only way to study power in a rigorous way is to figure out who initiated and who vetoed new ideas that were or were not included in a series of legislative decisions (a “decision-making” indicator of power). In issuing this edict, they overlooked the many problems with this method, including the fact that “it is often difficult to determine what factors are involved in the making of any given decisions,” and “the participants themselves may not be able to assess correctly the roles of the various members of the group,” or may forget many of the details shortly after the decision is made (Bauer 1966, for an excellent discussion of the problems with the decision-making method; Domhoff 1967, pp. 144–145 for similar arguments and the quotation in this paragraph).

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The chapter on corporate control also made use of the distributions of stock ownership, wealth, and income as power indicators, based on the same statistical rationale concerning proportions/percentages on which the overrepresentation indicator is based. These distributions are helpful because there was good information on them over a period of many years (Domhoff 1967, pp.  40–47). True, the data on wealth and income were not as detailed as is found in the innovative work that has been done since the turn of the twentyfirst century, nor did it extend backwards as far in the twentieth century as it does now (e.g., Kopczuk and Saez 2004; Kopczuk, Saez, and Song 2010; Piketty and Saez 2003; Saez 2012; Wolff 2010). But a study of stock portfolios in the late 1940s did show that “the 0.1 percent of families who had incomes over $45,000 in 1949 held 35 percent of all outstanding stock held by individuals, that the 0.5 percent who made over $25,000 had 50 percent of the stock, and that the 1 percent who made over $15,000 had 65 percent of the stock,” which are disproportionate by factors ranging from 350 to 100 to 65 times (Butters, Thompson, and Bollinger 1953, for the full study; Domhoff 1967, pp.  163– 164). A study of the estates of deceased wealthy individuals using the estatestax multiplier method revealed that the top 0.5 percent of the population held 25 percent of all privately held wealth in 1953 and 26.0 percent in 1956, which is again a large overrepresentation (Domhoff 1967, pp. 43–44, Tables 1 and 2, for a summary of information for 1922 to 1956; Lampman 1962, for the full study). By 1974 we knew through a new study using the estates-tax multiplier method that the top 0.2 percent held 33 percent of the stock and that the top 1 percent had 51 percent of it in 1969 (Smith and Franklin 1974). But, of course, the pluralists disputed the concentration of stock ownership and wealth as power indicators. They did so on the basis of the general claim that “who benefits?” indicators may be misleading because some benefits may fall to people by accident. Dahl (1982, p. 17) later used the example of how “American wheat farmers can benefit from a decision by Soviet leaders to buy American grain.” Dahl’s former student, Nelson Polsby, who did most of the heavy lifting when it came to criticizing the alternatives to pluralism, listed four reasons why value distributions can be misleading, which included the fact that “largely powerless Black Panthers, who oppose gun control, are beneficiaries of the fact that there are no gun control laws,” and that the powerful sometimes are “intentionally conferring benefits on the non-powerful (e.g., in at least some welfare systems)” (Polsby 1980, p. 207). None of this had anything to do with the information collected over decades by various government agencies, so it really had nothing to do with the matter. Meanwhile, as the debate over power indicators droned on without any concessions by any pluralists, even income inequality was gradually becoming

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more concentrated after 1970, which tracked perfectly with the decline of unions and the rising power of the “corporate rich” (Mills’ term for the reorganized class of corporate owners and managers) (Domhoff 2013). For example, the income of the top 0.5 percent rose by 140 percent between 1980 and 2010, and the income of the top 1 percent rose by 110 percent, but the income of the top 40 percent rose by only 40 percent, and the income of the bottom 60 percent stayed the same or fell backwards (Domhoff 2014, p. 64, Table 3.1). After the evidence was marshaled that the major corporations were controlled by wealthy members of the social upper class, with the help of upwardly mobile executives in the process of being assimilated into that class, the original Who Rules America? turned in Chapter 3 to “the shaping of the American polity,” with “polity” defined as “the framework within which American opinion reaches its decisions” (Domhoff 1967, p. 63). This definition seems too vague in retrospect, but it pointed to the involvement of nonprofit organizations, political parties, and the mass media in bringing issues into the political arena for eventual decision-making by the executive and legislative branches of the federal government. In terms of “shaping” efforts by members of the upper class and corporate leaders, they were said to be carried out by several foundations, think tanks, and policy-discussion groups, which were linked to the upper class and the corporations through the overrepresentation of members of the upper class and corporate executives on their boards of trustees. Put another way, these nonprofit organizations were linked to the social organizations of the upper class and to corporate boards by their interlocks with the parts of the database that were constructed in the process of studying the upper class and the corporations in Chapters 1 and 2. In addition, the finding that the majority of the funding for an organization came from corporations and/or corporate-dominated foundations was brought in as further evidence of control, which also means in today’s terminology that financial flows were serving as another type of network link. The chapter also included examples of how these organizations operated, but it did not provide a systematic enough analysis of how this upper-class/corporate/ nonprofit network interacted with and influenced government. I would judge the chapter as okay as far as it went, but it did not go far enough or have enough information on process as was needed—and subsequently developed. Moreover, I should note that many of the findings in the chapter originally came as a surprise to me. It was only through reading through the biographical information that corporate leaders provided to Who’s Who In America and other reference sources that I slowly came to realize how frequently the same few foundations and other nonprofit

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organizations were mentioned by business leaders. In that sense, the density of the corporate/nonprofit network (and the full range of the organizations in it) only emerged gradually in my thinking. Then it was demonstrated through systematic studies. In the case of the chapter on the federal government, I reverted to the term “control” to indicate that I thought the upper-class/corporate/nonprofit network dominated the executive branch. The evidence I presented for this strong conclusion began with campaign donations by members of the upper class and corporate leaders to political candidates in both parties. Following the lead of political scientist Alexander Heard (1960), who did excellent work on campaign finance in the 1950s, I emphasized that what makes money important “is the problem of gaining the nomination for a major political office in the first place” (Domhoff 1967, p. 85). Although members of the upper class and corporate leaders were the primary donors to both parties, I stressed that there were “intra-class differences” between the wealthy donors in the two parties. The Republicans received a large portion of their support from the white Anglo-Saxon Protestants in banking and manufacturing in the North, whereas the Democrats were supported by “very new and very old elements within the upper class, including Southern aristocrats and the ethnic rich” (Domhoff 1967, p. 86). I also took the occasion to show that most wealthy Republicans in the North supported the ultra-conservative Barry Goldwater presidential campaign in 1964. I rejected the claim that the new rich in the Southwest had taken over the party, which was floating around long before the poetical, non-academic theory of a Yankee-Cowboy division led many researchers astray and wasted a good deal of time and energy (Domhoff 1967, pp. 88–90). The later YankeeCowboy story aside, I think the conclusions about money and politics in this chapter were a good start, but they needed greater detail and historical depth, which was later added (Domhoff 1972b; Domhoff 1990, Chapter 9; Domhoff 2014, 140–141, 197–200, and 151–154 for the Obama donor network). The other main source of evidence for the upper-class/corporate/nonprofit network’s control of the federal government in the first version of Who Rules America? consisted of detailed studies of the presidents’ cabinets, the presidents’ inner circles of advisors, the diplomatic corps, and appointments to the federal judiciary between 1932 and 1965 (Domhoff 1967, pp. 97–107, 109–111). This effort showed that the cabinet members and the inner circles of advisors came in large part from the upper-class/corporate/nonprofit network, along with the corporate law firms that worked closely with the corporations. The chapter contained a cursory glance at the social backgrounds of members of Congress, and noted the best of the case studies on how corporate

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lobbyists strongly influence regulatory agencies and Congress (Domhoff 1967, pp. 107–108, 111–114). Once again, as with the chapter on the shaping of the polity, I would have to say the chapter was decent as far as it went. However, following Mills (1956, Chapter 11) too closely, I did underestimate the importance of Congress, a problem I began to address soon thereafter, and of which more is discussed shortly. (For those who think that the power elite’s dislike of government is fairly recent, or that their hostility toward government contradicts the thesis that they dominate it, the last chapter of Who Rules America? contains a lengthy discussion of this issue entitled “But Businessmen Hate Government” (Domhoff 1967, pp. 152–156). The original Who Rules America? also had a highly detailed chapter on the control of the military, the FBI, and the CIA, which paid by far the most attention to the military. It used some of the same sources as did Mills (1956, Chapters 8–9) to conclude that he was wrong to give any independent role to the military on the basis of its rise in importance during World War II and the subsequent Cold War (Domhoff 1967, pp. 115–127). I also documented that several of the key military decision-makers mentioned by Mills were from the upper class, had relatives with major corporate roles, or themselves became corporate directors and Wall Street financiers after they retired from the military. Other sources came to the same conclusion (Coffin 1964; Janowitz 1960). I continued to update this argument as new information became available (Domhoff 1968; Domhoff 1970b, pp.  137–139; Domhoff 1996, Chapter 6). Because virtually all scholars came to agree by the 1970s that the military was subordinate to the corporate executives and policy-planning experts appointed to lead the Department of Defense, this chapter was eliminated from future versions of Who Rules America?. Instead, the issue was dealt with as part of a subsection rejecting the idea that there is a “military-industrial complex” separate from the rest of the corporate community. The evidence for the upper-class/corporate/nonprofit network’s control of the CIA was equally strong, and the FBI’s links to corporate executives through its longstanding director at the time, J. Edgar Hoover, were noted, although the latter is an admittedly weak plank to stand on (Domhoff 1967, pp. 127–131). The analysis of the CIA was strengthened by future research, which was made possible by major revelations about the CIA that were leaked during the Vietnam War (Domhoff 1970b, Chapter 7, for a summary of the subsequent information). However, the CIA and the FBI were dropped from later versions because they are secondary issues. Perhaps as a result of my attempt to forge a new middle-range theory focused only on power in the United States between 1932 and 1964, which used respectable positivist definitions and methods, and presented new

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empirical information, the first version of Who Rules America? ranked No. 12 in Herbert Gans’s (1997) study of the top fifty-three non-textbook best sellers in American sociology from the 1950s to the early 1990s.

New Discoveries, New Concepts, New Syntheses Despite the generally positive reception of the first version of Who Rules America? as a contribution to the study of the American power structure, it was not without its critics. First and foremost, some researchers were not convinced that any of the think tanks or policy-discussion groups had any impact on what were widely interpreted as liberal-labor legislative successes, such as the Social Security Act and the National Labor Relations Act, which were passed at the height of the New Deal. This challenge sent me on what turned out to be an on-and-off quest that lasted for several decades. It finally culminated in new archival findings that showed the critics were wrong on the Social Security Act, but in good part right to say that the National Labor Relations Act was a defeat for the major corporations, although not fully for the reasons they suggested (Domhoff 1970b, pp. 207–249; Domhoff 1990, Chapters 2–3; Domhoff and Webber 2011, Chapters 3–5). They also doubted that the Democratic Party was beholden to wealthy fat cats, whatever their region, religion, or ethnicity, and they rightly noted that I did not do enough on the legislative process and the important role of Congress. The result was further research on these issues, which did not come to full fruition until the seventh version of Who Rules America?, so it has been a long and slow journey (Domhoff 2014). My new round of research began with detailed studies of several major policy-discussion groups concerned with foreign policy and domestic policy, with a stronger historical dimension as well (Domhoff 1970b, Chapters 5–6). Shortly thereafter, I began to think in terms of a “policy-planning network,” complete with a network diagram that showed the flow of people and money into think tanks and policy-discussion groups from large corporations and foundations, and the flow of ideas and people from the think tanks and policydiscussion groups into the federal government (Domhoff 1970a; Domhoff 1974a). More generally, sociologist Michael Useem (1979; 1980) discovered that people who served on two or more corporate boards of directors, and also were members of one of the policy-planning groups, had higher odds of being appointed to an advisory position in the federal government. His subsequent interviews with top corporate executives revealed that they saw involvement in policy-discussion groups as an important step in preparing corporate leaders for government positions (Useem 1984).

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At about the same time, detailed studies of campaign finance in the 1968 and 1984 presidential elections convinced me that I was on the right track in understanding the financial support for the Democratic Party (Alexander 1971; Domhoff 1972a, Chapters 1–2; Domhoff 1990, Chapter 9). Other sources come to similar conclusions on the role of ethnicity (and religion) in the financial support for the Democrats (e.g., Allen 1991; Burris and Salt 1990; Isaacs 1974; Lipset and Raab 1984; Webber 2000). By 1990 I had come to define the Democratic Party as the party of the “out-groups” in the United States, in terms of both its financing and its voter base, from its founding in the 1790s to the present (Domhoff 1990, Chapter 9; Domhoff 2014, pp. 140–141). The idea of the Democratic Party as a coalition of out-groups fit well for the powerful Southern slaveholders, who dominated the party from the 1790s to 1860, because they were on the defensive in a land of free labor, and they were always well aware of that fact. My conclusions about the differences between the two major parties also prepared me to readily agree with the importance of “social identity” in terms of voting behavior, as persuasively demonstrated in Democracy for Realists (Achen and Bartels 2016, Chapters 8–9). Every subsequent version of Who Rules America? updated the information on the network connections of the most recent presidential cabinets, and each one revealed the same pattern as the earlier accounts. The analysis of the Clinton Administration was especially detailed because it was the first Democratic administration since 1977–1980. If anything, the Clinton Administration was even more laden with financiers and corporate lawyers affiliated with various policy-planning groups than previous Democratic administrations (Domhoff 1983, pp.  137–143; Domhoff 1998, pp.  247–256; Domhoff 2002, pp. 150–157; Domhoff 2006, pp. 165–171; Domhoff 2010, pp. 183–195; Domhoff 2014, pp. 175–177). Taken together, the sections on the cabinet in the various versions of Who Rules America? present a striking portrait of how the executive branch of the federal government was dominated by corporate interests between 1932 and 2014. This portrait is further supported by a three-volume effort that pulled together information from a wide variety of sources on the individuals who served in presidents’ cabinets from the 1790s to 1980, and on the corporate and legal networks of Supreme Court appointees as well. It revealed that both the cabinet and court appointees seemed to reflect the rise and fall in importance of various business sectors, such as in the case of railroads. The New Deal was a partial exception, but matters reverted to the usual pattern during World War II and thereafter (Burch 1980; Burch 1981a; Burch 1981b). A study of presidential cabinets from 1897 to 1972 presented a very similar picture (Mintz 1975). The network connections of top government appointees since

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at least the 1940s onwards shows that the policy-planning network is indeed the key linkage between the corporate community and government. Then, too, the chairs of the president’s Council of Economic Advisors often come from the major think tanks and had served as advisors to policy-discussion groups, and sometimes returned to private life as corporate directors (Domhoff 1987). I also was able to deepen my understanding of Congress through further reading in the political science literature. By 1972 I had grasped that Congress was in good part controlled by the Southern Democrats, thanks to a superb early article on the topic (Irish 1942) and a book on voting patterns in Congress on a range of issues, which showed that the Southern Democrats and Northern Republicans often sided with each other on an important subset of issues (Mayhew 1966). I concluded that the Southern Democrats voted with the Northern Republicans “to gut any legislation supporting labor unions, minimum wages, or social welfare” (Domhoff 1972a, p. 94). I also concluded that the Southern rich stayed Democrats in part because the Republicans would not join them in quid-pro-quo trade-offs on federal subsidies, whereas the non-Southern Democrats were very glad to do so. However, I had not yet arrived at an understanding of the basis of the conservative voting coalition in Congress (defined as a majority of Republicans and Southern Democrats voting against a majority of non-Southern Democrats), nor of its full impact. This understanding was not to come for another several years through further reading and new studies (e.g., Manley 1973; Patterson 1967; Shelley 1983).

The Second Version of Who Rules America? Most of the new information developed in the 1970s was gathered together in a second version of Who Rules America?, this time called Who Rules America Now? to make clear that it was in some ways a new book, extending well beyond the first version. It eased into the specifics of the argument with an introductory chapter that began with everyday understandings of “class” and “power,” and then supplemented those understandings with the social-science meanings of those terms. (It also used the phrase “ruling class” instead of “governing class” to provide more of a symmetry with the use of “the power elite.”) In addition to a more detailed discussion of how new policies were formulated within the policy-planning network, it added more information on the numerous means through which the members of that network connect to government: service on advisory commissions to departments of the executive branch, appointments to blue-ribbon presidential committees, and

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testimony before Congress, as well as through the numerous appointments of corporate executives and experts from the policy-planning network to positions in the White House and executive departments. The book now talked about four general processes, not simply a policyplanning network, that connected the power elite to government. The “specialinterest process” included the myriad ways in which the specific needs of particular companies and business sectors are taken care of through lobbying, as buttressed by the thousands of case studies of this activity. The “candidate-selection process,” a concept borrowed from political scientist Walter Dean Burnham (1975), outlined the several ways in which the power elite involved itself in the efforts of the two political parties over and beyond campaign finance. The “opinion-shaping process” was more clearly separated from the policyplanning process, even though those who attempt to shape opinion (but often fail) use the policy stances developed in the policy-planning network as their main starting point. Several organizations linked to the upper-class/corporate/ nonprofit network were used as case studies of how the process operated, but I did not have a good understanding of how the opinion-shaping process could sometimes be successful even though it is difficult, if not impossible, to shape public opinion on most issues. To anticipate a discussion later in the chapter, new work in the 1990s and thereafter by experts on public opinion made it possible to show that everyday people have agency and can form their own opinions (e.g., Gilens 2012; Jacobs and Shapiro 2000; Page 2008; Page and Jacobs 2009; Page and Shapiro 1992). However, the opinion-shaping process, in conjunction with the candidate-selection process, nonetheless plays a role in the power elite’s success in enacting its policy agenda through raising doubts about rival legislation and criticizing the motives and credentials of those who disagree with them (Domhoff 2014, pp.  119, 129–130; Michaels 2008; Potter 2010). In Weberian terms, I concluded that these four processes constituted the “party” through which the upper-class/corporate/nonprofit network tried to influence communal action in a conscious and planned way (Weber, 1998). At the empirical level, and crucially, this new four-process theory of how the power elite connects to government makes it plausible to attempt the kind of decision-making studies demanded by pluralists. First, the policy statements prepared by corporate leaders and experts in various think tanks and policy-discussion groups can be compared with legislative proposals put forth by the White House and Congressional leaders. Then it can be determined whether the people involved in testifying and lobbying for a particular bill are the same people who discussed and prepared similar proposals

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earlier. So, too, the content of privately produced documents can be compared with the provisions in the legislation that is finally enacted. Within this context, interviews with participants and knowledgeable observers, such as journalists, are icing on the cake. I began to say that power structure research involves network analysis and content analysis, and put together several case studies (Domhoff 1979). The role of Congress (and indirectly, the candidate-selection process) also was brought into the policymaking picture in the second version of Who Rules America? in a section on the struggle over policy enactment. It claimed that those Mills (1948, pp. 23–27; 1956, p. 122) called the “sophisticated conservatives” within the power elite, whom I also called “corporate moderates” by the 1970s, were very often the tipping point in legislative conflicts. They stood between their ultra-conservative counterparts (as exemplified by the National Association of Manufacturers, the U.S. Chamber of Commerce, the American Farm Bureau Federation, and several think tanks) and “the more loose-knit and divided liberal-labor coalition that is rooted in trade unions, middle-income liberal groups, environmental and consumer groups, university communities, and the foundations and advocacy groups financed by a few rich mavericks” (Domhoff 1983, p. 144). If the corporate moderates, as represented by proposals from the moderate policy-planning groups and think tanks that they finance and lead, were in favor of a compromise with the liberal-labor coalition, then there were often enough votes for moderate legislation to pass. However, if the corporate moderates sided with the ultra-conservatives, as they usually did, then Who Rules America Now? claimed that “There have been only a few occasions in the twentieth century when the conservative voting coalition in Congress did not have the means to block liberal initiatives in some way, either in open votes on the floor of the House or Senate, in committees and subcommittees, or through parliamentary maneuvers and filibusters” (Domhoff 1983, p. 145). Thus, “when push comes to shove, the liberal-labor coalition has to hope that the moderate conservatives will be on their side, as they were on Social Security, Medicare, civil rights legislation, and several other new policies long advocated by liberals and labor” (Domhoff 1983, p. 145). This conclusion was grounded in fair measure on the findings in an excellent book on voting patterns in Congress on a wide range of issues (Clausen 1973). However, the section on how policy emerges, or else is stymied by a united power elite and the conservative voting coalition, closed with the admission that the National Labor Relations Act did not fit this analysis. So I was still a long way from closure on that exceedingly crucial issue for a class-domination theory of power

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in America. For the most part, though, the challenges posed by the critics of the first version of Who Rules America? had been met successfully as far as I was concerned.

A New Theory of Community Power Structures Who Rules America Now? also included a greatly revised version of a skimpy chapter in the original Who Rules America?, which I did not mention previously for reasons that will now become apparent. The original chapter was focused primarily on city power structures (aka “community power structures”) and was entirely pluralist. It even said that Dahl (1961), believe it or not, was probably right in regard to his picture of dispersed inequalities in New Haven (Domhoff 1967, p. 132). It noted that corporations could threaten to leave a city if their demands were not met, which is a very significant factor in any decision made by local elected officials (Domhoff 1967, p. 137). But the chapter offered no theory that could incorporate the local level into the national-level system, which made that chapter as incomplete in its own way as were the original chapters on the shaping of the polity and the control of the federal government. A few years later, though, the path-breaking sociologist Floyd Hunter (1953) told me he had collected some preliminary evidence that New Haven might have a more hierarchal power structure than Dahl believed. (To my chagrin, I did not cite his excellent book on the overlapping pyramids of power in Atlanta in the original Who Rules America?, focusing instead on his later fine work on the national level [Hunter 1953; Hunter 1959].) Shortly thereafter, my views about local power began to change drastically based on interviews and archival research I carried out in New Haven in 1974 and 1975, thanks to Hunter’s comment (Domhoff 1978). By that point I also had access to Dahl’s interviews with local business leaders and politicians, due to his generous sharing of his files. He also gave me the memos about the doings at city hall that he had received from his graduate assistant posted there, who published a revealing book on New Haven just as my own research began (Wolfinger 1973). And while I was mapping out New Haven’s surprisingly strong power structure, centered on two banks, two corporate law firms, and Yale University’s board of trustees and top administrators, sociologist Harvey Molotch (1976; 1979) provided a brand-new theory that made it possible to think about the community power literature in a way that meshes with my views on corporate power at the national level. His empirical work and wide-ranging

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theoretical tastes led to the insight that land owners, local banks, mortgage companies, and affiliated real estate interests, not national corporations, are the major movers and shakers in most cities, with the primary goal of increasing real estate values through the intensification of land use. Working as “place entrepreneurs,” coalitions of pro-growth elites try to reach their goals by making their cities attractive locales for outside capital, as well as for new federal government installations and the expansion of local university campuses. When they succeed, they turn a city into a “growth machine,” a term that has the same kind of clear, hard ring to it as “the power elite.” “The power elite and the growth machines” became my new shorthand statement for describing the American power structure (e.g., Domhoff 1986). In striving for their goals, the local growth machines often find themselves at odds with national corporations, which make their profits through selling services or products, and have little or no allegiance to any given city or region. Local growth coalitions are also in constant competition with one another, so the overall system is a very dynamic and competitive one, which often leads to a race to the bottom on taxes and regulations. To the degree that these progrowth coalitions face opposition on their home fronts, it comes at its core from neighborhoods that want to protect their amenities against downtown expansion, high rises, shopping malls, convention centers, stadiums, or freeways. More abstractly, this means there is a built-in conflict at the local level between the exchange and use values of land, which has little or nothing to do with class conflict. In fact, some of the most powerful blue-collar unions, those in the construction industry, serve as political bulldozers for the local growth machines in dealing with any hesitant liberal Democrats or environmentalists who might raise objections to growth at any cost (Logan and Molotch 1987). The conflict between exchange values and use values is resolved or compromised in a variety of ways, some halfway reasonable, some very ugly, as in the case of the urban renewal program that cleared out inner-city neighborhoods so that downtown elites could remake their cities (e.g., Domhoff 1978, Chapter 2; Domhoff 2013, pp. 77–80, 116–121, 129, 135–138; Logan and Molotch 1987; Mollenkopf 1975; Sanders 1987; Sanders 2014; Stone 1976). Energized by this new theory, Who Rules America Now? reexamined the entire community power literature from “Middletown” in the 1930s through the late 1970s, leading to the conclusion that the idea of the city as a “growth machine” fit every one of them. At this point I also added new interview and archival data to my analysis of New Haven as well—a practice I continued by studying Yale archives that became available in the late 1990s (Domhoff 1983, pp. 184–196; Domhoff 2005c). The idea of the city as a growth machine gained further support in studies by urban researchers, such as sociologist J.

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Allen Whitt (1982; 1986; 1987a; 1987b) and political scientists John Mollenkopf (1983) and Todd Swanstrom (1985). The finding that growth coalitions in some cities were forced to make concessions by neighborhood-based coalitions, and were defeated by citywide neighborhood coalitions in a few instances, especially in up-scale suburban cities or cities with large numbers of university-based student voters, further showed that this new theory of the local power structure had strength and flexibility (Dreier, Mollenkopf, and Swanstrom 2004; Gendron and Domhoff 2009; Logan and Molotch 1987; Molotch 1976). It can account for everything from the new mega-cities to the failed growth coalitions called “ghost towns,” which litter the American landscape and are sometimes used as tourist attractions by the nearby growth machines that defeated them in the land wars. When pluralists (e.g., Peterson 1981), urban Marxists (e.g., Harvey 1985), and regime theorists (e.g., Stone 1989) all ignored the evidence that supports the new growth-coalition theory and refutes their theories, they were subjected to strong critiques (Domhoff 1986; Gendron and Domhoff 2009, pp. 187–203; Molotch 1984; Molotch 1988; Molotch 1999). But these critiques had little or no impact. In any event, urban sociologists gradually turned their attention to many issues other than power, or else they employ urban Marxist David Harvey’s (1973; 1976) version of neoliberalism to address any concerns they may have with the role of local power actors (Harvey 2005). As a result, the lengthy and detailed chapter on urban power structures in Who Rules America Now? was shortened to a few pages in subsequent versions, and instead reappeared as online supplements that were extended and updated (Domhoff 2005b; Domhoff 2014, pp. 36–39). All in all, I thought Who Rules America Now? was a helluva book. At the least, it was better in substance on some issues than the original version, thanks to the considerable amount of research and new theoretical insights that many social scientists developed in the 1970s, including new studies that appeared in a special issue of The Insurgent Sociologist in 1975 and in an edited book entitled Power Structure Research (Domhoff 1980). This burst of new research included numerous studies of corporate interlocks that cast further doubt on the emphasis on the managerial revolution and narrow business interest groups by pluralists (e.g., Allen 1974; Allen 1978; Mintz and Schwartz 1981; Mizruchi 1982; Sonquist and Koenig 1975). My positive assessment of Who Rules America Now? may be supported by the fact that it ranked No. 43 on Gans’s (1997) top fifty-three list. If we also throw in that my two best 1970s follow-up books to the first Who Rules America?, which contributed

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greatly to the success of the second version, ranked No. 39 (The Higher Circles, 1970b) and No. 47 (The Powers That Be, 1979) on the Gans list, we can gain a sense of the interest in the American power structure between 1968 and the mid-1980s.

Another New Synthesis: 2014 The third version of Who Rules America (1998) was long (335 pages, which is 100 more than Who Rules America Now? and 150 more than the original Who Rules America?). It was also rather stolid and didactic, with detailed discussions of alternative theories and methodology at the beginning of the first chapter. There were later sections on such heady topics as “Strategic Alliances/ Producer Networks,” the power of pension funds, and the collapse of the Soviet Union, all of which reflected the fact that it had devolved into a textbook. The argument was now framed in terms of a “dominant class” and a “power elite,” who did battle with a “liberal-labor alliance” through their “corporate-conservative alliance,” which reached out to right-wing groups that were concerned with “social issues” related to race, religion, affirmative action, sexual orientation, gun rights, and immigration. But with students no longer all that interested in theories they had never heard about before, or in the details on the size of the federal government and why that matters in evaluating alternative theories, the third version felt more like a handbook than anything else. The book was streamlined and reorganized in three subsequent versions that reflected the tenor of the moment in which they appeared. For example, there was a speculative final chapter in the sixth edition on whether the Great Recession and the election of Barack Obama as president would lead to challenges to corporate and class dominance, which was out of the question before the manuscript was in print, and even sounds somewhat silly in retrospect (Domhoff 2010, Chapter 9). However, the seventh version stepped back from the fray and provided a new synthesis that includes recent original theoretical and empirical contributions by others. These new efforts included work on, for example, the origins of the different types of electoral rules in class conflicts in a number of countries (Ahmed 2013), the changing configuration of the policy-planning network (Burris 2008), and the reason why workforces in a few very different business sectors were able to unionize, despite corporate resistance, before the passage of the National Labor Relations Act (Kimeldorf 2013). More generally, it uses historical and comparative work by sociologists who

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employ the four-network theory of power to explain why the American power structure is more straightforward and corporate-dominated than is the case in most European countries, which had stronger and more independent national governments than the United States until World War II and thereafter (Domhoff 2014, Chapter 8; Lachmann 2000; Lachmann 2010; Mann 1993; Mann 2012) The seventh version is therefore a worthy heir to the original Who Rules America? and to Who Rules America Now? Although it is mostly read by the sociology and political science professors who teach courses in social stratification, political sociology, and political science, along with at least some of the students who take these courses, I think it might warrant consideration by any social scientist interested in understanding local or national power in the United States in the twenty-first century. Building on a database that starts with the 500 largest companies in the United States, it first reports that 87.5 percent of those corporations had at least one link to one another, and that they had interlocks with many large, privately held corporations and equity funds as well (Domhoff 2014, pp.  23–26). When fifty-two think tanks and policy-discussion groups are added to the mix, 497 of the 552 organizations (90 percent) in the combined corporate community and policy-planning network were connected either directly or indirectly, with several think tanks and policy-discussion groups at the center, and with the Business Roundtable ranked No. 1, and with ultraconservative groups very peripheral (Domhoff 2014, pp. 80, Table 4.1). (For a more extensive analysis of an even larger database that includes 2,563 corporations, thirty-three think tanks, and eighty-two foundations, along with forty-seven major universities and nineteen White House advisory committees, see Domhoff, Staples, and Schneider 2013). Legislative battles from the 1930s through the 1980s are now understood in terms of two major coalitions, starting with a “spending coalition,” which until the 1990s included a majority of Southern and non-Southern Democrats arrayed against a majority of Republicans. They worked together because they were mutually interested in providing subsidies and other government benefits for their main constituents, namely, planters, ranchers, and growers in the South, Southwest, and California, and urban real estate interests everywhere in the country (Clausen 1973; Domhoff 2014, pp. 142–143; Sinclair 1982). The nature of their bargain was very explicit. Urban Democrats in the North supported agricultural subsidies and price supports that the Southerners and western ranchers needed, and in return Southerners and western ranchers supported government spending programs for roads, urban redevelopment, public housing, and hospital construction. Spending programs

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that are thought of as liberal often differentially benefited the urban growth machines that provide campaign donations to the Democrats at both the local and national levels (Brown 1999; Domhoff 2013, pp. 15–17, 28; Domhoff 2014, pp. 142–144). As for the second alliance, the long-familiar conservative voting coalition, it came together to oppose unions, the expansion of civil rights, tax increases, and business regulation, which are the issues of greatest concern to largescale property owners in both the North and the South, and on which they rarely lost (Domhoff 2014, pp. 143–145; Shelley 1983). In fact, these are the four issues that defined class conflict for most of the twentieth century, with the civil-rights issue fitting under the rubric for class conflict because opposition to civil rights in the South was essential to the plantation owners’ complete control of their major workforce (Domhoff 2014, pp. 143–145; Domhoff and Webber 2011). (Although some political scientists have doubted the existence of the conservative voting coalition as an organized effort, I think new research since the seventh version appeared provides strong support for the earlier sources I cited [Jenkins and Monroe 2014, pp. 1125–1126].) Since the late 1990s, as everyone knows, the Northern and Southern rich have been united in the Republican Party, which means that the old conservative voting coalition is largely, if not entirely, housed in that party. Indeed, the new Southern Republicans may be even more conservative on many issues, such as social spending, than the old Southern Democrats. However, what many people may not realize is that the gradual movement of the Southern rich and the Southern Democrats into the Republican Party involved two crucial policy concessions on the part of the ultra-conservative Republicans in the North. First, the ultra-conservative Northern Republicans quietly abandoned their opposition to the huge agricultural subsidies (originally proposed by corporate moderates working through the policy-planning network), which have differentially benefited the Southern economy since the Agricultural Adjustment Act was passed with enthusiastic Southern support in 1933 (e.g., Domhoff and Webber 2011, Chapter 2). Second, the holdout ultraconservative minority among them gradually abandoned their “isolationism” and became rip-snorting supporters of defense spending. This spending also differentially aids the Southern economy because of the insistence on the part of the old Southern Democrats from the start of World War II onward that a great many new defense plants, and later just about the whole missile and space industry, had to be placed in the South (Schulman 1991). As for the liberal-labor coalition, which has been able to elect a significant number of Democrats to Congress over the decades, and often is essential to the spending coalition’s victories on subsidies, it is not often able to win on

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its own issues because of the adamant opposition of the conservative voting coalition. By and large, it usually has to settle for extensions of the Social Security Act in relation to old-age benefits and unemployment insurance, or else inflation catch-ups on the minimum wage. On larger issues, it had to hope in the past that the corporate moderates would be somewhat sympathetic to some of its concerns, which they often were until the 1970s. Within this context, the passage of the National Labor Relations Act finally could be accounted for, with the additional aid of new archival findings and historical accounts concerning the role of the corporate moderates (Domhoff and Webber 2011, Chapters 3, 5; Farhang and Katznelson 2005). The corporate moderates had fashioned a plan in the 1920s and early 1930s to deal with labor unrest through the “company unions” they called Employee Representation Plans, and they were confident that their workers would prefer the company unions to independent unions. They even suggested and served on the original National Labor Board appointed by President Franklin D. Roosevelt in 1933 in the face of an upsurge in union organizing. But both their legislative efforts and their company unions failed them. In 1935 it was the nascent liberal-labor alliance that shaped the main provisions of the National Labor Relations Act, against strong opposition by virtually all corporate leaders (Domhoff 2014, pp. 97–98, 172–173; Domhoff and Webber 2011, pp. 132–137). However, I had missed the full extent of the all-out opposition of the corporate moderates to the new version of the labor act for two reasons, as I finally understood by the late 1980s (Domhoff 1990, pp. 90–91). First, my other case studies had convinced me wrongly that a leading Marxist historian was right in concluding that “few reforms were enacted without the tacit approval if not the guidance of the large corporate interests” (Weinstein 1968, p. ix). Second, I did not know the main historical study that showed otherwise on the National Labor Relations Act, but I should have been aware of it because it had appeared long ago (Auerbach 1966). It revealed that the behind-the-scenes moderate corporate policy group on this issue, the Special Conference Committee, which had been supportive of the original National Labor Board, was completely opposed to the more liberal National Labor Relations Act of 1935 for a variety of reasons. In fact, it immediately instigated a constitutional challenge, and some of its corporate supporters purchased weapons and hired private police forces to do battle with union organizers, if necessary. That major mistake aside, the defeat suffered by the corporate moderates was not simply a matter of the very large electoral gains won by the liberal-labor coalition in Congress in the 1934 elections. It was also the case that the Southern plantation capitalists acquiesced in the passage of the act

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in exchange for the exclusion of their primary workforce (agricultural and domestic labor) from its purview. The liberal-labor alliance offered this bargain because it in fact needed the support of Southern Democrats, who still enjoyed preponderant power in the Democratic Party through their control of key Congressional committees (Farhang and Katznelson 2005; Katznelson 2013; Katznelson, Geiger, and Kryder 1993; Katznelson and Mulroy 2012). They also had close political ties to Roosevelt, who owed them for their political support at the Democratic Convention in 1932 and feared that they would block the rest of his domestic legislative agenda if the National Labor Relations Act somehow passed over their objections. Indeed, he valued other parts of his domestic agenda, including the Social Security Act, more than the National Labor Relations Act. In effect, then, the corporate rich outside the South lost on this issue of preeminent concern to them because they lost the support of their usual Southern allies. This analysis is supported by the fact that the liberal-labor alliance never again won on an issue related to unions after the Southern plantation owners vehemently turned against the labor act in 1937 and 1938 because of attempts by Northern unions to organize integrated unions in the South; they also abhorred the sit-down strikes that were extremely successful until they were declared unconstitutional by the Supreme Court in 1939 (Domhoff 2014, pp. 97–98, 172–173; Gross 1981, Chapters 1–2). At this point the Democrats also lost enough seats in the House in 1938 to make a coordinated conservative voting coalition stronger (and long-lasting, it turned out) (Manley 1973; Patterson 1967; Shelley 1983). This reversal of fortunes for the prolabor Democrats in 1938 was almost surely due to a big dip in the economy and the steep rise in unemployment caused by budget-balancing attempts by President Roosevelt, along with other short-sighted traditional government policies that also weakened consumer demand (e.g., Achen and Bartels 2016, Chapter 7). Union density declined over the next two or three years, but a big surge in union membership during World War II saved the day; this surge was followed by several years of postwar decline in union density, which was temporarily halted by a brief resurgence during the Korean War (Domhoff 2013, p.  81). As a result of these two war-based revivals, during which the federal government restrained corporations in their anti-union efforts, defeat for the union movement in the North after World War II came only gradually as corporations developed new anti-union strategies and moved as many of their factories as possible to union-free regions in the South. During the postwar years, unions therefore had a significant influence on some domestic policies, including on the passage of Medicare (e.g., Dark 2001; Quadagno 2005, Chapters 3–4; Roof 2011).

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Studies based on the private archives and policy papers of a major policydiscussion group, the Committee for Economic Development, made it possible to demonstrate that a new round of corporate conflict with unions in the late 1960s was a major factor in the “right turn” that the corporate moderates took at that time. Although they had chipped away at union strength through a variety of means after the Korean War ended in 1953, they had been unable to make much progress toward eliminating private-sector unions. Unfortunately, the rest of that story is too complex to be told here, but it is recounted in excruciating detail elsewhere (Domhoff 2013, Chapters 8–10; Domhoff 2014, pp. 98–101, 197–201; Domhoff 2015; Linder 1999; Matusow 1998). When the Nixon Administration, with the full backing of the one-time corporate moderates, resorted to price controls to “zap labor” to deal with inflation in 1971, and at the same time announced that it would no longer exchange American dollars for gold, it freed the American power elite to continue to expand corporate exports abroad and at the same time take a harsh stance toward organized labor (Domhoff 2013, Chapter 9). Contrary to those social scientists who once thought that the country was in decline in the 1970s, the corporate community and the White House had reasserted their post-World War II international dominance, which was still in place as of the year 2000. (And when the dust settles, it might be that the United States is and will remain the dominant power in the world for many years to come, but such long-term trends cannot be discerned on the basis of a few recent years, as the many past failed predictions of imminent American decline demonstrate.) As American ascendancy continued throughout the last quarter of the twentieth century, union density declined rapidly in the private sector and income inequality increased at an accelerating pace (Domhoff 2013, Chapters 12–13; Jacobs and Dixon 2010; Volscho and Kelly 2012; Western and Rosenfeld 2011). The passage of NAFTA in 1994 and trade normalization with China in 2000, both of which were in good part deals to export jobs to low-wage countries while at the same time protecting copyrights and other corporate properties marketed in foreign countries, further accelerated the decline in private-sector unionism (Dreiling 2001; Dreiling and Darves-Bornoz 2016). As was the case with the policy-planning network, recent findings relating to the opinion-shaping network made a new synthesis possible in the 2014 version of Who Rules America?. Americans usually formulate their own general opinions despite the massive efforts to shape those opinions by a large flotilla of public relations firms, nonprofit organizations, public affairs departments in corporations, and corporate-controlled foundations, the latter of which are now major donors to every plausible cause. (Corporate foundations are a

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relatively new supplement to the family foundations.) Most Americans agree with the corporate community that private enterprise is a good way to run an economic system, and they share the opinion that government can grow too large and bureaucratic. But they also want the government to develop more job-creation programs and they support expanded social insurance programs relating to health issues and old age, all of which even the former corporate moderates among the corporate rich have strongly opposed since the late 1970s; the general public also advocates a more cooperative foreign policy with other nations, as well as less militarism, than do the foreign policy discussion groups in the policy-planning network (Moore 2007; Page 2008; Page and Jacobs 2009). Although everyday citizens formulate their own general opinions, they pay little attention to politics and do not develop specific positions on impending legislation or inquire about the stances adopted on legislative proposals by elected officials (e.g., Zaller 2006, Chapter 6). They instead focus on the compelling and often enjoyable issues of everyday life, the most salient of which are family, jobs, and various forms of entertainment. In doing so, they are also living out the important American value of liberty (go where you want to go, do what you want to do), which can make the pull of everyday life even stronger (Flacks 1988). As a result, the opinion-shaping network has a fair amount of leeway in working with lobbyists and elected officials in crafting the details of new legislation, or in aiding the conservative voting coalition in blocking liberal and labor initiatives. Consultants employed within the opinionshaping network also can aid elected officials in finding ways to vote against majority sentiment on some issues in their state or Congressional district, which they are inclined to do for their own reasons ( Jacobs and Shapiro 2000). Moreover, the emphasis that pluralists once put on the importance of public opinion in arguing against class dominance in the United States has been muted by innovative research based on analyses of several hundred opinion surveys carried out primarily between 1981 and 2002. The American government is responsive to the top 10 percent of citizens at most on issues concerning taxes, economic regulation, and social welfare, so “the preferences of the vast majority of Americans appear to have essentially no impact on which policies the government does or doesn’t adopt” on these issues (Gilens 2012, p. 1). These results are supported by a study of three general social surveys that compared the top 4 percent of income earners with the remaining 96 percent, which narrows the range of the affluent who have any influence to within hailing distance of a class-dominance theory (Page and Hennessy 2010). Then a pilot study based on a small sample from the top 1 percent showed that “they are extremely active politically” and “much more conservative than

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the American public as a whole with respect to important policies concerning taxation, economic regulation, and especially, social welfare programs” (Page, Bartels, and Seawright 2013, p. 51). These studies led two prominent researchers on public opinion to suggest that “biased pluralism” (in which “corporations, business associations, and professional groups predominate”) and the theory presented in the seventh version of Who Rules America? are the two theories that still seem viable based on the new findings (Gilens and Page 2014, pp. 564–565, 573–574). Still, there are limits to attempts to ignore public opinion. Unpopular wars affect voting behavior, as seen most recently in the election of a Democratic Congress in 2006 as the widespread dismay over the war in Iraq grew stronger (Mueller 1973; Mueller 2005). Economic disruption also can lead to defeat for an incumbent party, as seen in the presidential and congressional elections in 1932 and 2008. Nor are corporate executives, policy experts, and elected officials always able to control the damage when there are unexpected accidents, scandals, or leaks, which generate lurid and detailed media accounts that alert readers and listeners about corporate wrongdoing and illegal activities by government officials, and sometimes lead to reforms (e.g., Molotch 2004; Molotch and Lester 1974).

The Distortion and Marginalization of Who Rules America? The seven versions of Who Rules America? have had their fair share of years in the sun, and they have been one of the starting points for studies of corporate networks, the policy-planning network, specific policy-discussion groups, and campaign finance (e.g., Apeldoorn and de Graaf 2016; Barnes 2017; Bonds 2016; Burris 1992; Dreiling and Darves-Bornoz 2016; Gonzalez 2001; Murray 2016; Murray 2017; Peoples 2009; Peoples 2010; Peschek 1987). However, the power structure research tradition on which this work is based came to be somewhat marginalized during the 1980s. I believe this is first and foremost because the social movements of the 1960s, which unexpectedly opened up new space for young social scientists to study power from new angles, gradually faded away. They did so for a mix of sociologically understandable reasons, starting with their success on their specific issues, which made it possible for more African Americans and women to pursue the compelling day-to-day interests and routines of their everyday lives, and often professional careers (Flacks 1988). But they also lost steam because of their debilitating internal divisions and the federal government’s successful efforts

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to disrupt the civil rights and anti-war movements (e.g., Cunningham 2004; Ellis 1998, Chapters 4–6). Within this context, new generations of sociologists naturally turned to the issues that arose in the 1970s and 1980s, as sociologist Karl Mannheim’s theory of generational cohorts shaped by major events during their coming of age may have led us to expect (Mannheim 1923/1952; Pilcher 1994). This was in part due to the large increases in immigration from Latin America and Southeast Asia, a distinctly new phenomenon in a country overwhelmingly populated by the descendants of immigrants from Europe and slaves from Africa. The marginalization also importantly involved the salience of “identity politics,” which to me meant that young activists and everyday people were now putting greater emphasis on issues related to their racial, ethnic, gender, and sexual identities than on their “class identity.” (In other words, I have never seen “class identity” as somehow “stronger” or more “basic” than any other identity, no matter how strongly class conflict shapes the country). I further think that these social identities were made more salient by the racism, sexism, homophobia, and other exclusions suffered by those who became involved in a new kind of identity politics, which was often annoying to those who favor a politics based on class identity (Domhoff 1998, pp.  304–305; Domhoff 2003, pp. 63–67). Beyond these important societal factors, however, power structure research also became marginalized because rival disciplines and theory groups within the groves of academe competed for the time and energy of the diminishing number of new graduate students with an interest in power issues. Despite all the efforts in the original Who Rules America? to emphasize that it was neither Marxist nor Millsian, the 1970s and 1980s generations of new sociologists and political scientists were generally critical of Who Rules America?. They tended to see it as supposedly being either watered-down Marxism or, worse, straightforward Millsian “elitist” theory (Domhoff 1990, pp. 40–44, for one account of these arguments). I had heard rumblings of these themes a few years earlier, and tried to head them off with an article entitled “Some Friendly Answers to Radical Critics,” but no such luck with friendly answers (Domhoff 1972b). These critics were by and large successful even though the Reagan and Bush administrations (1981–1992) pursued policies that could not happen according to their theories. As economist James O’Connor, a leading figure in one of these efforts, later stated in relation to his own impactful book: “The fact remains that Fiscal Crisis [of the State] failed to anticipate the rise of neoliberalism and globalization and the reestablishment of U.S. political

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hegemony after the fall of the Soviet empire” (O’Connor 2002, p. xviii). More generally, as concluded by Erik Olin Wright, one of the most visible sociologists who worked with O’Connor in the mid-1970s, “One of the tacit assumptions in much Marxist work of the early 1970s was the conviction that the statist turn in capitalism could not be dramatically reversed,” which meant that “no one seriously envisioned the wholesale dismantling of the welfare state, the deregulation of markets, the partial reversal of statist capitalism as a way of coping with the crisis tendencies of the period” (Wright 2004, p. 252). The distortion and marginalization was initiated by a strongly anti-Millsian Marxist (Balbus 1971) and by the “structural Marxists” in a study group in San Francisco. This group was organized by O’Connor, whose The Fiscal Crisis of the State (1973) was seen as a starting point for a new political economy. In their desire to create a refurbished Marxist theory that would be useful for revolutionaries, which is how some of them defined themselves, the members of these study groups first drew upon an obscure construction in O’Connor’s book: Monopoly capitalist class interests (as a societal force rather than as an abstraction) are not the aggregate of the particular interest of this class but rather emerge within the state administration “unintentionally.” In this important sense, the capitalist state is not an “instrument,” but a “structure.” (O’Connor 1973, pp. 68–69) The study group’s discussions of this statement led to the elevation of “instrumentalism” and “structuralism” to a very important dichotomy within Marxism via its newly founded journal, Kapitalistate. The San Francisco study group also decided that I was a Marxist of the “instrumentalist” variety, whose work “rests almost entirely at the very personal level of showing the social connections between individuals who occupy positions of economic power” (Gold, Lo, and Wright 1975, p. 33, my italics). They also lumped me with a small group of 1960s American Marxists, called “corporate liberals,” who were said to give a little too much credit to the moderation of one faction of the capitalist class and slighted the insurgent efforts of the working class, a charge that was laid on my doorstep as well (Esping-Anderson, Friedland, and Wright 1976). This claim was not accurate for most of the corporate-liberal historians, who had been militant Marxist activists (usually Communists) for several years before they saw a need to rethink some things and went to graduate school in history (e.g., Eakins 1966; Eakins 1969; Weinstein 1968; Weinstein and Eakins 1970).

