MONOPOLY CAPITALISM TN CRTSTS: NED-MARXIAN
CONTRADICTTONS, POST-KEYNESIAN RESPONSES

Thesis forthe Degree of M. A.
MICHIGAN STATE UNWERSITY
JACK EDWTN NIEMONEN
1977

 

ll Tum; Tynjlm T T TILT 1T NWT n

 

 

 

ABSTRACT

MONOPOLY CAPITALISM IN CRISIS: NEO-MARXIAN
CONTRADICTIONS, POST-KEYNESIAN RESPONSES

By

Jack Edwin Niemonen

From a historical perspective it is argued in this thesis that
American capitalism is characterized by contradictions in the neo-
Marxist sense, that without intervention on the part of a capitalist
claSs transformation of the capitalist mode of production becomes
increasingly likely. A possible alternative, in the absence of a
class-conscious, unified working class movement which challenges the
rules by which monopoly capitalism is conducted, is pressure toward
the development of what O'Connor (1973) termed the social—industrial
complex and/or some form of national planning of the economy to manage
the fiscal crisis of the state. It is further argued that these
latter developments will best be evidenced in the period after 1961,
given a quantum leap in foreign investment, the failure of Key-
nesian economics, increasing overseas competition for markets by
Japan and West Germany, loss of international hegemony, an increasing
taxpayers' revolt, political struggles in the internal social struc-
ture, and a declining standard of living (problems which are clearly

recognized by monopoly capital).

Jack Edwin Niemonen

However, policy planning on this level requires the ability to
transcend class differences and ideologies. Such differences are
suggested in part by the family-controlled vs. management-controlled
corporation debate, the U.S. Chamber of Commerce-~National Association
of Manufacturers mentality vs. the orientation of the liberal wing of
the upper class, etc., and bear directly upon the integration/
differentiation of the capitalist class. (How the interests of the
dominant economic class are translated into the governing process is
evidenced in the work of Domhoff, 1971 6 1975; Knowles, 1973; Kolko,
1967; Lundberg, 1968; Weinstein, 1969.)

This is, in part, the theoretical framework within which the
problem of corporate policies or objectives has been conceptualized.
It is intended toward the development of a theory of the objective
necessities of corporate conduct and the imperatives of the American
political economy. The likely direction of the capitalist class in
this context has been researched through a content analysis of business

executive speeches in the journal Vital Speeches of the Day (inclusive

 

of the period 1961—1976) to ascertain their orientation toward several
forms of anti- or partial planning (which will be shown to be inef-
fective at best) and three different models of nation-wide planning.

It has already been established that Vital Speeches represents the

 

most powerful and influential American multinational corporations.
A population of 124 speeches has been obtained which relates to the
problem here being investigated. The speechmakers themselves have
been divided into the following categories, based on extensive bio-

graphical research: Upper Class (on the basis of indicators developed

 

Jack Edwin Niemonen

by Domhoff, 1971, and including propertied owners), Competitive

 

Capital (represented by the U.S. Chamber of Commerce and the National

Association of Manufacturers), and Executive Managers (high-ranking

 

monopoly capital business executives not members of the upper class).
The U.S. Chamber of Commerce and N.A.M. organizations have also been
shown to represent the conservative element in monopoly capital.
These divisions rather than other possible ones are based on the
research of Menshikov (1969) who discredited the Old Wealth-New
Wealth split, and Johnson (1976) who debunked the Northeast and
"Southern Rim" split. O'Connor's suggestion that capitalist class
divisions are explicable largely in terms of the conflicts between
capitalists whose wealth depends mainly on the appropriation of sur-
plus value directly, and those who appropriate surplus value indi-
rectly, was not possible in this study because time considerations
prevented detailed research into defense contracting. The population
has further been divided on the basis of the 56 corporations it repre-
sents, of which 39 are directly interlocked with each other; all are
on Fortune's "500" or "fifties" list (with one exception, and that

is a corporation in the "second 500"). This division is in terms of

Probably Family controlled vs. Possibly Family controlled vs. Probably

 

 

Management controlled as revealed by Burch's (1972) research. When

 

the content analysis was completed, statistical tests using Guttman's
coefficient of predictability (lambda) were conducted on several
contingency tables, comparing class divisions with policy options,
class divisions with type of corporate control, membership on certain

policy-formation groups with policy options, etc.

