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Chapter 3
The Corporate Community and the Upper Class
This chapter has three main points: all three relate to claims made by pluralists in rejecting a class-dominance theory. First, it shows there is a nationwide social upper class in the United States that has its own exclusive social institutions and is based in the ownership of great wealth. Second, it demonstrates that this upper class is closely intertwined with the corporate community. Third, it argues that the social cohesion that develops among members' of the upper class is another basis for the creation of policy agreements within the policy-formation network.
The demonstration of an upper class that is tightly interconnected with the corporate community is relevant because it contradicts the idea that there has been a separation between corporate ownership and control in the United States. According to that view, there is on the one hand a wealthy but powerless upper class that is a mere "status group," and on the other a "managerial class" that has power independent of wealthy owners by virtue of its expertise in running corporations. Due to this division between high-society owners and well-trained independent managers, pluralists say it no longer makes sense to think in terms of a dominant class whose general interest in profits transcends the fate of any one corporation or business sector. They therefore prefer to think of corporations as one type of "interest group."
Contrary to this pluralist view, the evidence in this chapter shows that (1) members of the upper class own almost half of all privately held stock, (2) many large stockholding families in the upper class continue to be involved in the direction of major corporations through family offices, investment partnerships, and holding companies, (3) members of the upper class are disproportionately represented on the boards of large corporations, which is evidence for upper- class power on the "Who governs?" indicator, and (4) the professional managers of middle-level origins are assimilated into the upper class both socially and economically and share the values of upper-class owners. In addition to refuting the pluralist claim about a managerial revolution, this chapter shows that the corporate rich are drawn together by bonds of social cohesion as well as their common economic interests. ...