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In any case, my work then was contrasted with the brilliant but overly abstract theoretical work being done by the Althusserian Marxists (e.g., Poulantzas 1969; Poulantzas 1973) and the more grounded theoretical work of German theorist Claus Offe (1974), one of the founders of Kapitalistate. These two newly defined Marxist extremes (American-style instrumentalism and European-style structuralism) were then synthesized into an allegedly better theory by the Kap-State Marxists. In the process I was caught in the crossfire between warring Marxists, and Mills disappeared entirely as far as any further citations to his work on power. I disagreed with these characterizations in an article (“I Am Not An Instrumentalist”) in Kapitalistate by noting that in my work “classes and institutions are the basic conceptual units,” but that “individuals are the basic elements for building the networks that make up the classes and that locate the institutions in sociological space” (Domhoff 1976, p. 223, my italics). I also protested about being called a “corporate-liberal” theorist because I had earlier adopted and used Mills’ much more accurate distinction between “practical conservatives” and “sophisticated conservatives” before I had read anything about corporate-liberal theory (Domhoff 1967, pp. 28–29; Domhoff 1990, pp. 29–40, for a discussion of corporate-liberal theory and how it was misinterpreted). However, the very fine archival work by the corporate-liberal historians did add a much-needed historical dimension to my post-1967 understanding of the domestically oriented groups in the policy-planning network (Domhoff 1970b, Chapter 5; Domhoff 1979, Chapter 3). (The way in which two genuinely “corporate-liberal” organizations, the Twentieth Century Fund and the National Planning Association, were pushed aside by the corporate moderates [albeit after assimilating some aspects of the corporate-liberal program] has been masterfully demonstrated through new historical research that was published after the seventh version of Who Rules America? appeared [Whitham 2016].) I replied in more detail to the structural Marxists in Who Rules America Now?, starting with a major disagreement with them at the end of the updated chapter on “The Shaping of the American Polity.” In doing so I drew upon findings by organizational sociologists (e.g., DiTomaso 1980, for an excellent account), which showed how the recent work in organizational theory could strengthen power structure research. If corporations dread “uncertainty” in their “inter-organizational environment,” as they most certainly do, then it follows that they could never tolerate the tremendous uncertainty of an autonomous state, even if it was in fact structured to do what is best for capitalism and the capitalist class as a whole in terms of the accumulation of capital and the legitimation of new policies: “Given what is at stake, and contrary

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to O’Connor and other structural Marxists, it seems unlikely that any upper class has been content to leave these tasks to state managers acting in terms of the structural imperatives of the capitalist system” (Domhoff 1983, p. 111). I continued my critique of the structural Marxists in a new final chapter that had been added to Who Rules America Now?. This chapter had a more confrontational quality, aimed at several specific theories, than did the final chapter in the first version. It pointed out that Breiger’s (1974) insights on membership network analysis, which he also nicely framed as a “duality of persons and groups,” refuted the structural Marxists’ claim that my work rested on the “personal level.” I also claimed that what structural Marxists wrote about “the state” and the “state apparatus” seems very similar to what pluralists say about “the government,” using different terminology. For example, pluralists also begin with the idea that government has considerable autonomy (independence), but they then note that it has to deal with strong pressures from “interest groups” and political parties, which has parallels with the Marxists’ emphasis on class struggle and working-class demands on the state (Domhoff 1983, pp. 213–215). Pluralists would also agree that governments are “structured,” but they would emphasize structuring by constitutions, electoral rules, legislative enactments, and court rulings. The case against structural Marxism to one side, the new instrumentaliststructuralist distinction inadvertently provided the perfect foil for another 1970s sociologist, Theda Skocpol (1980), who used it to criticize all “neoMarxist” rival theories in what political sociologist Jeff Manza (2015, p. 449) rightly calls “a landmark essay” in terms of its impact. As part of her critique of neo-Marxists, she saddled my work with all the failings wrongly attributed to it by my Marxist critics. She also persisted in labeling me as a neo-Marxist despite my published statements to the contrary. Skocpol’s critique originally was carried out in the name of a non-Marxian “state autonomy” theory that sounded for all the world like Mills’ view of the state to me (1956, pp. 170, 277; 1962, p. 119), a view she did not mention. (Indeed, Skocpol did not cite Mills for anything in the 1980s and 1990s, except for his now-canonical critique of early postwar American sociology in The Sociological Imagination [1959], even though The Power Elite also frequently spoke of three major institutional hierarchies, orders, or domains [e.g., Mills 1956, pp. 4, 8, 15, 19, 77, 278, 292].) Nor did it seem to matter that Who Rules America?, following Mills, used the concept of institutions in its definition of the power elite and many other times throughout the book, including in its last closing paragraph. There was also irony for me in her emphasis on state autonomy, along with the sinking feeling that Who Rules America? was no longer being taken seriously enough to refute. In fact, I had confronted and dealt with claims

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of “state autonomy” and “relative state autonomy” in the United States in answering pluralists in the original Who Rules America?. That discussion began as follows: The final, and most important, objection that is usually raised against a governing-class model concerns the apparent autonomy of the federal government. Critics point to the New Deal, the Democratic Party, anti-business legislation, and the intense hostility of business to government in support of the idea that the federal government is a relatively autonomous institution that adjudicates disputes among various interest groups. (Domhoff 1967, p. 152) The discussion then went on to spell out the several reasons why corporate leaders would complain about the government even though they dominated it, which Parsons (1960, pp.  213–214) deemed “impossible to understand” unless we assume “genuine, and in some sense effective government control of business.” These reasons included the insight from political scientist Grant McConnell (1966, p. 294) that it makes sense to complain about allegedly unfair treatment, in part to keep government officials on the defensive, but most of all to ward off “any tendency toward the development of larger constituencies for the government units.” This analysis was expanded and sharpened in later editions (Domhoff 1983, pp. 166–149; Domhoff 1998, pp. 282–286). In a nutshell, corporate leaders face a basic power dilemma that is not fully appreciated for the difficulties it creates for them. They know they need government for many reasons, but they also fear it because it is a potentially independent power base that could rein them in to a considerable extent. It is especially dangerous as a potential challenger to complete corporate control of labor markets through its ability to hire unemployed workers, provide better social benefits, and/or support unions (Domhoff 2014, pp. 186–189). The many reasons that the various sectors of the corporate community have for opposing specific government actions and agencies gradually were blended together to create a fervent anti-government ideology that was then integrated with longstanding beliefs based on the American Revolution and the creed of liberal individualism. Ignoring the evidence that there is little or no significant government independence from the corporate community in the United States, as recounted throughout this essay, Skocpol’s state-autonomy theory enjoyed a very successful decade based on her misguided applications of it to this country. By then primarily identified as a political scientist, she later drew back to a

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“polity-centered” view of the American government within the context of a revision of her general theory. In effect, she conceded that the idea of state autonomy, which had empirical reality in many European countries, past and present, was not applicable to the United States. Her revised theory was relabeled as a variant of “historical institutionalism,” a comparative approach to studying the relationship between private organizations and government structures and agencies, which placed her work within the context of the several new schools of institutionalism that developed in the late 1980s and early 1990s (Powell and DiMaggio 1991; Robertson 1993; Skocpol 1995). She reported that the alterations in her analysis of power in the United States were due in good part to her reading on the role of women in bringing about new laws during the Progressive Era. These women are called either “remarkable,” “adept,” “amazing,” “apt,” “astute,” or “bold” about two dozen times in the book, announcing her altered view of the United States (Skocpol 1992). The content she offered in her version of historical institutionalism, which is focused on the United States, is little different from that of pluralism, except for its stronger emphasis on enduring institutions. For instance, she now said the lack of strong government bureaucracies in the United States (which were an essential feature of many European governments) provides ample opportunity for voluntary associations and necessitates the creation of “broad, transpartisan coalitions of groups—and ultimately legislators” that have to be “assembled for each particular issue” (Domhoff 1996, Chapters 8 and 9, for my detailed critique of Skocpol’s claims about the Progressive Era; Skocpol 1992, pp. x, 368, 529, for the phrases that are quoted). There is little or no mention of large-scale business enterprises, which were incorporating, consolidating, working closely together, and burgeoning in power before and during the Progressive Era, in good part as a reaction to the major legal and social-movement pressures that owners of big businesses increasingly experienced in the era after the Civil War (e.g., Bunting 1987; Parker-Gwin and Roy 1996; Roy 1983; Roy 1997; Weinstein 1968). Nor does she discuss the fact that many of the Progressive women were members of the social upper class and never won on legislative issues on which corporate leaders opposed them (e.g., Davis 1967; Domhoff 1970b, Chapter 2; Domhoff 1996, pp.  241–249; Gordon 1993; Gordon 1994, Chapter 4; Mink 1993; Mink 1995). Although anything I write is now often ignored by those who have followed in Skocpol’s footsteps, I have not hesitated to chastise them for their erroneous accounts of the New Deal, which are factually challenged when it comes to the National Industrial Recovery Act, the Agricultural Adjustment Act, the Social Security Act, and the National Labor Relations Act (Amenta 1998; Domhoff 1996, Chapters 3–5; Domhoff and Webber 2011, pp. 217–235;

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Finegold and Skocpol 1995; Hacker 2002; Hacker and Pierson 2002; Orloff 1993; Skocpol 1988). I also have criticized them for their account of the right turn that picked up speed in the 1970s, which Skocpol (2003; 2007) in part attributes to the decline of middle-level voluntary organizations that supposedly used to provide settings for their millions of members to develop a civic orientation and acquire leadership skills (e.g., the American Legion, Elks Club, General Federation of Women’s Clubs, Knights of Columbus, Shriners, and labor unions). Two of her former political science students supplemented her right-turn argument by claiming that in the 1970s there was a sudden rise in the organizational strength and determination of a previously complacent and disorganized corporate community, which was allegedly still “getting its clock cleaned” during the first Nixon Administration (Hacker and Pierson 2010, p.  116). But mountains of case study and network evidence already had shown that the corporate community was very well organized between 1960 and 1970 (e.g., Domhoff 1970b; Domhoff 1979; Hall 1969; Melone 1977; Salzman and Domhoff 1983). Even worse, her former students deny the central role of racism in precipitating the white backlash that brought the Republicans to power in 1968 and made possible the right turn that the corporate moderates wanted to take at that point for their own separate reasons, which concerned rising foreign competition, accelerating inflation, and the increasing bargaining power of unions in the context of a very tight labor market. They downplay or ignore the massive transformation of the Democratic Party and American power structure in the 1960s resulting from, and then in reaction to, the civil rights movement. They dismiss what many scholars have concluded about the importance of the civil rights movement and the backlash to it as follows: “This near-universal narrative is colorful, easy to tell, and superficially appealing,” and add that it “misses the real story,” with the accomplished historian Allen Matusow serving as the designated academic whipping boy for his conclusion that there had been an unraveling of the liberal coalition in the 1960s (Domhoff 2014, pp. 197–201; Hacker and Pierson 2010, pp. 95–96; Matusow 1984). That “real story” is based on the continuing high levels of government activism and social spending from 1964 to 1977: “nothing unraveled” as far as “spending, taxation, regulation, and all the other things that government does . . .” (Hacker and Pierson 2010, p. 96). However, historians, sociologists, and political scientists have shown otherwise for the importance of white racism in the North as well as the South, which has always had a major impact on union success in both the workplace and the political arena (e.g., Boyle 1995; Boyle 1998; Carter 2000,

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p. 215; Converse, Miller, Rusk, and Wolfe 1969; Frymer 2008; Matusow 1984; Quadagno 1994, Chapter 3; Stepan-Norris and Zeitlin 1991; Stepan-Norris and Zeitlin 2003; Sugrue 2001; Sugrue 2008). Crucially, just enough whites switched their allegiance by 1968 to elect Republicans to the White House for twenty-eight of the next forty years, with the two exceptions (Carter and Clinton) being white Democratic governors from the South who could still win some Southern states. The votes for the Republicans by the antiintegration blue-collar and white-collar voters, union and non-union, also strengthened the Northern part of the conservative voting coalition, which helped the Nixon Administration to transform the National Labor Relations Board into a means to undercut unions; in addition, their votes made possible the anti-union initiatives by the Department of Labor and further defeats for any legislation that might help unions (Domhoff 2013, Chapters 8–10; Gross 1995, Chapters 11–12; Linder 1999; Manley 1973; Shelley 1983). As you might suspect by this point, the seventh version of Who Rules America? discusses the assertions about the New Deal and the right turn by Skocpol and her former students in a considerably revised and updated closing chapter, which also states my critiques of pluralists, organizational state theorists, and classical elite theorists as well (e.g., Berry 1999; Burton and Higley 1987; Heinz, Laumann, Nelson, and Salisbury 1993; Higley and Burton 2006; Laumann and Knoke 1987). However, I then turn all open-minded and ecumenical after my criticisms are delivered by inviting all power theorists to find “common ground” within the context of Mann’s (2012; 2013) fournetwork theory, as he and I have independently applied it to the United States: The general theoretical framework that informs this book has agreements with each of the four other theories, even though it disagrees with many of their specific claims about the United States. Its emphasis on four major independent bases of power—the economic network, the political network, the military network, and the ideological network— generates a dynamic and open-ended view of the future because these networks interact and come into conflict in constantly changing ways due to newly created organizational forms, newly invented technologies, new methods of communication, military innovations, and new spiritual movements. Thus, there is an emergent and constantly changing quality to social organization that makes the present and future very different from the past, thereby rendering history an unreliable guide for present-day actions. (Domhoff 2014, p. 218).

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The chapter then claims that this theory also explains how and why the economic network (read “social upper class/corporate community”) “has always had ascendancy over the other three” power networks in the United States, which in turn explains “why the federal government was not very large until the 1940s and never very independent of those that dominated and benefited the most from the economic system.” Furthermore, it explains why “the military has never had a large or independent role in important government decisions” as well as why “churches and other places of worship have been too divided and fractious to be the kind of power base that the Catholic Church once provided” in some European countries (Domhoff 2014, p. 219). Once we grant corporate dominance in this country its due, and make proper allowance for the importance of the conflicting needs of Northern business interests and Southern planters on several major issues until at least the 1960s, then we can understand the conservative voting coalition’s dominance of Congress on legislation having to do with taxes, labor unions, and business regulation; the late arrival of government social insurance programs; and why the union movement is weak compared to what it is in most industrialized democracies (Domhoff 2014, p. 219; Voss 1993, for an excellent comparative-historical study of union strength that has had a strong influence on my views). Even more generally, this type of analysis also helps account for the institutional impediments to majority rule, such as: . . . the nature of the Constitution, the decentralized structure of the government, the weakness of the federal bureaucracy, and the strongholds of committee power within Congress. The American federal government lacks “capacity,” except as a military establishment that also provides pensions and various kinds of health and disability insurance for its civilian citizens, because the corporate community wants to limit the independence of elected officials and government employees. (Domhoff 2014, pp. 219–220) In case that was not conciliatory enough in terms of the more open-ended spirit that was in the sociological air when I started to study power in America, the book closes with the thought that the theory presented in the book “encompasses the key insights of the other theories without incorporating their weaknesses”; however, I have to admit, theory aside, that the rest of the concluding sentence states that “the evidence presented for a high level of class dominance in the United States calls into question many of their empirical claims” (Domhoff 2014, p. 220).

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Conclusion This chapter has argued that it is a combination of insights provided by organizational and class concepts that explains the strength of the corporate rich in America, and makes them a dominant class. The institution of private property and the form it has taken in the United States, the corporation, leads to an ownership class that has great economic resources and the potential for political power. At the same time, this ownership class has to deal with the differences among corporate owners resulting from market competition and the rise of new business sectors. The corporate-based private-enterprise system also generates ongoing conflict over wages, profits, work rules, taxes, environmental degradation, and government regulation. However, the wide range of nonprofit organizations financed and directed by members of the ownership class gives them an institutional basis from which they can deploy their class resources for ultimately political ends, including the development of compromises among themselves on key issues. It is therefore the interaction of organizational imperatives (e.g., the division of labor and top-down control) and class imperatives (e.g., the need for constantly rising profits and control of labor markets) that impact all American organizations and institutions, including government, which leads to class dominance. This dominance is maintained due to the unending efforts to shape the society and its government by an institutionally based leadership group (the power elite), which works its will through the special-interest, policy-planning, opinionshaping, and candidate-selection networks. So, as I look back on about fifty-four years of power structure research, I have to conclude that Who Rules America? has stood the test of time and criticism, and that its shortcomings and mistakes were corrected in later versions. For those reasons, along with the new insights and findings from many other researchers that were added to the later versions, I think the theory and evidence presented in its several incarnations are more accurate and less wrong than any other theory of the American power structure that has been offered to date. There is still plenty of room for improvement, but the latest version of Who Rules America?, along with the many long and detailed supplementary documents on WhoRulesAmerica.net, is the best starting point.

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———. 1989. Regime politics. Lawrence: University of Kansas Press. Sugrue, Thomas. 2001. “Breaking through: The troubled origins of affirmative action in the workplace.” Pp. 31–52 in Color lines: Affirmative action, immigration, and civil rights options for America, edited by J. Skrentny. Chicago: University of Chicago Press. ———. 2008. Sweet land of liberty: The forgotten struggle for civil rights in the North. New York: Random House. Swanstrom, Todd. 1985. The crisis of growth politics: Cleveland, Kucinich, and the challenge of urban populism. Philadelphia: Temple University Press. Sweezy, Paul. 1942. The theory of capitalist development: Principles of Marxian political economy. New York: Monthly Review Press. ———. 1953. “The American ruling class.” Pp. 120–138 in The present as history, edited by P. Sweezy. New York: Monthly Review Press. Useem, Michael. 1979. “The social organization of the American business elite and the participation of corporate directors in the governance of American institutions.” American Sociological Review 44:553–571. ———. 1980. “Which business leaders help govern?” Pp. 199–225 in Power structure research, edited by G. W. Domhoff. Beverly Hills: Sage. ———. 1984. The inner circle: Large corporations and the rise of business political activity in the U.S. and U.K. New York: Oxford University Press. Vaughn, James C. 2006. “The culture of the Bohemian Grove: The dramaturgy of power.” Michigan Sociological Review 20:85–121. Volscho, Thomas and Nathan Kelly. 2012. “The rise of the super-rich: Power resources, taxes, financial markets, and the dynamics of the top 1 percent, 1949 to 2008.” American Sociological Review 77:679–699. Voss, Kim. 1993. The making of American exceptionalism: The knights of labor and class formation in the nineteenth century. Ithaca: Cornell University Press. Webber, Michael. 2000. New Deal fat cats: Business, labor, and campaign finance in the 1936 presidential election. New York: Fordham University Press. Weber, Max. 1998. “Class, status, and party.” Pp. 43–56 in Social class and stratification: Classic statements and theoretical debates, edited by R. F. Levine. Lanham, MD: Rowman & Littlefield. Weinstein, James. 1968. The corporate ideal in the liberal state. Boston: Beacon Press. Weinstein, James and David Eakins. 1970. For a new America: Essays in history and politics from studies on the left, 1959–1967. New York: Random House. Western, Bruce and Jake Rosenfeld. 2011. “Unions, norms, and the rise in U.S. wage inequality.” American Sociological Review 76:513–537. Whitham, Charlie. 2016. Post-War business planners in the United States, 1939–1948. New York: Bloomsbury Publishing. Whitt, J. Allen. 1982. Urban elites and mass transportation. Princeton: Princeton University Press. ———. 1986. “The local inner circle.” Journal of Political and Military Sociology 14:115–125. ———. 1987a. “Mozart in the metropolis: The arts coalition and the urban growth machine.” Urban Affairs Quarterly 23:15–36. ———. 1987b. “The arts coalition in strategies of urban development.” Pp. 144–156 in The politics of urban development, edited by C. Stone and H. Sanders. Lawrence: University Press of Kansas.

Who Rules America? Through Fifty Years 59 Wolff, Edward. 2010. Recent trends in household wealth in the U.S., update to 2007: Rising debt and middle class squeeze. Annandale-on-Hudson, NY: Levy Economics Institute of Bard College. Wolfinger, Raymond E. 1973. The politics of progress. Englewood Cliffs, NJ: Prentice-Hall. Wright, Erik Olin. 2004. “Introductory comments to ‘Alternative perspectives in Marxist theory of accumulation and crisis’.” Pp. 251–254 in Enriching the sociological imagination: How radical sociology changed the discipline, edited by R. F. Levine. Boulder: Paradigm Publishers. Zaller, John. 2006. The nature and origins of mass opinion. New York: Cambridge University Press. Zweigenhaft, Richard L. 1975. “Who represents America?” Insurgent Sociologist 5:119–130. ———. 2016. “The rise and fall of diversity at the top: The appointments of Fortune 500 CEOs from 2005 through 2015.” WhoRulesAmerica.net: http://whorulesamerica.net/ power/rise_and_fall_of_diversity.html (based on a paper delivered to the Southern Sociological Society meeting in New Orleans on March 27, 2015). Zweigenhaft, Richard L. and G. William Domhoff. 2003. Blacks in the white elite: Will the progress continue? Lanham, MD: Rowman & Littlefield. ———. 2006. Diversity in the power elite: How it happened, why it matters. Lanham, MD: Rowman & Littlefield. ———. 2014. The new CEOs: Women, African American, Latino, and Asian American leaders of Fortune 500 companies. Lanham, MD: Rowman & Littlefield.

Section Two

Larger Perspectives and Research Agendas

Domhoff, Mills, and Slow Power

2

Robert J.S. Ross

When he adopted the term “power elite” to characterize those who rule America, G. William Domhoff became, de facto, the most important carrier of the legacy of C. Wright Mills. When he sustained the analysis of the class and institutional bases and origins of that elite, Domhoff ’s ideas evolved in ways which enriched, corrected and neglected aspects of Mills’ insights. All this despite his sometimes-tortuous attempts to claim separation, if not divorce. Domhoff ’s essay in this volume is a meticulous rehearsal of the theoretical issues among critical scholars of power of the past thirty to fifty years, and a look at the responses (and nonresponses) to his work among more conventional scholars. This essay places Domhoff ’s research and writing in the context of Mills’ views and his attitudes towards Marxism. (Mills 1956).

Mills’ Power Elite As Domhoff amply notes, Mills understood power to be exercised in modern society by large bureaucratic organizations. The implications of such a view of the institutional means of power became central to Mills’ theory: those at the top of the hierarchies—and hardly any others—are the powerful. The institutional orders, as Mills called them, were the corporate economy, the

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military, and what he termed the “political directorate” or more simply, the executive branch of the federal government: By the power elite we refer to those political, economic, and military circles which as an intricate set of overlapping cliques share decisions having at least national consequences. In so far as national events are decided, the power elite are those who decide them. (Mills 1956, p. 18) These “overlapping cliques” share an “uneasy coincidence of economic military and political power” (Mills 1956 pp.  278, 19) based upon “coincidences of interest” (Mills 1956, p. 19). National in scope and historic in importance: “slump, war and boom” (Mills 1956, p. 8)—these are the decisions that are the province of the power elite for Mills. The Power Elite was importantly a work born out of Cold War America and the concerns Mills and other intellectuals had in that context. He saw the “military definition of reality” and security issues as dominant among the power elite of his time. The men who commanded these hierarchies (they were all men back then) were, he determined, disproportionately drawn from the social upper classes or were absorbed into their world through the rewards of the corporate economy. They moved between the top spots in these institutions, in what later would be pictured as a series of revolving doors. Despite the common class backgrounds of the men he found to be leading the Cabinet, the top corporations and (only in part) the Joint Chiefs of Staff, Mills, as Domhoff, veered away from the Marxist usage “ruling class.” One can only speculate about the unarticulated reasons (e.g., aversion to the sloganeering style of Comintern-era Marxist writing), but Mills was succinct in writing: “Ruling class,” he wrote, “contains the theory that an economic class rules politically.” That, he said, must be established empirically, but not by definition (Mills 1956, p. 277).

Domhoff’s First Turn—Away from the Military Domhoff initially transformed Mills’ original scheme in two important ways. First, writing in the Vietnam War era, it was no longer viable to consider the military establishment as an autonomous source of decision-making. What had been, until Afghanistan, America’s longest war was a civilian-initiated project whose strategic overseers were firmly seated in the White House (e.g., see Halberstam 1973, Wells 1994). The second transformation had profound impact on Mills’ conception of the “middle levels” of power.

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Mills’ view of the importance of the military establishment in the making of decisions national in scope and historic in importance rested on two facts of life that dominated the fifties and early 1960s in American life. One was the looming threat of nuclear annihilation. Todd Gitlin (1993) captures this mood of the fifties (in his book, The Sixties), discussing the fear of nuclear catastrophe in popular culture, and the related attachment of young intellectuals (and others and those not so young) to young martyrs such as James Dean and the not-so-young Albert Camus (Gitlin 1993, pp. 11–30). Mills repeatedly refers to decisions to use or not to use the atomic bomb as examples of the proposition that our history is made by human choice. In addition, the military establishment of that time was understood to be an essential part of “monopoly capitalism” (Baran and Sweezy 1966). After Dwight Eisenhower first used the phrase in his 1961 farewell address, the “military-industrial complex” was understood by critical scholars and left activists as both powerful and essential to the stability of the modern capitalist economy (Cook 1961). Domhoff did not and does not focus on the “military-industrial complex.” Apart from the jarring reality that the bloody adventure in Vietnam was a creation of civilian strategists, other aspects of the evolving security structure of the world made Domhoff ’s change in Mills’ scheme appropriate. A crazed stand-off between the nuclear powers and the initial steps toward arms control gradually eased the sense of a world at the brink of all-consuming flames. Actual wars were smaller scale, wars of national liberation and in Pentagonspeak “asymmetrical.” Arguably more profound, however, in changing the relevance of the military establishment to the power elite, was the evolving nature of the role of military spending in the U.S. economy. Falling from its height of more than 40% of GDP during World War II to 10% during the late fifties when Mills wrote, defense spending has never gone over 10% and has been below 5% for most of the time since the 1970s (Watkins 2014). Changing technology also has an impact on the relevance of military industry to politics: it takes fewer people and much more capital to make drones and missiles than tanks and rifles. In technical terms the employment multiplier of military spending has fallen (e.g., see Waldman 2014 and Pollin and Garrett-Pelletier 2009).

Domhoff and the Middle Levels of Power However much he derided the “military definition of reality” and its “crackpot realism,” by 1956 Mills shared its hypnotic attention to U.S. security affairs. He had explored the favored agency of change of the historic Left when he

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wrote, in 1948, New Men of Power: America’s Labor Leaders. Later he would caustically refer to Marxists’ “labor metaphysic”—which he rejected. He investigated the emergence of new social strata in White Collar: The American Middle Classes (1951)—and was unimpressed. Although he was a co-author of an investigation of Puerto Rican migration to New York, The Puerto Rican Journey (1950), Mills “had no previous background—and perhaps no interest—on this matter” (Vélez 2005, p. 205). He wrote nothing of consequence about the civil rights movement, which had emerged during his last years. Below the pinnacles of power, by the mid-fifties, Mills saw the “middle levels” of power and he was dismissive. Enter Domhoff and the most innovative and important of his contributions to the analysis of American power and influence. As the military dropped from his depiction of the peak of power wielding, Domhoff proceeded to give weight and substance to what Mills had called the middle levels. Domhoff worked inventively and intensively on a number of thorny issues in legislative history (as his essay in this volume discusses)—in most cases (but one) showing the prevalence of capitalist class and upper-class interests. His innovative contribution has been the analysis of the “policy planning process” and network. A step back from Domhoff and Mills will show the importance of this work. In a breathtaking departure from political science orthodoxy, Peter Bachrach and Morton Baratz (1962, p. 948) proposed that: .  .  .  power is also exercised when A devotes his energies to creating or reinforcing social and political values and institutional practices that limit the scope of the political process to public consideration of only those issues which are comparatively innocuous to A. To the extent that A succeeds in doing this, B is prevented, for all practical purposes, from bringing to the fore any issues that might in their resolution be seriously detrimental to A’s set of preferences. Put briefly, Bachrach and Baratz pointed the analysis of power to “agenda control” in addition to the orthodox “decision-making” approach, and further suggested the importance of issue framing. After all, if, as they properly contended, power over inclusion or exclusion of matters for consideration (the public agenda) is a big part of the determination of outcomes, then power or influence over the way a matter is framed on the agenda is similarly important (Ross and Staines 1972). The political scientist E.E. Schattschneider (1960, p. 34) had earlier noted about lobbying groups “that the flaw in

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the pluralist heaven is that the heavenly chorus sings with a strong upper class accent.” These considerations suggest that Mills simply missed the way social class and economic influence mold the everyday power politics in congressional districts and the Congress. Part of this “miss” is Mills’ confusion of speed and power. The bureaucratic command, which he correctly associated with one major form of institutional power, is “fast”: an order is given, subordinates execute. Domhoff ’s contribution has been to show how the corporate community dominates the organs of expertise that mold options and perceptions even before the “slow” power of legislative process begins. “Slow” power—the building of agendas and framing of issues and the legislative process that ensues, is not “less,” but it is different from bureaucratic or executive order action. Consider as an example the formation of the U.S. transit system—a matter that Domhoff has not taken up, but would be perfectly susceptible to his approach. Starting in the 1920s, Bradford Snell (1974) showed, a consortium at first led by automaker GM, oil producer Standard Oil of California, and tire maker Firestone conspired to replace municipal trolleys (“light rail”) and commuter rail lines with diesel buses. Less efficient and convenient than trolleys, buses were nevertheless profitable for the firms involved. GM had a monopoly on the production of diesel bus engines. After World War II there emerged an “auto-industrial” bloc composed of the aforementioned actors and big infrastructure builders and their local allies (See Feagin and Parker 1990 [2002], pp. 153–179). These managed to construct the interstate highway system as well as the web of highways and tunnels that now characterize our auto-dependent system. For decades, they sheltered the taxes on gasoline from being used for public transportation and have more or less successfully prevented mass transit and rail from competing with the auto for metropolitan transit. However incremental and slow all these decisions have been, they have in fact created a built environment and way of life. That is another kind of power, one Domhoff understood but Mills did not. The long, slow aggregation of decisions—slow power—is the larger way a dominant class shows its dominance and maintains it. Again, Domhoff works this field well, in his studies of legislation at the national level and of New Haven locally.

Domhoff, Mills, Marx: Does It Matter? In Domhoff ’s view, an upper class based on corporate ownership brings into its orbit of “older money” the upper levels of corporate executives. This

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capitalist class is joined by their top agents, for example, the big law firm leaders—in a “corporate community.” This class-community has among it a more politically active fraction: This is the governing class, and the power elite is its executive arm. Now Domhoff insists that he is not a Marxist (eschewing even Mills’ non-sectarian “plain Marxist” label). In large part, he seems to think that since he does not have a “theory of history” he is outside of this theoretical community. Were Paul Sweezy still alive he might have a similar view of Domhoff as that he directed to Mills. In 1956 Sweezy appreciated Mills’ unmasking of American power, but argued Mills lacked a theory of the political economy— and thus his “class” analysis had no dynamic (Sweezy 1956). In this regard Domhoff falls short much as Mills did—he does not have an analysis of what drives either U.S. or world capitalism. As the Communist intellectual Herbert Aptheker (1960) pointed out, in particular, you don’t have to have a Marxist theory to see the advance of what he called “finance capital” and is now referred to as “financialization,” but you do have to have an economic analysis. If the rise of finance is one theme in the development of institutional power-wielding of the last generation, the other companion to it is the development of global capitalism. As Kent Trachte and I argued (1990), what is now called “globalization” was and is driven by capital solving its problems with organized workers through a “geographic” fix. To avoid the bargaining power of unions and workers in manufacturing, the big firms have exported large swaths of production to areas of the world where workers are more vulnerable and have less political influence than they had in the older “core” industrial regions. This has gutted the middle-income working class, leaving it with stagnant or lower purchasing power and more insecurity. The disproportionate loss of jobs in unionized sectors has also led to the rapidly declining political influence of workers and their unions. These changes are a large part of the “missing middle” sometimes referred to as an “hourglass”–shaped job and income structure. The increase in the importance of financial sector actors and the emergence of globalized production networks are the most profound forces shaping our everyday lives. Our era is thus one that witnesses major changes in the structure of capitalism and of our society: but these are not major themes or framing realities in Domhoff ’s view of power. But his methods can help us understand who the actors are and how to find them, and understanding the components of what I have called “slow power” gives us the tools and vision to clarify the workings of global capitalism. So, it does not actually matter (to me) whether Mills or Domhoff are considered “Marxist.” What does matter is that they can help us understand the current structure of power, even as they must be supplemented by an understanding of what drives changes in that structure.

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References Aptheker, Herbert. 1960. The World of C. Wright Mills. New York: Marzani and Munsell. Bachrach, Peter and Morton S. Baratz. 1962. “Two Faces of Power”. The American Political Science Review, Vol. 56, no. 4 (December, 1962), pp. 947–952. Baran, Paul A. and Paul J. Sweezy. 1966. Monopoly Capital: An Essay on the American Economic and Social Order: Monthly Review Press. New York. Cook, Fred J. 1961. “Juggernaut: The Warfare State”. The Nation, Vol. 193, no. 14 (October 28), pp. 277–336. Feagin, Joe R. and Robert Parker. 1990 [2002]. Building American Cities: The Urban Real Estate Game. Beard: Washington, D.C. Gitlin, Todd. 1993. The Sixties: Years of Hope, Days of Rage. New York: Bantam. Halberstam, David. 1973. The Best and the Brightest. New York: Random House. Mills, C. Wright. 1956. Images of Man. New York: Braziller. Mills, C. Wright. 1950. The Puerto Rican Journey: New York’s Newest Migrants. New York: Columbia University Press and The Bureau of Applied Social Research. Mills, C. Wright. 1951. White Collar: The American Middle Classes. New York: Oxford University Press. Pollin, Robert and Heidi Garrett-Peltier. 2009. The U.S. Employment Effects of Military and Domestic Spending Priorities: An Updated Analysis. Political Economy Research Institute University of Massachusetts, Amherst. October. Online at https://www.peri.umass. edu/media/k2/attachments/spending_priorities_PERI.pdf. Accessed May 16, 2017. Ross, Robert and Graham Staines. 1972. “The Politics of Analyzing Social Problems.” Social Problems, Vol. 20, no. 1, pp. 18–40. Ross, Robert J.S. and Kent M. Trachte. 1990. Global Capitalism: The New Leviathan. Albany: SUNY Press. Schattschneider, E. E. 1960. The Semisovereign People: A Realist’s View of Democracy in America. New York: Holt, Rinehart and Winston. Snell, Bradford C. 1974. American Ground Transport: a proposal for restructuring the automobile, truck, bus, and rail industries, United States Congress. Senate. Committee on the Judiciary. Subcommittee on Antitrust and Monopoly. Washington, U.S. Govt. Print. Off., 1974. Available online: http://evworld.com/library/American_Ground_Transport_ SnellReport1.pdf Sweezy, Paul M. 1956. “Power Elite or Ruling Class?” Monthly Review, Vol. 8, no. 5, pp. 138–149. Vélez, Edgardo Meléndez. 2005. “The Puerto Rican Journey Revisited: Politics and the Study of Puerto Rican Migration”. CENTRO Journal, Vol. 17, no. 2, pp. 193–211. Waldman, Paul. 2014. “Defense Spending Is the Most Expensive Way to Create Jobs.” The American Prospect. ( January 22). Online at: http://prospect.org/article/defense-spendingmost-expensive-way-create-jobs. Accessed May 16, 2017. Watkins, Dinah. 2014. “Trends in Military Spending.” Council on Foreign Relations. Available online at https://www.cfr.org/report/trends-us-military-spending. Accessed June 1, 2017. Wells, Tom. 1994. The War Within: America’s Battle Over Vietnam. Berkeley: University of California Press.

The Life and Times of Who Rules America? and the Future of Power Structure Research

3

Richard W. Lachmann and Michael Schwartz

G. William Domhoff ’s arresting biography of his masterwork, Who Rules America? (WRA? hereafter)—constituting the first chapter of this volume— details the connecting links and evolving analysis perfected in the new editions—and later additions—that comprise the corpus of Domhoff ’s power structure research. Such a comprehensive review of key ideas invites the other authors of this volume to point toward related work that extends and enriches the bedrock analysis that Domhoff has constructed. In following this mandate, we want to call out as particularly important two of Domhoff ’s major contributions, and then situate them in the project of analyzing critical institutional and policy issues in contemporary U.S. and global politics, made all the more urgent by the ascension of Donald Trump to the U.S. presidency. From the perspective of our own work, WRA? developed and documented two interconnected analyses that have laid foundations for large literatures that build upon—and extend the scope of—Domhoff ’s own work. First, Domhoff identified (and continues to analyze) the networks that connect the various elites sitting at the pinnacle of the dominant institutions in the

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United States into a coherent class that can act collectively in pursuing common interests. Second, Domhoff identifies, documents, and analyzes the key mechanisms of elite coordination which allow the elites to reach collective decisions about initiating or nullifying major public (mainly government) and private (mainly corporate) policies. These constantly active and always evolving set of mechanisms—anchored by policy-planning organizations that endow corporate interests with policy primacy—are the enabling institutions by which elites can become the agency of pre-meditated social change. We want to use these core elements in Domhoff ’s analysis to sketch out pathways for understanding twenty-first–century developments that promise to be key analytical issues for political economists and power structure analysts. And, perhaps most important, we want to provide analytical tools for activists seeking to alter the negative policy trajectories enacted and implemented by the U.S. government, its allies, and its client regimes. The doleful and terrifying events of the first decades of the twenty-first century are the denouement of the spread of neoliberalism, which first became globally visible with the CIA-engineered overthrow of the Allende government in Chile in 1973, and the adoption by the successor Pinochet regime of free-trade, free-market economic reforms (Klein 2007, Chapter 3; Aguiar de Medeiros 2009). As the last quarter of the twentieth century proceeded, neoliberalism first arrived at many countries in the Global South, and, soon after, arrived at the world economic core, mediated by the Thatcher regime in England and the Reagan regime in the United States (Harvey 2005; Amsden 2007; Mudge 2008; Crouch 2011; McMichael 2011; Centeno and Cohen 2012; Lachmann 2016). The United States and other rich countries—along with the international agencies they control—have imposed neoliberalism with a severity and cruelty upon poorer countries that they could not enact on their own citizens (Prasad 2006; Mann 2013; Evans and Sewell 2013; Peck et al. 2010). Cold War competition with the Soviet Union also restrained the United States and its “Free World” allies from demanding the most severe neoliberal policies from “Third World” countries it sought to hold in its bloc. The collapse and then demise of the Soviet Union in the late 1980s relaxed this restraint, and U.S. foreign policy veered increasingly toward direct military intervention: first under George H.W. Bush with the First Gulf War; and then under Bill Clinton, with the intervention in the former Yugoslavia and the huge bombing campaign against the Hussein regime in Iraq throughout the 1990s. At the same time, U.S. domestic policy moved sharply toward radical deregulation of business, savage cuts in the “social safety net,” and the amplification of institutional repression—hallmarked by the repeal of the

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Glass-Steagall controls over Wall Street, the gutting of Aid to Families with Dependent Children, and the full flowering of super-incarceration. The ascension of George W. Bush to the presidency, combined with the provocation of the September 11, 2001, attacks on the World Trade Center, indelibly imprinted these trends into the political-economic trajectories of the United States. Domhoff ’s analysis responded to and illuminated many aspects of these developments and the policy processes that undergirded them, most notably in his 2013 book, The Myth of Liberal Ascendancy: Corporate Domination from the Great Depression to the Great Recession. Domhoff himself, as well as a growing cadre of scholars working within his tradition, documented the changing political complexion of the policy-formation groups that became the transmission belts of corporate thinking and power into government policy. This changing complexion involved the rise of newer, more neoliberal and anti-regulatory planning networks and institutions, as well as the changing postures of older institutions within the network. At the same time, the work Domhoff and his colleagues have done to track personnel transfers among corporate boards, think tanks, and policy-planning groups and into government agencies has allowed them to recognize and chronicle the policy changes in terms of the personnel responsible for their enactment and implementation. The detailed analysis of the evolution of these policies thus became both an extension and affirmation of the Domhoffian perspective (Carroll and Sapinsky 2010; Dreiling and Darves 2011, 2016; Banerjee and Burroway 2015; Banerjee and Murray 2015; Perez and Murray 2016; van Apeldoorn and de Graaf 2016). Domhoff ’s success in explaining policy changes in the United States from 1945 up to the twenty-first century lead us to ask how, and to what extent, his analysis can be used to address three developments that he himself does not examine in depth in his work: •

•

•

First, the internationalization of corporate and financial elites, and the institutions that regulate those globalized corporations and rescue them from ever-more-frequent financial crisis Second, the extent to which the U.S. military elite is able to commit human and material resources to foreign ventures that are not necessarily tailored to the needs and desires of the corporate elite Third, how and when non-elites are able to disrupt elite plans

We devote the rest of this essay to outlining a strategy for answering those questions in the context of twenty-first–century globalized capitalism.

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A Global Elite? Beginning with the end of World War II, U.S. policy was directed at “creating openings for—or removing barriers to—capital in general, not just U.S. capital” (Panitch and Gindin 2012, p. 11). Domhoff recognized and analyzed the formation of that policy in The Higher Circles. The era of neoliberalism—and particularly after the fall of the Soviet Union—ushered in a new geography of world capitalism networked into globalized commodity chains, captained by globalized manufacturing and service corporations, and funded by globalized capital flows that connected Wall Street to financial centers in Europe and Asia. (The best recent comprehensive overview of global commodity chains is Bair and Mahutga [2016].) At the same time, transnational political-economic institutions, notably the United Nations, the World Bank, the International Monetary Fund, and later the World Trade Organization (complemented by a constantly changing cast of regional formations), have adopted new roles in managing and mediating this evolution. They have actively intervened in the increasingly multiplex relationships tying the Global North to the Global South, regulated the complex networks among globalized corporations, and adjudicated disputes between transnational corporations and nation-states. The increasing geographical reach of this multidimensional globalization has produced what many have called a nascent (or even consolidated) transnational capitalist class, the key institutional development in the changed environment within which the U.S. government now operates (Robinson 2004). These developments have led to a changed equation of forces and a changing complexion in the structures that impinge, constrain, and impel U.S. government policy. Domhoff ’s analysis has illuminated changes in government policy, and also in the pathways through which these changes have been organized and transmitted. We see a need to extend this analysis to understand how these changes emanate from, are connected to, and are impacted by the globalization process. Even within the United States, globalization and neoliberalism have changed the balance of power among the presidency, Congress, courts, and regulatory agencies. Federal courts have become increasingly aggressive in blocking regulations and constricting the power of agencies to regulate pollution, product safety, labor conditions, and the financial sector. Congress, by design and partisan stalemate, has ceded ever more authority to the executive branch. Meanwhile, regulatory agencies with links to global capital, above all the Federal Reserve, have gained enhanced powers, while others without such links have faced atrophied leverage.