Jack Edwin Niemonen

On this basis, partial answers to the following questions
(among others) have been written: What are the broad corporate
policies or objectives expressed in the speeches? To what extent do
they concur with the theoretical framework developed above (i.e.,
recognition of the fiscal crisis of the state and orientation to the
development of the social-industrial complex and/or long-range
economic planning--and by whom)? And, to what extent is the capitalist
class (monopoly capital) "integrated" on this basic issue, both in

terms of class divisions and type of corporate control?

MONOPOLY CAPITALISM IN CRISIS: NEO—MARXIAN

CONTRADICTIONS, POST-KEYNESIAN RESPONSES

BY

Jack Edwin Niemonen

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

MASTER OF ARTS

Department of Sociology

1977

. in Eugene Debs, America produced a man who understood that
expansion was a running away, the kind of escape that was destructive
of the dignity of men. He also believed and committed his life to the
proposition that Americans would one day prove mature and courageous
enough to give it up as a child's game; that they would one day 'put
away childish things' and undertake the creation of a socialist
commonwealth. Americans therefore have a third choice to consider
alongside that of an oligarchy and that of a class—conscious indus-
trial gentry. They have the chance to create the first truly demo-
cratic socialism in the world.

That opportunity is the only real frontier available to Americans in
the second half of the 20th century. If they revealed and acted upon
the kind of intelligence and morality and courage that it would take
to explore and develop that frontier, then they would have finally
broken the chains of their own past. Otherwise, they would ultimately
fall victims of a nostalgia for their own childhood.

William Appleman Williams (1973: 487-488).

ii

ACKNOWLEDGMENTS

I wish to gratefully acknowledge my committee chairperson,
Prof. Rick Hill, for his patient assistance and encouragement in the
writing of this thesis. Inadequately footnoted perhaps, several of
his own ideas and suggestions appear below in one form or another.
However, I alone am responsible for the content of this thesis.

I wish to also thank my other committee members, Profs. Jim
McKee and Bill Ewens, for reading a draft of this thesis and for pro-
viding helpful criticisms, comments, and suggestions. Some of these,
but not necessarily the most important ones, have been incorporated
into the final draft.

Finally, I wish to thank a graduate student in the Department,

Chuck Nance, for reading and coding the random sample of speeches.

iii

TABLE OF CONTENTS

LIST OF TABLES .
LIST OF FIGURES
CHAPTER

I. CORPORATE CAPITALISM FROM THE PROGRESSIVE ERA
TO THE PRESENT: A RADICAL PARADIGM .

Introduction .

The General Historical Context. Kolko
and Weinstein' s Reassessment of the
Progressive Era .

Strategy and Structure: The Historical
Development of the Large Corporation .

The Corporate Paradigm in Context of
the U.S. Political Economy . .

Introduction: The Impending Crises
in Monopoly Capitalism .

Monopoly Capitalism in Crisis:
Theoretical Approaches .

Monopoly Capitalism in Crisis:
Contradictions and the Irrational
System .

II. DEVELOPING RESPONSES TO THE FISCAL CRISIS:
PARTIAL PLANNING, NATIONAL PLANNING, AND
THE SOCIAL-INDUSTRIAL COMPLEX

III. CURRENT DIRECTIONS: A CONTENT ANALYSIS OF
CAPITALIST CLASS RESPONSES TO ECONOMIC
CRISES . .

Introduction: Brief Comments on the
Integration/Differentiation of the
Capitalist Class and Its Implications
for Policy- Planning

Economic Planning as a Historical Phenomenon .

The Data and Research Design .

iv

Page

vi

. vii

11

15

22

24

35

47

67

67
73
76

CHAPTER

IV. RESEARCH FINDINGS, TABLES, AND CONCLUSIONS .

Results
Conclusion .

FOOTNOTES

APPENDICES .

