Domhoff Who Rules America: The Corporate Community and the Upper Class; Gouldner: The New Class

The Corporate Community and the Upper Class

• Core paradox in Domhoff’s analysis: in the United States, a large majority (roughly $70\%\text{ to }75\%$ in some surveys) answer yes to questions like “Do corporations have far too much power in the United States?” and “Does the federal government ignore the interests of everyday people?”, despite freedoms of speech and formal political participation. The chapter explains why these perceptions are accurate within a democracy with civil rights and equal opportunity gains.

• Central claim: owners and top-level managers in large corporations collaborate to maintain themselves as the core dominant power group. Their corporations, banks, and agribusinesses form a corporate community that shapes federal policy on issues directly affecting their income, job security, and welfare.

• Intra-group dynamics: while there is healthy competition for profits within the corporate community (leading to visible policy conflicts in Congress), the group remains cohesive on broad policy issues that affect its welfare.

• Paradox of competition and cohesion: How can a highly competitive elite cooperate enough to advance a common will in politics? Domhoff argues that shared wealth, common economic interests, and political opposition to their interests drive cohesion.

• Social institutions cement cohesion and identity: owners/managers create and participate in exclusive social institutions (gated neighborhoods, private schools, exclusive clubs, debutante balls, secluded summer resorts) to foster a sense of group belonging and a distinct upper-class mentality.

• Nonprofit machinery: the corporate elite finance and direct a wide range of nonprofit organizations (tax-free foundations, think tanks, policy-discussion groups) to influence public policy. The top executives in these nonprofits become part of a broader leadership circle for the corporate community and the upper class.

• Intertwined power bases: if the corporate community and the nationwide social upper class are essentially the same people, they are more capable of organizing to dominate government. If they are separate, the upper-class wealth and status could form a rival power base and challenge openness in the power structure.

• The nationwide social upper class: composed of elites with exclusive social institutions and wealth ownership. Its social cohesion arises from two kinds of ties within a membership network:

  • Common membership in specific social institutions (private schools, clubs, resorts)

  • Friendships and informal interactions within those institutions

• Social cohesion research: laboratory-like studies show cohesion is greatest when groups are exclusive and high-status and when interactions occur in relaxed settings. Upper-class life is characterized by membership in numerous small groups (private schools, clubs, resorts) that create a national upper-class subculture.

• Upper-class education system (Prepping for Power): distinctive education begins in preschool (often attached to a high-status church) and proceeds through elementary private day schools, and frequently away at boarding schools in quiet rural settings. Higher education typically occurs at prestigious private universities. Public high schools or state universities are less common among the upper class, except in secluded suburban settings.

• Insulation through schooling: the system is designed to insulate upper-class students from the inner city and lower-class migrants, reinforcing class mentality and identity. Boarding schools act as surrogate families and help create a national upper-class subculture by linking various social institutions.

• The boarding school pillar: dozens of boarding schools developed in the late 19th and early 20th centuries anchored the rise of a nationwide upper class. They connect students to other elite institutions and facilitate mobility within the upper class networks.

• Postwar shifts in college destinations from New England boarding schools:

  • Harvard, Yale, Princeton, Columbia historically dominated admissions from New England boarding schools. After WWII, university growth and scholarships broadened access, and the share of graduates going to these three colleges from the 14 boarding schools declined from $52\%$ to $25\%$ (1953–1967). By the 1969–1979 window, the share bottomed at around $13\%$ in 1973, 1975, and 1979, with some schools showing little change and others dropping more dramatically.

  • Many upper-class students now attend a select group of smaller private colleges, especially in the East, with some in the South and West.

• Cate School (near Santa Barbara, CA): 1993–1996 data show a western-adapted feeder pattern:

  • $35\%$ of the 245 graduates went to one of fifteen prestigious Ivy League schools. Within the Ivy League destinations, the list included Middlebury ($12\%$), Harvard ($10\%$), Brown ($7\%$).

  • Other leading destinations: University of California ($27\%$), Stanford ($9\%$), University of Colorado ($9\%$), Georgetown ($8\%$), Duke ($7\%$), Vanderbilt ($6\%$), University of Chicago ($5\%$).

• St. John’s School (Houston): 1992–1996 data show a spread among Ivy League and other elite destinations:

  • $22\%$ Ivy League across 585 graduates; Princeton ($27\%$), University of Pennsylvania ($15\%$), Cornell ($13\%$), Harvard ($12\%$), Yale ($12\%$) were the most frequent Ivy destinations.

  • UT Austin: $18\%$ (105 graduates); Rice ($49\%$), Vanderbilt ($33\%$), Stanford ($15\%$) also prominent.

• Career trajectories of private-school graduates: most pursue business, finance, or corporate law, illustrating the intertwinement of the upper class with the corporate community.

  • Hotchkiss alumni study (1940–1950): $56\%$ bankers or business executives; of the $91$ business people, $80$ served as president, vice-president, or partner.

  • Lawyers accounted for $10\%$, primarily as partners in large firms closely affiliated with the corporate community.

• Board involvement of private-school alumni:

  • St. Paul’s alumni (eastern boarding school) study: among several thousand alumni over age 45, $303$ officers or directors in general, and $102$ directors of $97$ Fortune 800 corporations. Particularly high involvement in finance; $21$ graduates served as officers or directors at J. P. Morgan Bank (a major player before its merger with Chase Manhattan in 2000).