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The U.S. government response to the 2008 financial crisis, with the Fed playing the dominant role with little supervision by either Congress or presidents Bush and Obama, was emblematic of this shift (Helleiner 2014). The Fed’s power comes from its ability to enlist allies among foreign central banks and international regulatory agencies such as the World Trade Organization, the International Monetary Fund, and the Bank for International Settlements. Corporate policy-planning groups play only a secondary part in negotiations among such international agencies and central banks (Panitch and Gindin 2012; Drezner 2007). On the other hand, corporate interests remain central to negotiations for international trade treaties, though the Obama Administration negotiations for the Trans-Pacific Partnership (TPP) Agreement appeared to involve direct representatives of the corporate community, unmediated by Domhoffian policy-planning organizations (Brown 2015; Sutton 2014). The Trump Administration has withdrawn the United States from the TPP, and the fate of this decision will be an indication of corporate elites’ sway over U.S. trade policy. In any case, existing trade treaties, as well as the disciplinary power of the World Trade Organization over governments’ attempts to regulate global capital, are likely to endure. This will make a close analysis of these events valuable for developing a nuanced understanding of the impact of globalization on the policy-planning process. These high-visibility controversies have brought into sharp relief the impact of global commodity chains and capital flows on the enhanced relative autonomy of large industrial, service, and financial corporations from the constraints of federal government regulation as well as the domestic corporate community, which is sequestered within the United States. Director interlocks, loan consortia, and other institutional ties among U.S. domiciled companies, which once prevented the owners and managers of rogue firms from advancing their individual interests against those of the entire economic elite, have dramatically lessened since the 1990s (Chu and Davis 2016; Mizruchi 2013). It is important to trace the ways in which these relaxed constraints—and the evolving capacity for collective action among transnational corporations—impacts the strategies U.S. elites adopt to formulate and realize their interests (Murray 2017). We can build on Domhoff ’s method to identify the mechanisms through which transnational elites come together to develop policies, and the sites at which they press those policies on governments and international agencies. When we do so, we expect to see that as the United States loses global economic and military hegemony, its already reduced control over international agencies will further erode. Then those organizations will

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become sites of conflict, as other nations—most notably China—use the powers those agencies have accumulated (mainly at the instigation of the U.S. government) to press for policies that help their economic and political elites (Hopewell 2016). This decline in the U.S. position in international agencies—and in the global economy and financial system more broadly— will surely trigger yet another round of policy-planning efforts that power structure analysts must monitor and analyze if we wish to provide usable information for effective reform. These analyses must be particularly sensitive to the altered balance of power among components of the U.S. government, and among corporations, triggered by the changing geography of global political-economic power. The U.S. corporate elites may succeed in restoring their eroded hegemony on the world stage, or they may become embedded into a multipolar global elite. Neither outcome would challenge Domhoff ’s methodology; they would, however, mandate a broadened empirical agenda stretching beyond U.S. political-economic-geographical boundaries to encompass elites on a world scale. The exercise of elite power in a world no longer ruled by a single (American) hegemon would be more confused and inconclusive than the era from 1945 to the 2000s that Domhoff examines. Elites, or at least American elites, would not be as successful in imposing their policy preferences on global agencies, or even on their own weakening government. At that point we would need to incorporate the scholarship deriving from of the Global South—and other foci of the globalized political economy—into the Domhoffian perspective; the dynamics originating in distant locations will constitute causal vectors into the domestic institutional dynamics—and therefore on the policy-formation activities of U.S. elites.

An Autonomous Military Elite? Throughout his work, Domhoff documents the primacy of the interests and initiative of the corporate elite in determining government policy. In analyzing foreign policy, Domhoff has focused his attention on the economically determined initiatives of the U.S. government, which were foundational during the second half of the twentieth century. As the end of the century approached and the neoliberal surge lost momentum, the demise of the Soviet Union brought into focus the central role of the U.S. military in world affairs. With this refocusing, the loose relationship between corporate interest and military action became more visible.

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In the twenty-first century, U.S. military spending has averaged 4% of GDP. Since weapon development and acquisition constitutes the bulk of this budget, and since the decision-making over these expenditures resides within the military hierarchy, the military elite now controls capital flows equal to about half of the after-tax corporate profits in the United States. Their decisions over the destination of these expenditures have the same kind of economic weight as the largest industrial sectors. This control of investment capital is only one component of military leverage over social trajectories. The second component derives from its capacity to risk and spend lives in war. The number of American war deaths in Iraq and Afghanistan combined was less than 10% of the number in Vietnam, and this has meant that the military can launch lethal attacks in a growing number of countries with few constraints from public concern and popular protest against the cost in (U.S. military) lives. At the same time, the density of deaths among residents of the host countries where the United States has engaged in military operations has shown no such erosion, thus making the threat of U.S. military intervention more credible and fearsome. The drift of U.S. foreign policy toward increasing reliance on threatened or actual military intervention reflects these changes in the equation of forces, and it also calls for a fuller understanding of the role of military elites in determining U.S. foreign and domestic policy. We count ourselves among the many scholars who have studied military elites (e.g., Schwartz 2008), but there remains much work to be done to integrate our understanding of military dynamics into the Domhoffian perspective on the policy process. Although top military officers—along with the civilians in the Defense, Energy, and Homeland Security departments and spy agencies—bring to their jobs an understanding of their role in supporting U.S. corporate interests around the world; they view the preservation of U.S. military dominance as their primary institutional commitment. The success of these elites in claiming the ever-increasing resources needed to maintain this dominance stands in stark contrast to the failed efforts of many regulatory agencies and cabinet-level departments to fend off draconian budget cuts triggered by attacks on “big government” and the various economic crises of recent decades. This successful resistance to budgetary constraint is symptomatic of enhanced leverage within the federal policy process, a development that may parallel the globalization processes that have amplified corporate relative autonomy. To unravel this development and understand its broader significance, researchers must analyze with fresh eyes the institutional structures contained within the formal military, and the networks connecting military elites to the transnational business elite, to the heterogeneous array of national and transnational governmental institutions, and to the various military and

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police agencies operating at the local, national, and global level. This work must incorporate the distinct educations and career paths for Army, Navy, Air Force, and Marine officers, and their roles in creating service rivalries that can divide them. And it must also understand why the cloistering process that divides the military as an institution from other government structures makes the divisions within the military less conflictual than the divisions that separate them from civilian elites, as Mills (1956) noted early in the Cold War. The U.S. military elite has its own internal mechanisms for developing policy—notably war colleges—which are institutionally distinct from the economic elite’s policy-planning organizations. Not surprisingly, this autonomous structure produces plans that are not always congruent with those developed by the economic elite, and which then contend with corporate-developed policies for adoption by Congress or the executive branch. When no negotiated compromise is reached, even a legislative defeat may not be definitive, since the military may have primary responsibility for implementing the policy, and can therefore bend even contradictory results toward its own institutional commitments. One particularly salient instance of this autonomy can be found in the ugly history of the U.S. Army School of the Americas, which transmitted political, military, and police policies developed by the U.S. military to many Latin American countries (Gill 2004; Lakhani 2017). In recent years, the institutional network of the U.S. military has been expanded by the development of a separate military foreign service, with top officers who negotiate with (and issue directives to) their counterparts in nations around the world, at times in conflict with the goals of the State Department. Military policy planning can and should be studied using Domhoff ’s methods, since military intellectuals and planners are open in presenting their ideas, engage in debates among military factions that reveal their institutional interests, and inhabit networks analogous to those Domhoff has already analyzed. Once that research yields a portrait of the geography and dynamics of this structure, analysts can identify points of congruence and disagreement between economic and military elites, and (most crucially) understand the leverage utilized to resolve contradictions. A salient issue that will mature during the Trump Administration involves the escalating commitment of naval and air forces to confrontation with China (Obama’s Asian pivot). The continued escalation of this military confrontation will eventually endanger the economic elite’s ongoing plans to link the U.S. and Chinese economies ever more closely in ways that benefit American financial capital at the expense of declining industrial capital. Factions in the Trump Administration have expressed contradictory views that make it uncertain how they will resolve or exacerbate elite divisions

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on military intervention. Trump repeatedly identified China as the primary economic and geopolitical challenge. This creates pressure for overt military action in the Far East (ironically a continuation of Obama’s policy), although this impulse could be restrained by the military leaders now heading the Defense Department and the National Security Council—and the career military and intelligence officers residing in what journalists have begun calling the “deep state.” However, if Trump or the U.S. military find common ground and—like Bush II before them—arrive at a military strategy aimed at reviving U.S. supremacy, another American military failure could severely undermine the commanding positions of U.S. economic and military elites within the United States and in the world. Even in the absence of a war, governments, elites, and popular forces outside the United States, stung by trade wars, travel restrictions, and open expression of bigotry and arrogance by Trump, could challenge U.S. economic power in ways that could reduce the leverage of, and create divisions within, U.S. elites. Domhoff discusses these emergent splits in the U.S. elite at the end of The Myth of Liberal Ascendancy, when he traces the transformation of elite lobbying groups. What still needs to be done is to understand the process by which competing elites—within the capitalist class or between the corporate and other elites—create dueling policies that, for at least a period, operate simultaneously within the U.S. government, leading to oscillating U.S. actions, such as the post-9/11 vacillation toward China. In anticipating how to approach this work, we point to Domhoff ’s analysis that neoliberal foreign policy emerged in the 1980s from the dueling policy postures forwarded by business groupings he labeled corporate moderates and conservatives. We believe that a similar analytic approach will be needed to understand the resolution of the contradictions between military and economic elites over China (and other issues). This resolution could yield a synthesis of the dueling postures aimed at reasserting U.S. global dominance, or it might involve managing the demise of U.S. global hegemony in ways that allow both military and corporate elites to claim control over an ever-growing disproportionate share of American income and wealth. We will not, however, understand how this (and other) U.S. foreign policy is made without integrating the potential and at times actual autonomy of the military elite into Domhoffian analysis.

Popular Opposition to Elites In his historical work, Domhoff analyzes instances when electoral liberallabor coalitions enabled moderate economic elites to overcome conservative

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economic elites, resulting in the implementation of welfare-state policies (such as Social Security and the GI Bill) designed by policy-planning organizations. During recent decades, Domhoffian scholarship focused on the electoral defeat of the liberal-labor alliance as a key factor in numerous victories by conservative elites over their moderate counterparts, notably in the implementation of neoliberal domestic and foreign policy. These analyses require broadening to include an understanding of the policy impact of the more chaotic and disordering processes of social protest and mobilization. In the globalized, disorderly, and endless-war contexts of the early twenty-first century, two features of this broader context appear to be particularly salient: •

•

We need to understand the non-electoral leverage that mobilized popular forces can exercise over policy, through creatively disrupting the functioning of society and/or mobilizing one element of the elite against the elite whose power is challenged. Very often this leverage is exercised outside the visible policy process, and therefore must be brought into the analytic focus if it is to be understood and harnessed. We need to appreciate that the tightly coupled globalized political economy means that popular forces outside the United States are often powerful vectors impacting U.S. policy, either through direct challenge to U.S. influence in their countries, or in mobilizing their own institutions against the actions of the U.S. government and/or corporate interests.

The long and finally successful struggle of African Americans to dismantle the Jim Crow system in the former slave states allows us to glimpse the features of the analytic framework needed to provide a clear understanding of the causal paths between popular protest and the policy-formation process (Morris 1984; McAdam 1999; Young and Schwartz 2014): •

Consider, for example, the two-decade-long process by which the NAACP, in alliance with local activists throughout the South, won a series of integration-related federal court decisions, culminating in the Brown vs. Board of Education decision against school segregation. These decisions enlisted the U.S. judiciary as an ally with the black movement in the South in its challenge to the policies enacted and enforced by a combination of southern state governments, Congress, and the federal executive branch. This alliance with the federal courts amplified the disruptive power of the civil rights movement by constraining the repressive power of southern governments, and eventually forced a shift in the policy stance on the executive branch of the federal government (Tauber

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1999; Morris 2007). Research on twenty-first–century policy formation will require a full understanding of the circumstances and processes by which such alliances between social movements and government institutions are created, and bring into focus the connecting links between these processes and the dynamics of Domhoffian policy formation. Consider the trajectory of the civil rights movement in Birmingham, Alabama, host to arguably the worst segregationist violence in the South (Garrow 1986; Morris 1984, 1993). By 1963, when the movement had accumulated pro-integrationist decisions from the federal courts as well as vocal support from the Kennedy Administration, Birmingham remained resistant. This resistance dissolved into compliance when massive disruptive demonstrations combined with a consumer boycott definitively disrupted downtown business. The business leadership of Birmingham then prevailed on city officials to sign and implement a policy of general integration of public facilities. In this case, popular protest disrupted “business as usual” and thus mobilized the business elite of Birmingham against the Jim Crow system that they had been instrumental in constructing and maintaining. This shift in the policy stance of the corporate elite—as well as the Domhoffian pathways through which this stance influenced a reversal of government policy—can be seen as a prototype for understanding the routes by which popular forces can intrude on the corporate-sponsored policy-formation process. We believe that these dynamics are crucial in understanding the chaotic backstage in which disruptive popular forces impact business initiatives implicated in the policy oscillation of government institutions. Finally, consider the peculiar behavior of the Richard Nixon administration in the late 1960s toward civil rights in the South. Despite his strong electoral appeal to the segregationist South (in a quasi-successful effort to wean large numbers of Southern whites away from the Democratic Party), once elected, Nixon rigorously applied federal power to integrate more schools and register more black voters than the Eisenhower, Kennedy, and Johnson administrations combined. Although this reversal of his electoral platform–electoral behavior was a consequence of many pressures on Nixon’s administration, one very important vector was the competition between the United States and the Soviet Union for Cold War relationships with African countries that had recently achieved independence from colonialism. The Jim Crow system in the United States constituted a huge handicap in winning loyalty among African publics, and U.S. government enforcement of human rights in the South had become an ongoing point of contention with African governments.

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This constitutes an early example of the process by which global publics obtained considerable leverage over U.S. domestic policy. In the early twenty-first century, this leverage has become more visible and potentially more coercive. Understanding of the U.S. government policy process will therefore require scholarship analyzing the circumstances and process by which the collective action of global publics is transmitted into the U.S. policy-formation process. We believe that a full understanding of the increasingly chaotic policy environment in the neoliberal era has created urgency for broadening our focus to include the broad range of pathways through which popular forces impact the policy process. Such a broadened focus is necessary for understanding, for example, the thirty-year campaign that produced the inscription of (some) women’s and (some) LBGTQ rights into the federal policy fabric, and how (and whether) this progress can be sustained in the time of Trump. The impetus for most of the reforms achieved so far has originated outside the Domhoffian policy process, involving proactive mass movements (temporarily) leveraging government or corporate allies into (often begrudging) support for particular reforms, followed by their integrating into the policy-formation process. Symptomatic examples include the federal courts (not the Congress) as the institutional vehicle for legalization of abortion; Fortune 500 corporations (not government agencies) as the venue for the successful struggle to extend health benefits for LBGTQ domestic partners; and the military elite (not the Obama Administration) as the target of movement activism and ultimate decision-makers in lifting the ban of gays in the military (Human Rights Campaign 2016; Raeburn 2004; Young and Schwartz 2014). The role of global publics also needs focused attention. This is underscored by the U.S. policymaking apparatus not anticipating the ability of a bewildering array of popular forces in Iraq and Afghanistan to definitively disrupt the military-political goals of the George W. Bush Administration (and then the Obama Administration), and thus force several reconfigurations of U.S. Middle East military, political, and economic policy (Schwartz 2008; Arrighi 2007, pp. 183–4 and passim). These reconfigurations have become an almost constant feature of U.S. foreign policy, highlighted by military strategies migrating from primary reliance on “shock and awe,” then to “counterinsurgency,” followed by “drone wars,” and then reliance on “special forces” (Schwartz 2008; Arrighi 2007:183–4 and passim; Turse 2012; Turse and Engelhardt 2012). These policy shifts have reverberated through the entirety of U.S. foreign policy, yet we know little about the paths through which this resistance

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has affected—or bypassed—the Domhoffian policy process that operated up to—and including—the response to the 9/11 attacks (Chibber 2009). Theorizing the multi-dimensional consequences of public mobilizations— and their pathways into and through the policy process—will be a primary task of Domhoffian scholars in the time of Trump and beyond.

Conclusion We wrote this essay just after Donald Trump assumed the presidency and as a wave of popular opposition to the man and his policies emerged. As we complete the editing of this text, it is unclear if this opposition will weaken or strengthen over the course of the Trump Administration. It is already clear, however, that the effectiveness of this opposition—and therefore its resilience— will be shaped by its ability to exercise leverage over a variety of elites. We already can see the efficacy of judicious targeting in the early rounds of this sure-to-be-prolonged struggle. Although the Trump Administration has boasted that it will be unmoved by protests, the ferocious public reaction to the first-iteration anti-Muslim executive order inspired the rapid judicial resistance that forced its withdrawal (Landler 2017). The ferocity of the protest against Trump’s promise to immediately “repeal and replace” the Affordable Care Act was crucial to the series of false starts and withdrawn proposals aimed at dismantling Obamacare (Indivisible 2017; Pear 2017;Young et al. 2017). If Domhoff ’s perspective is to remain useful in understanding twenty-first– century dynamics, it must be extended to encompass semi-autonomous elites within the U.S. state system and beyond U.S. territorial limits, and understand the leverage applied by mobilized publics within the United States as well as the global venues of U.S. economic and military aggression. Domhoff ’s achievements in historical and sociological explanations demonstrate the intellectual importance of this task of extension and clarification. The moral crisis created by neoliberalism and dangerously deepened by the 2016 U.S. presidential election underscores the urgency of this work.

References Aguiar de Medeiros. 2009. “Asset-Stripping the State: Political Economy of Privatization in Latin America.” New Left Review 55: 109–132. Amsden, Alice. 2007. Escape From Empire: The Developing World’s Journey through Heaven and Hell. Cambridge: MIT Press.

Future of Power Structure Research 83 Arrighi, Giovanni. 2007. Adam Smith in Beijing: Lineages of the Twenty-First Century. London: Verso. Bair, Jennifer and Matthew Mahutga. 2016. “Global Commodity Chains and Development,” pp. 645–66 in Greg Hooks (ed.), The Sociology of Development Handbook. Berkeley: University of California Press. Banerjee, Tarun and Rebekah Burroway. 2015. “Business Unity and Anticorporate Protests: The US Fortune 500 in 2010.” Mobilization: An International Quarterly 20(2): 179–206. Banerjee, Tarun and Joshua Murray. 2015. “What Shapes Corporate Involvement in Voter Referendums: The Case of Opposition to GM Food Labeling.” Sociological Perspectives 58(3): 464–489. Brown, Alleen. 2015. “You Can’t Read the TPP, But These Huge Corporations Can.” The Intercept. Found at https://theintercept.com/2015/05/12/cant-read-tpp-heres-hugecorporations-can/ Carroll, William and Jean Phillipe Sapinsky. 2010. “The Global Corporate Elite and the Transnational Policy-Planning Network, 1996–2006: A Structural Analysis.” International Sociology 25: 501–538. Centeno, Miguel A. and Joseph N. Cohen. 2012. “The Arc of Neoliberalism.” Annual Review of Sociology 38: 317–340. Chibber, Vivek. 2009. “American Militarism and the U.S. Political Establishment.” Socialist Register 2009: 23–53. Chu, Johan S. G. and Gerald F. Davis. 2016. “Who Killed the Inner Circle? The Decline of the American Corporate Interlock Network.” American Journal of Sociology 122(3): 714–754. Crouch, Colin. 2011. The Strange Non-Death of Neoliberalism. Cambridge: Polity. Domhoff, G. William. 2013. The Myth of Liberal Ascendancy: Corporate Domination from the Great Depression to the Great Recession. Boulder: Paradigm. Dreiling, Michael and Derek Darves. 2011. “Corporate Unity in American Trade Policy: A Network Analysis of Corporate-Dyad Political Action.” The American Journal of Sociology 116(5): 1514–1563. Dreiling, Michael and Derrick Darves. 2016. Agents of Neoliberal Globalization: Corporate Networks, State Structures, and Trade Policy. New York: Cambridge University Press. Drezner, Daniel W. 2007. All Politics Is Global: Explaining International Regulatory Regimes. Princeton: Princeton University Press. Evans, Peter and William H. Sewell, Jr. 2013. “Neoliberalism: Policy Regimes, International Regimes, and Social Effects.” pp.  35–68 in Peter A. Hall and Michele Lamont (eds.), Social Resilience in the Neoliberal Era, Cambridge: Cambridge University Press. Garrow, David J. 1986. Bearing the Cross: Martin Luther King, Jr., and the Southern Christian Leadership Conference. New York: Vintage. Gill, Lesley. 2004. The School of the Americas: Military Training and Political Violence in the Americas (American Encounters/Global Interactions). Durham NC: Duke University Press. Harvey, David. 2005. A Brief History of Neoliberalism. New York: Oxford University Press. Helleiner, Eric. 2014. The Status Quo Crisis Global Financial Governance after the 2008 Financial Meltdown. Oxford: Oxford University Press. Hopewell, Kristen. 2016. Breaking the WTO: How Emerging Powers Disrupted the Neoliberal Project. Stanford: Stanford University Press. Human Rights Campaign. 2016. Corporate Equality Index, 2017: Rating Workplaces on Lesbian, Gay, Bisexual and Transgender Equality. Human Rights Foundation, ISBN 978-1-934765-29-0.

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http://assets.hrc.org//files/assets/resources/CEI-2017-FinalReport.pdf ?_ga=1.1824 54246.1182581341.1488821918 Indivisible. 2017. Indivisible: A Practical Guide for Resisting the Trump Agenda. Found at www. indivisibleguide.com/web/ Klein, Naomi. 2007. The Shock Doctrine: The Rise of Disaster Capitalism. New York: Metropolitan. Lachmann, Richard W. 2016. “Neoliberalism, the Origins of the Global Crisis, and the Future of States.” pp. 463–84 in Greg Hooks (ed.), The Sociology of Development Handbook. Berkeley: University of California Press. Lakhani, Nina. 2017. Berta Cáceres Court Papers Show Murder Suspects’ Links to USTrained Elite Troops.” Guardian (London) (March 2). Found on March 4, 2017 at www. theguardian.com/world/2017/feb/28/berta-caceres-honduras-military-intelligenceus-trained-special-forces Landler, Mark. 2017. “Appeals Court Rejects Request to Immediately Restore Travel Ban.” New York Times (February 4):A1. Found March7, 2017 at www.nytimes.com/2017/ 02/04/us/politics/visa-ban-trump-judge-james-robart.html Mann, Michael. 2013. The Sources of Social Power, Volume 4: Globalizations, 1945–2011. Cambridge: Cambridge University Press. McAdam, Doug. 1999 [1982]. Political Process and the Development of Black Insurgency, 1930– 1970 (2nd Edition). Chicago: University of Chicago Press. ISBN 978-0-226-55553-9 McMichael, Philip. 2011. Development and Social Change: A Global Perspective (5th Edition). Thousand Oaks: Sage. Mills, C. Wright. 1956. The Power Elite. New York: Oxford University Press. Mizruchi, Mark S. 2013. The Fracturing of the American Corporate Elite. Cambridge: Harvard University Press. Morris, Aldon. 1984. The Origins of the Civil Rights Movement: Black Communities Organizing for Change. New York: Free Press. Morris, Aldon. 1993. “Birmingham Confrontation Reconsidered: An Analysis of the Dynamics and Tactics of Mobilization.” American Sociological Review 58(5): 621–636. Morris, Aldon. 2007. “Naked Power and The Civil Sphere.” The Sociological Quarterly 48(2007): 616–628. ISSN 0038–0253 Mudge, Stephanie L. 2008. “What Is Neo-Liberalism?” Socio-Economic Review 6: 703–731. Murray, Joshua. 2017. “Interlock Globally, Act Domestically: Corporate Political Unity in the 21st Century.” American Journal of Sociology 122: 1617–1663. (Forthcoming). Panitch, Leo and Sam Gindin. 2012. The Making of Global Capitalism: The Political Economy of the American Empire. London: Verso. Pear, Robert. 2017. “White House Proposes New Rules to Steady Insurance Markets Under Health Law.” New York Times (February 15): A1. Found at www.nytimes.com/ 2017/02/15/us/politics/affordable-care-act-obamacare-trump.html?_r=0 Peck Jamie, Theodore Nik and Neil Brenner. 2010. Postneoliberalism and Its Malcontents. Antipode 41: 94–116. Perez, Samantha and Joshua Murray. 2016. “Latino Faces, Corporate Ties: Latino Advocacy Organizations and Their Board Members.” Sociological Forum 31(1): 117–137. Prasad, Monica. 2006. The Politics of Free Markets: The Rise of Neoliberal Economic Policies in Britain, France, Germany, and the United States. Chicago: University of Chicago Press. Raeburn, Nicole C. 2004. Changing Corporate American from Inside Out: Lesbian and Gay Workplace Rights. Minneapolis: University of Minnesota Press.

Future of Power Structure Research 85 Robinson, William I. 2004. A Theory of Global Capitalism: Production, Class, and State in a Transnational World. Baltimore: Johns Hopkins University Press. Schwartz, Michael. 2008. War without End: The Iraq War in Context. Chicago: Haymarket. Sutton, Maira. 2014. “U.S. Trade Rep on the Charm Offensive—Slight Tweaks to Secret TPP Process is Far From Enough.” Electronic Frontier Foundation. Found at www.eff. org/deeplinks/2014/02/us-trade-rep-charm-offensive-slight-tweaks-secret-tpp-processfar-enough Tauber, Steven C. 1999. “The NAACP Legal Defense Fund and the U.S. Supreme Court’s Racial Discrimination Decision Making.” Social Science Quarterly 80(2): 325–340. Turse, Nick. 2012. “Washington Puts Its Money on Proxy War: The Election Year Outsourcing that No One’s Talking About.” Tom Dispatch (August 9). Found February 7, 2017 at www.tomdispatch.com/blog/175580/ Turse, Nick and Tom Engelhardt. 2012. Terminator Planet: The First History of Drone Warfare, 2001–2050 (A Tom Dispatch Book). New York: CreateSpace Independent Publishing Platform. van Apeldoorn, Bastiaan and Nana de Graaf. 2016. American Grand Strategy and Corporate Elite Networks: The Open Door since the end of the Cold War. New York: Routledge. Young, Kevin, Tarun Banerjee and Michael Schwartz. 2017. “Who’s Calling the Shots?”, Jacobin (February 6). Found at www.jacobinmag.com/2017/02/trump-banks-protestscarrier-business-gop/, www.academia.edu/31494668/Young_Banerjee_and_Schwartz_ Whos_Calling_the_Shots_Jacobin_170206 Young, Kevin and Michael Schwartz. 2014. “Á Neglected Mechanism of Social Movement Political Influence: The Role of Anticorporate and Anti-Institutional Protest in Changing Government Policy.” Mobilization: An International Quarterly 19(#3): 239–260.

Institutions, PolicyPlanning Networks, and Who Rules America?

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I have long admired Who Rules America? (WRA?). Reading the 1967 edition in college inspired me to major in sociology. Its themes are as relevant now as they were then given the rise of a new gilded age in America, growing concern over wealth and income inequality, and the overwhelming presence of corporate executives and others from the upper class in the highest echelons of the Trump Administration in Washington. To his credit, G. William Domhoff has been relentlessly pursuing these themes for decades. But his book is not without its problems. In the introductory chapter to this volume, Domhoff notes that classes and institutions have always been his two basic conceptual units in WRA?. This chapter critically appraises the second half of that claim, his discussion of institutions, particularly as it bears on his analysis of policy-planning networks in the United States. For Domhoff, policy-planning networks are primarily clusters of think tanks, philanthropic foundations and policy discussion groups that are supported by the upper class and corporate community— hereafter the ruling class—and that tend to generate consensus on broad policy issues that favor ruling-class interests. Their policy recommendations are transmitted to the government through reports, congressional testimony and appointees. He argues that this is an important way in which the ruling class influences policymaking. This chapter argues that despite its important insights there are difficulties with his analysis of these networks that stem from his treatment of institutions and institutional theory.

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A brief preview is in order. First, Domhoff (2014, Chapter 9) mistakenly equates and, therefore, dismisses state autonomy theory and historical institutional theory. Dismissing historical institutionalism is unfortunate because it is potentially compatible with his own views. He also rejects historical institutionalism because he confuses it with another brand of institutional theory associated more with organizational than political analysis.1 Second, having dismissed these perspectives he went astray empirically in his analysis of policy-planning networks by omitting an important element in them— state policy research organizations. Given their unique institutional positions and mandates, these organizations operate much differently from the private think tanks and other organizations he identified in policy-planning networks. Had he not been so quick to dismiss state autonomy theory and more inclined to embrace historical institutionalism—particularly its comparative methodology—he might not have overlooked the significance of these state organizations. Third, although it may have been true once that policy-planning networks tended to forge consensus within the ruling class on broad policy issues, it is questionable nowadays in light of changes within the think tank world over the past twenty years—changes that had much to do with institutional quirks in the U.S. tax code and, ironically, the increased influence of the ruling class in think tank affairs. Finally, it is not clear how much influence policy-planning networks as he describes them really have on policymaking, particularly since he neglects state policy research organizations that enjoy privileged institutional access to policymakers.

State Autonomy and Historical Institutionalism Domhoff has long been critical of historical institutionalism as a mode of political analysis. His criticisms are mistaken because he mischaracterizes historical institutionalism in two ways—by conflating it with state autonomy theory and by confusing it with organizational theory.

Equating State Autonomy Theory and Historical Institutionalism State autonomy theory emerged in the early 1980s in response to neo-Marxism as some people began to suspect that under certain conditions policymakers in capitalist states enjoyed much autonomy from the demands of the ruling class (Block 1987; Nordlinger 1981). Theda Skocpol’s (1979, 1980, 1995) research on revolutions was a precursor to this approach, but her later work

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on the development of the U.S. welfare state was an exemplar. Domhoff and Skocpol feuded in print over how autonomous the U.S. state was in crafting key welfare state policies during the Great Depression. He insisted that class interests were the driving force, whereas she countered that they were not. State actors, she maintained, enjoyed considerable autonomy in devising these policies thanks to various policy legacies, state structures, entrenched bureaucracies and other institutional capacities. Whether Domhoff or Skocpol was right is beside the point here. What matters is that Domhoff dismissed state autonomy theory, which he later equated with historical institutionalism, on the grounds that it failed to appreciate the significance of class—and especially ruling class—political power in the United States. Equating the two and then dismissing the latter was a mistake. Perhaps the most seminal statement of historical institutionalism is Structuring Politics, a volume edited by Sven Steinmo et al. (1992).2 The contributors did not argue that states are autonomous from class influences. In fact, several chapters showed how class actors influenced public policy but in ways that were mediated by surrounding institutions—some political, some not. In other words, this was an attempt to blend the analysis of class and interest group politics with an analysis of institutional constraints, by which is meant the formal and informal rules and procedures that structure politics. For instance, Peter Hall’s contribution examined how the rise of neoliberalism occurred differently in the United States and Britain because of the different institutional opportunities available to different classes and other actors for influencing fiscal and monetary policy in the 1970s and early 1980s. Another chapter by Victoria Hattam showed how labor-organizing strategies shifted in the United States after the Civil War as a result of labor’s perceptions of the limited institutional opportunities it had for influencing politics. Importantly, historical institutionalism stemmed from the more general and somewhat earlier tradition in comparative political economy that showed how for institutional reasons the influence of class struggles on policymaking varied across countries (e.g., Gourevitch 1986; Hall 1986; Katzenstein 1978; Zysman 1982).3 To be sure, not all historical institutionalists operate from a cross-national perspective, as Hattam’s work illustrates (see also Skocpol 1995; Skowronek 1982). But what is important here is that historical institutionalism is much more in sync with the arguments in WRA? than Domhoff generally acknowledges precisely because it blends class analysis and institutional analysis. Policymakers have more or less leeway from class influences—including both working and capitalist classes—depending on the institutions involved. Let me be clear. Historical institutionalists do acknowledge the autonomy of institutions (both public and private) in the sense that once institutions

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have been built they tend to constrain people’s behaviors. Put differently, institutions influence the probabilities that people will act one way rather than another, and that some people will tend to enjoy more access, for example, to state policymakers than others.4 They also recognize that the process by which institutions, such as welfare states, are built in the first place is contested, involving conflict, power struggles and eventually settlements that embody extant power relations—an argument that is consistent with WRA?. If in principle historical institutionalism and Domhoff ’s two conceptual building blocks—class and institutions—have so much in common, then why hasn’t he embraced that perspective?5 First, he rejected Skocpol’s state autonomy view on empirical grounds, so when he equated her view with historical institutionalism he necessarily rejected that approach too. Second, Skocpol and others conflated and attacked the WRA? approach and the neo-Marxist instrumentalist approach to political analysis (described by Domhoff in the introduction to this volume). Domhoff insisted that he was not an instrumentalist, so we shouldn’t be surprised that he refused to share company with the enemy after such an attack. Finally, the methodology of WRA? is not comparative—that is, cross-national; it focuses entirely on the United States. Thus, the possible benefits of historical institutionalism’s comparative methodology were not self-evident for WRA? even after historical institutionalism became one of the dominant theoretical approaches in political sociology and political science. I cannot blame Domhoff for this. He had his work cut out for him just with the U.S. case because it involved collecting and analyzing a vast amount of data on corporate interlocks and government personnel; conducting rudimentary network analysis; and researching case studies at a time when obtaining and sifting through much of the data was a grueling task—none of it was digitized until at least the 1980s, many years after early editions of WRA? were published! Nevertheless, the absence of comparative perspective led to some empirical omissions and theoretical oversights in WRA?, particularly noticeable in its treatment of policy-planning networks, a point to which I return later.

Confusing Historical and Organizational Institutionalism To Domhoff ’s credit, the last chapter in the most recent (2014) edition of WRA? admitted that certain aspects of historical institutionalism might provide useful context in which to better understand how class forces affected public policymaking in the United States. At the same time, however, he

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offered new criticisms of that approach. In particular, he quoted Charles Perrow, a noted organizational sociologist, to argue that historical institutionalism misses the dynamic nature of society because it “de-emphasizes power and conflict and instead emphasizes routines, imitation, unreflective responses, custom and normative practices, and convergence of organizational forms” (Domhoff 2014, pp. 208–209). There are two problems with Domhoff ’s new line of attack. First, he confuses two types of institutional analysis. His criticisms up until this point have been with historical institutionalism as I have described it. Perrow’s concern was with institutional analysis as practiced by organizational sociologists— and that is something quite different!6 As noted previously, historical institutionalists emphasize power, conflict and struggle among classes as well as other interest groups. Organizational institutionalists do not; they emphasize instead routines, stability, imitation and convergence, often with little reference to the actors or conflicts responsible.7 Second, it is true that comparative political economy in the 1970s and early 1980s, the predecessor to historical institutionalism, engaged in the methodology of comparative statics—comparing different institutional configurations across countries at the same moment in time rather than over time. As a result, this early work did not focus on institutional change and the historical dynamism that Domhoff wants. But that was not its intent; it was trying to explain something else—cross-national policy variations. Moreover, the reason that comparative political economy eventually morphed into historical institutionalism was precisely the recognition of this fact. Structuring Politics was crystal clear about this, calling explicitly for greater attention to historical dynamics—including the dynamics of power and conflict (Thelen and Steinmo 1992). Indeed, the past twenty years or so of research by historical institutionalists has paid considerable attention to these issues.8 So it is wrong to conclude, as Domhoff does (2014, p.  209), that historical institutionalism “is a static theory because it is not alive to the tensions that can develop among the economic, governmental, military, and ideological networks, and because it usually gives only minor attention to classes and class conflict.”

State Policy Research Organizations One of the major insights of historical institutionalism is that the institutional capacities of nation-states for exercising power are variable. Some states were deemed to be “weak” while others were “strong.” The United States, for instance, was often described as being weak because its state capacities had

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developed much later than many European states thanks to their long histories of absolutism (Krasner 1978; Skowronek 1982). On occasion this led some scholars, such as Michael Mann (1984), to invoke the notion of state autonomy when describing those historically given situations when state actors enjoyed much discretion to act more or less as they saw fit given the extensive state capacities at their disposal to exercise power of various sorts (see also Block 1987; Nordlinger 1981). But the question for these scholars was always what are the conditions under which states are—or are not—autonomous from the influences of class actors, other external groups and the structural constraints of capitalism itself, such as the potential for capital flight. Perhaps due to Domhoff ’s strong objections to the state autonomy view, WRA? fails to realize that the U.S. state does in fact have some very strong state capacities, particularly insofar as economic policy analysis is concerned. Certain areas of the government in both the legislative and executive branches have formidable analytic capacities in policy research organizations—what some have called “state think tanks.”9 They are staffed with experts who are neither necessarily partisan politically nor beholden to class interests. The Federal Reserve Board, Treasury Department, Congressional Budget Office, Office of Management and Budget, Government Accountability Office and others have staffs of researchers with no particular class allegiance. Domhoff singles out the President’s Council of Economic Advisors (CEA) in his introduction to this volume, arguing that it is typically headed by someone with ties to the ruling class. In fact, these people are often academics holding university positions, such as Joseph Stiglitz, a Nobel Prize winner in economics. But even if Stiglitz and other chairs were beholden to the ruling class, the CEA has a permanent well-trained analytic staff that provides objective and very sophisticated economic forecasting and policy advice to all CEAs and presidents. These are career staffers that don’t come and go with a reshuffling of the CEA or its chairs. To zero in on who is appointed to head the CEA misses this point—the CEA chair and other CEA members routinely rely on the data analysis and input of the experts on staff. These state policy research organizations are largely ignored in the WRA? analysis of the policy-planning network. Yet insofar as they are consulted regularly by policymakers they can be very influential in the policymaking process. Furthermore, these organizations are much different from and often operate far away from the rough and tumble class-based and donorinfluenced world of the private think tanks that Domhoff sees as integral to the policy-planning network. Many of these experts are often impartial and nonpartisan. For instance, in the 1990s when Newt Gingrich and the Republicans gained control of the House of Representatives, the head of the

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Congressional Budget Office (CBO) was summoned to Capitol Hill to testify about the impact that supply-side tax cuts would have on the federal budget. Much to the Republicans’ chagrin, the CBO’s analysis showed that the tax cuts would add significantly to the federal deficit. Republicans would hear none of this and demanded to know if the CBO had used “dynamic modeling” techniques, which they suggested would take into account the presumed fact that the tax cuts would end up generating more revenue later through economic growth than they would lose initially through lower tax rates. Under intense political heat and at the risk of being fired the CBO director insisted that dynamic modeling was inappropriate and that his agency would not revise either its modeling techniques or its estimates in this case. Similarly, the CBO director told Democrats in Congress that the Clinton health care plan represented a huge expansion of government, contrary to claims made by the administration and its backers in Congress. More recently, the CBO announced that it was prepared to butt heads with congressional Republicans who wanted to repeal the Obama Administration’s Affordable Care Act—and in the end it did, contributing to the Republicans’ failure to repeal and replace Obamacare. These are not isolated cases of expert independence in the U.S. government (Bimber 1996, Chapter 8; Joyce 2011; Kliff 2016).10 The point is that independent policy analysis organizations like these inside the state are an important but missing part of Domhoff ’s policy-planning network. The introductory chapter in Structuring Politics warns scholars to pay closer attention to the origins and influence of policy analysis and ideas. In that regard historical institutionalists agree with Domhoff that studying policy-planning networks is important. Where they differ is in how they conceptualize such networks. Domhoff neglects the state organizations but they do not (Béland and Cox 2011; Blyth 2002; Campbell and Pedersen 2014; Hall 1989, 1993). As a result, it is a mistake to assume that virtually all elements of the policy-planning network operate in the interests of the ruling class. To be clear, there is truth to the argument in WRA? that some private policy research organizations are influenced by the political agendas of their wealthy benefactors. But it is not clear that state policy research organizations are beholden to ruling-class interests. Moreover, to dismiss the influence of independent experts, as Domhoff (2014, p. 210) does, because they are “selected and sponsored by one or more of the organizations within the policy network and that their ideas are discussed and criticized by corporate leaders before appearing in reports and proposals,” does not square with the analysis of experts in state policy research organizations. Had Domhoff embraced historical institutionalism’s comparative methodology he might have been more cognizant of the importance of state

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policy research organizations. Consider economic policy in Germany. Most of the prominent economic policy research organizations are funded by the regional (Länder) governments and are occasionally affiliated with universities. Private think tanks of the American variety are few and far between. As a matter of standard operating procedure the powerful Ministry of Economics and Technology commissions a handful of the most prominent of these organizations to produce a Joint Economic Report ( JEP) twice a year that includes economic forecasts and policy recommendations. The JEP is supposed to represent a consensus among the institutes involved. The Ministry then uses these reports to help guide the preparation of its own forecasts, recommendations and policies. Each January the Ministry also convenes an annual closed-door meeting with the major policy research institutes, representatives from various ministries and others to share forecasts and policy ideas and to discuss how the government might handle the country’s pressing economic problems. No official reports are written and no public statements are issued. The idea is to confidentially share information and see where everybody stands on the important issues of the day before the government moves forward. This system has long been institutionalized and tends to produce rigorous and politically nonpartisan policy analysis quite different from that in the United States as described in WRA?. The tendency toward rigor, objectivity and nonpartisanship is bolstered through an accreditation process whereby an esteemed scientific professional organization reviews each economic policy research institute every seven years to ensure among other things that the methodological quality of its work meets high standards. Those that score best receive financial and status rewards—a process that has encouraged a competitive “race to the top” among organizations to maintain the highest research standards. Denmark presents another contrast to the United States in that it is institutionalized in long-standing corporatist traditions. For example, the Danish Economic Council, the closest thing in Denmark to the American CEA, includes representatives from the major labor and employer associations, the central bank, key ministries and other important economic organizations. It is run by four economists commonly known as the Wise Men whose job is to conduct economic forecasts, make policy recommendations and try to facilitate consensus within the rest of the Council. The Danes also rely heavily on a number of ad hoc commissions organized by the state and staffed primarily with experts in the relevant policy areas that conduct analyses and formulate policy recommendations for the government. These recommendations are then transmitted to Parliament where they provide the basis for legislation. The idea is for each commission to arrive at consensus after extensive

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consultation with labor unions, employer associations and other interested organizations. Highly partisan, privately funded think tanks have only started to appear in Denmark within the past few years and are still few in number and very much at the margin of the policy-planning network. France provides an even sharper contrast to the United States. Historically the French have relied almost exclusively on analysis from within the state, notably the national statistical agency and the Treasury. Moreover, the Council of Economic Analysis responds to requests from the Prime Minister’s office for analysis and policy advice by gathering a variety of experts, typically from universities, including occasionally some from other countries, and from a wide range of perspectives spanning the intellectual and political spectrum. Analyses are performed, opinions are expressed and a final report is issued that covers the debate that has ensued. Similarly, the Prime Minister’s Center for Strategic Analysis helps coordinate the activities of several policy research organizations inside the state as well as outside but funded by the state in order to craft joint forecasts, policy analyses and recommendations with an eye toward consensus. Private think tanks are scarce and marginalized just as in Germany and Denmark. In sum, if Domhoff had not so adamantly rejected state autonomy theory and historical institutionalism, and had instead embraced historical institutionalism’s comparative methodology—or at least been attuned to some basic cross-national differences—he might have recognized the importance of independent state policy research organizations for the American policyplanning network.

Ruling Class Consensus? Historical institutionalism emphasizes how institutional change can impact policymaking. Indeed, how policy-planning networks were organized in Germany, Denmark and France changed considerably since the 1970s. The same was true in the United States. One important change in America raises questions about the basic claim in WRA? that the policy-planning network tends to facilitate consensus within the ruling class on broad policy issues. It is true that beginning in the late 1970s politics and policymaking in the United States gradually shifted to the right within both major political parties. This might be taken as an indication of ruling-class consensus and influence attributable in part to the policy-planning network. But there are signs that the degree to which at least the think tank part of the policy-planning network facilitates consensus within the ruling class has diminished since the

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mid-1990s. The level of partisanship has grown substantially among many private think tanks and their strategies and tactics for influencing policymakers have become much more aggressive. The Heritage Foundation is a good example of an aggressive conservative think tank that has recently become even more partisan than it once was (Ioffe 2013). The establishment of the liberal Center for American Progress (CAP) in 2003 took it to the next level. CAP was a brand new think tank model that blended elements of the traditional scholarly-type think tank, exemplified by the Brookings Institution, with substantially more aggressive advocacy work than had ever been seen before. It did so by spotting and then exploiting certain institutional features of the U.S. tax code that prevented conventional think tanks from lobbying politicians but allowed them to establish sister organizations that could. Others followed suit, including Heritage. All of this has had a chilling effect on the people working in the think tank world, many of whom reported that the level of partisanship ratcheted up so severely since the 1990s that people from rival think tanks who used to be friendly enough to have lunch or dinner together now did so less often. They are often afraid to socialize in public for fear of being seen, photographed on a cell phone camera, and then reported to their boss or their organization’s benefactors with dire consequences. The problem became so acute that a few people from liberal and conservative think tanks mounted various efforts to counteract such partisanship and identify policy issues where some consensus might be found, but their efforts did not amount to much. The fact is that the capacity of this important part of the policy-planning network to generate consensus on policy issues has eroded significantly. In addition to rising and more acrimonious politics and political gridlock in Washington, the inability to formulate consensus has been caused partly by the fact that private think tanks have proliferated since the mid-1990s at the same time that the resources available to support them have declined. Furthermore, the money that is available has become much more ideologically partisan. Previously, think tanks tended to accept money with no strings attached. But as the funding environment became more austere and competitive it became harder for them to stick to this principle. In some cases donors put pressure on think tanks to play partisan politics like never before. Brookings, for instance, recently accepted funds from a variety of corporations, including JP Morgan Chase; KKR, the global investment firm; Microsoft; and Hitachi, agreeing to provide them with “donation benefits.” These included setting up events to bring corporate executives together with government officials, helping firms promote their brand, discussing conclusions of think tank reports with donors before the research was finished and even taking

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advice from donors about how to shape final reports (Lipton and Williams 2016). In one celebrated case, the libertarian billionaires David and Charles Koch sued the Cato Institute, a right-wing think tank which they had supported since its founding in the 1970s, in an effort to assert control over the direction the organization was taking (Mayer 2012). Ironically, it appears that while ruling-class meddling like this in the policyplanning network has increased, the result has been to exacerbate partisanship and acrimony within the think tank world so much that the network’s capacity for achieving consensus on broad policy goals has been undermined— precisely the opposite of what WRA? says the network usually achieves! Put differently, WRA? may have underestimated the capacity of the ruling class to influence the think tank world and therefore overestimated its ability to broker agreement among ruling-class factions. This view is consistent with others who have argued that the American corporate elite has become fragmented, disorganized and ineffectual in helping to resolve America’s problems (Mizruchi 2013).

