>Max Sawicky wrote:
> > To take an example, there is ample evidence for a
>> critique of finance in regard to denying capital
>> to urban, minority communities for housing and
>> business formation.
>
>Neither "finance" nor "finance" structure grants or denies
>loans to anyone. People do the granting and denying. And
>the immediate people, loan officers etc, are obeying policies
>that are set by those who control/own the institution. And
>those people are very apt to be the same people (or their
>cousins) who dominate the Boards of Directors of industrial
>etc. corporations.
In response to a query for books about class, Justin mentioned G. William Domhoff, _Who Rules America Today?_.
Domhoff writes (endnotes omitted):
***** ...it is possible to say that the upper class, which accounts for at most 1 percent of the population, owns 37.2 percent of net worth (assets minus debts), 45.6 percent of financial wealth, and 15.7 percent of yearly income. In short, the upper class scores very high on the "who benefits" power indicator....
...The unity of corporations can be demonstrated in a number of ways. Corporations share a common interest in making a profit. They are often owned by the same families or financial institutions. Their executives have very similar educational and work experiences. Corporate leaders also see themselves as sharing common opponents in organized labor, environmentalists, consumer advocates, and government officials. A sense of togetherness is created by their use of the same legal, accounting, and consulting firms.
However, the best available way to demonstrate unity among corporations is through the study of _interlocking directors_, individuals who sit on two or more of the boards of directors that are in charge of the overall direction of corporations. Boards of directors usually include major owners, top executives from similar corporations, financial and legal advisors, and the three or four officers who run a corporation on a daily basis. Numerous studies show that the 15 to 20 percent of corporate directors who sit on two or more boards, who are called the _inner circle_ of the corporate directorate, unite almost every major corporation in the United States into a well-connected corporate community. This network is very dense in that there are many connections among its members (Table 2). Corporations with many connections tend to be the most central ones in the corporate community, and they are typically banks or very large manufacturing firms. The fact that there are so many connections among the 28 firms in Table 2 indicates that these firms are at the center of the whole corporate network.
Table 2 The 28 Corporations with the Most Connections Within the Corporate Community
Corporations No. of Connections No. of Connections
to Other within
Corporations Inner 28
1. Chase Manhattan Bank 45 8 2. Wells Fargo Bank 41 2 3. American Express 40 9 4. Prudential Insurance 39 7 5. Sara Lee 39 8 6. Minnesota Mining &
Manufacturing 37 7 7. General Motors 33 8 8. Kroger 33 5 9. Ashland Oil 32 3 10. Bank of America 32 1 [The rest omitted] Source: Jeannette Glynn, _Who Knows Who 1997_. Detroit, MI, Gail Research Inc., 1997, p. 749
Most social scientists agree that corporations have a strong basis for cohesion, but there is disagreement about their relationship to the upper class. Some theorists state that members of the upper class used to dominate corporations but do not do so anymore because of the increase in the size of corporations, the need for highly trained and specialized executives, and the decline in family ownership. Thus, there is an upper class of rich families with one set of interests and a group of professional business executives with their own interests and power base. Members of the upper class have power based on wealth; corporate executives have organizational power.
Contrary to this purported division between owners and managers, there is strong evidence for an overlap in membership and interest between the upper class and the corporate community. The wealthiest and most cohesive upper-class families often have "family offices" through which they can bring to bear the power of their stock ownership, sometimes placing their employees on boards of directors. Members of the upper class also control corporations through financial devices known as holding companies, which purchase a controlling interest in operating companies. More generally, members of the upper class own half of all corporate stock. *****
Domhoff locates the "power elite" at the intersection of "social upper class," "corporate community," and "policy planning organizations" (foundations, think tanks, the Business Roundtable, etc.), who dominate the government.
In short, through property ownership & governance (of corporations, "non-profits," & governments), "finance" & "production" are empirically inseparable, according to the empiricist tradition of Domhoff, C. Wright Mills, etc. It goes without saying that, in a Marxist analysis, "finance" cannot be turned into a separate entity that dominates "production" parasitically from outside, in that surplus value comes nowhere except from production, be it of products or services. There is no "M-M'" except _inside_ the circuit of M-C-M'.
Yoshie