  • These findings suggest clustering: graduates of specific schools tend to cluster at particular banks or corporations, reinforcing the interlocks between education, social networks, and corporate power.

• Social clubs as a core element of upper-class life:

  • Variety of clubs includes family-oriented country clubs, downtown men’s and women’s clubs, and specialized clubs for yachtsmen, sports, gardening, and fox hunting.

  • Evolution from downtown clubs (largely luncheon-based) to country clubs, which serve as a family hub with social and athletic activities (dances, parties, golf, swimming, tennis).

  • Membership is highly selective: nomination by active members, letters of recommendation, and interviews with a membership committee; negative votes by a small minority can deny admission.

  • Membership secrecy and limited lists complicate external research; most data come from club histories and archival records.

  • Nationwide overlap: membership across multiple clubs creates a national network; a few dozen men sit on three or more clubs and often on several corporate boards, enabling cross-linkages between social status and economic power.

  • The Links (New York) stands out: at least one director from $12$ of the $20$ largest corporations is a member; The Links has $79$ connections to $21$ industrial corporations. Notably, seven of General Electric’s directors, four from Chrysler, four from Westinghouse, and three from IBM are Links members. Other clubs also show high cross-overs with corporate boards.

  • Majority of top 25 corporations in major sectors have directors who sit in at least one of these elite clubs; all $25$ of the largest industrials have at least one director in these clubs. A broader set of clubs (11 prestigious clubs across the country) confirms and extends this pattern.

• Continuity, intra-class links, and upward mobility: real mobility from bottom to top is rare and often luck-based, contrary to Horatio Alger myths.

  • Horatio Alger’s tales (19th century) portrayed upward mobility as common, but historians note the discrepancy between popular myth and reality; Alger’s popularity in magazines and textbooks exceeds his representation in actual business leadership.

  • Forbes (1996) lists of the wealthiest Americans show that a substantial share of billionaires comes from already affluent backgrounds: in 1995–1996 lists, at least $56\%$ came from millionaire families, and $14\%$ came from the top $10\%$ of the income ladder.

• Class awareness: a capitalist mentality among the upper class

  • The institutions that establish the owners and top executives as a national upper class persist beyond individual names. Families rise and fall, but the institutions endure.

  • Everyday familiarity across regions is cultivated through common schooling experiences, shared summer resorts, club memberships, and board service on multiple corporations.

  • The upper class is composed of innumerable face-to-face small groups whose composition continually shifts as people move through various social settings.

  • Involvement in these institutions fosters class awareness, including feelings of superiority, pride, and a justified sense of privilege.

  • Economic basis of the upper class is ownership and control of profit-producing investments (stocks, bonds, real estate). This gives the group a capitalist mentality that extends beyond single corporations to concerns about the investment climate, rate of profit, and the overall political climate.

The New Class and Intellectuals (Gouldner)

• Broad claim: In many countries in the twentieth century and beyond, a New Class emerges, composed of intellectuals and the technical intelligentsia, who contest with the groups already controlling the economy (businesspeople or party leaders).

• Geographic and historical scope: A new contest of classes and a new class system is emerging in the third world (developing nations), the USSR and its client states (second world), and the first world (North America, Western Europe, Japan).

• Early evolution in Western Europe: The New Class begins as a structurally differentiated and autonomous social stratum; Gouldner lists several critical episodes that shape its formation, though the excerpt provides only one explicitly:

  • 1) Secularization: the intelligentsia are no longer trained by, living within, or subject to close supervision by a churchly organization, and thus become separated from the everyday life of society.

• Significance and framing: The analysis situates the New Class as a counterweight or challenger to existing elites, with intellectuals and technocrats playing a central role in governance, policy, and social change.

• Informational notes: The excerpt cites Gouldner’s book, including multiple page references (pp. 1-8, 18-20, 28-29, 83-85, 102-104, 106, 110, 112-113) to support the described episodes and arguments.

• Final framing: Gouldner’s discussion is part of a broader sociological inquiry into how knowledge elites intersect with economic and political power, and how this interplay varies across global contexts.

• Notes and sources referenced in the Domhoff excerpt (selected for context):

  • 1. Bernstein, Aaron. "Too Much Corporate Power?" Business Week, 11 Sep 2000.

  • 2. Hogg, Michael. The Social Psychology of Group Cohesiveness. NYU Press, 1992.

  • 3. Cookson & Persell. Preparing for Power: America’s Elite Boarding Schools. Basic Books, 1985.

  • 4. Gordon, Michael. Changing Patterns of Upper-Class Prep School College Placements. Pacific Sociological Review, 1969.

  • 5. Admissions data from Cate and St. John’s (1997).

  • 6. Armstrong, Christopher. Privilege and Productivity: The Cases of Two Private Schools and Their Graduates. PhD Dissertation, UPenn, 1974.

  • 7. Domhoff, G. William. Social Clubs, Policy-Planning Groups, and Corporations: A Network Study of Ruling-Class Cohesiveness. Insurgent Sociologist, 1975.

  • 8. Domhoff, G. William. Who Rules America? (1st ed. 1967).

  • 9. Miller, William. American Historians and the Business Elite. Journal of Economic History, 1949.

  10. Marsh, Ann. The Forbes Four Hundred. Forbes, 1996.

  11. Collins, Chuck. Born on Third Base: The Sources of Wealth of the 1996 Forbes 400. United for a Fair Economy, 1997.