The Question of Influence Ultimately, of course, what matters for WRA? is how the policy-planning network influences public policymaking. WRA? concludes that it does. But proving influence is not easy because serious measurement issues are involved. Consider the impact of reports, testimony and appointments to government positions, three indicators of policy-planning network influence in WRA?. Private think tanks try to measure their influence in a number of ways, such as by counting the number of times their reports are mentioned or their people are interviewed in the media, the number of times their people are invited to testify before Congress, or the number of people from their organizations that are appointed to influential positions in government, particularly when a new administration comes to power. But it is not clear that media citations or reports necessarily reflect how much influence an organization has on policymakers. Notably, the Heritage Foundation was first established by two congressional staffers precisely because they realized that think tank reports had too little impact on Congress. Most people are invited to testify before Congress because the legislators inviting them already know what they will say and that their testimony supports the legislator’s position on the issue. The door between think tanks and government positions swings in both directions, so it is unclear whether the movement of personnel between the two indicates the influence of think tanks on government or vice versa.

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Besides, numbers of published reports, citation counts, appearances before Congress and other data like these are often collected not so much to measure influence but to convince benefactors of the organization’s importance in order to generate funding. Making matters even more complicated, it is common for most policy ideas to come from and be supported by more than one organization. Policymaking is much like sausage making—what determines the final product is a mixture of influences from a variety of places that are often hard to pin down.11 In fact, most policy ideas have been around for so long before being adopted as legislation that it is very difficult to trace them back to their origins. One can always ask policymakers where they got their policy ideas from, but their impulse is to claim the credit for themselves regardless of where they really came from. This, after all, is a way to demonstrate leadership and help win elections. In the end, measuring influence is terribly difficult. When pressed on this issue, the head of one well-established private think tank in Washington remarked that trying to measure influence was “voodoo science” (Campbell and Pedersen 2014, p. 295). A better approach is to conduct detailed case studies of the creation of particular pieces of public policy. But when this has been done the results suggest that think tanks have more influence in some cases than others depending on a whole host of mediating factors, including institutions (Weidenbaum 2009). As a result, in some instances the policyplanning network theory in WRA? might explain a lot while at other times it might not. Now if by influence we mean getting face time and other forms of contact with policymakers and their staff to press ideas upon them, which is something everyone in think tanks agrees is very important, then a strong argument can be made that state policy research organizations have a distinct institutional advantage over other organizations in the policy-planning network. For instance, the chair of the Council of Economic Advisors and his chief of staff meet almost weekly with the President to brief and advise him. The Congressional Budget Office is required by law to provide budgetary analyses and forecasts to Congress several times a year, and to answer queries upon request as to the impact of pending legislation on the federal budget. The Office of Management and Budget does much the same for the President. The point is that these and other state policy research organizations routinely have more face time and contact with key policymakers and staffers than most of the think tanks and other organizations in the policy-planning network described by WRA?, which is another reason why their neglect in WRA? is troubling.

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Conclusion I began this chapter on a positive note and finish on one as well. My criticisms have focused on only one part of WRA?. There is still much to be admired in the book. Indeed, WRA? has done a major service to political sociology and political science. It has sparked debate and stimulated research for several decades. It has made people ask questions about the nature of power, politics and policymaking in the United States. It has been used frequently in classrooms, including my own, as required reading. Who could ask for more? It is still a wonderful book, warts and all, that has stood the test of time. There is no reason why WRA? should not continue to stimulate research and discussion for years to come. My earlier arguments raise a number of questions worth pursuing. To begin with, and methodological concerns aside, much more work is needed to determine the relative influences of private think tanks and state policy research organizations on the formation of public policy in the United States, and how this may have changed over time. These questions could be tackled, for instance, through a series of detailed case studies examining how a particular set of policies, such as in the areas of taxation, environment or trade, evolved historically. One could also test my hypothesis that the policy-planning network’s ability to generate consensus among the ruling class on big policy issues has diminished since the mid-1990s. We might also be interested to know how the U.S. policy-planning network compares to those in other countries. I have argued that the differences have been significant, but that was based on research conducted before the 2008 world financial crisis. Have things changed since then? Have these networks come to rely more on state policy research organizations than private think tanks since them? Were private policy-planning networks discredited in light of the crisis? Finally, how much influence do international organizations such as the Organisation for Economic Co-operation and Development (OECD) have on policy formation in different countries? Put differently, do policy-planning networks operate in isolation from one another and international organizations? After all, we live in an increasingly interconnected world, and policymakers and their advisers are well aware of what happens in other countries and what international research organizations advise on various policy issues. Answers to these questions would go a long way in helping us better understand how institutions, material and political interests, and policy ideas mix in ways that affect policymaking in the United States and elsewhere.

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Notes 1 Domhoff began to soften his criticism of historical institutionalism in the most recent edition of WRA? and in his chapter for this volume. 2 An earlier edited volume for which Skocpol shared co-editorship did much the same thing (Evans et al. 1985). The emergence of what came to be called “historical institutionalism” can be traced as well through the development of the Cornell Studies in Political Economy book series edited by Peter Katzenstein. 3 An important stream of this early research was about how class struggle was managed through corporatist institutions (e.g., Katzenstein 1985). 4 Some historical institutionalists take a stronger, more deterministic, and less probabilistic view of institutional effects than others (e.g., Krasner 1984). 5 Of course, the first few editions of WRA? preceded the birth of historical institutionalism and were written in dialogue with different literatures and debates of the time— pluralist, elite and neo-Marxist theories. 6 Perrow’s (2002) point of reference for organizational institutionalism is Powell and DiMaggio (1991). 7 Campbell (2004, Chapter 1) compares these two different versions of institutional analysis. 8 Several scholars have theorized change from within historical institutionalism, including Campbell (2004, 2010); Streeck and Thelen (2005); Thelen (2004), and Mahoney and Thelen (2010). 9 Unless noted otherwise, evidence on U.S. and European policy research organizations and think tanks presented in the rest of this chapter comes from Campbell and Pedersen (2014). 10 Only much later did CBO adopt dynamic modeling. 11 See Kingdon (1995) for a similar view of policymaking as a garbage can of different streams of influence.

References Béland, Daniel and Robert Cox, editor. 2011. Ideas and Politics in Social Science Research. New York: Oxford University Press. Bimber, Bruce. 1996. The Politics of Expertise in Congress. Albany: State University of New York Press. Block, Fred. 1987. “Beyond Relative Autonomy: State Managers as Historical Subjects.” Pp. 227–42 in Revising State Theory, edited by Fred Block. Philadelphia: Temple University Press. Blyth, Mark. 2002. Great Transformations. New York: Cambridge University Press. Campbell, John L. 2010. “Institutional Reproduction and Change.” Pp.  85–115 in The Oxford Handbook of Comparative Institutional Analysis, edited by Glenn Morgan, John Campbell, Colin Crouch, Ove Pedersen and Richard Whitley. New York: Oxford University Press. ———. 2004. Institutional Change and Globalization. Princeton: Princeton University Press. Campbell, John L. and Ove K. Pedersen. 2014. The National Origins of Policy Ideas. Princeton: Princeton University Press. Domhoff, G. William. 2014. Who Rules America? The Triumph of the Corporate Rich, 7th edition. New York: McGraw-Hill.

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Evans, Peter, Dietrich Rueschemeyer and Theda Skocpol, editors. 1985. Bringing the State Back In. New York: Cambridge University Press. Gourevitch, Peter. 1986. Politics in Hard Times. Ithaca: Cornell University Press. Hall, Peter. 1993. “Policy Paradigms, Social Learning and the State: The Case of Economic Policymaking in Britain.” Comparative Politics 25(3):275–96. ———. 1989. The Political Power of Economic Ideas. Princeton: Princeton University Press. ———. 1986. Governing the Economy. New York: Oxford University Press. Ioffe, Julia. 2013. “A 31-Year-Old is Tearing Apart the Heritage Foundation: Think Tank Republicans Have Been Making Fools of Themselves?” The New Republic, November 24. https://newrepublic.com/article/115688/heritage-foundations-michael-needham-tearsapart-right-wing (Accessed June 5, 2017. Joyce, Philip. 2011. The Congressional Budget Office. Washington: Georgetown University Press. Katzenstein, Peter. 1985. Small States in World Markets. Ithaca: Cornell University Press. ———, editor. 1978. Between Power and Plenty. Madison: University of Wisconsin Press. Kingdon, John. 1995. Agendas, Alternatives, and Public Policies, 2nd edition. New York: HarperCollins. Kliff, Sarah. 2016. “The Congressional Budget Office Has Some Bad News for Obamacare Repealers.” Vox, December 28. www.vox.com/policy-and-politics/2016/12/28/ 14098736/cbo-obamacare-repeal (Accessed December 2016). Krasner, Stephen. 1984. “Approaches to the State: Alternative Conceptions and Historical Dynamics.” Comparative Politics 16:223–46. ———. 1978. “United States Commercial and Monetary Policy: Unraveling the Paradox of External Strength and Internal Weakness.” Pp. 51–88 in Between Power and Plenty, edited by Peter Katzenstein. Madison: University of Wisconsin Press. Lipton, Eric and Brooke Williams. 2016. “Researchers or Corporate Allies? Think Tanks Blur the Line.” The New York Times, August 8, p. A1. Mahoney, James and Kathleen Thelen, editors. 2010. Explaining Institutional Change. New York: Cambridge University Press. Mann, Michael. 1984. “The Autonomous Power of the State: Its Origins, Mechanisms and Results.” Archives Europeennes de Sociologie 15:185–213. Mayer, Jane. 2012. “The Kochs vs. Cato.” The New Yorker, March 1. http://www.newyorker.com/news/newsdesk/the-kochs-vs-cato Mizruchi, Mark. 2013. The Fracturing of the American Corporate Elite. Cambridge: Harvard University Press. Nordlinger, Eric. 1981. On the Autonomy of the Democratic State. Cambridge: Harvard University Press. Perrow, Charles. 2002. Organizing America. Princeton: Princeton University Press. Powell, Walter and Paul DiMaggio, editors. 1991. The New Institutionalism in Organizational Analysis. Chicago: University of Chicago Press. Skocpol, Theda. 1995. Protecting Soldiers and Mothers. Cambridge: Harvard University Press. ———. 1980. “Political Response to Capitalist Crises: Neo-Marxist Theories of the State and the Case of the New Deal.” Politics and Society 10(2):155–201. ———. 1979. States and Social Revolutions. New York: Cambridge University Press. Skowronek, Stephen. 1982. Building a New American State. New York: Cambridge University Press.

Institutions, Policy-Planning Networks 101 Steinmo, Sven, Kathleen Thelen and Frank Longstreth, editors. 1992. Structuring Politics. New York: Cambridge University Press. Streeck, Wolfgang and Kathleen Thelen, editors. 2005. Beyond Continuity. New York: Oxford University Press. Thelen, Kathleen. 2004. How Institutions Evolve. New York: Cambridge University Press. Thelen, Kathleen and Sven Steinmo. 1992. “Historical Institutionalism in Comparative Politics.” Pp. 1–32 in Structuring Politics, edited by Sven Steinmo, Kathleen Thelen and Frank Longstreth. New York: Cambridge University Press. Weidenbaum, Murray. 2009. The Competition of Ideas. New Brunswick: Transaction. Zysman, John. 1982. Governments, Markets and Growth. Ithaca: Cornell University Press.

Section Three

The Policy-Planning Network in Action

The Policy-Planning Network, Class Dominance, and the Challenge to Political Science

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This chapter uses G. William Domhoff ’s concept of a policy-planning network to suggest ways in which political science could better integrate concepts and findings about political economy, class analysis, and the American power structure that mainstream political scientists have called for in recent years. After examining several attempts by prominent political scientists to bring attention to the shortcomings of the discipline, I conclude that their arguments would be strengthened if political scientists overcame their “analytic amnesia” and reengaged with the scholarly tradition within which Domhoff ’s work has been of central importance. I raise questions about the extent to which political science is equipped to explore the new questions that concern them without considering the analytical perspectives of those who have used the concept of a policy-planning network, and its position within the broader power structure, to explain how corporate power is able to dominate government on many issues of vital importance to American society and its citizens. Think tanks have become familiar actors in American politics, with their operatives supplying advice to policymakers and analysis to the news media.

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On occasion some think tanks have acted as quasi-lobbyists for corporate interests and foreign governments. A New York Times investigation found, “More than a dozen prominent Washington research groups have received tens of millions of dollars from foreign governments in recent years while pushing United States government officials to adopt policies that often reflect donors’ priorities” (Lipton, Williams, and Confessore 2014). Think tanks involved included the Brookings Institution, the Center for Strategic and International Studies, and the Atlantic Council, with Norway, Qatar, and the United Arab Emirates, among others, providing funds. A later New York Times examination of seventy-five think tanks “found an array of researchers who had simultaneously worked as registered lobbyists, members of corporate boards or outside consultants in litigation and regulatory disputes, with only intermittent disclosure of their dual roles” (Lipton, Confessore, and Williams 2016). Such journalistic accounts raise important questions about the links between economic power, agenda setting, and public policy in U.S. politics. To what extent does the academic discipline of political science provide the tools to explore such questions? In the wake of the economic downturn of 2008, several prominent political scientists called for better integration between concepts and findings about political economy, class analysis, and the American power structure, on the one hand, and the study of U.S. politics more broadly, on the other. For example, in a 2009 article in the American Political Science Association (APSA) journal Perspectives on Politics, Jeffrey A. Winters and Benjamin I. Page argued, “our basic point is that political science as a whole and the American politics subfield in particular needs to treat power, especially in its material form, much more seriously than it recently has done” (Winters and Page 2009, p. 732). In a 2010 article in the same journal, Lawrence R. Jacobs and Desmond S. King underscored “the importance of integrating the study of presidency and public leadership with the study of the political economy of the state” ( Jacobs and King 2010, p.  793). For their part, Jacob Hacker and Paul Pierson stated, in an article on presidents and the political economy: “Our perspective on presidential leadership is grounded in a simple observation: long-term policy developments are rooted in organized struggles to remake the economy and society in durable ways” (Hacker and Pierson 2012, p. 109). The upshot of these arguments is that American politics is more constrained by the context or system of which they are a part than is often acknowledged. But how should this context or system, and these constraints, best be understood? In an article published in 2011, referring to the arguments by Winters, Page, Jacobs, and King, I asserted: “While in agreement, I would note that

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the tools for doing so have existed for some time, though they have been underutilized in mainstream political science in recent years, to the detriment of critical understandings of U.S. politics” (Peschek 2011, p. 430). However, I only briefly described these “tools” that I claimed had existed for decades. In the 1970s a number of U.S. political scientists and sociologists developed and engaged with radical and non-pluralist theories of the state as a way of better understanding the politics of capitalist democracy in the United States. These are the “tools” that I believe should be critically redeployed in the analysis of American politics. Political economy, class analysis, and power structure research were central to these views. G. William Domhoff has been the leading exemplar of the “class dominance” approach to understanding American politics, starting with the 1967 publication of Who Rules America?, followed by numerous empirically and conceptually rich books and articles up to the present. Class dominance theories are concerned chiefly with the control of the state by a dominant social class that uses the state to achieve its ends. Domhoff was indebted to the work of sociologist C. Wright Mills in the 1950s on the American power structure, especially his analysis of the “power elite” (Mills 1956). Domhoff shows how the role of policy elites in lobbying, opinion-shaping, candidate selection, and—of great importance—policy-planning processes ensure that the corporate-conservative alliance tends to prevail over the labor-liberal alliance on core class issues pertaining to “wages and profits, the rate and progressivity of taxation, the usefulness of labor unions, and the degree to which business should be regulated by government” (Domhoff 2014, p.  xvi). His concept of a “policy-planning network,” though not the term itself, was sketched in the first edition of Who Rules America? and elaborated on in later editions of the book and in other publications. Think tanks and policy-planning organizations are described as “associations” that have been “formed to influence government and public opinion on significant issues” (Domhoff 1967, p. 63). In a chapter on “The Shaping of the American Polity” they are studied as one kind of institution—along with foundations, universities, and the mass media—that are “closely intertwined with each other and the corporate economy” (Domhoff 1967, p. 64). Domhoff describes the Council on Foreign Relations, the Foreign Policy Association, the Committee for Economic Development, the Business Advisory Council, and the National Advertising Council, which he views as “arms of the power elite which have the function of attempting to influence the framework of the American polity” (Domhoff 1967, p.  77). In his 1979 book The Powers That Be Domhoff included the “policy-formation process” as one of four “processes of ruling class domination in America,” the others being the special-interest process,

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the candidate-selection process, and the ideology process (Domhoff 1979). He shows how the power elite use resources, research, decision-making, and opinion making to formulate policy on larger issues. A distinction is made between the core policy-planning groups—the Council on Foreign Relations, the Committee for Economic Development, the Conference Board, and the Business Council—and satellites and think tanks “which operate in specialized areas or provide research information and expert advisors to the Big Four” (Domhoff 1978, p. 75). In the most recent edition of Who Rules America?, think tanks include the Brookings Institution, the American Enterprise Institute, and the Heritage Foundation. The policy-discussion groups that Domhoff describes are the National Association of Manufacturers and the U.S. Chamber of Commerce, the Council on Foreign Relations, the Business Council, the Committee for Economic Development, and the Business Roundtable. Finally, Domhoff notes that the policy network is not homogenous and that there are “ultraconservative” organizations such as the National Association of Manufacturers, the Chamber of Commerce of the United States, the American Enterprise Institute, and the American Security Council. How does this analysis affect our view of who rules? Domhoff argues that, “The ability of the corporate rich to transform their economic power into policy expertise and political access makes them the most important influence on the federal government” (Domhoff 2014, p. xiii). Class dominance theorists use research to demonstrate how the corporate community influences specific policy decisions by the federal government. Domhoff ’s class dominance theory thus puts great pressure on the pluralist view of the state. As he argues: [T]he owners and top-level managers of large corporations—the corporate rich—work together to maintain themselves as the core of the dominant power group. Their corporations, banks, and agribusinesses form a corporate community that shapes the federal government on the policy issues of interest to it, which are issues that also have a major impact on income, job security, and well-being of most other Americans. (Domhoff 2014, p. x) Domhoff does not argue that elite control of the national policy agenda is absolute. Rather the dominant class sets the terms for group competition: This combination of economic power, policy expertise, and continuing political access makes the corporate rich a dominant class, not in the sense of complete and absolute power, but in the sense that they have the power to shape the economic and political frameworks within

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which other groups and classes must operate, right down to changing the rules that govern elections and who can vote in them. They therefore win far more often than they lose on the issues of concern to them. (Domhoff 2014, p. xiii) Domhoff acknowledges that the corporate community has important structural power, deriving from the functioning of the capitalist economy, which is independent of attempts to influence government directly. But such power, in his view, is insufficient to ensure that the corporate community dominates the federal government, and thus it is necessary to examine the specific processes, including the policy-formation process, by which the ruling-class rules and fends off challenges: Despite their preponderant power in the federal government and the many necessary policies it carries out for them, leaders within the corporate community are constantly critical of it because of its potential independence and its ability to aid their opponents. They know they need government, but they also fear it, especially during times of economic crisis when they need it the most. (Domhoff 2014, p. xiii) During the 1970s, findings and concepts about the inter-relationships of class, power, and the state, including the policy-formation process, began to be incorporated into political science scholarship. Several leading American government and politics textbooks from that decade were shaped by and incorporated radical perspectives, including American Politics: Policies, Power, and Change by Kenneth Dolbeare and Murray Edelman, The Politics of Power: A Critical Introduction to American Government by Ira Katznelson and Mark Kesselman, Democracy for the Few by Michael Parenti, and The American Political System: A Radical Approach by Edward S. Greenberg. As a broad statement, one can say that such analysis has largely been ignored in mainstream studies of American politics since the 1980s. This period saw the emergence of “state autonomy” theory, more recently called “historical institutionalism,” as an influential framework. For all the gains of this approach, Brian Waddell is right to ask, “How is it that leading Americanists . . . can overlook so easily what was a sustained effort to understand the ways in which class forces interact with state power in the United States? Indeed, how can we expect that our discipline will be driven forward by the clash of competing theories, as Hacker expects, when the discipline seems expert at ignoring what radical scholarship offers” (Waddell 2012, p. 339).

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I now briefly describe several examples of recent scholarship by leading political scientists pertaining to class, power, inequality, and political economy that connect to the perspectives on business dominance of the state that I described previously, and note how they have been received by contemporary adherents of those perspectives, including Domhoff. In 2004 the Task Force on Inequality and American Democracy of the American Political Science Association issued a report on “American Democracy in an Age of Rising Inequality” (APSA Task Force Report 2004). Contending that “the dominance of the advantaged has solidified,” the report noted that, “corporations and professions have created a new generation of political organizations since the early 1970s in response to the rise of citizen organizations, global competition, and developments within American business.” The report went on to state, “Skewed participation among citizens and the targeting of government resources to partisans and the well-organized ensure that government officials disproportionately respond to business, the wealthy, and the organized when they design America’s domestic and foreign policies.” According to the task force, “we need to know more about the interactions of economic and social conditions with American politics” (APSA Task Force Report 2004, pp. 657, 659, 661). While welcoming the report’s call for political science to contribute to public understanding of the connection between inequality and U.S. democracy, Frances Fox Piven found it a “timid” document. Rather than seeing the distortions of democratic politics as a result of skewed participation, she argued that “we should pay more attention to the politics of extreme wealth concentration, the culture of greed and arrogance it has encouraged, and the stratagems the wealthy now deploy to control formally democratic institutions” (Piven 2006, p. 43). Task force member Jacob Hacker responded that if the task force was timid, “we were so only in the appropriate sense that we were restrained by the limited state of current knowledge” (Hacker 2006, p.  47). Research reports written by task force members were published in a 2005 book edited by Lawrence R. Jacobs, the task force chair, and Theda Skocpol. In a respectful review Domhoff concluded, “Neither the editors nor the chapter authors offer a conceptual framework that can adequately encompass their findings. No ‘class dominance,’ ‘power elite,’ or even a business community and attendant think tanks for them, just citizens, voluntary associations, political parties and interest groups, some of which have greater influence than others” (Domhoff 2007, p. 1591). The subject of inequality, and its relationship to American politics, has attracted renewed attention by Benjamin Page, Jeffrey Winters, Larry Bartels, Martin Gilens, and others. This research clearly challenges pluralist

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assumptions and to some extent is informed by the arguments about class dominance discussed previously. For example, Winters and Page conclude, “We believe it is now appropriate to move a step further and think about the possibility of extreme political inequality, involving great political influence by a very small number of extremely wealthy individuals. We argue that it is useful to think about the U.S. political system in terms of oligarchy” (Winters and Page 2009, p. 744). For their part, Page, Bartels, and Jason Seawright find that “if policy makers do weigh citizens’ policy preferences differentially based on their income or wealth, the result will not only significantly violate democratic ideals of political equality, but will also affect the substantive contours of American public policy” (Page, Bartels, and Seawright 2013, p. 68). In general, Page shows more awareness of political economy and class explanations than is found in most recent mainstream scholarship. For example, in a review of Bartels’s Unequal Democracy, he finds that “the chief defect of Bartels’s book is a tendency to blame the victim: to suggest that the ignorance and confusion of ordinary citizens is responsible for regressive public policies, when the main fault may actually lie with a surprisingly undemocratic political system and with those who manipulate it and profit from it.” He also thinks that Bartels’s “focus on policy makers and citizens leads us away from causes of party behavior that may be rooted in the nature of party activists, money givers, and major investors” (Page 2009, pp. 148, 149). Jacob Hacker and Paul Pierson have, in Winner-Take-All Politics, developed a relatively comprehensive and challenging analysis of recent developments in American politics and their relationship to growing inequality and business mobilization (Hacker and Pierson 2010). In an extremely interesting commentary on Hacker and Pierson, Fred Block and Frances Fox Piven demonstrate that many prior political scientists underscored the centrality of business power in American politics, leveling the charge of “analytic amnesia” about this tradition within the discipline. They develop an explanation, involving methodology, left fatigue, and timidity, of why while some political scientists who were deeply influenced by the politics of the 1960s have achieved eminent positions and even high office in the American Political Science Association, few of them have made the issue of business power central to their scholarship. Most importantly, these heterodox figures have not been successful in constituting a distinctive school or tendency within the discipline that could exert continuing pressure on other scholars to take business power seriously as a theoretical and empirical issue. (Block and Piven 2010, p. 207)

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Brian Waddell applauds Hacker and Pierson for breaking with the “prevailing view of most American politics scholars that politics and political power are more or less autonomous from economic forces and private power . . .” But he finds that Hacker and Pierson’s theme of “politics as organized combat” produces a “modified interest group analysis that stresses the advantages of organization in winning political battles.” He too encourages scholars to overcome their analytic amnesia and reengage with the scholarly tradition that raised questions “concerning the interplay of politics and markets, democracy and capitalism, and public and private power” (Waddell 2011, pp.  659–662). Certainly Domhoff ’s work has been of central importance to that tradition. One work that focuses centrally on the policy-planning process, and which engages with Domhoff and the class dominance perspective, is sociologist Thomas Medvetz’s (2012) book Think Tanks in America. This book is grounded in sociological theory and is based on extensive empirical research, including archival work, interviews, databases on the education and career backgrounds of think tank policy experts, and firsthand observation in think tank settings. Medvetz aims to explain what think tanks are and what they do. His central analytical argument is that “think tanks . . . have become the primary instruments for linking political and intellectual practice in American life” (Medvetz 2012, p. 7). He contends that producers of social scientific knowledge have been relegated to the margins of public debate by the growth of think tanks. Lamenting the declining value of “self-directed knowledge in public life,” Medvetz asks, “Should money and political power direct ideas, or should ideas direct themselves?” (Medvetz 2012, p. 226). This conclusion raises the question of whether Medvetz has met one of his main goals, which is to “relate the growth of think tanks to the changing social relations among power holders in the United States” (Medvetz 2012, p. 46). At the outset of his book, Medvetz distinguishes his study from several other perspectives on the role of think tanks, including “elite theory,” which derives from the work of Mills and was continued by Domhoff and others (Peschek 1987). Elite theory is said to argue that think tanks should be analyzed as “instruments deployed strategically in the service of a ruling class agenda.” Medvetz traces five waves in the growth of “proto-think tanks” from the 1890s through the 1960s. Although connected to the growing emphasis on scientific rationality and expertise in the Progressive Era, Medvetz believes that “nearly all of the proto-think tanks were founded by elites for specific political purposes.” This claim would seem to position him close to “elite theory,” which argues, according to Medvetz, that “think tanks originated in a ruling class project to manage capitalism and direct American foreign policy in the context of the country’s growing international power.” Although he states that this theory is “closer to my own view,” he distances

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himself from elite theory as he understands it in several ways. First, he objects to the view that proto-think tanks were the creation of the ruling class as a whole, contending instead that they were the offspring of a specific faction. Second, he criticizes the elite theory for depicting think tanks as part of a “closed network” that cannot explain “how these networks actually translate into political influence.” Third, he states that elite theory cannot account for “the existence of think tanks that orient themselves against ruling class interests” (Medvetz 2012, pp. 8–9). All these claims are untenable. First, although C. Wright Mills indeed authored The Power Elite (1956), he never discussed think tanks, and the elite theorists who partially follow in his footsteps are more accurately described as “class-dominance” theorists in contrast to the classical elite theorists who found the concept of class unwelcome. Class-dominance theorists have always been attentive to conflicts and divisions within the business community and its allies, and to how such differences as well as real-world political concerns shaped the emergence of institutions such as the Brookings Institution, the Council on Foreign Relations, and the Committee for Economic Development in the period of “proto-think tanks.” Mills distinguished between old-guard “practical conservatives” and business liberals or “sophisticated conservatives,” and Domhoff examines differences between moderate and ultraconservative subgroups within the corporate-financed policy network. Second, far from seeing think tanks as part of a “closed network,” class-dominance theorists show their connection to such avenues of political influence as testimony before relevant committees in Congress, service on federal advisory committees, service on specially appointed presidential and congressional commissions, meetings of the Business Council and Business Roundtable with government officials, and appointments of think tank directors and officers to top positions in the major departments of the executive branch. Third, “elite” theorists are not unaware of a liberal-labor policy network funded in part by labor unions and liberal foundations, though their influence is much less than those of centrist and ultra-conservative policy organizations. For Medvetz it was in the 1960s and 1970s that the contemporary “space” of think tanks emerged, as activists on both the left and right developed critiques of technocratic forms of expertise. But the response was asymmetrical, as funds from the right flooded in. In general Medvetz is correct to link changes in the policy or think tank network to the right turn in U.S. politics dating from the 1970s. However, the dynamics of this process have been more carefully studied by scholars more or less associated with what Medvetz calls “elite theory.” For example, using data on the director interlocks of policy-planning organizations, Val Burris shows how in the 1980s and 1990s,

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corporate liberals became more isolated from big business “moderate conservatives” and were replaced by several ultraconservative groups. This realignment, combined with a rise in cohesion in the policy-planning network, adds to our understanding of the right turn in U.S. state policy in that period (Burris 2008). I have argued that the tradition of class analysis, political economy, and power structure research would help political scientists explore the deeper questions about power and politics that some are raising. Thus I find myopic Hacker and Pierson’s claim, made in 2012, that “only in the last half-decade have political scientists devoted any real attention to the link between this remarkable transformation of the American economy and patterns of American government, much less to the role of presidents in mediating this link” (Hacker and Pierson 2012, p.  103). American political conflict needs to be situated in the context of the power structure of American society as a whole, within which policy-planning networks and think tanks play crucial roles. In my view, these factors are at least as important as such political science staples as the impact of public opinion, election outcomes, and relations with Congress, important though these are, and probably more so.

References APSA Task Force Report. 2004. “American Democracy in an Age of Rising Inequality.” Perspectives on Politics 2: 651–666. Block, Fred, and Frances Fox Piven. 2010. “Déjà vu, All Over Again: A Comment on Jacob Hacker and Paul Pierson’s ‘Winner-Take-All Politics’.” Politics and Society 38: 205–211. Burris, Val. 2008. “The Interlocking Structure of the Policy-Planning Network and the Right Turn in U.S. State Policy.” Research in Political Sociology 17: 3–42. Domhoff, G. William. 1967. Who Rules America? Englewood Cliffs, NJ: Prentice-Hall. Domhoff, G. William. 1979. The Powers That Be: Processes of Ruling Class Domination in America, New York: Vintage Books. Domhoff, G. William. 2007. “Inequality and American Democracy: What We Know and What We Need to Learn.” American Journal of Sociology 112: 1589–1591. Domhoff, G. William. 2014. Who Rules America? The Triumph of the Corporate Rich, 7th ed., New York: McGraw-Hill. Hacker, Jacob. 2006. “Inequality, American Democracy, and American Political Science: The Need for Cumulative Research.” PS: Political Science and Politics 39: 47–49. Hacker, Jacob S., and Paul Pierson. 2010. Winner-Take-All Politics: How Washington Made the Rich Richer—And Turned Its Back on the Middle Class, New York: Simon and Schuster. Hacker, Jacob S., and Paul Pierson. 2012. “Presidents and the Political Economy: The Coalitional Foundations of Presidential Power.” Presidential Studies Quarterly 14: 101–131. Jacobs, Lawrence R., and Desmond S. King. 2010. “Varieties of Obamaism: Structure, Agency, and the Obama Presidency.” Perspectives on Politics 8: 793–802.

Class Dominance, Challenge to Political Science 115 Lipton, Eric, Brooke Williams, and Nicholas Confessore. 2014. “Foreign Powers Buy Influence at Think Tanks.” New York Times, September 7, p. A1. Lipton, Eric, Nicholas Confessore, and Brooke Williams. 2016. “Think Tank Scholar or Corporate Consultant? It Depends on the Day.” New York Times, August 9, p. A1. Medvetz, Thomas. 2012. Think Tanks in America, Chicago: University of Chicago Press. Mills, C. Wright. 1956. The Power Elite, New York: Oxford University Press. Page, Benjamin I. 2009. “Perspectives on Unequal Democracy: The Political Economy of the New Gilded Age.” Perspectives on Politics 7: 148–149. Page, Benjamin I., Larry M. Bartels, and Jason Seawright. 2013. “Democracy and the Policy Preferences of Wealth Americans.” Perspectives on Politics 11: 51–73. Peschek, Joseph G. 1987. Policy-Planning Organizations: Elite Agendas and America’s Rightward Turn, Philadelphia: Temple University Press. Peschek, Joseph G. 2011. “The Obama Presidency and the Great Recession: Political Economy, Ideology, and Public Policy.” New Political Science 33: 429–444. Piven, Frances Fox. 2006. “Response to ‘American Democracy in an Age of Rising Inequality’.” PS: Political Science and Politics 39: 43–46. Waddell, Brian. 2011. “Class Politics, American-Style: A Discussion of Winner-Take-All Politics: How Washington Made the Rich Richer—And Turned its Back on the Middle Class.” Perspectives on Politics 9: 659–662. Waddell, Brian. 2012. “When the Past Is Not Prologue: The Wagner Act Debates and the Limits of American Political Science.” New Political Science 34: 338–357. Winters, Jeffrey A., and Benjamin I. Page. 2009. “Oligarchy in the United States?” Perspectives on Politics 7: 731–751.

Who Rules America? And the Policy-Formation Network: The Case of Venture Philanthropy

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Dateline: Washington, D.C., August 2008. Recently appointed superintendent of schools, Michele Rhee, has proposed a $200 million restructuring plan for the District of Columbia emphasizing school choice, the privatization of public education, and merit pay in lieu of tenure, with corporate philanthropy funding it all (Scott 2009). In a stunning example of a new, entrepreneurial form of private financial support, “venture philanthropy” is quickly reshaping the landscape of K-12 in the United States. Indeed, some suggest that organizations such as the Bill and Melinda Gates and the Walton Family foundations set urban policy with no public accountability (Lipman and Jenkins 2011), an insight quite familiar to readers of G. William Domhoff ’s work. In recent years, foundations have become major vehicles for advocacy funding but, in 1967, few appreciated their political potential when Who Rules America? (WRA?) drew attention to their role in shaping cultural and intellectual projects. More broadly, WRA? provided a framework for thinking about the policy formation process itself, and for this—and many other reasons— it is difficult to underestimate the importance of this work. Indeed, WRA? inspired a generation of researchers, laying the foundation for a voluminous literature that includes investigations of the social origins of government officials; the roots of historically important legislation, including the Social

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Security Act of 1935; the role of Political Action Committees in elections; the social networks of lobbyists; corporate interlocking directorates; and potential mechanisms of unity within the business community. Surely, the unifying question here is about the exercise of power and it is within this context that Domhoff draws the reader to consider the policy formation process: who really creates public policy and how is it implemented. Concentrating on the social upper class, his early work suggests that social cohesion facilitates policy cohesion and, over the years, he presented an overwhelming amount of data demonstrating that those who “rule” are indeed socially interrelated. And with this, he underscores a fundamental assumption about elite power wielding that is, for a dominant class to rule, it must have at least some capacity for unity. The publication of the third edition of WRA? brought a refined understanding of the policy formation process as it begins in corporate boardrooms, social clubs, and discussion groups, and ends in government-enacted legislation with the help of a network of foundations, think tanks, and policy groups. (Domhoff 1998). These two decades later, however, the world appears quite different. Mark Zuckerberg, Jeff Bezos, and George Soros have replaced the Rockefellers, Mellons, and Harrimans in the popular imagination, the corporate elite is fragmented (Mizruchi 2013), and the inner circle has disappeared (Chu and Davis 2016). Moreover, corporate lobbying is reshaping state-level legislation (Lafer 2017), the Koch brothers are the face of the political influence of wealth, and aggressive “venture philanthropy” is reshaping social institutions. Domhoff (2015) suggests that despite these types of changes, owners and top-level corporate executives continue to rule, with policy-planning networks crucial vehicles for cohesion formation. Recent years have seen the rise of a new institutional form, “venture philanthropy,” which fits Domhoff ’s model quite well, given their success in implementing public policy on their own terms. The question here is whether these new organizational forms are a natural extension of the policy-planning process analyzed in the various editions of WRA?, and whether the tools pioneered in those publications can help us understand the changes found in the current historical moment. To address this, I present a brief overview of the role of “venture philanthropy” in redesigning the U.S. educational system, paying particular attention to questions of elite unity and mechanisms through which public policy is formulated and implemented. In doing so, I hope that this may identify some fruitful questions for further research. Venture philanthropy is rooted in neoliberalism and brings the practices and languages of the private sector to the world of nonprofits, where

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grants are investments, impact and metrics are common catchwords (Boris and Winkler 2013), market solutions reign, and education is seen through the lens of workforce development (Lipman and Jenkins 2011). Building on traditional conservative philanthropies, it has adopted many of the strategies and the philosophy of established foundations, which were themselves political actors (Scott 2009). The old-style Olin Foundation, for example, clearly a political force, helped create a number of right-wing think tanks— including the American Enterprise Institute, the Heritage Foundation, and the Hoover Institution—that remain highly influential today (Scott 2009). Even the more liberal Ford Foundation was generating public policy as early as the 1950s, eventually turning to funding municipal union-busting efforts (Domhoff 1998). What distinguishes venture philanthropy from earlier forms is its wealth, goals, and audacity. In a short four years after the publication of the third edition of WRA?, for example, the landscape of private funding for K-12 changed fundamentally with the four dominant traditional groups—the Annenberg Foundation, the Lilly Endowment, the David and Lucile Packard Foundation, and the Kellogg Foundation—replaced by the Gates and Walton foundations (Ravitch 2010). And while traditional philanthropies framed their mission in terms of the public good (Saltman 2009), the central agenda of the new breed of “corporate-controlled foundations” (Domhoff 2014) is to remake the educational system in their own image. Now joined by the Eli and Edythe Broad Foundation, “their boldness,” Ravitch (2010) writes, “was unprecedented,” wanting “nothing less than to transform American education” (p. 199). The aim of this “corporate reform movement” (Ravitch 2013) is to privatize K-12 using charter schools, vouchers, and tax credits as mechanisms, and high-stakes testing, school closings, and teacher termination as strategies. Although, as Domhoff (2014) has noted, attempts to shape public opinion are fraught, this effort has been remarkably successful albeit far from complete. They have framed the discourse about the direction of public education in the United States and they have helped institutionalize standardized testing as the measure of school achievement. Their most recent success is the appointment of Betsy DeVos of school voucher fame as Secretary of Education. Educational reform venture philanthropy has quickly developed a wellintegrated policy network echoing those so well described in WRA?. Cohen (2007) identified 132 different organizations of various sizes in the school voucher or tax credit movements alone, spanning 43 states and ranging from funding agencies, to parent groups, to nationally important think tanks of various political stripes familiar to any Domhoff reader. These include the neoconservative Hudson, Manhattan, and American Enterprise institutes;

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the Libertarian Cato Institute; the neoliberal Center for Education Reform; the centrist Progressive Policy Institute; and the left-leaning Center for American Progress (DeBray-Pelot et al. 2007). Indeed, about 30% of the organizations identified were national and multi-issue, suggesting that the educational corporate reform movement is integrated into a larger policy formation network that transcends ideology and is committed to a larger agenda. Currently, “Americans for Prosperity,” founded by the Koch brothers, and the states’ rights, “American Legislative Exchange Council (ALEC), are lobbying state legislatures throughout the country for expanded private school choice, underscoring the breadth of the coalition. Regional efforts appear to have similar organizing structures. Tracing the ties of sponsors of Washington State’s charter school–reform movement, Au and Ferrare (2014) found national leadership, including the Bill and Melinda Gates Foundation, the Walton Family Foundation, the Bezos Family Foundation, and the Eli and Edythe Broad Foundation, as well as a solid Wall Street connection with the Goldman Sachs Foundation. Consistent with earlier work on policy networks, we conclude that “elite individuals make use of local nonprofit organizations as a mechanism to advance their education policy agenda by funding those nonprofits through the philanthropic organizations affiliated with those same wealthy individuals” (Au and Ferrare 2014, p. 1). Particularly striking in the Washington State example is the dominance of funding agencies bankrolled by new wealth, including the Robertson Foundation (of Tiger Global Management LLC fame), The Donald and Doris Fisher Foundation (Gap Clothing), and the Michael and Susan Dell Foundation (Dell Computers) (Au and Ferrare 2014; Scott 2009). But, as noted previously, the coalition for school reform is much broader than high tech and hedge fund wealth and also includes, as Ravitch (2010) points out, a collection of “strange bedfellows,” ranging from corporations hoping to profit from privatization, to those who simply believe that the private sector is more innovative than the public sphere. It also includes a number of large urban school districts that have adopted many practices underwritten by venture philanthropy, as well as the U.S. Department of Education, where policy-network think tank members cycle in and out of high-level positions (DeBray-Pelot et al. 2007). The push to reform public education in the United States, then, is a multipronged effort organized around big wealth. Although hundreds of private groups collectively spend more than $4 billion a year, the current big three (The Gates, Walton, and Broad foundations) collectively control the effort, dedicating millions of dollars to outreach to the media, national and regional governments, and voters (Barkan 2011). They have invested aggressively in

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politicians eager to support charter school expansion and school choice more broadly (Fabricant and Fine 2012), and they earmarked $60 million to convince both political parties to embrace their version of school reform (Barkan 2011). Apparently, this latter effort was an exceptionally good investment, given that in 2015 the “Every Student Succeeds Act,” which House Speaker Paul Ryan called “the biggest rewrite of our education laws in 25 years,” passed the Senate in a bipartisan vote (Fabian 2015). In addition, The Gates Foundation alone spent more than $200 million to fund the creation of Common Core, the current K-12 standards, and to enlist a wide assortment of advocacy groups in its support. The coalition is also in the business of leadership training, that is, preparing managers who share their worldview for upper-level positions in urban school districts and, in this way, they are trying to shift credentialing from universities to the corporate world (Saltman 2009). The Broad Foundation has taken the lead in this, with a $136 million investment that seems to be quite successful: their website boasts that 84% of graduates of their management-training program have served in cabinet-level positions of local school systems (Broad Foundation 2017). In 2009 alone, their students filled 43% of all superintendent openings in large urban districts (Barkan 2011), suggesting that their particular ideological frame will drive school management for years to come. Paralleling the push for alternative leadership programs, a number of smaller foundations have established non-university–based teacher preparation options that train college graduates for the classroom. Particularly well known is “Teach For America,” which began with foundation funding, later supplemented with significant federal support (Scott 2009), and serves to build an undereducated, uncertified, non-unionized teacher labor force (Saltman 2009). Interestingly, Michele Rhee, the architect of the Washington, D.C., educational restructuring plan designed with funding by venture philanthropy in mind, was a product of Teach For America. Alternative leadership and teacher preparation programs have both been central to the post-Katrina restructuring of the New Orleans school system, which has become a poster child for the venture philanthropy model of educational reform. Indeed, “Teach For America” places record numbers of instructors in New Orleans schools, with an administration dominated by Broad Foundation leadership graduates (Scott 2009). Here, non-unionized charter schools, voucher programs, and a model of market competition have replaced the (admittedly awful) public school system (Ravitch 2010). In addition to their New Orleans success, the corporate reform movement has made systematic progress in implementing their charter-school agenda, although traditional public schools still educate a vast majority of

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U.S. students. In 2014, of the 50 million students enrolled in K-12, more than 2.5 million in 40 states and the District of Columbia went to a charter school, a number that more than doubled in a ten-year period. More striking, though, are the inroads in large urban districts, their target locations. Indeed, the tension between the public and the private advocates is most forceful in the inner city, although few locales have experienced a transformation on the scale of the New Orleans school district. Cities in New York, California, and Texas, as well as the District of Columbia in particular, are targets for expansion (Scott 2009) as well as Memphis and other parts of Louisiana (Credo 2013). The irony, given venture philanthropy’s emphasis on accountability and metrics of evaluation, is that the charter school, their best success thus far, is not a clear winner when it comes to improving educational outcomes. Although studies have produced contradictory evidence on this over the years, the push for charters continues uninterrupted. Renzulli and Roscigno (2007) summarized the early finding succinctly when they wrote that the evidence is mixed, while more recent work suggests that, although charter schools do not improve student achievement, they do seem to have a positive effect on high school graduation rates and college attendance (Berends 2015). These results are quite modest given the stakes, undermined further by the thorny questions about student selection and comparability. In short, it is surprising to see a full-court press for a strategy with such equivocal results. The growth of charter schools preempted vouchers as vehicles for expanding school choice in the face of constitutional challenges to the latter. Nevertheless, school voucher programs that allow public funds to pay for secular and religious private school exist in 15 states and the District of Columbia, with an estimated enrollment of 446,000 (Goldstein 2017). With the appointment of Betsy DeVos as Secretary of Education, we should be hearing much more about vouchers in the coming months and years. Here, too, however, the advantages of voucher programs are not clearcut. Recent research suggests that, at least in Louisiana and Indiana, voucher recipients scored lower on both reading and math than those who remained in their original schools. Taken together, the data on charter schools and voucher programs suggest that the venture philanthropy agenda in education may not be a very effective strategy for improving outcomes, and that the practices of the private sector may not serve the public well. Nevertheless, the coordinated effort of wealthy individuals and their affiliated institutions continues to reinvent K-12 and, despite periodic setbacks, they continue to formulate policies that profoundly affect students. This abbreviated description of venture philanthropy’s educational reform movement demonstrates that the policy formation network of WRA? is alive

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and well in the 21st century, with alliances cross cutting traditional ideological categories. Indeed, it is hard to remember a more targeted effort with as high a probability of success. This tells us that elites can still unify; indeed, it is a striking example of a coordinated effort by a well-developed policy network. At the same time, as predicted by WRA?, there have been failures. Michele Rhee’s headline-grabbing attempt to restructure Washington, D.C.’s, school system ended in defeat. More recently, voters in Massachusetts rejected a charter-school expansion question on their ballot and as of this writing, despite Republican control in Iowa, proposals to expand school choice programs have stalled. This reminds us that ideological domination, as Domhoff suggested, is never complete. However, it is hard to imagine that the push for privatization will wane anytime soon. What is new in this example? One of the things that has changed in recent years is the importance of the local level. Nationally coordinated regional efforts at policy formation have received much attention of late, given ALEC’s practice of delivering right-wing legislation to state capitols for implementation. The movement to restructure public education demonstrates that this type of organization is more far-reaching; that broad coalitions of corporate actors operate on the national and state levels simultaneously, and they do so quite effectively. It would be interesting to know what conditions facilitate this type of coordination. The second thing new here is the specter of race. Although WRA? was sensitive to the racial composition of the elite, power structure researchers did not see the racial implications of the policies that they studied as a central concern. The educational reform agenda of venture philanthropy is racialized, and this explains why it targets large urban areas. In recent years, only about 24% of students enrolled in charter schools were white (National Alliance for Charter Schools 2017), an unremarkable statistic given the geographical focus of the movement, and a rhetoric of school choice promoting equality. However, critics suggest that, rather than rebuilding public schools into functioning entities, the charter schools of venture philanthropy perpetuate racial stratification in numerous ways. This includes their tendency to increase drop-out rates (Fabricant and Fine 2012) and, in the case of New Orleans at least, by creating a network of elite schools for more privileged students that excludes kids of color (Saltman 2009). Put more forcefully, Lipman (2011) writes that the restructuring of education in the United States is deeply racialized, centered on urban communities of color where public schools are either closed or privatized, and subject to a minimalist curriculum driven by the need for standardized-test preparation. This suggests that

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it would be fruitful to examine how elite policy impacts on different groups, with a particular focus on race. Also of interest is whether changing political paradigms affect elite policy preferences and the elite’s organizing capacity. It is easy to understand the corporate school reform movement as a neoliberal project, organized around the privatization of public services and the belief in education as a vehicle for labor force development. With this lens, the focus on the inner city schools, even with a strategy producing a very modest return on investment, makes sense. Low-income kids of color receive qualitatively different and cheaper educations than their white, more affluent counterparts, with different jobs in their futures (Au 2015). This occurs in a process of educational triage providing “basic skills training for millions of workers, more advanced education for supervision for middle class and . . . the brightest of the working classes, and elite education for scions of the capitalist, and other sections of the ruling classes” (Hill 2006, p. 26). This suggests that unity on school reform is rooted in a shared vision of how to mediate the cost of education on the one hand, with the need for a trained labor force, on the other, and this is what has generated a broad-based coalition of left, centrist, and right-wing groups. To what extent, then, can a changing political economic paradigm overcome the fractional interests and ideological differences within the elite and, thus, how does it impact on the capacity of the elite to unify? This leads to the most important question about elite control: how much unity is enough? WRA? captured the commonalities and fissures in elite policy outlooks, recognizing that coordination can never be complete, whereas venture capital’s attack on public education demonstrates that cohesion remains possible and potentially transformative. What is not clear, however, is how unified an elite must be to prevail on a particular issue. To put this another way, how much dissention undermines a coordinated effort? And what about other policies? Early 2017 witnessed a legislative fiasco on health care reform. Analyses of previous efforts at reforming health care have disagreed about the role of a unified corporate community in determining the fate of those initiatives. In the most recent example, it would be important to know the role of the elite—whether they were unified enough to torpedo the Republicans’ proposal for replacing the Affordable Care Act and if not, what if anything does it say about elite power? At this writing, a border adjustment tax that would levy a 20% tariff on imported goods is under discussion as part of a tax reform package that Congress will consider. This will be fought by Walmart (of the Walton Foundation fame), but this time without Bill Gates as a natural ally. Many believe

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that the inner circle and/or financial institutions mediated among different interests of this sort, producing policy preferences that were best for capital, in general. Despite the striking capacity for unity illustrated by venture philanthropy’s sojourn into educational policy, it is not clear that a centralized policy-planning network can fulfill this broader function. Research examining the policy formation networks of these (and other contemporary) issues would go a long way in identifying the extent to which the elite can still organize on a broad range of topics. But this would still leave the question of how much is enough. A motivating force of WRA?—and a number of the many, many studies flowing from Domhoff ’s work—was the pluralist assumption that, although corporations were extremely powerful when unified, individual interests would generate a diverse set of coalitions with different victors on different issues. The question that remains then is: how much unity is necessary for an elite to rule. Thus, while venture philanthropy seems to be a natural extension of the policy-planning process that WRA? identified so well, questions about elite capacity and elite unity endure. Over the years, G. William Domhoff raised a number of these, while presenting a coherent portrait of unified corporate power. At this particular historic moment, pursuing these questions and continuing his work is more important than ever, particularly if it can lead to developing strategies for change.