A. Key for the Content Analysis Coding Scheme .

B. List of Speeches Used From Vital Speeches,
Plus Other Relevant Summary Data .

 

LIST OF REFERENCES .

Page

98

98
124

134

145

. 145

151

160

Table

10.

11.

12.

LIST OF TABLES

Competitive Capital Compared to Finance Capital
on Selected Policy Options .

Selected Policy Options and Class Divisions (I)
Selected Policy Options and Class Divisions (II)

Selected Policy Options and Type of Corporate
Control in 1961-1970 . . . . .

Policy Options and Type of Capital .

Policy Options and Member (or not) of One or
More of Three Key Policy-Formation Groups

Policy Options and Class Divisions .
Policy Options and Type of Corporate Control .
Type of Corporate Control and Class Divisions

Policy Options and Type of Corporate Control
by Time Periods . . . . . . . .

Policy Options and Class Divisions by Time
Periods . . . . . .

Policy Options and Type of Capital by Time
Periods . . . . . . . . . . . . . . . .

vi

Page

99
99

101

101

103

105
107
109

110

112

116

. 120

LIST OF FIGURES
Figure Page
1. Director Interlocks Among the Corporations

Represented in the Population of Speeches
Analyzed in This Study . . . . . . . . . . . . . . . . . . 128

vii

CHAPTER I

CORPORATE CAPITALISM FROM THE PROGRESSIVE ERA

TO THE PRESENT: A RADICAL PARADIGM

Introduction

 

That American capitalism is in the midst of a fundamental
crisis is indicated by several factors: increasing unemployment, the
continuous development of inflation and the decline of real income,
reduced capital-investment budgets and the attendant difficulties of
capital formation, economic stagnation and mounting production for
socially wasteful and destructive purposes, the high probability of
major financial failures and bankruptcies with attendant liquidation
of financial credits, the failure of Keynesian theory,1 the energy
crisis whose roots are to be found in the capitalist system itself
(see Mermelstein, 1975:267-323), the cyclical nature of economic
development, the fiscal crisis of the state, the crisis in the system
of monetary relations,2 and the aggravation of inter-imperialist con-
tradictions, as well as of contradictions between the capitalist
powers and the developing countries. The question which arises is:
is it possible to interpret, understand, and/or explain these crises
in terms of how they were produced and whether fundamental changes

in American institutions are required in order to alleviate them.

This question becomes particularly cogent given American sociology's
traditional lack of historical understanding and lack of orientation
to the basic structure of the economy. Thus, it is imperative here
to attempt to develop an alternative systematic perspective to Keynes-
ian economics on capitalist crises, i.e., a theoretical framework
which offers a sense of understanding of political economy in terms
of the consolidation of corporate capitalism, the evolving structure
of monopoly capitalism, monopoly capitalism in crisis, corporate-
government intervention, and the future of capitalism. The need, in
this context, is to demarcate the different forms of possibilities
rooted in the historical context.

More specifically, this approach requires analyzing the cor-
poration and the state and their interconnection. Then, it becomes
possible to understand the tension arising from the relationship
between the "economic” and "political" aspects of economic policy,
because the system is viewed in class terms and its "laws of motion”
are seen as "arising from the contradictions contained in the antag—
onistic capital-labor relationship" (Alcaly, 1975:138). The present
crisis is a crisis of the system of production, an outgrowth of the
natural workings of the capitalist economy which inevitably occurs as
a result of the institutions and incentives that the capitalist
system creates. Because capitalism is a world—wide system, the crisis
must necessarily be world-wide. In this context one can demonstrate
the arrant irrationality of the system, shown by way of an explication
of its contradictions. Then, it is possible to explicate possible

responses (of the warfare-welfare state) to the current crisis, which

may amount to "piecemeal" modifications; the development of "friendly
fascism" (Aronowitz, 1975:429—430); state monopoly capitalism, in
which national planning becomes a possibility; the disintegration of
monopoly capitalism; or perhaps socialist revolution, with its
attendant problems of societal reorganization, of managing the
problems that capitalism has created, etc. In addition, however, the
important question must be answered: who does the planning, whether
partial or comprehensive, and in whose interests is the planning done?
If (as Tabb has suggested) planning is done by the powerful for the
powerful--"as it has been and will continue to be if 'unity' is
allowed to act as a cover for privilege"-~then one should expect that
the capitalist class, with the minor participation of "responsible”
labor statesmen, will act in the interests of already too powerful cor-
porations (Tabb, 1975:409). Accordingly, this becomes a rationale for
exploring the integration/differentiation of the corporate class,
since it is their collective responses to the current crisis which
will have the greater significance for the future of monopoly capital-
ism in the absence of a unified, class-conscious mass movement from
"below."

