The golden era of the US corporate elite Corporate elites “Any President who wants to run a prosperous country depends on the corporation at least as and states after much as—probably more than—the financialization corporation depends on him. His dependence is not unlike that of King John on the landed Jerry Davis barons of Runnymede, where Magna Carta CRESC Seminar: Studying Elites was born.” University of Manchester Fortune magazine, 1952 24 April 2009 © 2009 by The Regents of The University of Michigan • All Rights Reserved 2 3 4 Research question: Outline of the talk • Industry and finance capitalism in the early 20th century WTF?? • The evolution of local and national elite networks • The rise of market-based finance and the end of How have the links between corporate “bank hegemony” • Dense elite networks: conspiracy, or something more elites and the state evolved in the benign? US? • Finance turns states from sovereigns to vendors What part does “financialization” • Bespoke tailors, or prêt-à-porter? play? 5 6 Social critics have linked bank-based corporate networks to economic control for a century Industry and finance capitalism in the early 20th century Louis Brandeis, 1914 V.I. Lenin, 1916 “The practice of interlocking directorates “A very close personal union is established is the root of many evils. It offends between the banks and the biggest industrial laws human and divine....It is the commercial enterprises…through the most potent instrument of the Money appointment of bank directors to the Trust” Supervisory Boards of industrial and commercial enterprises, and vice versa ” 7 8 On the verge of World War I, three American banks held JP Morgan Chase board, 2001: plus ça change… dominant positions in the corporate network • In 1912, JP Morgan’s partners collectively held 72 directorships on 47 corporate boards • First National of New York executives served on 49 boards • National City Bank executives served on 48 boards • 1914: in the face of populist pressure and imminent legislation, JP Morgan’s men resigned directorships in 30 of their “subject” companies 9 10 Mid-century theorists linked business networks Network analysis shows that corporate elites really explicitly to political power do all know each other… GOLDEN WEST FINANCIAL CORP ONEOK INC NEW WESTERN RESOURCES INC KS ABM INDUSTRIES INC MURPHY OIL CORP REGIONS FINANCIAL CORP “By the power elite, we refer to those ALASKA AIR GROUP INC C. Wright AVISTA CORP SCHOLASTIC CORP LANDSTAR SYSTEM INC TESORO PETROLEUM CORP GEORGIA GULF CORP PERFORMANCE FOOD GROUP CO political, economic, and military circles UNIVERSAL FOREST PRODUCTS INC TECH DATA CORP NATIONAL FUEL GAS CO The Fortune Mills, 1956 QUINTILES TRANSNATIONAL CORP WATSCO INC NASH FINCH CO PROVIDENT FINANCIAL GROUP INC OLD KENT FINANCIAL CORP PINNACLE WEST CAPITAL CORP SILGAN HOLDINGS INC CHAMPION ENTERPRISES INC which, as an intricate set of overlapping M&T BANK CORP GENERAL CABLE CORP NEW DEVON ENERGY CORP NEW JDS UNIPHASE CORP 1000 board of FAIRCHILD SEMICONDUCTOR INTL INC UNITED STATIONERS INC SERVICE CORP INTERNATIONAL HUB GROUP INC PAYCHEX INC SIERRA PACIFIC RESOURCES GENESIS HEALTH VENTURES INC FOAMEX INTERNATIONAL INC RGS ENERGY GROUP INC PUGET ENERGY INC GREENPOINT FINANCIAL CORP PAYLESS CASHWAYS INC PHAR MOR INC PSS WORLD MEDICAL INC JABIL CIRCUIT INC UNIVERSAL CORP EMCOR GROUP INC PENTAIR INC VALERO ENERGY CORP NEW MICRON TECHNOLOGY INC MITCHELL ENERGY & 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CORP MERISEL INC DTE ENERGY CO MOHAWK INDUSTRIES INC SMURFIT STONE CONTAINER CORP AMERICAN ELECTRIC POWER CO INC HEILIG MEYERS CO KENNAMETAL INC LSI LOGIC CORP HEALTH NET INC TERADYNE INC WESCO INTERNATIONAL INC SUPERVALU INC national consequences” WORLDCOM INC NEW REYNOLDS & REYNOLDS JACOBSCO ENGINEERING GROUP INC FOOTSTAR INC UNIFI INC QWEST COMMUNICATIONS INTERNATIONAL network AGCO CORP DE MANDALAY RESORT GROUP STANDARD REGISTER CO RITE AID CORP ANIXTER INTERNATIONAL INC PRINCIPAL FINANCIAL GROUP INC DOLLAR GENERAL CORP GALILEO INTERNATIONAL INC AMERICAN AXLE & MANUFACTURING HLDGS MCN ENERGY GROUP INC CALPINE CORP SMITHFIELD FOODS INC IMATION CORP VOLT INFORMATION SCIENCES INC FMC CORP CABLEVISION SYSTEMS CORP NEW DQE OCCIDENTAL PETROLEUM CORP MELLON FINANCIAL CORP LINENS N THINGS INC UNITED AUTO GROUP INC STATE STREET CORP AK STEEL HOLDING CORP A O SMITH CORP VALSPAR CORP LIZ CLAIBORNE INC ALBERTSON S INC RYLAND GROUP INC HEALTHSOUTH CORP ITT INDUSTRIES INC OSHKOSH TRUCK CORP 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