References Au, Wayne. 2015. “Meritocracy 2.0: High-Stakes, Standardized Testing as a Racial Project of Neoliberal Multiculturalism,” Educational Policy 30: 39–62. Au, Wayne and Joseph Ferrare. 2014. “Sponsors of Policy: A Network Analysis of Wealthy Elites, Their Affiliated Philanthropies, and Charter School Reform in Washington State,” Teachers College Record 116: 1–24. Barkan, Joanne. 2011. “Got Dough? How Billionaires Rule Our Schools,” Dissent 58: 49–57. Berends, Mark. 2015. “Sociology and School Choice: What We Know after Two Decades of Charter Schools,” Annual Review of Sociology 41: 159–180. Boris, Elizabeth and Mary Kopczynski Winkler. 2013. “The Emergence of Performance Measurement as a Complement to Evaluation among U.S. Foundations.” In S. B. Nielsen & D. E. K. Hunter (Eds.), Performance Management and Evaluation: New Directions for Evaluation, 137: 69–80. New York: Wiley. Broad Foundation. 2017. http://broadfoundation.org/education/ Chu, Johan and Gerald Davis. 2016. “Who Killed the Inner Circle? The Decline of the American Corporate Interlock Network,” American Journal of Sociology 122: 714–754. Cohen, Rick. 2007. “Strategic Grantmaking: Foundations and the School Privatization Movement,” National Committee for Responsive Philanthropy. www.issuelab.org/resource/ strategic_grantmaking_foundations_and_the_school_privatization_movement

The Policy-Formation Network 125 Credo. 2013. “National Charter School Study,” Center for Research on Educational Outcomes. Stanford University. DeBray-Pelot, Elizabeth, Christopher Lubienski and Janelle Scott. 2007. “The Institutional Landscape of Interest Group Politics and School Choice,” Peabody Journal of Education 82: 204–230. Domhoff, G. William. 1998. Who Rules America? Power and Politics in the Year 2000. Mountain View CA: Mayfield Publishing Company. ———. 2014. Who Rules America? The Triumph of the Corporate Rich. New York: McGraw-Hill. ———. 2015. “Is the Corporate Elite Fractured, or Is There Continuing Corporate Dominance? Two Contrasting Views,” Class, Race and Corporate Power 3. http://digitalcom mons.fiu.edu/cgi/viewcontent.cgi?article=1050&context=classracecorporatepower Fabian, Jordan. 2015. “Obama Signs Education Bill,” The Hill December 10. http://thehill. com/homenews/administration/262781-obama-signs-education-reform-bill Fabricant, Michael and Michelle Fine. 2012. Charter Schools and the Corporate Makeover of Public Education: What’s at Stake? New York: Teachers College Press. Goldstein, Dana. 2017. “School Choice Fight in Iowa May Preview the One Facing Trump,” New York Times. March 21. www.nytimes.com/2017/03/21/us/school-choice-fight-iniowa-may-preview-the-one-facing-trump.html?rref=collection%2Fsectioncollection%2 Feducation&action=click&contentCollection=education®ion=stream&module= stream_unit&version=latest&contentPlacement=7&pgtype=sectionfront Hill, Dave. 2006. “Class, Capital and Education in this Neoliberal and Neoconservative Period,” Information for Social Change 22: 11–35. Lafer, Gordon. 2017. The One Percent Solution: How Corporations Are Remaking America One State at a Time. Ithaca, NY: ILR Press. Lipman, Pauline. 2011. “Neoliberal Education Restructuring,” Monthly Review 63: 114–127. Lipman, Pauline and Cristen Jenkins. 2011. “Venture Philanthropy.” Chapter 5 in Pauline Lipman (Ed.), The New Political Economy of Urban Education. New York: Routledge. Mizruchi, Mark. 2013. The Fracturing of the American Corporate Elite. Cambridge: Harvard University Press. National Alliance for Charter Schools. 2017. http://dashboard2.publiccharters.org/National/. Ravitch, Diane. 2010. The Death and Life of the Great American School System. New York: Basic Books. ———. 2014. Reign of Error: The Hoax of the Privatization Movement and the Danger to America’s Public Schools. New York: Vintage. Renzulli, Linda and Vincent Roscigno. 2007. “Charter Schools and the Public Good,” Contexts 6: 31–36. Saltman, Kenneth. 2009. “The Rise of Venture Philanthropy and the Ongoing Neoliberal Assault on Public Education: The Case of the Eli and Edythe Broad Foundation,” Workplace 16: 53–72. Scott, Janelle. 2009. “The Politics of Venture Philanthropy in Charter School Policy and Advocacy,” Educational Policy 23: 106–136.

Corporate Interests and U.S. Foreign Policy

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G. William Domhoff ’s class-dominance approach is noteworthy for capturing long-term trends that have been well-supported by scholars in political science and sociology. In a much-publicized article in the journal Perspectives on Politics, Martin Gilens and Benjamin Page provide empirical support for what they call an “Economic Elite Domination” approach to the study of American politics. In an analysis of public opinion and the policy preferences of Congress spanning the period from 1981 through 2002, Gilens and Page contend that “economic elites and organized groups representing business interests have substantial independent impacts on government policy, while mass-based interest groups and average citizens have little or no independent influence” (Gilens and Page 2014, p.  565). This analysis is consistent with Domhoff ’s observations regarding the embedded relationship between the upper class, corporations and the U.S. state, including the dominant class coalitions within the Democratic and Republican parties. In Domhoff ’s formulation, the upper class and the corporate establishment are linked by memberships in elite social networks and in policy-planning associations whose work sets the policy agenda for legislators in U.S. political institutions. Therefore, Domhoff recognizes the intersection of economic power with political power. Such an insight should not be that surprising in a country that has historically privileged business interests and “the market” over competing societal interest groups, to the point where business groups have continued to exercise their agenda-setting functions even during periods of crisis, such as the depression of the 1930s, or social upheaval, such as the

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1960s and early 1970s (Ferguson 1996; Moreton 2010; Olmstead 2015). Today the sheer pace and scope of corporate power and class dominance illustrates the ongoing relevance of Domhoff ’s framework. The past thirty-plus years of U.S. neoliberal policies have been a direct expression of corporate policy preferences that continues to widen the gap between rich and poor so as to call into question the very legitimacy of the U.S. state (Kotz 2015; Mair 2013). Poll after poll has shown that voters no longer trust their political representatives to represent the “will of the people” but instead say that Congress answers to corporations and the rich, which scholars have documented as part of a broader trend of reduced legitimacy for Western capitalist democracies (Streeck 2017). The crisis of legitimacy faced by U.S. political institutions is a direct result of the unbridled power of corporations, which is now, after the great recession of 2008, the subject of more critical examination by scholars across the social sciences. In other words, more scholars are now forced to take Domhoff ’s arguments seriously because of the consequences of a corporate domination of the U.S. state that has existed long before the 2008 crisis, but is now forcing a crisis of legitimacy that few can simply ignore. If this is true in domestic politics, then it also holds in U.S. foreign policy, where corporate dominance has long been apparent in the think tanks, policy associations and corporate lobbying networks that set long-term foreign policy agendas. The following analysis makes the case that the ongoing expansion of U.S. empire, meaning a U.S. military presence in as many as 135 countries in the world and a preponderance of military capabilities that accounts for more than 40 percent of global military spending, is for the most part a project of transnational corporate dominance that has strong roots in the history of elite foreign policy networks. Indeed, a robust continuity exists among the creation, maintenance and further expansion of a U.S.-led global security architecture and the interests of a corporate policymaking establishment that have helped to shape that architecture. However, I argue that Domhoff ’s class-dominance theory needs to be supplemented by attention to the way that sectoral divisions among U.S. business interests leads to business conflict over U.S. policy. This includes consideration of the policy preferences of the military-industrial complex, which I develop in the last section of this chapter.

Corporate Interests and U.S. Empire The theories of U.S. empire that emphasize corporate power have emerged from a wide range of critical scholarship. The seminal works of historians

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Walter LaFeber and William Appleman Williams have helped to shape a broader understanding of U.S. foreign policy by linking the origins of U.S. empire to the perceived need of capitalists and capitalism for expanded global markets to mitigate the consequences of periodic socioeconomic crisis (LaFeber 1998; Williams 2009). Often labeled the “Open Door” school, this perspective has gained new traction with the publication of The Peace of Illusions by Christopher Layne, who has updated the insights of this school in an attempt to account for the continuities of U.S. foreign policy from the Cold War to the present (Layne 2007). Layne, like Williams long before him, tends to emphasize the ideological reasons for perpetual military expansion, namely the ingrained belief among policymakers that access to foreign markets requires military expansion to keep those markets open and protected. A corporate-centered account of U.S. empire that uses network analysis to link corporate policy preferences to U.S. foreign policy agenda setting, including policies promoting imperial expansion, is to be found in the recent American Grand Strategy and Corporate Elite Networks: The Open Door and Its Variations Since the End of the Cold War, by Bastiaan van Apeldoorn and Nana de Graaf. These authors map a consistent set of ties between corporate elite networks, policy-planning organizations, and key cabinet officials within the executive branch of presidential administrations that have shaped the “grand strategy” of U.S. foreign policy (Apeldoorn and de Graaf 2016). My own work has also emphasized the connection between corporate policy-planning associations, including the Council on Foreign Relations and the Committee for Economic Development, and long-term foreign policy agenda setting. For example, in U.S. Politics and the Global Economy, co-authored with Daniel Skidmore-Hess, we note the importance of each of these policyplanning organizations to the U.S. objectives of creating the global institutions and policy initiatives after World War II that would be central to a U.S.-led world order (Cox and Skidmore-Hess 1999). We argue that the corporations that were the most thoroughly internationalist in orientation, especially those that not only traded extensively but had a history of extensive foreign direct investment, were leaders of a corporate interest bloc that supported U.S. funding of the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (World Bank), the Marshall Plan, NATO and the creation of the European Common Market. As numerous scholars have shown, the most internationally powerful of the corporate sector also supported a steady expansion of U.S. military budget to accommodate U.S. intervention in the Third World, including the Vietnam War (Domhoff 2014). In my view, the best way to conceptualize corporate power in U.S. foreign policy is by viewing the relationship between corporations and the state

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within a framework that includes attention to grand strategy, tactics and the shifting preferences of corporations depending on their sectoral position with national and global production. I use such a framework in this chapter to develop some insights that will hopefully be of some use to students and scholars of U.S. foreign policy. The first aspect of the framework is the relationship between corporate actors, their policy-planning organizations and their lobbying networks, to the formulation of policy agendas that are incorporated into long-term grand strategies pursued by policymakers at the highest levels of foreign policymaking. Grand strategies refer to the establishment of policies designed to guide the United States in its relationship with the rest of the world over an extended period. These include U.S. backing of military and political alliances deemed necessary to further access to foreign markets by U.S.-based transnational corporations. These also include an overall assessment of U.S. military commitments that are necessary to defend these military and political alliances in the present and within a future timeframe. An example of such long-term strategic planning would be the periodic Defense Planning Guidance reports that are drafted and approved at the highest levels of the executive foreign policy bureaucracy, often identifying strategic, economic and political interests and recommending particular long-term strategies to defend those interests. The relationship between the most powerful corporate policy-planning organizations and long-term grand strategic thinking has been well established in the scholarly literature. Corporate planning organizations linked to U.S.-based firms that are the largest, most profitable and most heavily engaged in foreign direct investment are disproportionately influential (and powerful) in helping to establish the policymaking parameters of U.S. grand strategy. In that sense, there exists a strong empirical basis for continuity within U.S. foreign policy from the Cold War to the post-Cold War period. Corporate elite networks have long advocated an expansionist, imperial foreign policy and have supported the deployment of military troops and military aid at higher levels than the general public (Page and Barabas 2000). At the same time, these networks are deeply embedded within the foreign policy-planning architecture through think tanks, associations and lobbying networks that enjoy privileged linkages to the most powerful foreign policy actors in the U.S. executive branch. In my own work, I have developed a production-centered approach to understanding corporate influence on grand strategy in U.S. foreign policy. This approach starts with the proposition that corporations engaged in transnational production, dispersed across a wide range of countries and supply networks, are going to be most involved in the grand strategies of developing,

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advocating and maintaining global U.S. foreign policy commitments. The interests of these transnational corporations dovetail with the geostrategic objectives of the U.S. state, which has used its political power, codified within grand strategic planning, to maintain a global economy that is open to trade and investment. This insight has been supported by detailed network analysis that links transnational corporations to all of the prominent U.S. foreign policy associations that advise, assist and work with policymakers in the formulation of grand strategy. These include the Council on Foreign Relations, the Committee for Economic Development, the Foreign Policy Association, the Atlantic Council of the United States, the Center for Strategic and International Studies and the Peterson Institute for International Economics, to name some of the most prominent. An overview of the policy preferences of each of these corporate-backed organizations substantiate widespread consensus over the following: support for global U.S. imperial commitments, including a steady expansion of U.S. military bases around the world; use of the U.S. military to maintain open markets, sea lanes and protection of vital resources, including oil; support for U.S. leadership in global trade and investment agreements that reduce or eliminate restrictions on foreign direct investment and foreign trade; and support for multilateral strategic and economic organizations, including NATO, the World Trade Organization, the IMF and World Bank and other institutions facilitating multilateral coordination necessary to promote greater global economic integration (Cox and Skidmore-Hess 1999). In short, an overarching grand strategic vision exists among a corporatecentered network of U.S.-based foreign policy associations, disproportionately led by the transnational corporations whose production activities are dispersed around the world. Multinational corporations have long advocated an expansionist foreign policy, extending from the birth of the U.S. foreign policy empire during the late 19th century to the creation of the global institutions that were a product of U.S. hegemony after World War II. However, the current transnational production structure has emerged from the global socioeconomic crisis of the 1970s, when global Fortune 500 corporations were facing a declining rate of profit that began in 1965 and extended to 1982. In response to this crisis, the U.S.-based Business Roundtable was created in 1972 and the Trilateral Commission in 1973, in attempts to forge a global “solution” to the capitalist crises of the 1970s. Both the Business Roundtable and the Trilateral Commission advocated a greater reliance on global production networks for corporations experiencing declining rates of profit. Dispersal of global production across low-cost platforms in the developing world was seen as part of the necessary solution for corporations that were

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increasingly facing a profit squeeze and increased borrowing and regulatory costs in the developed world. In the United States, the Business Roundtable sought to utilize its corporate membership base to pressure Congress and the executive branch to support policies that would expedite the dispersal of production into cheaper, low-cost locations while maintaining control over the most high-value activities in the developed economies (Cox 2012). Corporations, led by the Business Roundtable, lobbied for Congressional legislation that would make it less costly for corporations to restructure their businesses. The Roundtable supported the passage of the Tax Reform Act of 1986, which included provisions that would allow corporations and businesses to restructure their operations by selling off unprofitable divisions. The Act “provided tax-free mechanisms to transfer capital among parts of the corporate family” (Prechel 1997, p. 420). Concretely, this provision allowed corporations to more easily shift their corporate structure from multidivisional forms (MDF) to multilayered subsidiary forms (MLSF). Corporations could replace divisions that were previously owned by the firm and managed by the central office with subsidiaries that would be legally independent of the corporation while still being financially controlled by the corporate parent. This allowed corporations much greater flexibility in financing their operations because divisions that were previously wholly owned by the firm were shifted to the status of subsidiary corporations that could raise money on their own through stock sales. The shift in corporate structure from the MDF to the MLSF allowed corporations, at tax-free rates, to restructure their operations by shedding legal responsibility for corporate divisions that were previously managed by the central office. This facilitated the global restructuring of the corporation, with the central office of the parent company establishing a far-flung network of subsidiary firms that would produce a range of products at arm-length from the legal obligations of the parent corporation (Davis 2016). Within this structure, corporations could easily shift ties from subsidiaries to independent suppliers and contractors in an effort to further restructure the corporate form. This, too, gave corporations much greater flexibility in financing their operations because divisions that were once fully owned by the firm were shifted to the status of subsidiary corporations, which could issue their own through stock in order to raise money. With these efforts, the Business Roundtable has been a very active representative of transnational corporate business interests in U.S. foreign policy. The corporate membership of the Business Roundtable has worked with the U.S. state in negotiating the terms of bilateral and regional trade and investment agreements. Starting with the North American Free Trade Agreement

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(NAFTA), which has served as a model for the types of investment agreements pushed by transnational capital from 1994 to the present, networks of corporate elites have been privileged by their disproportionate inclusion in special trade advisory committees. In the United States, such trade advisory committees report directly to the U.S. Special Trade Representative, and are directly involved in the bargaining that takes place during the negotiation of trade and investment agreements. Corporate lobbies such as the Business Roundtable are very well represented within these trade advisory committees (TACs). Business representation accounts for about 80 percent of the membership in these TACs, and a very high correlation has also existed between membership in the Business Roundtable and membership in the TACs (Dreiling 2000). The Business Roundtable has been an important policy association and lobbying group for the representation of transnational corporate interests within trade and investment agreements. To recall something said earlier, the Business Roundtable formed in the context of steadily declining profit rates (from 1965 through 1982) for multinational corporations, especially those firms in the Fortune 500, whose membership overlaps considerably with that of the Business Roundtable. Network analysis of the importance of the Business Roundtable’s membership in NAFTA lobbying networks and U.S. Trade Advisory Committees has demonstrated that the Roundtable was the central corporate organization that brought together the overall interests of transnational firms as a class actor. That is, the preferences of the Roundtable in supporting NAFTA were consistent with the overall preferences of an emerging transnational corporate elite network (Cox 2008). However, it would be a mistake to conclude, based on network analysis alone, that transnational capital is unified around the same policy objectives. As was the case with NAFTA, transnational capital both worked together across different sectors of transnational production but were also divided in their policy preferences as a result of their sectoral divisions. The lesson from this is that sectoral divisions matter in structuring corporate policy preferences. Transnational corporations producing computers, computer software, and high-technology equipment were in favor of reducing tariffs to zero both within NAFTA and for countries exporting to the North American region. On the other hand, U.S.-based automobile firms saw NAFTA as a way to help them better consolidate their competitive position within the North American market, while imposing tariffs against competitors that did not produce the required percentage of the finished product within North America. Therefore, the NAFTA agreement was a mix of corporate-negotiated investment measures whose levels of investment “protection” varied according to the sectoral characteristics and production location of participating firms (Cox 2008).

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The same sectoral tensions are also present among transnational firms regarding their identification of foreign countries as allies or as potential threats to U.S. interests. One of the best examples of this involves divisions within the ranks of U.S.-based transnational firms regarding whether China should be viewed as a U.S. ally or as a strategic enemy. Transnational corporations in manufacturing, high-technology and the retail sector lobbied Congress and the executive branch during the 1990s in favor of promoting China’s inclusion in the World Trade Organization, which was ultimately achieved in 2001. Transnational firms became increasingly connected to China through production networks whose terms were negotiated between transnational corporations, the U.S. state, the Chinese state and regional and local political elites in China. These networks have created extensive partnerships between U.S. and Chinese investors who are mutually dependent on each other for profitability and access to foreign markets. At the same time, the U.S. military bureaucracy, as well as the U.S.-based transnational firms most dependent on sales to that bureaucracy for its profits, have taken the lead in describing China as a foremost threat to U.S. security interests and to geopolitical stability in the South China Sea (Cox and Lee 2012, pp. 31–55). The extent to which China is perceived as an economic ally of the United States or as a geostrategic threat is often based on the particular orientation of transnational corporate interests. Therefore, transnational corporate policy preferences are mediated and conditioned by the sectoral preferences of transnational capital. One such preference is the interests of the militaryindustrial complex, which involves both cooperation and contestation among sectors of transnational capital in the United States. The “military-industrial complex” is a controversial and contested label within scholarly studies of corporate power in the United States. Domhoff has been critical of this term, going so far as to say the term has no utility because such a broad cross-section of U.S. corporate interests is linked to military spending that there is no specific “military-industrial complex” that exerts weight in policymaking apart from the broader corporate policy establishment (Domhoff 1996, pp. 218–229). There is certainly truth to this proposition. I would not go so far as to say that the military-industrial complex (MIC) makes or even shapes the grand strategic direction of U.S. foreign policy. Such foreign policy is over-determined by a more complex set of corporate interests that see military power as necessary to protect access to global markets. However, there are tactical differences that have long emerged between different fractions of the corporate elite regarding the criteria used to both identify threats to U.S. interests and the tactics needed to oppose those threats. Using the concept of “threat definition” and an assessment of U.S. geostrategic

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politics in the aftermath of the 9/11 terrorist attacks, I assess some of the implications of these differences between sectors of capital for defending the utility of the MIC concept (for further background, see Cox 2014).

The Rising Power of the MIC Post-9/11 The argument advanced here is that defense contractors were active participants in the think tanks and lobbying networks that contributed to how the Bush Administration developed a military response to the 9/11 attacks. To demonstrate this, I examine the connections among military corporations, think tanks and key decision-makers in the Bush Administration after the attacks of 9/11. I also examine the ways in which 9/11 further centralized executive branch power and, in particular, expanded the power of the Defense Department in the aftermath of the attacks. This is especially significant given the close working relationship that military contractors have with the Defense Department bureaucracy. Critical junctures such as the 9/11 attacks contribute to heightened MIC influence in the policymaking process because of a further concentration of power and privilege within the executive branch and a weakening of checks and balances within the federal system. Critical junctures also tend to elevate the opinions of hardliners in the executive branch at the expense of moderates, whose advocacy of approaches to conflict short of full-scale militarization are less effective in providing symbolic value to political elites during a time of strategic crisis. The most effective transmission belt linking military corporations to the Bush Administration was the Project for the New American Century (PNAC) (Gibbs 2004). First, PNAC was established in 1997, and was disproportionately financed and supported by military corporations and oil firms. Ideologically, its membership has close linkages to a history of MIC groups dating back to the Cold War, including the father of neoconservatism Albert Wohlstetter, whose mentorship at the University of Chicago gave rise to several prominent thinkers within the neoconservative movement (Bacevich 2011). Going beyond the realist preoccupation with security measures necessary to maintain preponderance of power within the international arena and to check rival and potentially rival states from ascending in influence, the neoconservative movement borrowed aggressively from the rollback policy positions advocated by right-wing organizations during the Cold War. In fact, the membership of the Committee on the Present Danger, also heavily financed by military contractors during the Cold War period, overlapped with the membership of PNAC as it was established in 1997. The Committee on the Present

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Danger, in both its first iteration in 1950 and its second iteration in 1976, called for an aggressive militarization that would weaken and ultimately help to destabilize or overthrow regimes sympathetic to or aligned with the Soviet Union. Similarly, PNAC called for a global militarization robust enough to effect regime change of rogue states, especially in the Persian Gulf region. The language of the PNAC mirrored the rollback language of the Committee on the Present Danger (CPD), and anticipated a third resurgence of the CPD in 2004. The influence of neoconservatives on the strategic posture of the United States was evident in the Defense Planning Guidance document drafted by Paul Wolfowitz in 1992 during the George H.W. Bush Administration, which called for a dramatic expansion of U.S. militarization on par with the earlier National Security Council Report NSC-68, which advocated a similar robust expansion of militarization in 1950, just before the outset of the Korean War. In fact, the level of continuity of the rollback position in U.S. foreign policy is especially striking here, and the fact that PNAC was very well represented in the Bush Administration and linked to earlier iterations of this position is noteworthy of the longstanding continuity of the MIC sector in U.S. foreign policymaking. Just as with PNAC, the CPD had its greatest influence on policymaking during critical junctures, first during the Korean War of 1950, which provided a pretext for the most dramatic increases in the U.S. military budget in its history, and the perceived gains of the Soviet Union in 1979, including the Soviet invasion of Afghanistan (Hossein-Zadeh 2006; Skidmore 1996). In 1997, PNAC had little direct influence in policymaking, but after the events of 9/11, its former members were elevated in stature as the Bush Administration used its long-time recommendations for full-scale militarization to respond to the 9/11 attacks. In addition to support for substantial increases in militarization, PNAC called quite explicitly for regime change, focusing heavily on the Persian Gulf region, and targeting Iraq as the country whose regime should be toppled to create a domino effect of the toppling of dictators and the rise of pro-U.S. regimes in the region. The interrelationships between PNAC and military contractors is best illustrated by the changing roles of Bruce Jackson, who alternated from being Bob Dole’s campaign advisor in 1996 to executive director of PNAC by 1997, to director of strategic planning for Lockheed Martin. Jackson also founded the Committee to Expand NATO in 1996, a key pillar of Lockheed Martin’s efforts to aggressively promote the exportation of weapons abroad in lieu of post-Cold War reductions in the rate of growth of military spending. Similarly, he founded the Project for Transitional Democracies, advocating an expansion of NATO membership for Eastern European states and

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newly independent states that used to be part of the Soviet Union. By the late 1990s, Jackson was advocating for regime change in the Middle East, as part of PNAC and as a strategic lobbyist for Lockheed Martin. By 2002, and shortly after the 9/11 attacks, Jackson was invited into the office of Deputy National Security Adviser Stephen Hadley to discuss Jackson’s role in founding the Committee for the Liberation of Iraq, which worked closely with former PNAC members who were now in key policy positions within the Bush Administration to help justify an occupation of Iraq in the aftermath of 9/11. Jackson acknowledged that he knew little or nothing about Iraq, but he boasted of the Iraqi exile contacts that his group was able to pull together in his newly emerging organization. These would become a focal point for efforts by administration hardliners to build a case that attempted to link the regime of Saddam Hussein to the events of 9/11 (Cumings 2007). Another right-wing advocacy group that helped provide the policy agenda for the Bush Administration’s response to 9/11 was the National Institute for Public Policy (NIPP), also closely linked to Lockheed Martin and the nuclear weapons industry. The institute advocated the revitalization of a strategic campaign to increase the production and utilization of low-level usable nuclear weapons against terrorist groups that pose a threat to U.S. national security. According to William Hartung, three members of the institute took significant positions with the Bush Administration’s foreign policy bureaucracy, and the director of the NIPP was appointed by the administration to lead the Nuclear Posture Review, which recommended the adoption of most of the NIPP recommendations on increasing the stockpile of low-level nuclear weapons, in addition to creating a newer generation of “low-yield” nuclear weapons that could be deployed and used on the battlefield under scenarios in which the war on terror was expanded to enemy territory. The NIPP, like the PNAC, had very close ties to Lockheed Martin, including the presence of Lockheed Martin executive Charles Kupperman on the advisory board of the organization (Hartung and Ciarrocca 2003). In addition, the lack of fit between the recommendations of the rightwing groups heavily financed and staffed by the MIC and the recommendations made by The National Commission on Terrorist Attacks Upon the United States (the 9/11 Commission) to most effectively fight the war on terror are worth noting. The 9/11 Commission indicated that one of the most important avenues for an effective response to Al Qaeda networks is a robust coordination of intelligence activities across the myriad intelligence agencies that historically had tried to protect their respective turfs in the years leading up to 9/11, which resulted in a lack of shared intelligence that contributed

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to the success of the 9/11 hijackers (The National Commission on Terrorist Attacks Upon the United States, 2004). Intelligence functions, if effective, needed greater coordination and oversight by a central source, which was supposed to be embodied by the newly created post of the Director of Intelligence. However, what has happened since these recommendations has been a further concentration of intelligence functions by the Defense Department, which now controls about 80 percent of intelligence spending. Such an increased concentration of power in the Defense Department has spawned an intelligence network that has become heavily privatized. Concentrated in the beltway, and specifically in northern Virginia, which has received a disproportionate share of post-9/11 funding, the privatized intelligence functions are increasingly carried out by corporations that have a stake in perpetuating the war on terror and the perpetual designation of new enemies. The privatization of intelligence has further expanded the ranks of the MIC into myriad private-sector corporations that have benefited from the widest distribution of intelligence contracts in U.S. defense history, reinforced by the emergence of a very powerful military-intelligence complex that is closely integrated with the profit-making activities of the ten largest U.S. defense firms (Bamford 2009). The Defense Department also expanded its reach into areas, such as aid and development spending, previously controlled much more exclusively by the State Department, and the expansion of Defense Department supervision of the war on terror had become so pervasive by 2006 that it prompted a Senate Foreign Relations Committee Report chaired by Republican Richard Lugar, entitled “Embassies as Command Posts in the Anti-Terror Campaign” (Senate Committee on Foreign Relations 2006). The committee concluded that the Defense Department had begun to usurp the authority and influence of State Department personnel as the U.S. increasingly moved to militarize the war on terror through U.S. embassy compounds, a set of practices that former Defense Secretary Robert Gates argued had gone too far. Furthermore, the allocations of funding for the war on terror have long been highly politicized, with disproportionate funding going to rural areas, and regions and states with low population density. This is partly designed to maximize support for military and intelligence spending within regions and localities that depend on such spending as a high percentage of economic activity. Recent research has exhaustively confirmed a robust relationship between targeting military spending to rural areas and low population–density regions and states as a way to maximize support for a high military budget. In fact, such regions and localities are much more likely to elect representatives who consistently vote for military appropriations, compared with large-scale

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allocations to urban areas where military spending is just one component of overall economic activity (Thorpe 2014). If we chart the distribution of military spending across the United States from the Cold War to the present, the distribution of dollars is far more widespread today across the territorial U.S. than it was at the height of the Cold War, which helps explain the difficulty in forming Congressional coalitions that are willing to challenge high levels of military spending. One way of measuring the plausibility of the MIC as a significant causal factor in U.S. military spending hikes is to examine the “threat definition” used by policymakers and its relationship to the levels of U.S. military spending, especially during the aftermath of critical junctures such as 9/11. The level of escalation of U.S. military spending from 1998 to 2008 is unprecedented in U.S. foreign policy history, despite the fact that the U.S. faced no enemy state with anywhere near the capacity of the former Soviet Union. By 1998, U.S. military spending was already at the average level of spending during the Cold War, and by 2008, the U.S. budget was higher than at any time in Cold War history. The utilization of the MIC concept can best predict the types of weapons systems that received disproportionate shares of funding. Using a database developed by the Project for Defense Alternatives, the largest military spending increases after 9/11 were accounted for by the operations and maintenance budget, and by the modernization of existing largescale weapons systems, most of which were well in place before the events of 9/11 and were justified by a Rogue State Doctrine that was then used as an umbrella strategy for prosecuting a global war on terror (Conetta 2010). For example, the highest line-item on the Defense Wide Agency and Program Funding for 2010 remained the Missile Defense Agency, which received $7.8 billion in budget allocations, second only to Defense Health Programs at $27.9 billion. For the armed services, before and after 9/11, there has been a reliance on large-scale platforms, including big-deck aircraft carriers, intercontinental bombers and stealth fighter jets, that proved problematic, if not useless, for the type of counterinsurgency operations emphasized in the war on terror. As Carl Conetta noted in his study for the Project for Defense Alternatives: “In the decade before the 9/11 attacks, the United States spent over $1 trillion in military modernization. But most of this expenditure proved irrelevant to defending against the most serious attack on America in sixty years. Subsequently, three more years of funding after 9/11 added another $450 billion to modernization accounts, but still the nation found itself illequipped to execute the new tasks it had undertaken: counterinsurgency in Iraq and Afghanistan” (Conetta 2010, p. 10).

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The Ongoing Relevance of the MIC As the Obama Administration left office, military spending levels, while they had tapered off slightly from the George W. Bush years, remained higher on a per year basis than at any time during the Cold War. What explains the resistance to cuts in military spending, despite the absence of an external threat comparable to the Soviet Union, and despite an economic crisis that in the past has led to more significant cuts to the military budget? The first factor is the long-term centralization of power within the executive branch that has occurred as an outgrowth of the Cold War and has been extended and further institutionalized as part of the never-ending war on terror. The centralization of executive branch power has contributed to a threat definition that favors bureaucracies that have disproportionate control over intelligence resources. The Defense Department, by controlling 80 percent of intelligence spending, is able to exert considerable influence over threat definition, and therefore over recommendations for how resources are to be allocated to respond to foreign threats. This also gives military corporations added leverage in decisions pertaining to military spending. As I have documented here, the largest defense contractors have an active engagement in policy-planning organizations that include military contractors and former Department of Defense (DOD) officials. But there is an even more embedded set of institutional relationships that Jerry Harris has documented: The symbiotic relationship between state and industry can be seen in the National Defense Industrial Association (NDIA). An organization with 9,000 corporate affiliates, 26,000 individual members, and no foreign membership. The Association maintains close coordination with the DOD, functioning through 56 chapters and 34 committees, each with direct access and a working relationship with the DOD. Divided up among these contractors is the largest single slice of the Pentagon’s budget. (Harris 2006, p. 129–130) The political strength of military corporations has been further enhanced by their economic consolidation, which allows a smaller number of firms to secure a higher percentage of prime military contracts. The top ten military contractors also are heavily engaged in political mobilization and in the disproportionate financing of think tanks and policy-planning organizations advocating increases in spending for big-ticket weapons items, regardless whether they are appropriate to counter the type of enemies the United

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States is most likely to face over the next decade. In addition, the top military contractors increasingly produce military weapons systems through a supply chain that connects them with other sectors of the corporate economy, which then have a vested interest (at least in the short-term) of supporting military spending increases. Many of the broadest cross-sections of corporate interests, prominent military contractors included, are working inside the “Fix the Debt” coalition, which recommends cuts to the federal budget that are disproportionately focused on entitlements such as Social Security and Medicare, while military spending is spared similar cuts. While progressive groups were arguing for larger cuts in military spending to help spare social programs, the “Fix the Debt” corporate coalition advocated smaller cuts in military spending and much more significant cuts to entitlement programs (Confessore 2013). What is instructive about the “Fix the Debt” corporate coalition is how dispersed its ranks are across just about all corporate sectors, from finance to a range of manufacturing interests to military contractors. The current MIC agenda is being given at least tacit support from a range of non-MIC corporate interests that are in favor of lessening the cuts to military spending while expanding cuts to entitlements. This is primarily due to the overlapping interests of large-scale institutional financial investors and military contractors, as well as the supply chain relationships that link military contractors with a base of manufacturing firms that produce goods for the military. In addition, the ability of military contractors to preserve big-ticket items is further entrenched by institutional and economic relationships between military firms and Congressional power brokers, whose districts include significant military contracts. When those districts are spread out across the country, including to rural and relatively isolated areas that disproportionately depend on defense spending, then military contractors have more leverage in preventing the elimination of weapons systems—even when the Pentagon no longer wants those weapons systems. As of this writing, the Donald J. Trump Administration has assumed office, and in his first Congressional address, Trump is proposing military budget increases of $54 billion, to be matched by an equivalent decrease of $54 billion in non-military discretionary spending. That recipe fits the short-term interests of both the corporations that produce military weapons as well as the interests of corporations and upper-class taxpayers that want to be freed of public-sector regulations and social welfare obligations. The policies represent an extreme continuation of privileging corporate welfare and corporate priorities at public expense, and therefore require additional scholarly analysis and public scrutiny.

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References Bacevich, Andrew. 2011. “Tailors to the Emperor.” New Left Review, May-June, pp. 101–124. Bamford, James. 2009. The Shadow Factory: The NSA from 9/11 to the Eavesdropping of America. New York: Anchor. Conetta, Carl. 2010. “Undisciplined Defense.” Project for Defense Alternatives, January 18, pp. 1–63. Confessore, Nicholas. 2013. “Public Goals, Private Interests in Debt Campaign.” New York Times, January 9, p. A1. Cox, Ronald W. 2008. “Transnational Capital, the U.S. State and Latin American Trade Agreements.” Third World Quarterly, Vol. 29 (8), pp. 1527–1544. Cox, Ronald W. 2012. “Corporate Finance and U.S. Foreign Policy,” in Corporate Power and Globalization in U.S. Foreign Policy, ed. Ronald W. Cox. New York: Routledge, pp. 11–28. Cox, Ronald W. 2014. “The Military-Industrial Complex and U.S. Military Spending after 9/11.” Class, Race and Corporate Power, Vol. 2 (2), pp. 1–20. Cox, Ronald W. and Daniel Skidmore-Hess. 1999. US Politics and the Global Economy: Corporate Power, Conservative Shift. Boulder: Lynne Rienner. Cox, Ronald W. and Sylvan Lee. 2012. “Transnational Capital and the U.S.-China Nexus,” Pp. 31–55 in Corporate Power and Globalization in U.S. Foreign Policy, ed. Ronald W. Cox. New York: Routledge Press. Cumings, Richard. 2007. “U.S.: Lockheed Stock and Two Smoking Barrels.” Corpwatch, January 16. http://www.corpwatch.org/article.php?id=14307 Davis, Gerald. 2016. The Vanishing American Corporation: Navigating the Hazards of the New Economy. New York: Berrett-Koehler Publishers. Dreiling, Michael. 2000. “The Class Embeddedness of Corporate Political Action: Leadership in Defense of the NAFTA.” Social Problems, Vol. 47 (1), pp. 21–48. Domhoff, G. William. 1996. State Autonomy or Class Dominance: Case Studies on Policy Making in America. New York: Walter de Gruyter, Inc. Domhoff, G. William. 2014. “The Council on Foreign Relations and the Grand Area: Case Studies on the Origin of the IMF and the Vietnam War.” Class, Race and Corporate Power, Vol. 2 (1), pp. 1–41. Ferguson, Thomas. 1996. Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems. Chicago: University of Chicago Press. Gibbs, David. 2004. “Pretexts in U.S. Foreign Policy.” New Political Science, Vol. 26, (3), pp. 293–321. Gilens, Martin and Benjamin Page. 2014. “Testing Theories of American Politics: Elites, Interest Groups and Average Citizens.” Perspectives on Politics, September, Vol. 12 (3), pp. 564–581. Harris, Jerry. 2006. The Dialectics of Globalization: Economic and Political Conflict in a Transnational World. Boston: Cambridge Scholars Publishing. Hartung, William and Michelle Ciarrocca. 2003. “The Military-Industrial Think Tank Complex.” Multinational Monitor, January-February, pp. 17–20. Hossein-Zadeh, Ismael. 2006. The Political Economy of U.S. Militarism. New York: Palgrave Macmillan. Kotz, David. 2015. The Rise and Fall of Neoliberal Capitalism. Cambridge, MA: Harvard University Press.

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LaFeber, Walter. 1998. The New Empire: An Interpretation of American Expansion 1860–1898. Ithaca: Cornell University Press, 35th Anniversary Edition. Layne, Christopher. 2007. The Peace of Illusions: American Grand Strategy from 1940 to the Present. Ithaca: Cornell University Press. Mair, Peter. 2013. Ruling the Void: The Hollowing Out of Western Democracy. London: Verso. Moreton, Bethany. 2010. To Serve God and Wal-Mart: The Making of Christian Free Enterprise. Cambridge, MA: Harvard University Press. Olmstead, Kathryn S. 2015. Right Out of California: The 1930s and the Big Business Roots of Modern Conservatism. New York: The New Press. Page, Benjamin and Jason Barabas. 2000. “Foreign Policy Gaps between Citizens and Leaders.” International Studies Quarterly, Vol. 44 (3), pp. 339–364. Prechel, Harland. 1997. “Corporate Transformation to the Multilayered Subsidiary Form: Changing Economic Conditions and State Business Policy.” Sociological Forum, Vol. 12 (3), pp. 405–439. Senate Committee on Foreign Relations. 2006. “Embassies as Command Posts in the Anti-Terror Campaign,” December 15. Report from the 109th Congress, 2nd Session, pp. 109–152. Skidmore, David. 1996. Reversing Course: Carter’s Foreign Policy, Domestic Politics and the Failure of Reform. Nashville: Vanderbilt University Press. Streeck, Wolfgang. 2017. Buying Time: The Delayed Crisis of Democratic Capitalism. London: Verso, 2nd Edition. The National Commission on Terrorist Attacks Upon the United States. 2004. Washington, D.C.: The U.S. Government Printing Office. Thorpe, Rebecca. 2014. The American Warfare State: The Domestic Politics of Military Spending. Chicago: University of Chicago Press. van Appeldoorn, Bastiaan and Nina de Graaf. 2016. American Grand Strategy and Corporate Elite Networks: The Open Door and Its Variations Since the End of the Cold War. London: Routledge. Williams, William Appleman. 2009. The Tragedy of American Diplomacy. New York: W. W. Norton, 50th Anniversary Edition.

Section Four

The Power Elite and Their Opponents

Who Challenges the Power Elite? Labor Factions in 20th-Century America

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G. William Domhoff ’s contributions to power structure research have evolved over time and increasingly provide a compelling perspective on corporate dominance, political outcomes, and social inequality. A major component of his understanding of ruling class influence over political outcomes is the idea that class factions matter. Northern business interests have historically conflicted with those of Southern planters and with local growth coalitions. Understanding the waxing and waning of their coalitions and rivalries is crucial in explaining major political outcomes. The ruling class’s legitimacy and its command of economic resources are not automatic; they must be established and re-established. The labor movement has been its biggest and most continuous challenger. The U.S. labor movement for much of its history has, like the ruling class, been divided into factions. These factions also matter. Not only do they matter to the workers they represent, but also their relative strength impacts capitalist factions’ decisions, strategies, and ability to accomplish their agendas. Labor and capital necessarily challenge each other, but neither is monolithic. Hence their struggles are factional. Both labor and capital tend to divide between more

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moderate and radical factions (as a result of material and ideological differences); interclass conflict is subsumed by the interplay of these factions. The prominence of one labor or capital faction may reflect or be the results of intra-class conflicts and struggles as well as outcomes of conflict with factions across the class divide. For instance, moderate labor factions have at various historical moments leveraged the success of radical factions to win concessions from ruling class factions. We turn to the labor struggles of the 20th-century United States to demonstrate the intricacies and importance of factional divisions in labor and the ruling class and their effects on strategies, tactics, and outcomes.