The General Historical Context: Kolko and Weinstein's
Reassessment of the Progressive Eraé

 

 

Kolko has shown that the Progressive Era was characterized by
substantial consensus and unity among key business leaders and most
political factions on the role of the federal government in the
economy: to rationalize the economy, i.e., to organize the economy

and the larger political and social spheres in a manner allowing

corporations to function in a predictable and secure environment,
permitting reasonable profits over the long run. Predictability in
this context means "the ability, on the basis of politically stabil-
ized and secured means, to plan future economic action on the basis
of fairly calculable expectations," and security signifies "pro-
tection from the political attacks latent in any formally democratic
structure." Thus the desire was for stability, or the "elimination
of internecine competition and erratic fluctuations in the economy"
(Kolko, 1967:280). The Progressive Era, however, was not character-
ized by conspiracy and there was nothing surreptitious about the
desire of certain businessmen for reforms. Rather, the movement that
occurred was for the political rationalization of business and indus-
trial conditions, a movement which assumed that the general welfare
of the community could be best served by satisfying the corporeal
needs of business (Kolko, 1967:282). The corporate elite and their
representatives did not simply endorse the underlying purposes and
goals of the important measures in the Progressive Era; rather, such
bills were first proposed by them, in part to preserve private
property relations as they essentially existed. Belief in the basic
justice of private property relations ultimately set limits on the
leaders' available Options--essentially those which would preserve
the basic social and economic relations necessary to a capitalist
society. In Kolko's words,

big business did not always have a coherent theory of economic

goals and their relationship to immediate actions, although

certain individuals did think through explicit ideas in this

connection. The advocacy of specific measures was frequently
opportunistic, but many individuals with similar interests

., .wOFT'fi‘

tended to prescribe roughly the same solution to each concrete
problem, and to operationally construct an economic program.

As the author shows, because of their positive theory of the state,
important elements of the capitalist class managed to define the
basic form and content of the major federal regulation that was
enacted during the Progressive Era (Kolko, 1967:2-5, 283).

The relationship of the corporate elite to the remainder of
society was basically unaltered by their divisions on federal inter-
vention in the economy. "In terms of basic class structure, and the
conditions of interclass relationships, big and small business alike
were hostile to a labor movement interested in something more than
paternalism and inequality." The result was federal regulation in
the context of a class society and the identification of political
and key business leaders with the same set of social--and ultimately
class--values; otherwise the creation of "political capitalism" would
have been highly improbable. This point underlines the need to con-
centrate not only on internal organizational and structural changes
within industries, as Chandler (1973) does, but also on the basic
control and decision-making power of the institution of business in
relation to the other important classes of society, and on the means
by which that power is exercised and the ends toward which it is
directed. As Kolko shows, ". . . the dominant trend in the political
decisions that were made, with few exceptions, preserved the type of
distribution of power and decision-making that also insured the power
of the regulated industries" (Kolko, 1967:56, 60, 284).

The crucial factors which motivated the course of business

action in the federal political sphere could be outlined as follows.

First, the structural conditions within the economy imposed the need
for rationalization on many American corporations. Although laissez
faire provided the corporate sector with an ideological rationale
intellectually, it also created instability and insecurity in the
economy, and thus the struggle for the federal regulation of the
economy. Second, in any case, in the long run the capitalists had

no vested interest in pure, irrational market conditions and grew to
abhor the dangerous consequences inherent in such situations. And
third, the federal government, rather than being a source of negative
opposition, represented a potential source of economic gain, illus-
trated by the desirability of proper tariffs, direct subsidies in
certain instances, government-owned natural resources, and monopo-
listic privileges possible in certain federal charters and regulations
(Kolko, 1967:57-59).

The crucial factor in the American experience was the nature
of economic power which required political means to rationalize the
economic process. This resulted in a synthesis of politics and
economics (indicting Keynesian analysis because it is based on the
same separation of economic law and political reality which dominates
classical theory. Keynes really never analyzed the extent and form
of state intervention in the economy). This integration is the
dominant fact of U.S. society in the twentieth century, although
once "political capitalism" is created, a dissection of causes and
effects becomes extremely difficult (Kolko, 1967:288, 301).

Finally, behind the economy, resting on new foundations in

which effective collusion and price stability can now become the

rule, stood the organized power of the national government. ”That
stability and future of the economy is grounded, in the last analysis,
on the power of the state to act to preserve it. Such support does
not end crises, nor does it eliminate antagonisms inherent in the
very nature of the economy [see below], but it does assure the ability
of the existing social order to overcome, or survive, the consequences
of its own deficiencies" (Kolko, 1967:302; cf. Lehmann, 1975:159-166).
Yet the inevitable conclusion here, which Kolko does not confront, is
the implication that history in some sense comes to a halt because
with the consolidation of the corporate order, social change becomes
extremely difficult.

In summary, Kolko has shown that federal regulation in the
Progressive Era was inspired by the dominant business corporations
primarily to escape the harsh consequences of competition and to
avoid "the more cumbersome, less controllable, state regulation and
the 'nascent radicalism' in the states." United to some extent by
common goals and values and yielding sufficient power, big business
and liberal political leaders--who were recruited from the same social
class as big businessmen--were able to use progressivism as a tool
to shape social and regulatory legislation in the context of a federal
government which was openly linked to the needs and desires of finan-
ciers and industrialists who wanted markets and stability. This was,
in essence, an attempt to restore order to a system characterized by
rapid industrialization and attendant social chaos (Bernstein G

Matusow, 1972 2-3, 17-18, 36).

Concurrently with federal regulatory attempts to stabilize,
rationalize, and continually expand the existing political economy,
the broad programmatic outlines of the "liberal state" and the
political ideology now dominant in the United States were developed.
This ideal of a liberal corporate order was formulated and develOped
under the aegis and supervision of the more sophisticated leaders of
America's largest corporations and financial institutions who both
during the Progressive Era and now enjoy ideological and political
hegemony. These corporate elite replaced the ideological concepts
of laissez faire with "an ideal of a responsible social order in
which all classes could look forward to some form of recognition and
sharing in the benefits of an ever-expanding economy." Thus liberal-
ism was pp£_a movement to restrain the power of the business community,
Arthur Schlesinger notwithstanding, but as the political ideology of
the dominant business groups served the interest of the large cor-
porations by disguising the manner in which they have exercised con-
trol over American politics in this century. Rather than a movement
for the removal of state control over private enterprise, liberalism
became the movement for state intervention to supervise corporate
activity, given the development of the domination of the American
political economy by a relatively small number of merged corporations.
Weinstein demonstrates that business leaders sponsored institutional
adjustments to their needs, and supported political ideologies that
appealed to large numbers of people of different social classes in
order to gain, and retain, popular support for their entrepreneurial

activity. In the Progressive Era and ever since, the corporate elite

accomplished this by adapting to their own ends the ideals of middle
class social reformers, social workers, and socialists, by alone having
a relatively comprehensive ideology and political economy, and by
co-opting potential opponents and radical critics through partici-
pation "in a process of adjustment, concession, and amelioration that
seemed to promise a gradual advance toward the good society for all
citizens" (Weinstein, 1970:ix—xiv). Both the subsequent change in
the expectation that the free operation of the market would produce
satisfactory conditions for society at large, and the changes in
the concept of the proper role of government and in the techniques
of maintaining political and social stability, reflected the end of
laissez faire competition and the rise of a new corporate oligarchy.
As Weinstein writes,
the increasing centralization of power and the expert management
of business and social life by federal and state governments
met the needs of corporations whose scale of Operation was
national and international. Day to day power centered more and
more in the hands of administrators and experts who thought
primarily in terms of increasing the efficiency of the existing
system, [and] were constrained to do so in a manner to win the
approval of corporation leaders.
In other words, the existing system was to be ameliorated and made
more efficient (Weinstein, 19701252). This, then, was the new "con-
servatismz" the coordinated attempt of the "ruling class" increasingly
to make use of the government machinery in the interest of the
capitalist economy, thus always acting within the boundaries of
existing productive relations.
Why the liberal defenders of the new corporate order were so