Domhoff’s Model One of the most important insights in Who Rules America? is that, while political power in the United States is concentrated in the ranks of the economic elite, the latter is not monolithic. Indeed, the history of U.S. politics is not only (or perhaps not mainly) a history of class conflict, but also a history of intra-class conflict. This insight is represented in Domhoff ’s discussion of conflicts between moderate and ultra-conservative wings of the policyplanning network and in ongoing discussions of the shifting coalitions and factional interests represented in the Democratic and Republican parties. Both Democratic and Republican parties and politicians are significantly financed by the power elite and, importantly, produce and support policies that reflect this reality. Yet the interests of various sectors of capital are diverse. These diverse interests coalesced into two rival factions in 20th-century U.S. politics—“the spending coalition” housed in the Democratic Party and representing agribusiness in the South and Southwest and urban real estate and development interests (local growth) across the country; and the “conservative coalition” based on the shared interests of Northern and Southern employers and housed primarily (and entirely by 1990) in the Republican Party. Legislative competition between these coalitions focused primarily on conflict on spending and taxation. In Domhoff ’s view, the liberal-labor alliance, though sometimes aligned with the spending coalition, presents the most significant counterweight to the pro-capital policies of both corporate coalitions. The liberal-labor alliance consists of “union leaders, locally based environmental organizations, most minority-group communities, liberal churches and liberal university communities” (Domhoff 2006, xiv) and is represented in the liberal (and marginal) wing of the Democratic Party. We are focused here on how labor’s

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factions (both ideological and sectoral) interacted with capital’s factions and the state to impact economic and political outcomes.

Early Labor History—the AFL and Its Radical Rivals The American Federation of Labor (AFL) emerged in 1886 as the Knights of Labor (KoL) rapidly declined in the wake of failure and violence associated with the railroad and general strikes of 1886. Though the early years of the AFL included major defeats in manufacturing, it made significant headway in other less centralized industries in which worker replacement costs1 were higher (Kimeldorf 2013). Following years of violence and moderate success, the AFL received a brief reprieve as corporations rose in power and a moderate corporate faction emerged in the aftermath of the Panic of 1893 and ensuing depression (Roy 1997). The AFL grew to more than 500,000 by 1900 (Wolman 1924). Though the AFL was the only major national union organization in 1900, over the next 30 years several competitors arose, most notably the Industrial Workers of the World (IWW), the Trade Union Unity League (TUUL), and the Congress of Industrial Organizations (CIO). Though all had the goal of organizing industrial workers, they had distinct organizational structures, ideologies, and strategies. The AFL, in many ways, was a significantly more conservative organization than the union organizations that preceded it and that it preceded. Its conservatism was rooted in its selective membership and had significant impacts on its strategies and interaction with capital. The AFL’s unions, unlike the KoL before it or the CIO and others that came after, organized predominantly skilled workers by craft occupations. Though long dogged by its seemingly class-conscious 1901 constitution, which described the “struggle between the oppressors and the oppressed of all countries, a struggle between the capitalist and the laborer,” the AFL was more accurately described by its philosophy of “pure and simple unionism.” For the most part, it fought for better wages, better working conditions, and fewer hours and did not adopt a coherent class-based strategy. As such, it avoided political movements, and many of its member unions limited or prohibited memberships of Marxists, Communists, and anarchists. In reaction to management tactics to replace striking workers with cheaper immigrant labor, the AFL also adopted a strong nativist streak (Mink 1986). Still its tactics (coordinated, targeted strikes and boycotts) and demands against employers were confrontational. However, the rise of industrial corporations at the end of the 19th century (a response to the Sherman Antitrust

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Act, the Depression, and pressures from striking workers) had convinced many within the AFL that work stoppages and boycotts were inadequate in the face of these new corporate powers (Brody 1980). In response, they began bargaining with burgeoning employer associations such as the National Civic Federation (NCF). These new corporate moderates were willing to bargain (to a point) with the narrowly defined skilled craftspeople represented by AFL unions to stabilize competitive industries (while also continuing to deskill labor whenever possible) (Swenson 2002; Domhoff 2013 online). The NCF represented a moderate corporate faction that accepted the conservative unionism of the AFL (AFL President Samuel Gompers was the first vice president of the NCF) as a means of rationalizing the emergent corporate order and preventing the expansion of socialist organizing (Griffin, Wallace and Rubin 1986). Between 1900 and 1905 the AFL almost tripled its membership (a gain of approximately a million members) (Galenson and Smith 1978). Accommodation by capital (in the form of bargaining) represents a capitulation to the real power of AFL unions. What was the source of AFL union power? The craft unions derived their primary power from monopolies of knowledge (Montgomery 1979). Through union apprenticeship programs, union workers developed and maintained crucial production knowledge outside employer purviews. Apprenticeship programs also vetted potential new members and fostered their loyalty to the union and solidarity with other union members. Highly developed apprenticeship programs then made it very difficult to replace unionized craft workers and made strikes especially effective (providing an incentive for employers to avoid and settle them when possible). The International Typographical Union (ITU) provides an informative example of this dynamic.2 With its origins in 19th-century printing guilds, the ITU maintained three- to six-year apprenticeship for printers. The apprenticeship weeded out the disloyal, socialized new printers into the fraternity, and kept knowledge of a complex production process in union hands (King 1897). So, if a newspaper, for example, needed a typesetter, it had little choice but to hire a union worker. Even when the linotype machine was introduced in 1882, skills necessary to work the machine were maintained within the union. By the 1890s, in some cities, unionized journeymen had almost complete monopoly on printing, with more than 90% unionization (Zerker 1982). Newspapers and publishers had no choice but to draw from a unionized labor pool. One testament to the ITU’s strength was the willingness of employers to engage in bargaining at all. As the president of the Printing Pressmen’s union, a subordinate of ITU, reported at the 1899 ITU conference: “Formerly, employer and employe [sic] got together with a club; now they meet in a

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friendly and businesslike way” (Tracy 1913, p. 565). Perhaps the most powerful demonstration of its strength was the massive 1906 national strike for the eight-hour working day; with two years of preparation and more than $4 million the ITU resisted court injunctions, replacement by country printers, and European immigrants to establish a national eight-hour day for ITU printers (Tracy 1913). Though many AFL unions would see their progress halted or reversed in the coming decades, the ITU held strong. Other notable exceptions included: mining (United Mine Workers [UMW]), steam railroad unions (railroad brotherhoods, locomotive engineers, locomotive firemen, railroad conductors, and trainmen), and the transportation and building trades (United Carpenters and Brotherhood of Electrical Workers) (Wolman 1924), craft unions that mainly confronted non-manufacturing capital and local growth coalitions. As AFL unions made progress in the early 1900s, several major employers, such as U.S. Steel, began to reject interference in the “management of business” by breaking agreements and crushing strikes with force. Others were quick to follow. By 1903 the National Association of Manufacturers (NAM) adopted a vehement anti-union stance, the open shop movement (later The American Plan), and quickly became the largest and most outspoken opponent of unionism in the United States (a position it maintained through most of the century) (Wakstein 1969; Workman 1998). At the same time, the use of scientific management (“Taylorism”), introduction of machinery, and the de-skilling of labor intensified. If the AFL’s craft unions had their strength in a monopoly of knowledge, the goal of Taylorism was to break (and invert) this monopoly by analyzing the work process and breaking it down into discrete parts that require less skill (Montgomery 1979). A 1916 editorial of The International Molders’ Journal (the Molders’ Union journal) expressed the threat to craft workers: The one great asset of the wage-worker has been his craftsmanship . . . . [T]he greatest blow that could be delivered against unionism and the organized workers would be the separation of craft knowledge from craft skill . . . . Any craft would be thrown open to the competition of an almost unlimited labor supply; the craftsmen in it would be practically at the mercy of the employer. (Frey 1916, p. 365) Going on the offensive, employers pushed for open shops and de-skilled labor, and made efficient use of court injunctions, effectively slowing the AFL’s growth until World War I.

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When the IWW and the TUUL emerged in the first quarter of the 20th century (1905 and 1920,3 respectively) they represented serious alternatives to the AFL model. Both organizations were explicitly political, radical, and organized along industrial lines. The IWW was founded by radical socialists, anarchists, and Marxist trade unionists in direct, intentional opposition to the AFL. Like the KoL before it, the IWW organized workers regardless of craft or trade, maintained a decentralized organization, and envisioned the general strike as labor’s most powerful tool. Not only did it focus on industrial unionism and militant direct action, but also on inclusiveness, as it welcomed women, immigrants, African Americans, Jews, Latinos, and Asian Americans into its ranks. The organizing goals of the IWW went beyond the AFL’s “pure and simple” unionism as well, fighting for shop-floor control and eschewing collective bargaining (Brissenden 1920). Though the IWW had some significant victories and organized a peak of 100,000 members, its position against signing collective bargaining contracts made it difficult to retain gains. Combined with intense state repression, including subterfuge, mass arrest, violent confrontation, murder, and execution, especially during World War I, and an internal schism, the IWW as an important labor organization was not long for this world. By 1930 the IWW counted only around 10,000 members nationwide (Siitonen 2005). World War I represents an important moment in the factional success of union organizing. Again, changing needs of capital allowed for limited incorporation of the moderate-conservative AFL coupled with extreme repression of radical-left unionists. Increased production needs, loss of immigrant labor, and an expansion of federal economic involvement created an opportunity for strike leverage of which many AFL unions took advantage (Dubofsky and Dulles 2010). The war needs made the AFL a necessary partner in production. Responding to labor unrest at the outset of the war, Wilson created the National War Labor Board (NWLB), charged with mediating labor disputes and smoothing corporate/labor relations. The board consisted of ten members: five picked by the AFL and five by the National Industrial Conference Board (NCIB), a moderate corporate association.4 Bolstered by wartime production and the NWLB, the AFL grew from around 2 million to more than 3.5 million between 1916 and 1919. At the same time, radical and socialist unionists (particularly from the IWW), under charges of espionage and sedition, were being jailed by the hundreds or thousands in at least one case (Dubofsky 1994; Shor 1996). However, the success of the AFL was fleeting. In 1919, following the war, one in five workers struck as post-war employers refused to recognize or bargain with unions. This unrest is perhaps most spectacularly illustrated in the

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1919 Seattle general strike in which 65,000 workers virtually shut down the city for five days. Labor unrest was then, with the help of NAM and its media allies, presented as evidence of a socialist revolution, hence the post-war Red Scare was turned against unions (Piott 2011). Employers branded unionists as Bolsheviks, attacked picketers, disrupted union meetings, and made extensive use of black strike breakers. The Palmer Raids continued wartime repression of leftists and radicals, deporting hundreds and arresting thousands of unionists. Though President Wilson publicly advocated for good-faith bargaining and the recognition of unions, the war was over. And in the case of the highprofile 1919 steel strike, the justice department and national guard intervened on behalf of employers to break the crucial 1919 steel strike, signaling an end to wartime federal labor support (Brecher 1997; Dubofsky 1994). The 1920s would not be characterized by repression of the left labor factions and compromise with moderate labor, as had been the case during the war. Rather, this period would see repression of the radical left in combination with a mass offensive against labor of all stripes. Not initially a rival to the AFL, the Trade Union Educational League (TUEL) was formed in 1920 in the midst of extreme labor and left repression, by a small group of socialists, Communists, and former Wobblies (as members of the IWW were known). Its goal was radicalizing existing union locals and replacing their leadership through “boring from within.” Beginning in 1922, TUEL was subsidized by the Communist Party of America (U.S. affiliate of the Communist International) and could intensify its efforts. Because boring from within proved ineffective, leaders expelled from the AFL formed a rival federation, The Trade Union Unity League (TUUL), in 1929. Like the IWW, TUUL organized mainly unskilled workers across industries (its biggest success was in light manufacturing) and across race and gender lines (particularly focused on organizing African Americans), incorporated radical union democracy, and advocated class struggle through prolific use of strikes and direct action ( Johanningsmeier 2001). Before dissolving in 1935,5 even with a peak membership of 74,000, TUUL presented a radical challenge that capital found to be much less desirable than bargaining with the simple unionism of the AFL (Weir 2013). Though neither the IWW nor TUUL ever gained membership approaching the scope of the AFL, they laid significant groundwork for the emergence and success of the CIO. Over the next twelve years the NAM, in cooperation with Republican administrations and the NCF, instituted “the American Plan” to replace closed and union shops with open shops and successfully roll back most of the AFL’s organizing gains. The American Plan was a sophisticated strategy that consisted of several tactics: 1) reduce class solidarity through pitting native and

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immigrant workers against each other, rapidly expanding mechanization, and utilizing paternalist company unions or welfare capitalism; 2) weaken the organizational capacity of workers with espionage, bribery, political lobbying, and the creation of alternatives to craft apprenticeships; 3) decrease the efficacy of strikes and collective action by providing strike-breakers and monetary support to employers, and use police, militias, and “private agents” to repress, suppress, and break strikes; and 4) manipulate the political system to legally constrain unions, in particular radicals (Griffin, Wallace and Rubin 1986; Wakstein 1969; Davis 1975). As a result, union density in the United States dropped from 18.4% to 12.3% between 1920 and 1930 (Galenson and Smith 1978).

Labor’s Ascendency—CIO, AFL, and the State Amid the Great Depression’s devastation, labor and unemployed insurgency spurred a legislative response: FDR’s New Deal and its strong labor provisions, which in turn, played an important role in the coming labor insurgence. First, the symbolic power of the 1933 National Industrial Recovery Act (NIRA), particularly section 7(a),6 granting unions the right to bargain on behalf of workers “free from interference,” and most importantly the passage in 1935 of the National Labor Relations Act (NLRA, Wagner Act), which extended the rights granted in the NIRA and added enforcement through the creation of the National Labor Relations Board (NLRB), were transformational for labor. To be clear, as much as the NIRA and NLRA were a victory for labor (one that required maintained vigilance), they were also in line with efforts of moderate corporate elites over the previous decade to “rationalize” labor relations and end disruptions to production. Our understanding closely resembles the one presented by Goldfield (1989, p. 1269), that New Deal legislation was the . . . result of interaction between labor movement growth and activity, the increasing strength and influence of radical organizations, particularly the Communist party, liberal reformers with both immediate and historical corporate ties, and government officials (or state managers) with primary concern for preserving social stability and assuring the continued electoral success of the Roosevelt-led Democratic Party. Empowered by the legislation, growing dissent, new successes, and the wartime boom, the ensuing decades would prove an unprecedented period of union innovation and growth.

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In the weeks following the passage of the NLRA, both capital and labor responded. The corporate community, having been dealt a major blow by the legislation, launched a multi-faceted attack against unionization, including restructuring “employee representation plans” and company unions to maintain their legality, challenging the constitutionality of the bill, obtaining injunctions to block the enforcement powers of the NLRB, and finally, preparing for significant suppression of labor organizing and action (Lichtenstein 2002; Domhoff 2013 online).7 Workers responded with action. Work stoppages increased significantly in 1936, including some of the first sit-down strikes in the automotive and rubber industries (Lichtenstein 2002). Despite early success, AFL leadership did not immediately attempt to capitalize on the legislation or new labor militancy. AFL reluctance hastened an internal debate rooting back to the mostly failed strike wave of 1933–34. At the forefront of this debate were John L. Lewis of the UMW and Sidney Hillman of the Amalgamated Clothing Workers, who both argued forcefully for the industrial organization of workers irrespective of skill or tradition. Following the now infamous “small potatoes” argument in which Lewis punched an AFL opponent to his industrial appeal, Lewis, Hillman, and others formed the Committee for Industrial Organization (still under the auspices of the AFL) in the fall of 1935. From its inception, the CIO enunciated broad ambitions to organize the mass of industrialized workers on a class basis. John L. Lewis, no radical himself,8 recognized that the AFL had far too few experienced organizers and appealed to and later hired Communists, socialists, and former Wobblies to assist in the new organizing efforts. The CIO was officially ousted from the AFL in 1937 under charges of “fomenting insurrection” and dual-unionism and reconstituted itself as the Congress of Industrial Organizations. It differed from the AFL on many critical dimensions. The AFL focused its organizing on strictly delineated, skilled crafts, whereas the CIO organized by industry. The federations represented different, but overlapping, factions of the working class. Their difference in organizing orientation had long-lasting impacts on their ideologies, tactics, and strategies. The CIO moved beyond simple unionism and incubated class consciousness, including (with restrictions and reservations) radicals, Communists, and socialists rather than ousting them. Communists in CIO unions, who competed with more centrist-unionists, went on to play an integral role in the success of the CIO; by broadening issues subject to negotiation and incubating rank-and-file democracy, Communist-led and democratic CIO unions created a potent class-based solidarity and unique political culture that proved extraordinarily successful in labor struggles (Stepan-Norris and Zeitlin 2003). In addition to its ideological diversity, the CIO was more inclusive;

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it organized across race and gender divisions, undermining employers’ divide and conquer tactic. Tactically, the CIO embraced and made extensive use of the highly effective sit-down strike and solidarity actions. Though the AFL had offered tacit support for the tactic when it had worked for the rubber workers in 1936, when it became associated with industrial unionism (in violation of AFL jurisdictions), AFL President William Green condemned sit-down strikes as illegal, unpopular, and bound to lead to further repression (Pope 2006). Still, some AFL locals engaged in the tactic. Lastly, the CIO engaged in electoral politics in a way that the AFL had never done. Bitter rivals until their eventual merger in 1955, both federations experienced unparalleled growth and success (and period setbacks) over the course of their rivalry. The 1936–1937 UAW-CIO fight with General Motors provides a spectacular and emblematic example of who, how, and for what the CIO fought. At the time, GM was the largest, most profitable corporation in America. Across the country, in more than 100 production and assembly plants, GM employed more than 250,000 people (Fine 1969). In the mid-1930s, GM was the second biggest contributor to NAM and as a flagship member carried out NAM’s antiunion strategy to a T: incorporating paternalism, repression, strikebreaking, and state support (Fine 1969). Work at GM was often seasonal (long, hard work in the winter and spring followed by long periods of unemployment) and subject to “speed-up” and idiosyncratic supervision. The shop floor in GM plants could be fairly characterized as mini-dictatorships—“[f]oremen and other managers had the unfettered right to discipline, fire, lay off and rehire at their own discretion” (Lichtenstein 2002, p. 49). Thus, CIO unionists fought not only for standard of living issues (wages, hours, benefits), but job security and shop floor control. In 1936 and ’37, UAW unionists struck against GM, in Flint, Michigan, and its subsidiary plants, across the country. The center of the action was Flint, where GM employed more than 45,000 workers. In the past, industrial strikes and picketing were often broken by police and hired thugs who allowed worker replacement with scabs. This time workers sat down at their work stations. Replacement, therefore, required a confrontation between every replacement worker and striking worker. Whereas replacement workers are normally willing to risk conflict at picket lines (with help from company guards) they are usually not willing to forcibly remove a striking worker from their workstation. Though used previously, the UAW pursued the sit-down on a scale not seen before, shutting down multiple plants for six weeks (combining the powerful strategies of sit-down strikes and solidarity strikes). The strikers occupied the factories, halting production entirely,9 and shielding themselves from confrontation with police and strikebreakers. Inside the factory, sit-down strikers formed strong bonds and

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developed critical solidarity. The workforce at GM was segregated and only one African American participated in the sit down, but hundreds of black workers (many Communists) joined picket lines to support the occupiers. The Women’s Emergency Brigade, composed of female workers as well as the wives and family members of male strikers, also provided critical support. Additionally, the electoral activity of the CIO paid off as Democrats, President Roosevelt, and Michigan Governor Murphy withheld federal and state troops from breaking the strike.10 In February 1937, GM and the UAW reached an agreement that made the UAW-CIO the sole bargaining voice for GM employees. The contract was short, only four pages, and covered just six months, but it opened the door to future negotiations and represented a huge symbolic victory. Although most Americans supported unions at the time, with polling data showing that 72% “approved of unions” (Gallup 2017), many in Flint and around the country had stood on the sidelines during the strike, fearful of retaliation. Inspired by the Flint victory, millions of workers left the sidelines and joined the growing movement. In 1937 alone, 5 million workers engaged in industrial action, including 400,000 workers participating in 477 sit-down strikes11 (more than 10% of all strikes that year), and nearly 3 million joined unions across the United States (Fine 1969; Newsinger 2010; Lichtenstein 2002). Much of the new organizing was hard fought by workers, but employers too could see which way the wind was blowing and many (including the infamously anti-union U.S. Steel) raised wages and/or recognized unions in efforts to avoid the kinds of confrontations happening around the country. The CIO was not the only federation to gain members; not counting the loss of CIO unions, the AFL gained members in 1937 as well. Although both federations gained members, between 1937 and the 1955 merger, the AFL enrolled more workers and increased its relative density (Stepan-Norris and Southworth 2010). Despite the early explosive growth of the CIO, there are several reasons the AFL could outpace CIO growth during and following World War II. The first major setback for the CIO was the 1938 NLRB v. Fansteel decision, in which the Supreme Court declared that the NLRB could not legally enforce strike protections for sit-down strikers, who, per the decision, were in violation of the law. The decision significantly restricted the use of the highly effective CIO tactic. The emergence of the CIO was also accompanied by intense opposition and competition from the AFL. This rivalry spurred growth in the AFL and impacted CIO growth in several ways: 1) The jurisdictional innovation of the CIO was adopted by the AFL. The AFL both chartered its own industrial unions and authorized existing craft unions to

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organize along industrial lines (Roberts 1971); 2) Employers sometimes welcomed AFL unions as a preferable alternative to CIO organizing,12 going as far in some instances as offering sweetheart deals to AFL unions (Babson 1999); and 3) AFL made cross-class alliances to push anti-CIO legislation. The AFL partnered not only with Republican legislators and anti-labor Southern Democrats, but NAM itself as well to revise the Wagner act and undermine the NLRB (Swenson 1997; Gross 1981). The surprising alliance produced legislative and judicial change, which ultimately culminated in the Taft-Hartley Act almost a decade later.13 Finally, the AFL’s traditional craft unions were increasingly successful in creating regional labor monopolies that secured employment and confronted urban growth coalitions and were more insulated from business cycle effects (and grew rapidly in the mid-century) than the CIO’s industrial unions (Lichtenstein 2002). Though the union movement began to stall in 1940, World War II represented another moment of relative peace between management and labor, allowing for a renewed period of growth. The war both increased industrial demand and decreased the labor force (to the point of pulling women and African Americans into previously closed sections of the economy out of necessity), creating an extremely tight labor market.14 Thus, unions were able to assert new pressure on employers. To maintain manufacturing efficiency, Roosevelt re-established the National War Labor Board. The NWLB came to adopt a compromise between capital and labor, in which unions pledged not to strike in exchange for a “maintenance of membership” provision whereby new workers would be required to maintain the union membership once they joined (they were given a yearly opportunity to opt out). Additionally, there were wage and price freezes; although the former was enforced, the latter largely was not (BLS 1950). This led to an accumulation of wage grievances that would culminate in a national strike wave after the war. However, between 1937 and 1945, both federations grew enormously, and for the most part so did workers’ wages, benefits, and standards of living (Zeiger 1995; Stepan-Norris and Southworth 2010).15

Taft-Hartley, the AFL-CIO, and the “Accord” At the end of World War II, approximately 35.4% of the non-agricultural workforce was unionized, the liberal-labor alliance and moderate corporate elites had forged a form of corporatism exemplified in tripartite negotiations, and labor was enjoying unprecedented power. This situation, like the one during World War I, was quick to change. A complex set of circumstances (most

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immediately, inflationary pressures and a large strike wave) turned the tables on labor. When other tactics (reduce solidarity, repress organizing, breaking strikes) failed to stem the tide of organizing, corporate elites made use of a fourth tactic, legislative action. In 1946, Republicans gained control of both houses of Congress for the first time since 1930 and finally had the power to pass the NAM-sponsored amendments to the Wagner Act. Overriding Truman’s veto, Taft-Hartley was passed in 1947. It’s hard to overstate the long-lasting impact of Taft-Hartley on labor organizing in the United States. In addition to extending the sit-down strike ban of the Fansteel decision,16 the bill outlawed many crucial tactics of both the CIO and AFL, including sympathy strikes and secondary boycotts, protests, and pickets.17 It also prohibited closed shops (contractual obligation for employer to only hire union members, which reduces worker divisions, and increases unity and unions’ bargaining leverage), restricted union shops, and allowed for states to pass right-to-work laws. The law also reversed the Wagner Act’s requirement of employer neutrality, therefore allowing employers to express opposition to unions. These provisions later became the bedrock of employer attempts to eradicate unionism in the United States. Lastly, Taft-Hartley required union leaders to sign and submit affidavits denouncing the Communist Party and affirming they had no connection to any organization with aims to overthrow the U.S. government. Despite the legislative loss, unions continued to enjoy popular support (Gallup 2017). But by removing crucial union-organizing tactics, Taft-Hartley virtually guaranteed that unions would be severely limited in organizing new industries or expanding gains in previously organized ones. The sit-down strike was crucial to CIO industrial organizing success, and sympathy organizing was an invaluable tool for many unionizing efforts (Fantasia and Voss 2004). The anti-Communist provision intensified long-standing internal divisions in the CIO and ultimately resulted in the expulsion of some of its most successful unions. Perhaps as importantly, the radical left in the CIO played a central role in linking the union struggle to class struggle, the feminist movement, and the black freedom struggle. By expunging this element from the mainstream labor movement, it became more conservative and less willing to engage in the big leftist struggles of the next half-century. The labor movement’s organizational strength was crippled, and union density (percent of workers organized) has been on the decline since 1954. By the mid-1950s the CIO had been purged of its radical elements and tactically crippled. The AFL had long ago accepted and adopted industrial unionism. The federations’ rivalry had cooled to barely a simmer; there was no longer a reason to remain separated. The AFL and CIO merged in 1955,

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essentially reducing the U.S. labor movement to one faction. This was amid what some have termed the “labor-management accord” (1945–1980). Characterized by soft corporatism and formalized, rational (predictable) negotiations and a coupling of corporate growth and the wages of working people, this accord only existed in core industrialized sectors, if it existed at all. Meanwhile, workers in industries with intense domestic competition and/or weak unions (either historically or because of the Communist purge) fell behind those in core industries as unions failed to organize new or increasingly relocated plants, or lacked the strength to resist cuts. African American and Latino men18 who were more likely to work in marginal firms, and women who were more likely to work episodically or in domestic labor, were cut out of the firm-centered bargaining system and failed to see the same regular raises or benefits. Even so, what little accord there was, it would be decimated in the next decades.

The Neoliberal Period, Employer Offensive, and Private/Public Split Profitability in U.S. manufacturing began to seriously decline in the 1970s as international competition increased and stagflation wracked the market (Harrison and Bluestone 1990). Labor already weakened by the past three decades of stagnation was further threatened by the increasingly real threat of offshoring manufacturing altogether. Craft unions, though many were isolated from the threat of offshoring, faced existential threats from mechanization and computerization. The ITU, for example, was decimated by technology. Though the ITU had adapted to technological change and maintained monopoly over skill before, the introduction of cold type printing processes in the 1970s and computerized printing in the 1980s combined with the monopolization of newspapers was too much to bear. Grasping what little strength they had left, ITU locals secured “job guarantee” contracts. These contracts protected the jobs of current union workers in exchange for ceding control of technology implementation to management, and thereby virtually eliminated future union work (McKercher 2002). Taking advantage of this environment, employers nationwide went on the offensive. Expanding the bounds of employer free speech, large corporations began employing a cottage industry of consultants who mastered industrial propaganda discouraging union organizing. Consultants also provided legal strategizing and representation to maximize anti-union activities to the limits of the law and beyond (calculating when breaking the law via suppressing

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unionization was economically sound). This problem was exacerbated by electoral victories that resulted in anti-union NLRB appointments that severely rolled back employer penalties, gave employers even more leeway in “free speech,” and further restricted what constituted eligible areas for collective bargaining. Right to work laws spread out of the South and into the Sun Belt and eventually the heart of the industrial Midwest, further economically and organizationally destabilizing unions across the country. Union density had been on the decline in the United States since 1954, but the AFL-CIO had still managed to slowly and steadily maintain gains in absolute numbers through the 1960s and held steady throughout the 1970s. However, beginning in 1980, because of the intensification of anti-union tactics in combination with globalization, mechanization and computerization, overall membership began to decline, drastically escalating the fall in union density (StepanNorris and Southworth 2010). As employers propagandized against unions and fewer American workers had any experience with unions (and many that did had little more than bureaucratic experience), support for unions fell as well, reaching a low of only 48% approval in 2009 (Gallup 2017). Led by the Service Employees International Union (SEIU), a large activist faction of unions separated from the AFL-CIO in 2005 as the Change to Win Federation. But their efforts went nowhere, and by 2009 several of its largest affiliates reunited with the AFL-CIO. At this point in the neoliberal era, the largest factional division in U.S. labor is probably best characterized as a public-private split. As of 2015, only 6.7 percent of private-sector workers belong to a union, whereas 35.2 percent of public-sector workers do (Dunn and Walker 2016). Private-sector unions have been reduced to one of many liberal interest groups whose support of the Democratic Party is repeatedly unrequited, but until recently public-sector unions enjoyed large growth. Still unified under one “house of labor,” the AFL-CIO has attempted over the past two decades to broaden the labor movement and incorporate various social movement tactics and causes. It remains unclear what effect the factional divide between public- and private-sector unions has or will have on their strategy or politics moving forward. It is clear, however, that the corporate community has adjusted their strategies to address the rise of public-sector unions. Until mid-century, federal, state, and local government organizations were not obliged to engage in collective bargaining. Following in the footsteps of New York City Mayor Robert Wagner, Jr., in 1962, John F. Kennedy issued an executive order granting union rights to federal employees. States and municipalities then passed similar statutes throughout the 1960s and 1970s. Because unionizing in the public sector is very different than in the private sector, following

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the changes in legislation, public-sector union density increased quickly and dramatically. By 1980, more than 35% of public employees were union members, holding steady through the 2000s. However, following the financial crisis in 2008, Republican-led legislatures and governors around the country, most notably in Wisconsin, Indiana, New Jersey, and Ohio, passed bills voiding collective bargaining agreements and/or severely limiting the ability of public-sector unions to organize. In Wisconsin, for instance, union membership dropped from 14.2% in 2011 to 8.3% in 2015 as result of this legislation (Umhoefer 2016).

Conclusion Like the capitalist factions identified in Who Rules America?, labor movement factions in the United States, though they share much in common, differ in their structural positions, interests, ideologies, and tactics. As such they challenge different factions of the corporate class in various ways, prompting a variety of responses. Competition between labor organizations tends to be good for the labor movement overall; rival factions promote innovation and growth (Stepan-Norris and Southworth 2010), empower workers, and build collective class power. Ultimately, understanding the factional nature of the labor movement helps us to contextualize the actions of capital’s factions. Legislative and political action of various capitalist factions is not only a result of intra-class contests of ideology and material need, but is also a complex response to labor factions, their tactics, and relative strength. Capital’s accommodations of labor factions (i.e., wartime truces, tripartite negotiations, and the midcentury accord) were not the generous actions of corporate moderates, but strategic concessions to major labor victories. The nature and origin of labor’s victories have varied by the tactics of its factions, and as such the calculated response was tailored (“Taylor”-ed) to respond to specific labor strengths as time and again accommodation gave way to repression. Corporate moderates and the political tactics they prefer—state-welfare, company unions, limited, routinized bargaining—rise to prominence when labor is most dangerous, when they pose an existential threat. Hence, moderate corporate policies are most likely to gain traction when radical labor militancy is very high (1890s, 1910s, 1930s). At the same time, radicalism and militancy in factions of the labor movement (IWW, TUUL, CIO) make dealing with moderate labor factions (AFL) more appealing. This combination has tended to translate into gains for workers as they win concessions and

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unionization increases. However, victories of moderate labor factions (and moderate corporate policies) are often coupled with the repression that destroyed the IWW. Additionally, the victories in wages and security may demobilize the workers that make labor success possible. The existential threat now ameliorated, corporate conservatives rise to prominence once again (and as we saw in the 1920s when the NCF joined with NAM to implement the American Plan, they are often joined by the moderates) to go on the offensive and rollback union gains in service of ever-greater profitability. Even when radical labor factions avoid dissolution through violent state repression, as the CIO did, corporate conservatives have still effectively neutralized them legislatively, and otherwise, once the crisis has passed.

Notes 1 The costs of replacing a worker. As Kimeldorf (2013) explains, the more training needed, the more geographically isolated, and the more time sensitive the work, the more cost is associated with replacing the worker and therefore the more organizing leverage they have. 2 The ITU is an important example of AFL craft strategy, but also differs from other AFL unions in several significant ways. More political than most other craft unions, ITU leadership embraced liberal/left causes, such as suffrage, public welfare provision, and civil rights (though the union, through its apprenticeship program, excluded black workers and initially women as well). Later they would leave the AFL for the CIO. 3 Formed originally as the Trade Union Educational League in 1920 to organize radicals within existing unions, the organization reformed as an independent federation, the TUUL, in 1929. 4 Formed in 1916, the NCIB was founded by industrialists (including executives at GE and AT&T) who previously supported the open-shop movement, but responding to labor unrest in the wake of the Ludlow Massacre decided to go a different way. Though not friendly to unions per se, it recognized that unions were a permanent fixture of American life. 5 The Communist International had adopted the Popular Front strategy and therefore abandoned dual-unionism in favor of organizing within other unions. 6 Ruled unconstitutional in 1935. 7 Revealed during 1937 Senate hearings, corporations were preparing for confrontations with workers by stockpiling weapons, organizing anti-union thugs, and hiring spies to infiltrate labor. 8 Lichtenstein (2002, p. 44) notes he “had a well-deserved reputation as an autocrat who voted Republican in most elections.” 9 GM’s production shrunk from 50,000 vehicles in December 1936 to 125 in February 1937 (Newsinger 2010). 10 Though Murphy deployed the National Guard, they were tasked with de-escalating tensions between strikers and police, not breaking picket lines or evicting strikers. 11 At least 100 of which included AFL members (Fine 1969). 12 The AFL’s opposition to the CIO’s shop steward system, often overt racism, and vehement anti-Communism were particularly attractive.

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13 To be clear, though the AFL allied with NAM to lobby Congress in opposition of the Wagner Act and the NLRB, they were vehemently opposed to Taft-Hartley. 14 Unemployment dropped from 14.6% in 1940 to 4.7% in 1942 and 1.2% in 1944. 15 Inequality decreased among the working class, and the middle class experienced unprecedented growth. These transformations were racially uneven and unequally benefited white male workers. However, this inequality was not identical across the federations. Perhaps unsurprising, given the differences in racial inclusiveness—in the years 1940–1950 in which the CIO had more power, the more equal were white and black workers (Zeitlin and Weyher 2001). 16 The Supreme Court decision still left the NLRB with some leeway in deciding how to proceed in sit-down strike cases, Taft-Hartley specifically directed that sit-down striking along with the aforementioned tactics resulted in forfeiture of all strike protections (i.e., a worker who was fired for engaging in the tactic has no legal recourse for his or her employment or damages). 17 Secondary or solidarity actions may have been just as or even more important than the sit-down strike for new organizing. These actions provided crucial support to what could otherwise be relatively weak workers. They protected strikers, put additional pressure on employers, and built solidarity. 18 Even those who managed to gain work in core firms were, because of historical segregation and contemporary discrimination, more likely to be on the short end of the seniority stick and therefore were more vulnerable to business cycle effects.

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Who Rules the Roost?

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Introduction How can we explain the disproportionate success of corporate control in U.S. public policy? G. William Domhoff has spent years digging in the trenches, uncovering the skeletons of past power struggles. He has exposed volumes of data, but more importantly, he has fashioned a theoretical and epistemological framework. Domhoff demonstrates the methodological imperative of looking beyond actors involved in final decisions. He shows the need to investigate the overlapping networks of foundations, think tanks, policydiscussion groups, corporate boards, and branches of government involved in policy outputs. I begin by acknowledging how labor intensive it is to try to replicate Domhoff ’s accomplishments—even on one relatively minuscule topic. Theoretically, Domhoff has navigated the terrain between neutral-pluralism and a totally captured state. The neutral state advocates maintained that the state is nothing more than the aggregation of individual participants and preferences. Democratic states are pluralist; all participants have equal weight. The pluralist perspective entered the discourse with Robert A. Dahl and continued in the form of organizational studies such as that of Mizruchi. Elites are simply too fractionalized, Mizruchi argues, and therefore are incapable of capturing the state. On the other end of the continuum is the captured-state, a modern version of the Marxian position that the state is nothing more than a committee to manage the common affairs of the bourgeoisie. Domhoff ’s work demonstrates that neither of these adequately explains the role of corporations in public policy.

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Epistemologically, Domhoff ’s work is first and foremost grounded in Marxism—it’s about class struggles. And, these are class struggles in the context of democratic capitalism. The work is also informed by the theoretical contributions of Gramsci (hegemonic dominance) and the empirical contributions of numerous political scientists such as those mentioned in his introductory essay. One succinct way to portray Domhoff ’s approach is to use the scheme elaborated by Przeworski (1985). He describes the democratic state as a zone of struggle somewhere between two extremes (in his model, dictatorship and socialism). The battles over public policies, policy outcomes, and policy applications are indeterminate: sometimes the workers win and sometimes business wins; sometimes domestic capital wins and sometimes international fractions of capital win. This is consistent with Domhoff ’s unequivocal position that despite policy-planning networks and influential institutions, the power elite is not always successful. This does not make him theoretically agnostic; causality is at stake. It would be erroneous to conclude that the observed “indeterminacy” of public policy outcomes or a less-than-100 percent probability of “winning” supports the neutral/pluralist state position. At the micro level, Domhoff investigates the organizational strength and cohesion of different actors and the implications for public policy. How are the fractions of the ruling class, the workers, or citizens internally divided or united? What role does the state have in organizing some classes and disorganizing others? What are the conditions under which legislation is successfully proposed, passed, or resisted (Stryker 2007)? Methodologically, Domhoff ’s approach is one of rejecting counterfactuals (my description, not his). Domhoff ’s main strategy is to consider data that had been ignored by scholars at both ends of the debate. Often this means providing evidence of institutions, influence, and linkages that existed before that offered by his nemesis. When he turns to the passage of the National Labor Relations Act (NLRA), for example, he evaluates not just the years before the passage but the corporate position at the turn of the century. In his analyses, Domhoff has followed the template of network analysis. When he began, he presented linkages in terms of the sociological template of sociometry. This template was raised to a more formal level beginning with the work of Harrison White, and disseminated and advanced by Breiger and others.

Poultry Politics The U.S. poultry industry must function within the confines of several legislative arenas, including labor, consumer protection, environment, foreign

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policy, and animal rights. They all affect the profit of producers. Regarding labor, business is in a constant struggle with workers over their right to unionize, wages, and the conditions of work. A 2005 GAO (General Accounting Office) report found that poultry plant injuries ranked high among industries; hand ailments were common. The report also ranked poultry as one of the lowest-paid industrial jobs. In 1991, at the Imperial Foods Chicken Plant (Hamlet, North Carolina), some 200 workers were trapped in a burning chicken factory unable to escape. Twenty-five were killed and fifty were injured. State investigators cited the company with eighty safety law violations and fined it $800,000. Safety violations included doors locked from the outside and an absence of sprinklers and fire alarms. The owner spent four years in prison. The firm never reopened. Regarding labor, businesses are in a constant struggle with unions, National Labor Relations Board (NLRB) decisions, Occupational Safety and Health Administration (OSHA) investigations, Department of Labor, and U.S. Immigration and Customs Enforcement (ICE; formerly the U.S. Immigration and Naturalization Service, or INS), but overall they seem to have the upper hand. In the case of consumers, the industry is subject to inspections that are intended to protect consumer health. The Food Safety and Inspection Service (FSIS) of the U.S. Department of Agriculture (USDA) is responsible for oversight and issuing recalls. A recent “Class I” recall (a health hazard with a reasonable probability that the product will cause serious, adverse health consequences or death) involved canned organic roasted chicken breast contaminated with foreign materials. The producer had to recall 5,610 pounds. In another case, Tyson Foods Inc. (September 2016) had to recall approximately 132,520 pounds of fully cooked chicken nugget products that might have been contaminated with hard plastic. Such consumer recalls adversely affect company profits. Environmental oversight also threatens industry profits. In 1993, the Maryland executive director of the Chesapeake Bay Foundation called on the federal government to force poultry companies to take responsibility for manure, alleging that the industry was the primary source of Chesapeake and coastal bay pollution. Because of the importance of exports, the industry is affected by U.S. foreign relations. Foreign policy may result in U.S. trade embargoes of nations, jeopardizing industry profits. Conversely, other nations may use phytosanitary complaints against U.S. producers as a strategy for protecting their own industries. In such cases, the U.S. foreign policy apparatus may be required to “neutralize” the trade barrier. President Bill Clinton, for example, exchanged support for Boris Yeltsin’s re-election for Russia’s agreement to drop its embargo against American chicken.

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A fifth arena of struggle is that of animal rights. From time to time animal advocates are successful in passing legislation addressing the pain and suffering of birds. In the 2016 election, Massachusetts voters approved a ballot question that banned the sale of foods derived from animals raised in cruel conditions, and mandated minimum cage sizes. How are we to understand poultry policies? Do product recalls suggest a consumer-advocate victory? Did the 1986 NLRB Harter Equipment Inc. ruling, which upheld the legality of permanently replacing strikers with temporary workers during a lockout, constitute the power of business over workers? The NLRB’s decision, based on a 1938 Supreme Court ruling upholding the legality of permanently replacing strikers, makes it crystal clear that an employer can lock out strikers and then continue operating with temporary replacements (Serrin 1980). This is an effective tool used by poultry firms in the 1980s to temper or destroy overzealous unions. A perusal of poultry legislation reveals oscillations: sometimes toward business, at other times toward the other stakeholders (consumers, environmentalists, animal activists, or foreign importers). Such indeterminacy might even appear to support the pluralist/neutral state interpretation. Not so fast, Domhoff would say, the power elite perspective offers superior explanatory power. Although it’s clear that deregulations in any of the aforementioned arenas are best for industry, individual companies and producers associations must continually intervene in the policy arena. Industry’s strategies run from formal to informal; from legal to illegal. There have been imaginative cases of “illegal” management strategies to deal with labor organization. In 1980, when the United Food and Commercial Workers (UFCW) tried to unionize the Perdue plant at Accomac and again in 1981 when the union planned to picket a Perdue restaurant in New York, Frank Perdue turned to a member of the Gambino crime family for help with his labor problem. He failed to enlist mob support in both cases and, according to the 1986 report of the President’s Commission on Organized Crime, Perdue violated no law. Perdue said, “In hindsight, I should never have had the meetings” (U.S. News and World Report 1986). The Pilgrim’s Pride “Company Perspectives” (nd) reported that the “only blemish for the company . . . was Pilgrim’s involvement in a campaign contribution scandal with eight Texas lawmakers.” In 1989, Mr. Pilgrim had handed out $10,000 checks to Texas senators (with the payee’s name left blank), to help persuade them to gut the state’s workers’ compensation laws. Mr. Pilgrim successfully defended himself before a grand jury and was not indicted.

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In 1997, Mike Espy, President Clinton’s Secretary of Agriculture, was indicted on 39 counts of corruption. He pleaded guilty to one count, and in 1998 was acquitted by a federal jury of the remaining charges. His lawyers argued that the gifts were not illegal; rather they stemmed from long-standing friendships with members of the industries, and did not influence him in official decision-making. The independent counsel appointed by Attorney General Janet Reno got Tyson’s Foods to agree to pay $6 million after pleading guilty to making illegal gifts to Mr. Espy. In 2001, the Department of Justice brought a federal indictment against Tyson. As a result of an INS undercover action (Operation Everest), managers were accused of a seven-year scheme to recruit and hire hundreds of illegal immigrants from Mexico and Guatemala. The indictment further claimed that Tyson paid $100 to $200 per head to smugglers. No Tyson executives were convicted but a former employee was. Domhoff ’s power elite perspective would direct us to those formal and legal interventions on behalf of the industry. Lobbying and campaign contributions formed an important conduit linking corporate control to poultry policies. During Clinton’s Arkansas governorship, Tyson benefited from about $12 million in tax breaks for expansion projects. Mr.  Tyson denied that there was anything inappropriate; rather, he argued, the largest employer (22,000 workers) and the Arkansas governor have to work together (McGraw and Simons 1994). Tyson Foods donated to the presidential inauguration funds of Clinton ($100,000 in 1993) and Bush ($100,000 in 2005) (Buncombe 2005). More detailed descriptions of the aforementioned examples can be found in The Chicken Trail (Schwartzman 2013).

The Domhoffian Research Agenda—How Many Years Do I Have? Each policy represents a research agenda. There are hundreds of cases involving the poultry industry on the five aforementioned dimensions. For each case we would need to ask: is the emergence of policy helped or stymied by a lack of unity among the power elite (individual firms, business interest groups, and governmental representatives); and what was the network through which the policy preferences materialized. The collection of answers would allow a generalization about the “poultry power elite,” corporate control, and its effect on public policy. Here I present one infinitesimally small

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slice of the ongoing struggle. The Cuban embargo was one place where U.S. foreign policy and domestic policy collide.

U.S. Exports—Weapons of Foreign Policy Poultry industry executives and representatives have continuously engaged with branches of government to maintain their capacity to export. In 2014 about 21 percent of U.S. poultry production was exported. But trade is an armament of foreign relations, and poultry producers have sometimes been sacrificed for U.S. foreign policy goals. Trade restrictions were written into the Jackson-Vanik amendment to the Trade Act of 1974. It established criteria by which countries would gain (or be denied) the Most Favored Nation (MFN) status. The MFN were approved for Normal Trade Relations with the United States and access to U.S. government financial facilities. These are the two fundamental pillars for U.S. exporters: unfettered ability to trade and to offer credit or financing. The Department of Treasury’s Office of Foreign Assets Control (OFAC) helps enforce economic and trade sanctions. Tyson Foods, along with companies such as Ikea, Harper’s Bazaar, banks, and others together have paid millions of dollars to settle federal government allegations that they violated U.S. trade embargoes based on the 1974 Act. Tyson Foods reportedly shipped $250,000 worth of frozen chicken parts to Iraq through a broker in Jordan, violating a U.S. trade embargo (Reddy 2002). Since the 1990s, Russia has been a major destination for U.S. meat exports. Russia had put an embargo on U.S. poultry for alleged phytosanitary violations. In a 1995 summit meeting in Egypt, President Clinton agreed to publically support Russian President Boris Yeltsin in his re-election. Yeltsin was becoming increasingly unpopular for his war against Chechnya. In what became known as “Chechens for Chickens,” Clinton’s support was given in return for Yeltsin’s lifting the embargo of U.S. chicken. At the time, 90 percent of U.S. poultry exported to Russia originated with Tyson Foods. For U.S. companies to benefit from Russia’s accession to the World Trade Organization (WTO), Congress had to strike Russia from the Jackson-Vanik legislation’s barred list and authorize the president to extend permanent normal trade relations (PNTR). The National Chicken Council enthusiastically supported granting Russia PNTR status. In 2013, poultry and meat ranked No. 1 among U.S. food exports to Russia, but in 2014, Russia threatened a ban on U.S. poultry imports. Because WTO rules make it difficult to impose import restrictions, Russia’s Veterinary and Phyto-Sanitary

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Surveillance Service claimed that it found signs of the antibiotic tracycline in four shipments of U.S. poultry. More recently, poultry producers were caught in the cross fire of U.S. sanctions against Russia for its support of Ukrainian rebels. These examples show how easily U.S. foreign policy can become injurious for poultry exporters and why they must be organized and attentive. One important industry organization, USAPEEC (USA Poultry and Egg Export Council), works with other industries and trade associations that advocate for industry on trade policy issues. It then acts as an intermediary with the USDA in Washington, and with embassies and Agricultural Trade Offices around the world. Its membership includes the National Chicken Council, National Turkey Federation, United Egg Association, the U.S. Poultry & Egg Association, and the U.S. Agricultural Export Development Council. In total, it represents forty-eight processors, eighty-nine trading companies, fifteen commodity groups, and seventy-one associate members (shipping, cold storage, port authorities, etc.). The Trade Act of 1974 placed extremely strict restrictions on U.S. financing of exports. As early as 1906, U.S. banks sought the ability to finance U.S. exports. Then, as now, bankers argued that only by extending credit to foreign buyers could the U.S. successfully compete with European exporters. The U.S. Congress finally responded to this need with the Federal Reserve Act of 1914. It authorized American banks to establish branches in foreign countries. This link between trading and extending credit is equally vital today. U.S. agricultural exporters to Mexico have benefited from numerous USDA “credit” programs. The Export Credit Guarantee Programs (GSM 102 and 103) provide loan guarantees for specific commodities. Agricultural exports destined for Mexico received the highest amount of all GSM loans between 1980 and 1994. In 1983, more than half of the U.S. agricultural sales to Mexico were financed with GSM credits (GAO 1990, 34). The U.S. Export-Import Bank (EXIM) also assists by offering credit insurance, long-term loans, and guarantees. In the event that a foreign buyer goes bankrupt, defaults, or is otherwise unable to acquire U.S. dollars, EXIM protects the U.S. exporter. In 1994, “the Ex-Im Bank provided more services to U.S. business selling to or investing in Mexico than in any other country in the world” (Detzner and Gonzalez 1995). In 1997, the second highest award ($440,000) from the Market Access Program (USDA Foreign Agricultural Service [FAS]) went to Tyson Foods (105th Congress 1998). None of these USDA subsidies or credits is available for financing Cuban purchases. For the poultry industry this constitutes a restraint on trade.

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The Cuban Embargo—Summary Sanctions against Cuba have vacillated since 1960. Each executive decision involved conflicts among the various stakeholders. The initial sanction prohibited all U.S. exports to Cuba, excluding food and medicine. Then President Kennedy placed a total trade embargo: a prohibition on all financial and commercial transactions, and a prohibition on travel. Under Presidents Ford and Carter, fragments of the embargo were loosened. In the 1980s, President Reagan reinstated the travel ban and the prohibition on U.S. citizens spending dollars in Cuba. In 1983, Reagan enlarged the coverage by imposing a ban on nickel products from the Soviet Union, which bought nearly half of Cuba’s nickel production. With the 1992 Cuba Democracy Act, President George H.W. Bush tightened the embargo to prohibit foreign subsidiaries of U.S. companies from trading with Cuba, prohibited travel, and restricted family remittances. The 1992 act also prohibited entry into the United States of vessels that had entered Cuba within the preceding 180 days. In 1996, Clinton signed the 1996 Cuban Liberty and Democratic Solidarity Act (Helms-Burton Act). It imposed penalties on foreign companies doing business in Cuba and on U.S. citizens traveling to Cuba. And, it withheld payments to international organizations in amounts equal to any loans or other assistance they provided to the Cuban government. In 1999, President Clinton began to normalize relations: permitting direct mail service; raising the remittances levels; expanding the number of direct passenger flights; and importantly, authorizing agricultural sales to non-government entities. The 2000 Trade Sanctions Reform and Export Enhancement Act (TSRA) signed by Clinton removed unilateral agricultural and medical sanctions, and exempted business travel from the long-standing embargo. Exports were controlled through one-year licenses. The law continued to deny exporters access to U.S. government or private commercial financing or credit, and required payment in advance of delivery. In 2005, under President George W. Bush, the travel ban was again tightened, in particular regarding the payment scheme. In 2009 and 2011, President Obama eased travel restrictions, ended restrictions on Cuban Americans and business travelers, and authorized a higher quantity ($3,000) and unrestricted destination of remittances (LeoGrande 2015).

Agricultural Exports to Cuba Cuba depends on imports to feed its 11 million citizens and growing numbers of foreign visitors. About 80 percent of its food is imported (Scuse 2015). Notwithstanding the U.S. trade embargo, Cubans have been eating U.S. chicken

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since 2001. Poultry was among the exports authorized by Congress in the 2000 TSRA. In December 2001, the first month after the embargo was lifted on agricultural and medical products, Cuba bought $4.3 million worth of food and agricultural products. Then it ranked 144th out of 226 global agricultural export markets. By 2003, Cuba was the 35th-largest export market for U.S. agriculture (Varney 2004). In 2014, poultry and meat made up 49 percent of all U.S. agricultural exports to Cuba (USDA 2015). Poultry exports to Cuba continued to increase following the termination of unilateral agricultural sanctions. The Cuban purchases of U.S. poultry in 2015 were forty times greater than in 2001 in contrast to global purchases, which doubled during the same period.1 Cuba in the past few years has ranked somewhere between the top fourth and eighth-largest export market for U.S. broilers. In 2014, frozen chicken-leg quarters, a relatively low-cost poultry cut, accounted for 83 percent of U.S. broiler meat exports (Zahniser et al. 2015). Nevertheless, U.S. agriculture has stiff competition from Europe and Brazil: the U.S. market share slipped from a high of 42 percent in FY 2009 to 16 percent in FY 2014 (USDA 2015). This is due to U.S. export-financing rules. Rep. Rick Crawford (R-Arkansas) opined that these finance rules have effectively ended U.S. exports of rice and wheat to Cuba. Cuba now buys rice from Vietnam and Brazil, and wheat from Europe and Canada (Bloomberg 2016). There is consensus among U.S. agricultural producers that Cuba would become a significant market with further relaxation of the embargo, particularly the export-finance rules. Poultry producers in Georgia, Alabama, and Arkansas would very much like to terminate the detrimental regulations that require payments before shipment, and prohibit extension of any U.S. public or private credit. Unfortunately, the Southern states that could benefit significantly have Republican representatives who have traditionally opposed lifting the embargo because of Cuba’s Communist government (Yu 2015). It is to this clash over financing in that period that I now turn. Although the Association for Linen, Uniform and Facility Services Industry (TRSA) opened trade (Title IV of Public Law 106 387), the financing restrictions as outlined in the Trade Act of 1974 remained unchanged. U.S. government agencies—including USDA—were prohibited from providing U.S. export assistance, or any U.S. credit or guarantees for exports to Cuba. As Agriculture Secretary Tom Vilsack said, he can’t use a single dollar of trade promotion funding for trade with Cuba. These restrictions apply to FAS’s successful cooperative market development programs like the Market Access Program and the Foreign Market Development Program (National Chicken Council 2015). Poultry exporting under these conditions was difficult.

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Poultry Exports President George W. Bush placed an additional hurdle on the export-financing restrictions. He proposed a reinterpretation, which would require Cuba’s import agency, Empresa Cubana Importadora de Alimentos (Alimport), to pay cash for commodities before departure from a U.S. port. Trade with Cuba was a political quandary for President Bush. He was pressured by constituencies that he needed for his 2004 fall re-election. Cuban Americans in Florida viewed the forty-year effort to strangle Castro’s Cuba of foreign currency, goods, and services as paramount to a regime collapse. U.S. agribusinesses saw Cuba as a lucrative market (Gross 2004). There were, and continue to be, four major stakeholders. Extremely organized and active lobbies represent agriculture (farm organizations, agricultural commodity associations, and agribusiness firms), industry, and commerce. In 1998, in the Congressional debate leading to the 2000 TRSA, USA*Engage included 675 American companies that were involved in exporting. The U.S. Agriculture Coalition for Cuba (USACC) represents more than thirty agricultural organizations and companies committed to a deeper U.S.-Cuba relationship. The National Chicken Council and USAPEEC promoted embargo elimination. They also participated in broader coalitions. The foreign policy preferences of the business associations were bolstered by a second, less powerful and less aggressive stakeholder—an assortment of religious and humanitarian groups who desired to end the embargo. They are too numerous to mention but include organizations such as Americans for Humanitarian Trade with Cuba. An alliance of some 600 business and 140 religious and human rights organizations emerged after Pope John Paul II’s 1998 trip to Cuba. They were joined by an increasing number of think tanks dedicated to different versions of reasonable foreign relations with Cuba. They included bodies such as the Center for Democracy in the Americas (CDA), the New America Foundation (U.S.-Cuba 21st Century Policy Initiative), the Center for International Policy (Cuba Program), and the Latin America Working Group. The third stakeholder is made up of Cuban Americans. The pro-embargo pressure from the Cuban lobby, Cuban associations, and Congressional representatives continued throughout the whole period. Their ardent embargo position appears to be based on a moral argument. Robert G. Torrecelli (D-New Jersey) argued that Cuba is the greatest rogue regime in the world. It needs to “free their people, allow basic human rights, or make basic concessions in their relations with the United States” (105th Congress, S8216). It could be argued, however, that these Cuban Americans represent the

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remnants of a capital fraction that lost assets in the 1959 Cuban revolution. Part of their agenda is repatriation and/or compensation for lost land and financial assets. A fourth and minor stakeholder, siding with the third, is made up of U.S. agriculture producers who would be vulnerable to competition from Cuban imports should trade resume. The U.S. sugar industry has resisted efforts to lift the embargo. Erikson (2005) notes that only about 15 percent of U.S. sugar consumption is currently imported. An end to the embargo might be the end to their protective quotas and subsidies. U.S. citrus producers also predicted injurious market competition from Cuban imports. To what extent is foreign policy subordinate to corporate executives and policy-planning experts? The larger umbrella organizations united business interests, justice rights advocates, and policy experts against those who advocate maintaining and/or strengthening the embargo. Passage of TSRA (Public Law 1076–387) was a significant victory for the first two stakeholders; nevertheless, it left intact those disadvantageous restrictions on export-financing. Thus, the post-TSRA amendment and bill skirmishes among different fractions of the ruling elite developed around the export-financing regulations. In the 107th-108th Congresses, anti-sanction representatives continued to introduce bills to repeal the export financing and travel prohibitions (H.R. 173, H.R. 174, H.R. 187, H.R. 188, H.R. 798, H.R. 1698, H.R. 2646, H.R. 3422, S. 402, S. 403, and S. 1731 to name a few!). They were met by the opposition. Rep Ron Paul (R-Texas) introduced H.R. 2662, which prohibited U.S. assistance to Cuba from the Export-Import Bank, the Overseas Private Investment Corporation, or the Commodity Credit Corporation, and any exchange, reduction, or forgiveness of Cuban debt. The battle continued from 2001 on, but the export-financing battle changed radically with the arrival of a new advocate. In May 2001, President George W. Bush expressed his opposition to any effort to remove the financial restrictions, stating that it “would just be a foreign aid program in disguise, which would benefit the current regime.” He reiterated that his administration would oppose any efforts to weaken sanctions against Cuba ( July 11, 2002), and followed this by asking the Treasury Department to enhance and expand the embargo enforcement capabilities of the OFAC. Secretary of State Colin Powell and Treasury Secretary Paul H. O’Neill followed up in a letter to House appropriators stating that they would recommend a presidential veto of any bill that eased restrictions on trade and travel to Cuba (CRS 14). The U.S. Department of Agriculture provides guidelines to potential exporters to Cuba. Still, trade was a political problem for President Bush, who was getting squeezed by two important constituencies: Cuban Americans in Florida,

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who view the forty-year effort to strangle Castro’s Cuba of foreign currency, goods, and services as paramount; and agribusinesses that view Cuba as a potential market. Organizations such as the Cuban-American National Foundation and Cuban Liberty Council—crucial interest groups in Florida—oppose the expansion of trade. To appease exile groups, President Bush cracked down on the People to People program, thus curtailing the flow of American tourists to Cuba’s beaches. The administration also supported the long-standing U.S. bans on Cuban imports. On October 24, 2004, Bush asked Congress to maintain the embargo and said the transfer of power from Fidel Castro to his brother Raúl, amounted to “exchanging one dictator for another.” Shortly after, he announced plans for new restrictive guidelines on the payment issue. In lieu of the previous practice—payment to be received before the shipment’s release to the buyer (even if the ship is docked in Havana)— the new rule of the Department of the Treasury’s OFAC required payment before the shipment left the U.S. port. It had an effective date of March 25, 2005. This reinterpretation of “payment in advance” unleashed a flood of complaints from agribusiness stakeholders. In 2004, food giants Tyson Foods Inc., Louis Dreyfus Corp., and Gold Kist Inc. shipped about 15,000 tons of Alabama-raised poultry to Cuba (Alabama Port Director and CEO James K. Lyons in a November 29, 2004, letter to U.S. Sen. Richard Shelby, R-Alabama). The poultry industry feared a loss of trade under the new payment system. Alabama Agriculture Commissioner Ron Sparks, who had traveled to Cuba in support of trade ties, lamented that, “Such a reinterpretation of this law would be a reckless act at the expense of Alabama’s poultry farmers and producers” (Poultry Site 2004). Many U.S. producers feared trade losses. The American Farm Bureau Federation responded that it will likely cut off U.S. farm product sales to Cuba. The USA Rice Federation stated this will inhibit rice sales to the sixth largest market in volume in 2004. They supported S. 328 to counter OFAC’s action. However, the pro-embargo stakeholders were further fortified by Bush’s appointment of Cuban-born Carlos Gutierrez as Secretary of Commerce. He was co-chair of the Commission for Assistance to a Free Cuba, and a strong advocate for the Bush Administration’s policy of helping the Cuban people hasten the day of their freedom from dictatorship by blocking most trade with Cuba. Protests from farm groups and agribusiness firms finally extracted a small concession, namely shipment of goods was allowed once the seller’s agent (if located in a third country) receives payment from the Cuban buyer. The tug-of-war over export-financing restrictions continued with the pro-embargo stakeholders holding ground. Representing business interests,

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senators and representatives continually sponsored amendments and bills that would allow open trade and permit U.S. export-financing. When these two avenues were blocked, some introduced amendments to appropriations acts to disallow those U.S. agencies from using funds to enforce the embargo restrictions. Congressman Jerry Moran (R-Kansas, first as a representative and then as a senator) introduced, session after session, bills and amendments. The goal of the amendments was to cut off funding to the Treasury’s OFAC for administering those tasks involving the private financing prohibition and shipping restrictions, among other Cuban embargo regulations that apply to agricultural and medical product sales. H.Amdt.1031 (106th Congress) was an amendment to H.R. 4871, the Treasury and General Government Appropriations Act, 2001. H.Amdt.554 (107th Congress) amends Bill: H.R. 5120, the Treasury and General Government Appropriations Act, 2003. H.Amdt.1049 (109th Congress) amends Bill: H.R. 5576, the Transportation, Treasury, Housing and Urban Development, Judiciary, and Related Agencies Appropriations Act, 2007. H.Amdt.467 (110th Congress) amends Bill: H.R. 2829, the Financial Services and General Government Appropriations Act, 2008. H.R. 1737 (111th Congress) amends the Trade Sanctions Reform and Export Enhancement Act of 2000. They all endeavored to prohibit funds from the respective appropriation bills from being used to enforce a Department of Treasury regulation that changed rules related to trade with Cuba. These are a few of the unsuccessful bills introduced by only one congressman on one topic. During the Obama Administration, Jerry Moran, now a senator (R-Kansas), introduced bills recommending total elimination of the embargo: S. 1543 (114th Congress) and S. 472 (115th Congress).

A Poultry Coup d’Etat? Granting the success of poultry corporations in ongoing policy conflicts with labor, consumers, environmentalists, and animal rights activists does not mean ignoring conflict among different fractions of capital. In the case presented, the interests of U.S. exporters to Cuba were in conflict with politicians protesting Cuba’s non-democratic regime, human rights abuses, and violations of freedom of speech. But, in fact, the politicians represent a fraction of capital: those who were defeated in the Cuban revolution. They are looking for restitution of their former Cuban assets or at least reprisals against Cuba. That fraction of capital is joined by a smaller group of special interests—U.S. producers of commodities (such as fruits) who fear competition from Cuban imports.

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President Donald Trump nominated Sonny Perdue for secretary of agriculture, and he was eventually confirmed after untangling his various conflicts of interest. He is not related to the founders of Perdue Farms, but he is a former governor of Georgia, the No. 1 chicken-producing state, and has owned several agribusinesses, including a Georgia-based grain global trading agency. The National Chicken Council was highly supportive of Perdue’s nomination—a welcomed choice. Representatives of the “Broiler Belt” now have an advocate inside the “beltway.” Poultry will continue its reign over consumers. Secretary of Agriculture Perdue, while the governor of Georgia, cut the budget of the state’s Agriculture Department. The deputy commissioner of the department said that conditions leading to two serious salmonella outbreaks requiring large-scale recalls should have been caught, but there were insufficient funds for inspections. As Trump’s USDA head, Perdue promises to defend agriculture against critics, viz., those opposed to industrial factory farms and GMO agriculture. The poultry industry will continue its reign over conservationists. As governor, Perdue favored the timber industry and ignored the climate implications of deforestation. During a 2007 drought, he, three Protestant ministers, and a choir singing “Amazing Grace” prayed for rain. Some worry that it’s unlikely that a former fertilizer salesman will tackle the unregulated farm pollution that poisons drinking water or fouls the Chesapeake Bay. Chicken manure used as fertilizer carries nitrogen and phosphorus into the bay. The poultry industry continues its rule over labor. Poultry processing continues to be more dangerous than other factory work. In 2010, poultry workers had a 5.9 percent injury and illness rate compared with 3.5 for all U.S. workers. In 2015, the rates were 4.3 and 3, respectively (Department of Labor, Bureau of Labor Statistics). Industry representatives claim that there is a steady reduction in injuries and illnesses since 1994. In contrast, labor representatives claim that workers fear being disciplined, harassed, and fired for reporting injuries. The drop in the number of OSHA inspections also contributes to possible underreporting of injuries. Poultry firms are fined from time to time for safety and health violations, exposing workers to serious hazards, back wages, etc., but it would be incorrect to interpret this as a significant setback for the industry. Successful labor control has been furthered by ethnic succession. The replacement of African American workers with immigrants from 1994 to 2010 (Schwartzman 2013) continues. The share of African Americans working as butchers and other meat-, poultry-, and fish-processing workers has dropped from 20 percent in 2012 to 13.5 percent in 2016, while for Hispanic workers the percentage has risen from 34.6 to 41.6.

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Industry power over labor is likely to continue under Perdue. In 2009, as governor, he signed a bill that blocked local communities in Georgia from regulating animal cruelty, worker safety, and pollution related to factory farms. And by 2010, he reversed his previous tough stance on employer use of illegal immigrants. Following his 2017 nomination, he indicated support for making it easier for farmers to employ immigrant workers year-round. The poultry elite has held onto its position over the other stakeholders (labor, environmentalists, consumers, and animal rights) through both Democratic and Republican administrations. It is unlikely to lose that position in the Trump Administration. Still, there is struggle over exporting. This hardly constitutes support for a pluralist interpretation; it simply demonstrates the need to investigate different policies separately. The victory of the poultry elite encapsulated in the 2000 TRSA law was partial. They won authorization to export commodities but not finance them. In 2014, Georgia exported $8.6 million worth of poultry to Cuba, but the Georgia Department of Economic Development remained dissatisfied with the 2005 financing restrictions (National Chicken Council 2015). Poultry exporters had to repeatedly defend their positions against political lobbies, which reached into the legislative, judicial, and executive branches of government. The National Chicken Council continues lobbying to remove the financing and trade restrictions. Recently, legislation was proposed that would allow farmers to extend credit to Cuban clients ( January 2017, Rep. Rick Crawford [R-Arkansas]). This change was favored by Arkansas rice producers, chicken growers, and other agricultural groups. It was opposed by members of Congress, including Sen. Marco Rubio (R-Florida), Sen. Ted Cruz (R-Texas), Sen. Bob Menendez (D-New Jersey), and Rep. Ileana Ros-Lehtinen (R-Florida), who remain staunchly opposed to lifting the Cuban trade embargo. Trump’s Mar-a-Lago residence falls in the district of Rep. Ted Deutch (D-Florida), who opposes lifting the trade embargo against Cuba “unless and until the regime is prepared to start respecting human rights.” Who then rules the roost? In September 2016, Republican presidential candidate Donald Trump said in response to a question about normalizing relations with Cuba, “I think it’s fine. But we should have made a better deal.” In October 2016, when accepting the endorsement of Bay of Pigs veterans in Miami, he said he would present Cuba with “demands” for political liberalization and reverse Obama’s executive actions if those demands are not met. In late November, after he won the election, he tweeted: “If Cuba is unwilling to make a better deal for the Cuban people, the Cuban/American people and the U.S. as a whole, I will terminate the deal” (BBC 2016). Sen. Marco Rubio and others advised Trump to revive the Bush policies (Peters 2017). Perdue is

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now Secretary of Agriculture, and Bob Young, of the American Farm Bureau Federation, is optimistic that Perdue will be a voice of free trade within the administration. Dominance over public policy is not achieved easily, and is reversible once earned. Poultry has been relatively successful since the 1970s. Despite some setbacks, it has continued to grow and resist excessive regulation regarding labor and environment. But it wants to export poultry to all corners of the globe. Will chicken nuggets triumph over U.S. foreign policy; material over ideology? It will depend on which fraction of capital receives President Trump’s support.

Note 1 My calculations based on USDA/FAS data.

References Cited 105th Congress. 1998. www.congress.gov/congressional-record/1998/07/15/senatesection/article/S8165-1. BBC. 2016. Trump threatens to terminate US-Cuba thaw. www.bbc.com/news/world-uscanada-38135894 (28 November). Bloomberg. 2016. The Cuba Thaw Will Be Big for America’s Frozen Chickens. www. bloomberg.com/news/articles/2016-03-21/the-cuba-thaw-will-be-big-for-america-sfrozen-chickens (21 March). Buncombe, Andrew. 2005. U.S. Poultry Giant under Fire after Segregation Scandal Is Revealed. Independent, September 17. http://news.independent.co.uk/world/americas/ articles312981.ece. Detzner, John A. and George R. Gonzalez. 1995. “Doing Business in Post-Devaluation Mexico”: National Law Center for Inter-American Free Trade. Inter-American Trade and Investment Law 2, no. 12 (February 3): 244. Erikson, Daniel P. 2005. The Future of American Business in Cuba: Realities, Risks, and Rewards. www.thedialogue.org/PublicationFiles/Erikson_Future%20of%20American% 20Business%20in%20Cuba_2005.pdf. Gross, Daniel. 2004. The Fox in Our Henhouse: Why Is Fidel Castro Buying All Those American Chickens? Moneybox, February 24. www.slate.com/articles/business/moneybox/ 2004/02/the_fox_in_our_henhouse.html. LeoGrande, William M. 2015. A Policy Long Past Its Expiration Date: US Economic Sanctions Against Cuba. Social Research: An International Quarterly 82, no. 4 (Winter): 939–966. McGraw, Dan and John Simons. 1994. The Birdman of Arkansas: Don Tyson Revolutionized the Nation’s Chicken Business: Now He’s Hatching a Global Food Empire. U.S. News and World Report 117, no. 3 ( July 18), p. 42.

Who Rules the Roost? 181 Mitchell, Gary. 2004. Poultry sector fears losses if Cuba trade rule tightened. Tulsa World. December 3. http://www.tulsaworld.com/news/poultry-sector-fears-losses-if-cubatrade-rule-tightened/article_8f bb04f7-8873-5aac-a3c4-1ace77744c74.html. National Chicken Council. 2015. Agriculture Groups Unite to End Cuban Embargo. www. nationalchickencouncil.org/agriculture-groups-unite-end-cuban-embargo/ (8 January). Peters, Philip. 2017. Obama’s Cuba doctrine and why Trump should keep it. The American Conservative, January 26. www.theamericanconservative.com/articles/obamascuba-doctrine/. Poultry Site. 2004. U.S. poultry industry fears loss of Cuba Trade. www.thepoultrysite. com/poultrynews/7246/us-poultry-industry-fears-loss-of-cuba-trade/ (6 December). Przeworski, Adam. 1985. Capitalism and Social Democracy. Cambridge: Cambridge University Press. Reddy, Anitha. 2002. “Ikea, Tyson Foods Among U.S. Embargo Violators.” Washington Post, July 3. https://www.washingtonpost.com/archive/business/2002/07/03/ikea-tysonfoods-among-us-embargo-violators/46018725-7773-4c12-8594-f b7f98bc6af3/?utm_ term=.2685ac4c85af. Schwartzman, Kathleen. 2013. The Chicken Trail: Following Workers, Migrants, and Corporations across the Americas. Ithaca: Cornell University Press. Scuse, Michael. 2015. Statement by Michael Scuse Under Secretary Farm and Foreign Agricultural Service U.S. Department of Agriculture Before the Committee on Agriculture, Nutrition and Forestry April 21, 2015 Hearing: Opportunities and Challenges for Agriculture Trade with Cuba. www.fas.usda.gov/sites/default/files/2015-05/041517_ statement_by_michael_scuse.pdf. Serrin, William. 1980. 200 Mississippi Women Carry on a Lonely, Bitter Strike. New York Times, February 27, p. A12. Stryker, Robin. 2007. Half Empty, Half Full, or Neither: Law, Inequality, and Social Change in Capitalist Democracies. Annual Rev. Law Soc. Sci. 3: 69–97. www.annualreviews.org/ doi/pdf/10.1146/annurev.lawsocsci.3.081806.112728. U.S. Department of Agriculture (USDA). 2015. Agricultural Exports to Cuba Have Substantial Room for Growth. Foreign Agricultural Service. International Agricultural Trade Report. June 22. www.fas.usda.gov/sites/default/files/2015-06/06-22-2015_cuba_iatr_0.pdf. U.S. Government Accountability Office (GAO). 1990. U.S.-Mexico Trade: Trends and Impediments in Agricultural Trade. http://archive.gao.gov/d27t7/140595.pdf. U.S. News and World Report. 1986. “Frank Perdue: Chatting Up a Mob Boss.” March 17, p. 9. Overseas. U.S. Foreign Policy Sanctions: Cuba. http://usaengage.org/Issues/SanctionsPrograms/Cuba/. Varney, James. 2004. Trade Trip to Cuba Has Its Critics: Havana Conference a Sham, Experts Say. Havana Journal, December 6. http://havanajournal.com/business/entry/ louisiana_trade_trip_to_cuba_has_its_critics/. Yu, Elly. 2015. Better Relations with Cuba Could Boost Ga. Poultry. WABE http://news. wabe.org/post/better-relations-cuba-could-boost-ga-poultry (23 December). Zahniser, Steven, Bryce Cooke, Jerry Cessna, Nathan Childs, David Harvey, Mildred Haley, Michael McConnell and Carlos Arnade. 2015. U.S.-Cuba Agricultural Trade: Past, Present, and Possible Future. AES-87 ERS/USDA. www.ers.usda.gov/webdocs/publications/ aes87/53141_aes87.pdf ?v=42172 ( June).

“Fairness” in Presidential Economic Policy: Disagreements Among Upper-Class Elites

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“I’m just a humble—I’m just a humble ex-bureaucrat.” Lawrence Summers (2008), at a panel discussion at the Brookings Institution

Successive editions of Who Rules America? have provided useful tools for analyzing the intersections of class conflicts and institutional power in government (Domhoff 1967, 2014). This chapter seeks to refine these tools as it analyzes economic policymaking in the Obama Administration and the latent theme of fairness in economic reform legislation after the Great Recession of 2008. G. William Domhoff analyzes the power elite, the leadership group for the upper class and corporate community, composed of CEOs and board members of the largest corporations, and trustees of major foundations and policy-planning groups, hereafter also called the elite (Domhoff 2014, pp. 104–106). The power elite has disagreements among itself, and disagrees more fundamentally with the liberal-labor political alliance (Domhoff 2014, pp. 184–186).1 This chapter suggests several additional conceptualizations of elite conflict that are useful in analyzing reforms such as the Dodd-Frank Act

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(2010). This legislation moved away from earlier market-fundamentalist versions of neoliberalism that emphasized deregulation and undiminished property and contract rights for corporations. Domhoff conceptualizes the upper class as a network of interrelated institutions such as exclusive boarding schools, social clubs, and charity events whose participants are mostly top corporate executives and families in the highest 1 percent of the wealth distribution (Domhoff 2014, pp. 42–70). Disagreements within the upper class, reflected in arguments in policy planning and lobbying groups, shaped reforms enacted of the upper class, for the upper class, and by the upper class and power elite. Under Obama, elite economic reformers did not directly address the persistent issues of economic inequality between social classes. Rather, elite reformers adjusted the standards governing relations within the upper class, composed of 1 percent (.01) of the population with household incomes of roughly $1.3 million and wealth of $16 million. In times of boom and particularly bust, policies reflected emergent judgments about groups within the upper class, such as the financial and high-tech sectors, and the very wealthy portion of the upper class consisting of the top .001, with incomes of $6 million (Domhoff 2013; Johnston 2011). The 525 billionaires in the United States owned $1.9 trillion in wealth in 2013. Eight of the world’s billionaires own as much as half the earth’s population (Sullivan 2017). Elite reformers on particular issues such as regulating bank speculation consist of a handful of individuals who are or have been congressional progressive or black caucus members, or critical voices in universities, journalism, government regulatory agencies, and elsewhere. Some elite reformers come from the more change-oriented organizations in the liberal-labor policy network (Domhoff 2014, pp. 102–104).2 Many elite reformers have risen in their careers to become members of the power elite and/or the upper class, but even if they have not, these reformers are sufficiently well connected so as to instigate a discussion within the power elite and the upper class, particularly with more established leaders of the liberal-labor policy network and with moderate policy-planning groups such as the Brookings Institution, who are skeptical about significant reform. In addition to their dialog within more conservative institutions, elite reformers also interact with the liberal-labor political alliance (Domhoff 2014, pp.  184–186), which promotes social-democratic measures favoring equality, such as the Social Security Act and the National Labor Relations Act. However, the aim of elite economic reformers is not to reduce inequality, but rather to promulgate fairness; that is, upper-class notions of the distribution of rewards and obligations of productive groups. Whereas equality is the call

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of the labor-liberal political alliance, among the upper class and power elite fairness is the common premise. The variant of fairness common among the corporate rich and the most powerful policy-planning groups is market fairness, a standard that claims that the rewards resulting from transactions on a market are fair. Elite reformers also think in terms of fairness, but advocate a particular strand of fairness, investor fairness, which recognizes that markets can lead to social disruptions among the upper class, and seeks government regulation to see that investors in the upper class (rather than workers) get their own adjusted social contract such as a Square Deal, New Deal, or Fair Deal for their own exclusive community. My analysis draws upon the research for my work in progress, The Rise and Fall of the Fairness Agenda: Emergent Standards for Investors and Professionals in Economic Crises (Lo 2017). In this chapter, I advance a theory of elite reform through a case study of the Volcker Rule, a provision in the Dodd-Frank Act about bank trading of derivative3 securities. This measure was a political compromise between elite reformers versus staunch conservative Republican and business leaders, brokered by sophisticated conservative groups and institutions (Domhoff 2002, p. 163).

The Volcker Rule and Policy-Planning Groups A few elite reformers such as Paul Volcker, Barney Frank, Maria Cantwell, Sheila Bair, and Susan Collins pushed for extensive regulation so that banks would invest prudently, service customers, and avoid speculative securities and, in case of failure, could be dismantled, supervised by the federal government, rather than being bailed out. Opposing the elite reformers were neoliberal groups, such as the American Enterprise Institute, and financial interest groups, such as the Securities Industries and Financial Markets Association (SIFMA). Within the Obama Administration, reform proposals were carefully controlled by sophisticated conservatives such as National Economic Council head Lawrence Summers and Treasury Secretary Timothy Geithner, and academic experts and business executives in the Brookings Institution and the Squam Lake Group of the Council on Foreign Relations. Obama’s top economic advisors pursued global market expansion first and system stability when needed, with regulation of bank activity or consumer products as an afterthought at best. Reform brokers could accept limited changes such as executive centralization and improved accountability, while relying on existing professional institutions to register and regulate within the private

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sector. Barack Obama as president stood at a distance from racial, ethnic, women’s, and labor movements, but sometimes took advantage of popular reform sentiments to press for more change than was favored by sophisticated conservatives. Paul Volcker, the former chair of the Federal Reserve Board, proposed a regulation that would restrict banks from trading derivatives and hedge funds for the bank’s profit. Volcker, however, was not a major reformer before the Great Recession of 2008. As Federal Reserve Chair, he pushed the Federal Funds rate to 20 percent to combat inflation, an orthodox monetarist response that gave him impeccable conservative credentials. Volcker’s biography can provide some insight into why he became part of the minority of the upper class who campaign for financial reform. Volcker’s experiences of the social institutions of family and higher education shaped his career of work, shaped his associations, and created his wealth, making him eventually of the upper class, and for it through reform. Volcker was not born into the upper class of significant inherited wealth. His father was city manager of Teaneck, New Jersey, and father and son attended public high schools. Paul Volcker’s route to the upper class was a lastminute but successful application to Princeton University. Volcker recalls that the paper on Princeton’s application was like parchment. “I thought places like Harvard, Yale, and Princeton were beyond me .  .  .  . They didn’t take kids like me from Teaneck High School” (Treaster 2004, pp. 97–99). When he was a master’s student of public administration at Harvard, he studied with Keynesians like Alvin Hansen in Harvard’s Economics Department but was impressed more by conservative books. The next steps were positions at the Treasury Department and Chase Manhattan, New York Fed head, and Federal Reserve Chair, and an association with Rockefeller policy-planning groups, including the Trilateral Commission. At the time of Obama’s inauguration, Volcker held two important positions, both firmly grounded in upper-class institutions. The first was in the Group of Thirty, a policy-planning group begun by the Rockefeller Foundation in 1978. The group is composed of top executives in banks, hedge funds, and central and state banks from around the world, and at the time included Timothy Geithner, Lawrence Summers, Martin Feldstein, JeanClaude Trichet, and Mario Draghi. Volcker chaired the steering committee of the group’s Working Committee on Financial Reform, as well as chaired the Trustees of the Group of Thirty. Jacob A. Frenkel of AIG chaired the group itself. On January 15, 2009, a scant five days before President Obama’s inauguration, the Group of Thirty promulgated a report: Financial Reform: A Framework

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for Financial Stability. On the one issue of whether banks should be allowed to trade speculative investments, the Group of Thirty under Volcker’s leadership took a stand differing from staunch business conservatives. Volcker rejected the business claims that any problems of derivatives could be managed solely through already existing regulations of bank credit ratings, leverage, capital requirements, bank boards of directors, and disclosure of derivatives holdings. Volcker reasoned that it was unfair for these banks to receive money from the government at low interest rates, only to use the money to profit from risky derivatives trading, and to be bailed out if they failed. Volcker’s solution, in addition to tightening existing regulations, was to restrict banks from such trading on their own accounts, and to prohibit banks from operating hedge funds and private equity funds. Banks that did engage in such proprietary trading would have to adhere to high standards of minimum capital: Large, systemically important banking institutions should be restricted in undertaking proprietary activities that present particularly high risks and serious conflicts of interest. Sponsorship and management of commingled private pools of capital (that is, hedge and private equity funds in which the banking institutions own capital is commingled with client funds) should ordinarily be prohibited and large proprietary trading should be limited by strict capital and liquidity requirements. (Group of Thirty 2009, p. 61) Volcker had a prominent role in Obama’s transition team, and although he was not himself appointed to the top positions at Treasury or on the National Economic Council, he received favorable comments in an e-mail sent to John Podesta from Robert Pirie (2009), past CEO of Rothschild Inc. and former senior managing director at Bear Stearns. In February 2009, Obama appointed Volcker to chair the President’s Economic Recovery Advisory Board (PERAB) to supplement the views of Summers, Geithner, and Federal Reserve Board Chair Ben Bernanke. Eleven business and finance executives sat on PERAB, accompanied by two trade union presidents, and three academics who were, or had been, government officials (U.S. President Barack Obama, The White House, 2009). Four PERAB members had been on Obama’s economic transition team (Suskind 2011, p. 143). Other than the union presidents and Roger W. Ferguson (CEO of TIAA-CREF), none of the PERAB members had a reputation for being economic reformers. Under Volcker’s leadership, though, PERAB sent a memo to Obama in June 2009, advocating for a ban on bank proprietary trading (Cassidy 2010).

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In June 2009, the McKinsey Global Institute (the research arm of McKinsey Associates, an international business consulting firm with 11,000 professionals) published an article by Patrick Butler pointing to the subsidies given by the federal government to depository banks and the risky investments the banks made: [T]he growth of larger, more complex institutions . . . transferred to taxpayers costs and risks that no one had contemplated. Ignoring this downside would be a mistake, as would peremptory regulation to separate investment and commercial banking. We need a balanced reappraisal of the advantages and disadvantages of universal [financial conglomerate] banking. Even if there is no justification for untangling commercial-and investment-banking activities, stronger firewalls may be required between them, at least for deposit insurance and government guarantees. A ban on bank trading of derivatives would be one way of building a stronger wall between commercial and investment banking activities (McKinsey Quarterly 2009). In short, the Group of Thirty and PERAB were composed mostly of the corporate/finance upper classes from around the world (Thirty) and from the United States (PERAB), with some U.S. government officials scattered in. Both groups favored the ban on proprietary trading of banks largely because of Volcker’s leadership. Volcker also received support from the Peterson Institute for International Economics, a policy-planning group funded by three foundations at $1 million and higher; donors also included thirteen large corporations and foundations giving $100,000 upwards to $1 million. Volcker (2010) lectured at a Peterson Institute event, “Volcker on Essential Elements on Financial Reform,” on March 30, 2010.

The Premises of Volcker Rule Proponents: Investor Fairness Elite reformers in Obama’s PERAB and the Group of Thirty advocating the Volcker Rule had a common approach to economic policy. Elite reformers on the Obama transition team and in reform liberal publications such as the New York Times were less concerned with the plight of foreclosed homeowners and unemployed workers, and were more focused on the smooth functioning of interconnected financial institutions, and on the holders of large deposits and

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investments. The 1 percenters wanted their institutions to treat their investments fairly: with care and transparency, advancing the client’s interest using applicable standard procedures. These patterns of upper-class systematic preferences relate to a standard of fairness, investor fairness, which sometimes indicated that reform was needed when market outcomes were not appropriate. Fairness is the social expectation of a suitable balance between the contributions to, and rewards from, productivity. I use the word “fairness” in much the same sense that John Rawls used the term, to define a sub-concept under the heading of justice. Fairness is justice applied in a particular society; it is a historically specific sense of deserved treatment according to customary norms (Kessler-Harris 2001; Hochschild 1981). It is a common understanding of that society, supported by many institutions. Fairness in economic life assesses the rules of group activity in the institutions and communities in which one participates. Rawls (1971, p. 12) illustrates the concept of fairness by the maxim that, “We are not to gain from the cooperative labors of others without doing our fair share.” In cooperative efforts at work or in politics, fairness is an elaboration of what is one’s fair share of efforts such as paying taxes, amount saved for investment, or exertion at work or in emotional work. Fairness also entails a fair share of rewards such as income, wealth, consumption goods, power, or prestige. For a bank, we can rewrite Rawls: “We are not to excessively profit from the pooled savings of others without doing our fair share of putting our own money at risk, and diligently performing our duties to our clients and the public.” In a depository institution like a bank, clients deposit funds into their accounts so that they can meet payrolls and pay mortgages and other obligations. A default in a client’s institution would mean that these clients would default on their own obligations, threatening a chain reaction. Businesses and consumers depend upon depository institutions, where standards of investor fairness such as safety, transparency, and adherence to contract and procedure are upheld by the prudential regulation of the Federal Deposit Insurance Corporation (FDIC), with deposits explicitly guaranteed by the FDIC. Even in other institutions when there is no explicit federal guarantee, investor fairness stands as a principle, backed by the law of corporations, fiduciary responsibility, and the legal concepts of care, disclosure, equitable limitation, and loyalty (to client interests). The themes of Volcker proponents cohere around a standard of fair reward for funds invested, through fair process. The Volcker Rule sought to reform the practices of depository banks so as to keep them upholding the standards of investor fairness, meeting their agreed-upon obligations, so

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that extraordinary federal bailouts would not be needed. Investor fairness involved banks not only keeping in line with expected obligations, but also acceptable rewards as well. For Volcker and other reformers, the money that financial institutions had made on the “prop desk” doing proprietary trading was excessive and thus socially and ethically unacceptable. Proprietary trading in derivatives accounted for about 10 percent of the profits of Goldman Sachs (Cassidy 2010), about $40 billion a year in major Wall Street institutions, according to investigative reporters (Rivlin 2013). Proprietary trading profits depended upon funds borrowed at low rates from the Federal Reserve Bank, or from depositors attracted because the deposits were insured. All of this, according to reformers, was an imbalance of too many rewards and not enough obligations. From the upper-class perspective of elite reformers, investor fairness was needed to adjust the expectations of appropriate financial rewards and productive contributions among 1 percenters: primarily banking and real estate, but by implication to other sectors and groups such as manufacturing; hightech; old wealth and new, different regions and ethnic groups; and between the top 1 percent and the top 100th of 1 percent: between ordinary entrepreneurs and “structural speculators” with the power to rewrite the economic rules of the game through lobbying and campaign contributions (Logan and Molotch 2007). Proprietary trading had tilted the surplus flowing within the upper class, toward the top executives of the largest financial conglomerates such as JP Morgan Chase, Goldman Sachs, and Bank of America Merrill Lynch; top executives were also large shareholders of the firms. To gain cash from depositors and the Federal Reserve system, some Wall Street investment banks during the 2008 crisis became commercial banks as well, using the new cash from the Fed and depositors to keep themselves from collapsing as a result of their failing investments in bundled mortgages and their bad bets to transfer risk and bet against mortgages. The Volcker rule sought modest restrictions on speculative activities. Elite reform made sense for some in the upper class, given its concerns and culture. Although social democratic pressures, as we see in a subsequent section, were vital to the success of elite reform, elite reform was a positive agenda for the upper class and was not merely a concession to social democratic forces. But for egalitarians, influencing the evolution of reform fairness was one of the few open channels by which the pressure of social democrats could be effective among high policymakers. Fairness discourses were accessible more broadly through the intellectual, artistic, and cultural life the U.S. upper class sponsored. Through mass media and popular culture, talk of fairness reached broad sections of the U.S. population.

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Upper-Class and Elite Opposition to the Volcker Rule We have documented the disagreement among upper-class groups over Volcker’s proposal that depository banks should be prohibited from engaging in proprietary trading of derivatives for their own gain. Volcker’s proposals faced opposition in upper-class circles outside and inside the administration. During Obama’s first year in office, as major reform legislation was being planned, the ban on proprietary trading was not on the agenda of Obama’s top economic advisors, let alone financial industry interest groups or upperclass policy-planning groups. Neither Obama’s Treasury Secretary Timothy Geithner nor National Economic Council head Lawrence Summers favored restricting bank proprietary trading. Top advisors had their favored solutions to the crisis; for Geithner, it was stress tests, calculations of how the most important banks would fare in simulations of economic crises (Suskind 2011, pp. 350, 396; Cassidy 2010). The U.S. Treasury Department’s (2009) draft plan for financial reform, a white paper prepared by Treasury staff, did not mention restricting proprietary trading. Obama, swayed by Geithner and Summers, did not endorse the Volcker rule, waiting to endorse only until there was egalitarian talk in Congress and in the press criticizing outsized executive bonuses in bailed-out companies (U.S. President Barack Obama, The White House, Office of the Press Secretary, 2010). Even then, Geithner disagreed with the President, expressing private skepticism about the Volcker rule, arguing that it might reduce U.S. global competitiveness, and that proprietary trading was not a major cause of the financial crisis (Wutkowski and Eder 2010)—the exact same arguments that key policy-planning groups were repeating (see the subsequent discussion). No consensus for Volcker existed among policy-planning groups that would serve as a counterweight to the strong opposition Volcker faced from the financial industry. The Brookings Institution, widely regarded as a leading centrist policy group (Domhoff 2014, pp. 89–90) and considered by McGann (2014) as the No. 1 U.S. think tank, did not take a unified official stand on Volcker or Dodd-Frank. Rather, Brookings in its many publications and webpages, featured the views of individual academics and business leaders with positions at the institution. The influence of these individuals can be assessed by the rank of their positions, and the number and placement of their publications. On the Volcker Rule, the most influential Brookings fellow was Douglas J. Elliott. Elliott (BA in sociology from Harvard, a former vice president and managing director at J.P. Morgan) was opposed to Volcker’s

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proposal, analyzing the proposed Volcker Rule on six occasions in Brookings publications. In a December 2009 Brookings Research Paper, Elliott categorized the proposed Volcker Rule as a throwback to the 1930s concept of the “old Glass-Steagall law,” that banks taking in customer deposits on Main Street should remain distinct institutions from Wall Street. Elliott criticized this old thinking: My own belief is that the U.S. financial system is much too complex these days to usefully be able to divide activities into the two groupings. For example, I do not know how to tell the difference between a “loan” and a “security” now that most large loans can be, and are, traded. Without some of these basic distinctions, it becomes impossible to implement a Glass-Steagall–like division, even if one felt it were worthwhile. (Elliott 2009) Elliott (2009) added a dig that the Volcker Rule was more suited for “emerging economies,” which have “less developed markets” than the United States. Furthermore, to Elliott, the Volcker proposal lacked widespread support and was “virtually a dead issue politically.” But as we shall see, even though Volcker lacked consensus among upper-class circles, pressure from labororiented U.S. senators led to some elements of the Volcker Rule being placed in the Dodd-Frank Act. On January 21, 2010, President Obama belatedly endorsed Volcker’s proposals and coined the term “Volcker Rule.” Reacting to the popular outcry over large bonuses for bailed-out bank executives, Obama for one time turned to elite reformers on his PERAB advisory board rather than his appointees Summers and Geithner. The very next day Elliott (2010b) underlined his criticisms of the Volcker Rule. Elliott yearned for the compromising Obama before the Volcker endorsement who had balanced regulation with the neoliberal saving grace—in Elliott’s words, “the benefits of letting financial markets work to find the most efficient solutions on their own.” For Elliott, the Volcker Rule was an outright prohibition of some economic actions, the worst kind of edict in the eyes of Elliott. Elliott was trying to appeal to behavioral economists within the Obama Administration who would rather influence human action through small, carefully engineered “nudges” of monetary incentives, costs, and regulations. In March 2010, Elliott (2010c) intensified his criticism of the Volcker Rule, arguing that it could do “significant damage” by unreasonably

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constraining bank investments, leading to lower profits. Investment decisions are “better left to the markets.” In addition, Elliott pointed out that when it came time to implement the Volcker Rule, it would be very difficult for regulators to determine which holdings of the same derivatives were banned as speculative, and which holdings were permissible to create an inventory for bank customers or a hedge4 for customers’ positions. Banking and financial lobbyists such as the Securities Industry and Financial Markets Association (SIFMA) and the American Bankers Association, as we shall see, sought to use these difficulties to create large loopholes and exceptions to the derivatives trading ban. By May 2010, Elliott (2010d) was calling the Volcker Rule “disastrous,” so bad that it would likely be taken out of the bill. Indeed, the Volcker Rule was not included in the Senate version. For Elliott, a better mode of regulation would be a requirement that banks hold a minimum level of capital in their derivatives trading units (Elliott 2010a, 2010e). Elliott’s position was in line with the testimony of financial executives before the Senate Committee on Banking, Housing, and Urban Affairs. E. Gerald Corrigan, managing director at Goldman Sachs, argued that market making for clients and hedging for client accounts are “natural activities” that lead banks to trade in derivatives. For Corrigan, like Elliott, the Volcker Rule was an unnecessary outright prohibition of bank activities; modest regulation was more effective that prohibition (Senate Committee on Banking 2010). Barry Zubrow, chief risk officer and executive vice president of JP Morgan Chase, also argued that bank customers wanted access to hedge funds, and worried that federal government restrictions on derivatives would leave U.S. financial institutions at a competitive disadvantage globally. Zubrow also emphasized that the Volcker Rule was not needed, because bank proprietary trading in derivatives (despite evidence to the contrary) did not cause the spectacular collapses of Bear Stearns, Lehman Brothers, or AIG (Senate Committee on Banking 2010). Similarly, Peter J. Wallison of the American Enterprise Institute agreed that diversified bank-holding companies, which combine depository banks and investment banks, are not the source of systemic risks. Derivatives such as credit default swaps (CDS) did not result in catastrophic, system-threatening losses. All the bad CDSs of Lehman Brothers were cleared up for $5.2 billion. Goldman Sachs’s $12.9 billion in AIG counterparty stakes would have had a “negligible” effect on Goldman if AIG had gone bankrupt (US House Financial Services Committee 2009).

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Delayed Implementation of the Volcker Rule Opposing the Volcker Rule were powerful forces within the Obama Administration along with an array of business interest and conservative groups. Many of these groups, even after the Volcker Rule was included in Dodd-Frank legislation and the bill was signed into law, continued their opposition through public relations campaigns, lawsuits, and lobbying to weaken Dodd-Frank and delay its implementation. For this aim, the U.S. Chamber of Commerce had at its disposal a total of 183 lobbyists; the American Bankers Association, ninety-one; JP Morgan Chase, sixty; and Goldman Sachs, fifty-one (Rivlin 2013). The political tug of war between reformers and deregulation proponents within the upper class led to extensive delays in the implementation of the Volcker provisions in the Dodd-Frank Act, postponing for more than two years the time when retail banks had to spin off their derivatives trading to independent units. Dodd-Frank mandated the writing of regulations to implement the Volcker Rule; draft regulations were issued on October 11, 2011. Between bill signing on July 21, 2010, and October 11, 2011, Krawiec (2013) analyzed logs recording meetings with the Treasury Department, the Commodities Futures Trading Commission, the SEC, and the FDIC. Banks, financial institutions, finance industry associations, and associated law firms accounted for 418 meetings with the regulatory agencies. Labor, public interest, and all other groups and individuals amounted to thirty-one meetings. USA Today followed up with research on 2012 and 2013 meetings with regulators and found that SIFMA had seventeen meetings on the Volcker Rule and Goldman Sachs had twenty-one (McCoy 2013). Pressure from financial companies and interest groups weakened and delayed the Volcker Rule. In December 2014, Congress passed an Omnibus Continuing Resolution that contained a repeal of Section 617 of Dodd-Frank so that banks no longer had to “push out” their swaps trading into new units that were separately capitalized from the main bank (Dayen 2014). Implementation was delayed because of pressure from the financial industry converging with opposition from high-level career officials, such as Federal Reserve General Counsel Scott Alverez (Davidson 2015). Federal agencies finished formulating the rules implementing Volcker in December 2013; banks had until July 21, 2015, to comply (Hopkins and Katz 2014). The Fed then gave banks another two-year extension until July 21, 2017, to conform to limits on proprietary trading and restrictions on relations

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with hedge funds and private equity funds (U.S. Federal Reserve Board 2014). The Fed extended for up to five additional years to 2022 a deadline for banks to divest from their illiquid investments (American Bankers Association 2016). Financial industry pressure to stop implementing the Volcker Rule is evident in a public comment period for the Financial Stability Oversight Council (FSOC) in 2010–2011 (Krawiec 2013). Among the letters that presented indepth arguments about Volcker Rule implementation, large financial institutions and groups dominated. The U.S. Chamber of Commerce (Hirschmann 2010) argued that servicing clients required bank proprietary trading and thus, many exceptions to Volcker were in order. The Clearing House Association (Alexander 2010), PNC Financial Services Group (Parsley 2010), and the Securities Industry and Financial Markets Association (Snook 2010) thought that banks should be allowed to trade derivatives whenever they had to hedge or make a market for clients. The American Banking Association (Bleier 2010; Walsh 2010) argued that depository banks should be allowed to hedge and trade derivatives on government securities. The Financial Services Roundtable (a lobbying group with eighty-four members, including three of the top five Wall Street investment banks and three of the top five life insurance companies) argued that life insurance companies and venture capital firms should receive exemptions from the Volcker Rule (Whiting 2010). The National Venture Capital Association (whose board includes top executives from three of the top six venture capital firms) concurred with the latter point (Heesen 2010). Many of the arguments in the comment letters to the FSOC from banks and financial groups repeated the arguments by Elliott and others that were made in the bill drafting stage. The U.S. Chamber of Commerce (Hirschmann 2010) argued for weakening of Volcker in ways reminiscent of Elliott’s positions. The chamber thought that enforcing a stringent Volcker Rule in the U.S., when the EU had no comparable regulations, would put the United States at competitive disadvantage; the securities industry and Financial Markets Association agreed (Snook 2010). The chamber believed that the minimum capital requirements agreed to at Basel Conference II in 2004 would be an adequate safety measure for derivatives trading, and that further regulation was unnecessary (Hirschmann 2010).

The Premises of Volcker Rule Opponents: Market Fairness Among the opponents of Volcker, even at the centrist Brookings Institution (Elliott 2010b), there are repeated statements that the best approach is to let

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“financial markets work to find the most efficient solutions on their own.” Markets, so the argument goes, begin with consumer demand. As Volcker opponents Zubrow at J.P. Morgan, Corrigan from Goldman Sachs (Senate Committee on Banking 2010), the Chamber of Commerce (Hirschmann 2010), and the Securities Industry and Financial Markets Association (Snook 2010) put it, the demand of bank customers for a range of investments, including derivatives, makes it necessary for depository institutions to engage in the profitable trade in derivatives. For the market-oriented opponents of Volcker like Elliott (2010c) and others, bank profits made banks stronger—all the more reason to trade in derivatives. The strong pro-market orientation in the late twentieth and early twentyfirst centuries has been characterized as “market fundamentalism” by Block and Somers (2014), referring to conservatives who accept market solutions as an article of faith and who strongly condemn those on government assistance and not working. Other useful conceptualizations for the market order are neoliberalism (Harvey 2005) and Washington Consensus (Bacevich 2010), referring to the U.S. policy of supporting global trade centered on the United States, and military support for market-oriented regimes around the world. Neoliberalism can be traced back to Milton Friedman’s (2002) praise of free markets, and his arguments in Capitalism and Freedom how free coordination of production through market incentives contrasts starkly to the totalitarian Soviet command economy. Friedman would agree with Elliott’s (2010b, 2010c) argument against the Volcker Rule for it being an outright prohibition by government authority, in contrast to a monetary incentive or cost, seen by marketeers as less compulsion. For Friedman, the global context was a world where free enterprise and communism competed with each other. For today’s proponents of market fairness, the context is global businesses competing with each other. An argument against the Volcker Rule was that it would impede the competitiveness of U.S. firms (Hirschmann 2010; Snook 2010). The pro-market orientation of Volcker opponents can be summarized by the phrase “market fairness.” Market fairness argues that no reforms are needed because the unfettered operation of markets already ensures that financial rewards to investors and workers already match their due. When market fairness is the norm, transactions that are based in the market seem to have rewards appropriate to an individual’s or group’s contributions to the economy through work and investments. Recall that fairness is the social expectation of a suitable balance between the obligations and rewards of productivity. For Volcker opponents, and kindred neoliberals and market fundamentalists, The Market is the standard to judge appropriateness of the gains of salaries, bonuses, and investment returns, and the responsibilities of work and saving. The Market was sometimes the spot prices on global

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markets, that quarter’s earnings, or even a share price that would only last for a microsecond. But as we have seen, the reformers on the other side believed in another standard, even reformers who were of the elite and were every bit as upper crust as market fairness proponents.

The Limits of Upper-Class Elites in the Making of Dodd-Frank Almost all elite decision-makers are members of the upper class, or at least persons of upper-middle class backgrounds who were elite educated, had government leadership positions, and had enough accumulated wealth to be accepted into the upper class. On the issue of the Volcker Rule, elite reformers did not prevail in business, government, and policy-planning circles. The Volcker Rule did not gain a consensus within the upper class. The inclusion of the Volcker Amendment in the Dodd-Frank bill was not due to the balance of forces in upper-class circles alone. Rather, Volcker was put into the final bill at a House Senate conference committee, because of the support of left Democratic Senators Merkley (Oregon) and Levin (Michigan). The disagreement in the upper class and within the Obama Administration was a draw. Volcker prevailed only through the legislative branch, and with direct pressure from the bottom 90 percent. Merkley and Levin had sponsored an amendment to include the Volcker Rule in the Dodd-Frank bill; although the amendment failed, it paved the way for the conference committee to include Volcker. The success of Merkley and Levin depended upon sufficient enthusiastic support and voter turnout from labor, racial, ethnic, and social Democratic voters to put Barack Obama in the White House, give Democrats control of both houses, and exert pressure between elections, through lobbying groups such as Americans for Financial Reform (AFR). Based in several thousand community groups, the AFR has an executive committee consisting of representatives from the AFL-CIO and the Service Employees International Union (SEIU), two citizens’ watchdog groups, the National Community Reinvestment Coalition, and the Leadership Conference on Civil and Human Rights. AFR sent memos to Washington, D.C., regulatory agencies to urge that the intent of the Dodd-Frank legislation be vigorously implemented through the rule-making processes (Americans for Financial Reform 2010, 2012). In the disagreement among the upper class between business groups favoring market fairness and elite reformers favoring investor fairness, reformers

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prevailed in the enactment of the Volcker Rule because of pressure from social democratic organizations favoring equality. Business groups favoring market fairness, however, came back to delay the implementation of the Volcker Rule. As a result, the policies of the Obama Administration were an incomplete response to the significant problems of speculation in financial institutions. They were, however, a noteworthy response that achieved a new compromise between market fairness and investor fairness among elite policymakers. Socially appropriate rewards and responsibilities among the upper class were gradually adjusted, channeling some money toward financial institutions that were in jeopardy, and altering the opportunities for outsized profitability for large corporations in different economic sectors. Investor fairness is to be distinguished from equality in the distribution of goods and services. In industrialized democracies, labor unions, social movements, and social-democratic political parties call for equality in the form of universal access to basic necessities and a reduction in the inequalities of wealth and income (Sen 1992). Although social democratic pressure was needed for Volcker to have any edge, elite reformers themselves were not egalitarian, but rather had their own rationale for reform: investor fairness, with different premises from egalitarianism. During crisis periods when government policies must be quickly decided, elite-held but widely spread standards of fairness are conveniently on hand as common sense, which is uncritically applied to set an agenda for reform. This agenda largely prevents issues of inequality from being seriously raised. Only a very upper-class definition of fairness, fairness among investors of the 1 percent, governed the alternatives.

Conclusion and Further Research G. William Domhoff ’s analysis of factional conflict in the American upper class and power elite has proven relevant to the changing political landscape over the past fifty years. I have sought to contribute to power structure research by examining the positions and arguments of elite reformers, social democrats, and pro-market business groups—to discover their underlying premises: investor fairness, equality, and market fairness. The capability to conduct economic transactions is a matter of basic functioning that constitutes human rights and a realm of equality for Amartya Sen (1992). The depository bank of 1960 handled home loans in the community and consumer transactions; households with accounts in an FDICinsured bank rose to 93 percent of all households in 2015. But the rise of

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conglomerate financial institutions made home mortgages and checking accounts matters of exotic and speculative investment instruments for the top 1 percent, which were the source of great profits for banks, but which turned sour in the economic crisis of 2008. Social democrats wanted measures to rein in speculation and undo some of the damage to the consumer-oriented part of the banking system that the Glass-Steagall Act had protected from Wall Street. But faced with opposition from groups who thought that markets were eternally fair, the only way forward for social democrats was to go with elite reformers, who made reform not a matter for consumers, but for the investors of the 1 percent. The idea of fairness is a constructed standard based in an understanding of what the rewards and obligations of groups should be, based on their perceived contribution to production. What a contribution is, what productivity is, and whether particular policies are fair are matters for disagreement, even among the upper class. On the issue of the Volcker Rule, upper class and elite groups disagreed among themselves whether trading of derivatives was necessary to professionally manage risk in a productive global economy, or was inappropriate given bank responsibilities stemming from insurance by the FDIC. After thirty years of the pro-market, deregulation regimes of Reagan, Bush, and Bush, the Great Recession made a section of the upper class receptive to the notion of investor fairness. Investor fairness in some ways was a continuation of neoliberalism, in that both insisted on a global economy, free trade, mobility of labor and capital, and the predominance of market incentives and exchanges. But investor fairness, unlike neoliberalism, argued for rebalancing the unlimited pursuit of profit with a social concern, for how shifting holdings of wealth affected relations among groups in the upper class. Future research on other provisions of the Dodd-Frank Act will reveal how the three-way disagreements among the forces of investor fairness, market fairness, and egalitarianism were resolved with a modest victory for investor fairness, which only succeeded through social-democratic pressure. My research (Lo 2017) on policies about foreclosures shows sharp disagreements between social democrats, who wanted extensive refinancing and modification of mortgages and a halt to foreclosures, versus market fundamentalists, arguing that the foreclosed were undeserving. Treasury Department officials in the Obama Administration, supported by centrist policy groups such as Brookings (Elmendorf 2007; Rivlin 2008; Furman 2008), allocated $31.5 billion in consumer mortgage relief out of the Troubled Assets Relief Program (TARP). By comparison, $400 billion in TARP funds was paid to

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large corporations in distress, mostly to purchase their bundled mortgages and other securities whose value had sharply fallen. A total of $25 billion in homeowner relief was paid from the stimulus package of the American Recovery and Reinvestment Act of 2009, out of a total stimulus package of $787 billion (US Office of the Special Investigator General 2015). My analysis of another case of elite policymaking, to standardize derivative securities and trade and clear such investments through regulated exchanges, revealed the limited accomplishments of elite reformers in the context of competitive global financial institutions and the limits of international agreements among nation-states. Furthermore, elite reformers’ attempts to increase minimum levels of risk-based capital and leverage capital in banks also foundered on international negotiations for a new Basel Accord on bank regulation. My research also points to new directions to explore the historical origins of investor fairness and market fairness in upper-class circles. The principle of elite reformers in the Obama years, investor fairness, evolved as a new concept out of market fairness around 1910, a time of extreme inequalities in wealth and income (Piketty 2013). Theodore Roosevelt and Woodrow Wilson regulated the huge new business trusts (Hovenkamp 1991), amid new ideas from intellectuals and journalists such as the “national liberalism” of the New Republic magazine (Forcey 1961). Elite reform, back then and now, is premised on global free trade and business efficiency in government (Sklar 1988; Lustig 1986), expressed in Edwin L. Godkin’s Nation magazine of the 1880s, in contrast to today’s Nation, read by leftists calling themselves “progressives.” Many of the institutions that actively participate in today’s policy disagreements originated in the early twentieth century. Some of today’s institutions, such as the Group of Thirty and TIAA-CREF, a voice for investor fairness, stemmed from the vast industrial wealth of John D. Rockefeller (Group of Thirty) and Andrew Carnegie (TIAA-CREF). Ironically, the reform fairness of the present-day leaders in those institutions is inspired by past critics of concentrated wealth such as Louis Brandeis. Brandeis’s Other People’s Money was an indictment of the business practices of the great Wall Street investors of 1910 and how they unfairly appropriated smaller investors. Charles Evans Hughes investigated the vast new fortunes in the life insurance industry and how ordinary investors were unfairly treated. Brandeis and Hughes at the time stood not as humble ex-bureaucrats, but as attorneys with a new sense of their profession and its ethics. By 1910, it was clear that the laissez-faire market order of Supreme Court Justice Roger Taney, born in an agrarian market republic, was no longer adequate in a new era of mass production and mass marketing industry. Fortunes

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were colossal, and enterprises were too big to fail. Today’s elite reformers questioned their own contemporary laissez-faire order when faced with the same issues of inequality, periodic panics and great recessions, new fortunes and monopolies, and corruption of government. Reformers of 2010 constructed modest solutions from an upper-class and elite perspective—solutions that therefore had some chance of being supported and implemented by broader segments of the upper class. Elite reformers can thank Brandeis and Hughes for their investigations of how the large fortunes of the .0001 are unfair to ordinary 1 percenters. They can also thank the super-rich of 1910 for founding institutions, which after four generations of passed-on wealth, give reformers a location where fairness among the upper class can be respectfully discussed. But what is fair for the 1 percenters and what is more equal for the 99 percent are two very different things.

Acknowledgments The author thanks Michael Schwartz, G. William Domhoff, Darlaine Gardetto, and Lee “Chip” Clarke and the editorial board of the Rose Monographs series for their comments on earlier versions of this work. Jeff Stilley did an outstanding job gathering documentary sources on the 2008 crisis in a systematic and theoretically driven fashion, and summarizing the material. Research support from the Dean of the College of Arts and Sciences, University of Missouri, is gratefully acknowledged.

Notes 1 Domhoff uses the term “liberal-labor alliance” to refer to social movements and elements of the Democratic Party that campaign for equality. 2 The “liberal-labor policy network” consists of organizations such as the Center for Budget and Policy Priorities, the New America Foundation, and the Center for American Progress. This network contains moderates and conservatives as well as elite reformers and some social democrats/egalitarians. 3 A derivative is a security whose value is tied to the future value of, or contract, about another security. Examples include a credit default swap, in which a company insures a bundle of mortgages, accepts a payment, and pledges to pay the mortgages in case they default or lose value. 4 A hedge consists of further investments set up to protect an original investment against losses. A hedge on a stock investment, for example, could be to pay for a put option that gives you the right to sell the shares of stock at 10 percent below what you paid for the stock. If the stock goes down by 30 percent, you only lose 10 percent.

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U.S. Congress, Senate. 2010. Senate Committee on Banking “Implications of the ‘Volcker Rules’ for Financial Stability,” February 4. www.banking.senate.gov/public/index. cfm/hearings?ID=DE472A35-AE01-442F-A768-B374E2849D70 U.S. Federal Reserve Board. 2014. Press Release, Release Date: December 18, 2014. www. federalreserve.gov/newsevents/press/bcreg/20141218a.htm U.S. Office of the Special Inspector General for the Troubled Asset Relief Program (TARP). 2015. Mortgage Servicers Have Denied Four Million Homeowner Applications for HAMP Assistance Information excerpted from the July SIGTARP Quarterly Report to Congress on the Status of TARP. U.S. President Barack Obama, The White House, Office of the Press Secretary. 2010. “Remarks by the President on Financial Reform,” January 21. https://obamawhitehouse. archives.gov/the-press-office/remarks-president-financial-reform U.S. President Barack Obama, The White House, President’s Economic Recovery Advisory Board. 2009. https://obamawhitehouse.archives.gov/administration/eop/perab/ members/volcker accessed June 2, 2017. U.S. Treasury Department. 2009. Financial Regulatory Reform: A New Foundation. http:// online.wsj.com/public/resources/documents/finregfinal06172009.pdf Volcker, Paul. 2010. “Volcker on Essential Elements on Financial Reform,” Lecture at the Peterson Institute March 30. https://piie.com/events/volcker-essential-elementsfinancial-reform Walsh, Carolyn, Deputy General Counsel, American Bankers Association Securities Association, to Financial Stability Oversight Council. November 4, 2010. Public Input for the Study Regarding the Implementation of the Prohibitions on Proprietary Trading and Certain Relationships with Hedge Funds and Private Equity Funds, Docket ID: FSOC-2010– 0002, Agency: Financial Stability Oversight Council (FSOC) www.regulations.gov/ docket?D=FSOC-2010-0002 Whiting, Richard, Executive Director and General Counsel, Financial Services Roundtable, to Financial Stability Oversight Council. November 5, 2010. Public Input for the Study Regarding the Implementation of the Prohibitions on Proprietary Trading and Certain Relationships with Hedge Funds and Private Equity Funds, Docket ID: FSOC-2010– 0002, Agency: Financial Stability Oversight Council (FSOC) www.regulations.gov/ docket?D=FSOC-2010-0002 Wutkowski, Karey and Steve Eder. 2010. “Geithner Aired Concern On Bank Limits: Sources,” Politics. January 21, 9: 43pm EST.

Index

absolutism 91 Affordable Care Act 82, 92, 123 Afghanistan: American war deaths 76; Soviet Union invasion of 135; war 64 African Americans: Jim Crow system and 79–81; lack of power 18 Agricultural Adjustment Act 33, 44 agricultural exports, to Cuba 172–3 Aid to Families with Dependent Children 72 Allende government in Chile 71 Al Qaeda networks 136 Althusserian Marxists 41 Alverez, Scott 193 Amalgamated Clothing Workers 153 American Bankers Association 192 American Banking Association 194 American Enterprise Institute 108, 118, 192 American Farm Bureau Federation 27 American Federation of Labor (AFL) 160–1; Congress of Industrial Organizations (CIO) and 152–6; labor history 147–52; radical rivals of 147–52; Taft-Hartley and AFL-CIO 156–8 American Grand Strategy and Corporate Elite Networks (Apeldoorn and de Graaf ) 128 American Legislative Exchange Council (ALEC) 119, 122 American Marxists 40 American Plan 149, 151, 161 American Political Science Association (APSA) 106, 110, 111

American Political System: A Radical Approach (Greenberg) 109 American Politics: Policies, Power, and Change (Dolbeare and Edelman) 109 American Recovery and Reinvestment Act of 2009 199 American Revolution 43 American Security Council 108 Annenberg Foundation 118 Apeldoorn, Bastiaan van 128 Aptheker, Herbert 68 Atlantic Council 106, 130 autonomous military elite 75–8 Bachrach, Peter 66 Bair, Sheila 184 Baltzell, E. Digby 12, 14 Bank for International Settlements 74 Bank of America Merrill Lynch 189 Baratz, Morton 66 Bartels, Larry 110–11 Bear Stearns 186, 192 Bell, Daniel 14 Bezos, Jeff 117 Bezos Family Foundation 119 biased pluralism 38 big business 5 Bill and Melinda Gates Foundation 116, 118, 119 Black Panthers 19 Block, Fred 111

206

Index

Bohemian Club of San Francisco 15 Brandeis, Louis 199, 200 Breiger, Ronald 16 Brookings Institution 95, 106, 108, 113, 182, 184, 194 Brown vs. Board of Education 79 Burnham, Walter Dean 26 Burris, Val 113 Bush, George H. W. 39, 71, 135, 172 Bush, George W. 72, 78, 81, 134, 139, 172, 175, 176 Business Advisory Council 107 Business Council 108 Business Roundtable 108, 130–2 Campbell, John L. 86–99 Camus, Albert 65 candidate-selection process 26–7, 48, 107–08 Cantwell, Maria 184 capitalism 6, 40, 68 Capitalism and Freedom (Friedman) 195 Carnegie, Andrew 199 Carter, Jimmy 172 Castro, Fidel 176 Castro, Raúl 176 Cato Institute 96, 119 Center for American Progress (CAP) 95, 119 Center for Democracy in the Americas (CDA) 174 Center for Education Reform 119 Center for International Policy (Cuba Program) 174 Center for Strategic Analysis 94 Center for Strategic and International Studies 106, 130 China: United States and 133; U.S. government and 78 civil rights movement 45, 79–81 Civil War 88 class dominance approach 126; theorists 113; understanding politics 107–9 class identity 39 Clearing House Association 194 Clinton, Bill 24, 71, 167, 169, 170 Cold War 22, 71, 77, 80, 134, 138, 139 Collins, Susan 184 Committee for Economic Development 36, 107, 108, 113, 128, 130 Committee on the Present Danger 134–5 Commodity Credit Corporation 175 Communist International 151, 161n5

Communist Party of America 151 Communists 153, 155 community power structures, new theory of 28–31 Conetta, Carl 138 Conference Board 108 Congress 92, 96–7, 123 Congressional Budget Office 91, 92, 97 Congress members, social backgrounds of 21–2 Congress of Industrial Organizations (CIO) 147, 151, 160–1; American Federation of Labor (AFL) and 152–6; Taft-Hartley and AFL-CIO 156–8 Conservative voting coalition 25, 27, 33–5, 37, 47, 67–8, 74, 86, 108–9 conspiracy theory 14 control, term 21 corporate community 16–17, 22, 25, 32, 36–7, 47, 67–8, 74, 86, 108–9, 123, 153, 159, 182 corporate-conservative alliance 31, 107 corporate control 19, 19–21 corporate dominance 47, 127, 147 corporate elite 117 corporate interests, U.S. empire 127–34 corporate liberals 40, 41, 114 corporate moderates 27, 33–4, 36–7, 41, 45, 78, 114, 148, 160 corporate ownership, upper class 67–8 “corporate rich” 6 corporations 5 Corrigan, E. Gerald 192, 195 Council of Economic Advisors (CEA) 25, 91, 97 Council of Economic Analysis 94 Council on Foreign Relations 107, 108, 113, 128, 130 Cox, Ronald W. 126–40 crackpot realism 65 Crawford, Rick 173, 179 Cruz, Ted 179 Cuba: agricultural exports to 172–3; embargo 172; Obama’s executive actions 179 Cuba Democracy Act of 1992 172 Cuban Liberty and Democratic Solidarity Act of 1996 172 Dahl, Robert A. 12, 165 Danish Economic Council 93–4 David and Lucile Packard Foundation 118 Dean, James 65 Defense Department 76, 137, 139

Index 207 Defense Planning Guidance 129, 135 Defense Wide Agency and Program Funding 138 de Graaf, Nana 128 Democracy for Realists (Achen and Bartels) 24 Democracy for the Few (Parenti) 109 Democratic administration 24 Democratic Congress 38 Democratic Party 10, 23–5, 35, 45, 146–7 Democrats 4, 21, 25, 29, 32, 92 Denmark 93–4 derivative 184, 200n3 Deutsch, Ted 179 DeVos, Betsy 118, 121 Dodd-Frank Act 182, 184, 190, 191; limits of upper-class elites in making 196–7 Dolbeare, Kenneth 109 Domhoff, G. William 3–10, 11–48, 63, 70, 116, 182–4 Donald and Doris Fisher Foundation 119 Draghi, Mario 185 drone wars 81 dynamic modeling techniques 92 economic class, concept of 17 Edelman, Murray 109 education reform movement 118–24; charter schools 118–22 Eisenhower, Dwight 65, 80 Eli and Edythe Broad Foundation 118, 119, 120 elite reformers 183 elite theory, think tanks 112–14 Elks Club 45 Elliott, Douglas J. 190–2 Employee Representation Plans 34 Energy Department 76 Espy, Mike 169 establishment, concept of 13 European Common Market 128 fairness: idea of 198; investor 187–9, 197, 199; market 199; market of Volcker Rule 194–6 Federal Deposit Insurance Corporation (FDIC) 188 federal government, control of 21–2 Federal Reserve Act of 1914 171 Federal Reserve Board 91 Feldstein, Martin 185 Ferguson, Roger W. 186 financialization 68

Financial Markets Association 194 Financial Stability Oversight Council (FSOC) 194 Firestone 67 First Gulf War 71 Fiscal Crisis of the State, The (O’Connor) 39, 40 “Fix the Debt” coalition 140 Food Safety and Inspection Service (FSIS) 167 Ford, Gerald 172 foreign policy, U.S. exports as weapons of 170–1 Foreign Policy Association 107, 130 Foundations 15, 20, 23, 27, 32, 36, 86, 107, 113, 116–19, 120, 165, 182, 187 Frank, Barney 184 Friedman, Milton 195 Gans, Herbert 23, 30 Gates, Bill 123 Gates, Robert 137 Geithner, Timothy 184, 185, 190 General Federation of Women’s Clubs 45 General Motors, UAW and 154–5 GI Bill 79 Gilens, Martin 110, 126 Gingrich, Newt 91 Gitlin, Todd 65 Glass-Steagall Act 191, 198 global elite 73–5 globalization 68 Global North 73 Global South 71, 73 Godkin, Edwin L. 199 Goldman Sachs 189, 192, 195 Goldwater, Barry 21 Gompers, Samuel 148 “governing class” 12 Government Accountability Office 91 Grand Theory 11 Great Depression 7, 88 Great Recession 3, 31, 185, 198 Green, William 154 Greenberg, Edward S. 109 Group of Thirty 185–7, 199 growth machine 29 Gutierrez, Carlos 176 Hacker, Jacob 106, 110, 111 Hadley, Stephen 136 Hall, Peter 88 Hansen, Alvin 185

208

Index

Harris, Jerry 139 Hartung, William 136 Harvey, David 30 Hattam, Victoria 88 health care plan, Clinton 92 Heard, Alexander 21 hedge 192, 194, 200n4 Helms-Burton Act 172 Heritage Foundation 95, 96, 108, 118 Higher Circles, The (Domhoff ) 73 Hillman, Sidney 153 historical institutionalism 7–9, 44, 92, 94, 99n5, 99n8; confusing with organizational institutionalism 89–90; emergence of 109; equating state autonomy theory and 87–9 Hitachi 95 Homeland Security department 76 Hoover, J. Edgar 22 Hoover Institution 118 Hudson Institute 118 Hughes, Charles Evans 199, 200 Hunter, Floyd 28 Hussein, Saddam 136 identity politics 39 Ideological, Economic, Military and Political networks (IEMP model) 17 Imperial Foods Chicken Plant 167 Industrial Workers of the World (IWW) 147, 150, 160–1 inequality: research on 110–11; wealth and income 86 Insurgent Sociologist, The (journal) 30 International Bank for Reconstruction and Development 128 International Molders’ Journal (journal) 149 International Monetary Fund 73, 74, 128, 130 International Typographical Union (ITU) 148–9, 158, 161n2 investor fairness 184; Volcker Rule 187–9 Iraq, American war deaths 76 Jackson, Bruce 135 Jacobs, Lawrence R. 106, 110 JC Morgan Chase 95 Jews 16, 150 Jim Crow system 79–81 John Paul II (Pope) 174 Johnson Administration 80 Joint Economic Report ( JEP) 93 JP Morgan Chase 189, 190, 192, 195

Kapitalistate (journal) 40, 41 Kap-State Marxists 41 Katzenstein, Peter 99n2 Katznelson, Ira 109 Kellogg Foundation 118 Kennedy, John F. 80, 159, 172 Kesselman, Mark 109 King, Desmond S. 106 KKR (global investment firm) 95 Knights of Columbus 45 Knights of Labor (KoL) 147, 150 Koch, Charles 96, 117, 119 Koch, David 96, 117, 119 Korean War 35, 36, 135 Kupperman, Charles 136 labor factions: American Federation of Labor (AFL) and radical rivals 147–52; CIO, AFL and the state 152–6; early history 147–52; employer offensive and private/public split 158–60; Industrial Workers of the World (IWW) 147, 150; International Typographical Union (ITU) 148–9; Knights of Labor (KoL) 147, 150; National Association of Manufacturers (NAM) 149, 151; National Civic Federation (NCF) 148; power structure research 145–6; Printing Pressmen’s union 148; Service Employees International Union (SEIU) 159; Trade Union Unity League (TUUL) 147, 150–1; United Carpenters and Brotherhood of Electrical Workers 149; United Mine Workers (UMW) 149 Lachmann, Richard W. 70–82 lack of power, indicator of 18 Lafeber, Walter 128 Layne, Christopher 128 LBGTQ rights 81 Lehman Brothers 192 Lewis, John L. 153 liberal individualism 43 liberal-labor alliance 31, 33, 34–5, 79, 107, 146, 156, 182–3, 200n1 liberal-labor coalition 27, 146, 156 liberal-labor policy network 113, 183, 200n2 Lilly Endowment 118 Lo, Clarence Y. H. 182–200 Lockheed Martin 135–6 Lugar, Richard 137 Lyons, James K. 176

Index 209 McConnell, Grant 43 Manhattan Institute 118 Mann, Michael 17, 91 Mannheim, Karl 39 Manza, Jeff 42 market fairness, phrase 195 market fundamentalism 195 Marshall Plan 128 Marxism 4, 5–6, 12, 39, 166 Marxists, The (Mills) 7 Marxist theory 17; finance capital 68 mass media 14 Medicare 27, 35, 140 Medvetz, Thomas 112 membership network analysis 16, 42 Menendez, Bob 179 Michael and Susan Dell Foundation 119 Microsoft 95 middle levels of power: Domhoff and 65–7; Mills’ conception 64–5 military elite, autonomous 75–8 military-industrial complex (MIC) 65, 133; relevance of 139–40; risking power of post-9/11 134–8 Mills, C. Wright 6–7, 12–3, 15, 17, 20, 22, 27, 39, 42, 63–8, 77, 107, 112–13 Millsian “elitist” theory 39 Ministry of Economics and Technology 93 Mintz, Beth 116–24 Missile Defense Agency 138 Mollenkopf, John 30 Molotch, Harvey 28 Moran, Jerry 177 Myth of Liberal Ascendancy, The (Domhoff ) 72, 78 NAFTA see North American Free Trade Agreement (NAFTA) Nation (magazine) 199 National Advertising Council 107 National Association of Manufacturers (NAM) 27, 108, 149, 151, 154, 161 National Chicken Council 170, 171, 178–9 National Civic Federation (NCF) 148, 151, 161 National Commission on Terrorist Attacks Upon the United States (9/11 Commission) 136–7 National Community Reinvestment Coalition 196 National Defense Industrial Association (NDIA) 139

National Industrial Conference Board (NCIB) 150, 161n4 National Industrial Recovery Act (NIRA) 44, 152 National Institute for Public Policy (NIPP) 136 National Labor Board 34 National Labor Relations Act (NLRA) 23, 27, 31, 34–5, 44, 152, 166, 183 National Labor Relations Board (NLRB) 46, 152, 156, 159, 167, 168 national liberalism 199 National Planning Association 41 National Security Council 78 National Turkey Federation 171 National Venture Capital Association 194 National War Labor Board (NWLB) 150 neoliberalism 30, 73; corporate school reform movement 123; venture philanthropy 117–18 neoliberal policy, domestic and foreign 79 New Deal 5, 24, 44, 46, 152, 184 New Men of Power, The (Mills) 7, 66 New Republic (magazine) 199 New York Times (newspaper) 106, 187 Nixon, Richard 80 Nixon Administration 36, 45, 46, 80 nonprofit organizations, control of 20–1 North American Free Trade Agreement (NAFTA) 36, 131–2 North Atlantic Treaty Organization (NATO) 128, 130, 135 Northern Republicans 25 Nuclear Posture Review 136 Obama, Barack 31, 172, 185, 190, 196 Obama Administration 74, 81, 139, 177, 179, 182–3, 197; Affordable Care Act 82, 92; military 77, 78 Occupational Safety and Health Administration (OSHA) 167, 178 O’Connor, James 39 Offe, Claus 41 Office of Management and Budget 91, 97 Olin Foundation 118 O’Neill, Paul H. 175 opinion-shaping process 26, 36–7, 107 Organisation for Economic Co-operation and Development (OECD) 98 organizational institutionalism, confusing with historical 89–90 Other People’s Money (Brandeis) 199

210

Index

overrepresentation 18 Overseas Private Investment Corporation 175 Page, Benjamin I. 106, 110–11, 126 Palmer Raids 151 Parenti, Michael 109 Parsons, Talcott 14, 43 Paul, Ron 175 Peace of Illusions, The (Layne) 128 Perdue, Frank 168 Perdue, Sonny 178–80 Perrow, Charles 90 Perspectives on Politics (journal) 106 Peschek, Joseph G. 105–14 Peterson Institute for International Economics 130 Pierson, Paul 106, 111 Pilgrim’s Pride 168 Piven, Frances Fox 110, 111 place entrepreneurs 29 pluralism 4–5; biased 38; pluralist 14, 18 policy-discussion groups 13, 16, 20, 23, 25–6, 32, 38, 86, 108, 165 policy-planning networks 23, 36–7, 86–7, 98; class dominance approach 107–8; concept of 105; confusing historical and organizational institutionalism 89–90; Democratic and Republican parties 4–6, 146–7; equating state autonomy theory and historical institutionalism 87–9; question of influence 96–7; ruling class consensus 94–6; state autonomy and historical institutionalism 87–90; state policy research organizations 90–4; think tanks 105–8, 112–14 political power, Domhoff ’s model 146–7 politics, poultry industry 166–9 Politics of Power, The (Katznelson and Kesselman) 109 polity, definition 20 Polsby, Nelson 19 poultry: exports 174–7; exports to Cuba 172–3; industry and labor 177–80; politics 166–9; research agenda 169–70 Powell, Colin 175 power 9–10 “power elite” 10, 22, 25–7, 29, 31, 36, 42, 48, 65, 68, 107–8, 110, 146, 168–9, 197; Domhoff 182–4; Mills’ 63–4; phrase 12–13; popular opposition to elites 78–82; poultry 169–70; term 63

Power Elite, The (Mills) 6, 42, 113 power indicator 18; corporations 19–20 Powers That Be, The (Domhoff ) 107 power structure research 6–7, 38–9; Domhoff ’s model 145, 146–7 Power Structure Research (Domhoff ) 30 President’s Economic Advisory Board (PERAB) 186, 187 Printing Pressmen’s union 148 Progressive Era 5, 15, 44 Progressive Policy Institute 119 Project for Defense Alternatives 138 Project for the New American Century (PNAC) 134–6 Project for Transitional Democracies 135 proto-think tanks 113 Puerto Rican Journey, The (Mills) 66 racism, white 45–6 Reagan administration 39, 71 Red Scare 151 Reno, Janet 169 Republican Party 33, 146–7 Republicans 4, 21, 25, 46, 91, 92 Rhee, Michele 116, 120, 122 Robertson Foundation 119 Rockefeller, John D. 199 Rockefeller Foundation 185 Rogue State Doctrine 138 Roosevelt, Franklin D. 34 Roosevelt, Theodore 199 Ros-Lehtinen, Ileana 179 Ross, Robert J. S. 63–8 Rubio, Marco 179 ruling class 5, 13, 25, 64, 86–8, 91–2, 98, 107, 109, 112–3, 125, 145–6, 166; policyplanning networks 94–6 Ryan, Paul 120 Schattschneider, E. E. 66 Schneider, Daniel J. 145–62 Schwartz, Michael 70–82 Schwartzman, Kathleen C. 165–80 Seawright, Jason 111 Securities Industries and Financial Markets Association (SIFMA) 184, 192, 193, 195 September 11, 2001 attack: military-industrial complex (MIC) after 134–8; World Trade Center 72 Service Employees International Union (SEIU) 159, 196 Shelby, Richard 176

Index 211 Shriners 45 Skidmore-Hess, Daniel 128 Skocpol, Theda 42, 87–9, 110; state-autonomy theory 43–4 slow power 67 Snell, Bradford 67 social indicators 15 socialism 6, 12, 166 Social Register 13, 16 Social Security 27, 79, 140 Social Security Act 23, 44, 116–17, 183 social upper class 15–16 Sociological Imagination, The (Mills) 42 sophisticated conservatives 27 Soros, George 117 Southern Democrats 25, 32–3, 35, 156 Sparks, Ron 176 Standard Oil of California 67 state-autonomy theory 42–4, 91, 94; emergence of 109; equating with historical institutionalism 87–9; Skocpol 43–4 state policy research, organizations 90–4 “status group” 13; concept of 17 Stepan-Norris, Judith 145–62 Stiglitz, Joseph 91 stock ownership, distribution 19 Structuring Politics (Steinmo) 88, 90, 92 Summers, Lawrence 184, 185, 190 Supreme Court 24, 35, 155, 162n16, 168, 199 Swanstrom, Todd 30 Sweezy, Paul 12, 68 Taft-Hartley Act 156, 162n13, 162n16; AFL-CIO and “Accord” 156–8 Taney, Roger 199 Tax Reform Act of 1986 131 Teach for America 120 Thatcher regime 71 think tanks 15, 20, 23, 25–7, 32, 72, 86–7, 91, 93–8, 105–8, 110, 112–14, 117–19, 127, 129, 134, 139, 165, 174, 190 Think Tanks in America (Medvetz) 112 Third World 71, 128 threat definition, concept of 133 Torrecelli, Robert G. 174 Trachte, Kent 68 Trade Act of 1974 170–1 trade advisory committees (TACs) 132 Trade Sanctions Reform and Export Enhancement Act (TSRA) 172, 173, 175

Trade Union Educational League (TUEL) 151, 161n3 Trade Union Unity League (TUUL) 147, 150–1, 160 Trans-Pacific Partnership (TPP) Agreement 74 Treasury Department 91 Trichet, Jean-Claude 185 Trilateral Commission 130 Troubled Assets Relief Program (TARP) 198 Trump, Donald J. 82, 140, 178, 179 Trump Administration 81, 82, 86, 140, 179; military 77–8 Twentieth Century Fund 41 Tyson Foods 169, 170–1 UAW (United Automobile Workers) 154; General Motors and 154–5 Unequal Democracy (Bartels) 111 unions 5–6; union density 35; see also labor factions United Carpenters and Brotherhood of Electrical Workers 149 United Egg Association 171 United Food and Commercial Workers (UFCW) 168 United Mine Workers (UMW) 149, 153 United Nations 73 upper class: corporate ownership 67–8; Domhoff 183; limits in making DoddFrank 196–7 urban renewal program 29–30 U.S. Agriculture Coalition for Cuba (USACC) 174 USAPEEC (USA Poultry and Egg Export Council) 171, 174 U.S. Army School of the Americas 77 USA Today (newspaper) 193 U.S. Chamber of Commerce 27, 108, 193, 194 U.S. Department of Agriculture (USDA) 167, 171, 173, 175, 178 U.S. Department of Education 119 Useem, Michael 23 U.S. Export-Import Bank (EXIM) 171, 175 U.S. exports, weapons of foreign policy 170–1 U.S. foreign policy, corporate interests and 127–34 U.S. Immigration and Customs Enforcement (ICE) 167

212

Index

U.S. military: elite 77; global spending 127; policy planning 77; role in world affairs 75; spending 76, 138 U.S. Politics and the Global Economy (Cox and Skidmore-Hess) 128 U.S. Poultry & Egg Association 171 U.S. Trade Advisory Committees 132 venture philanthropy 116; charter schools 118–22; educational reform movement 118–24; neoliberalism 117–18 Vietnam: American war deaths 76; Vietnam War 22, 64–5, 128 Vilsack, Tom 173 Volcker, Paul 184–7 Volcker Rule: delayed implementation of 193–4; investor fairness 187–9; market fairness 194–6; policy-planning groups 184–7; upper-class and elite opposition to 190–2 Waddell, Brian 109, 112 Wagner, Robert, Jr. 159 Wagner Act 152, 156, 157, 162n13 Wallison, Peter J. 192 Walton Family Foundation 116, 118, 119, 123 “warlords” 6 wealth and income 19 wealth and income inequality 86 White Collar: The American Middle Classes (Mills) 66 white racism 45–6

Whitt, J. Allen 29–30 Who Rules America? (Domhoff ) 3, 7, 11, 28, 30, 41–2, 70–1, 86, 107, 116, 124; distortion and marginalization of 38–47; early editions 13–23; second version of 25–8; seventh version 11, 23, 31–3, 38, 41, 46; third version 31 “who’s who” 16 Who’s Who in America 20 Williams, William Appelman 128 Wilson, Woodrow 151, 199 Winner-Take-All Politics (Hacker and Pierson) 111 Winters, Jeffrey A. 106, 110–11 Wohlstetter, Albert 134 Wolfowitz, Paul 135 women’s rights 81 World Bank 73, 128, 130 World Trade Center, September 11, 2001 attacks 72 World Trade Organization 73, 74, 130, 133, 170 World War I 149, 150, 156 World War II 4, 6, 8, 22, 24, 32–3, 35–6, 65, 67, 128, 130, 155 Wright, Erik Olin 40 Yale University 28 Yeltsin, Boris 167, 170 Young, Bob 180 Zubrow, Barry 192, 195 Zuckerberg, Mark 117