successful was made possible by several factors. The first was the

sophistication of those men who helped formulate the new liberal

10

concepts or who came to accept and support them. The second factor
was the advantageous position of the United States with respect to
Eur0pe and the colonial world. This position made possible ”a process
of rapid and sustained industrial expansion, supported in the nine-
teenth century by a vast internal (continental) empire, and in the
twentieth by the penetration of the old empires of Europe, facilitated
by the growing dependence of the Allied powers on the United States
as the result of two world wars." The last factor was the absence of
serious competition from the left or right since World War I, which
is important because in the absence of a revolutionary movement with
a comprehensive critique of the existing society and a comprehensive
vision of an alternative one, ”all reformers, no matter how radical
they thought themselves to be, could (and have been) caught up in
reform structures whose underlying purpose is to reduce the inharmonies
of the existing social system" (Weinstein, 1970:251-254).
Weinstein and Kolko thus focused upon the role of the state
in capitalist society, in which the aims and functions of public and
private power became inextricably linked. This linkage was achieved
by the corporate elite, or key business leaders, who, through their
personal relationship with politicians or more generally on the basis
of a shared ideology with political leaders, were able to shape
government policies in their own interest (Lehmann, 1975:161).
However, Weinstein and Kolko made no attempt at a differenti-
ating class analysis. That is, they did not distinguish between the
capitalist class as a whole with its collective interest and the

specific interests of different industries, branches, and financial

11

institutions. Nor did they make clear how a certain industry or
industrial combination such as the Steel Trust comes to communicate
its interest in federal regulation to its competitors and to capital-
ists in foreign countries. Furthermore,

the absence of a theoretical conceptualization of the role of

the state in capitalist society prevents Kolko and Weinstein from
seeing the (not only theoretical) possibility of a need for state
intervention against specific capitalist interests, though in

the interests of the capitalist class as a whole. Since they
perceive an overall ideological affinity of political and eco-
nomic elites, leading to an identity of political bureaucracy and
economic power structure, conflicts within the ruling class tend
to be ignored by the authors (Lehmann, 1975:164-165).

Additionally, if the state is an instrument of capitalist hegemony,
it is nevertheless a part of capitalist society and not free of its
contradictions:

the basic conflict between labor and capital, the competition
between individual capitals, the rivalry between capitalist
nations, the uneven development making for recurring economic
crises. All these conflicts may increasingly manifest themselves
within the sphere of the interventionist state, its bureaucracy,
agencies and commissions. A government attempting to regulate
conflict and to nationalize crises and losses reflects . . . the
success of the corporate elite in shaping the state in its own
interest. Beyond that it signifies the recognition of the
working class as a political force. The incorporation of this
main antagonistic force into the capitalist state at once gives
the state more power and makes it more vulnerable (Lehmann,
1975:164-165).

These issues will be addressed to some extent below.

Strategy and Structure: The Historical Development
of the Large Corporation

 

 

It is within the context described above that the development
of the large corporation occurred. Although the synopsis of
Chandler's research on organizational configuration which follows

is necessary to the paradigm being developed here, the discussion has

12

omitted a crucial step: a comparison/contrast showing the dialectical
relationship between historical event (cf. Kolko, 1967; Weinstein,
1970) and the development of the large corporation in terms of strategy
and structure (Chandler, 1973). This is a task too involved to be
undertaken in this thesis, however; how that analysis should proceed
is implied in Chapter 8 of Baran and Sweezy (1968). Understanding
this qualification, the following discussion becomes less abstract.
Four phases can be discerned in corporate history since 1870:
"the initial expansion and accumulation of resources; the rational-
ization of the use of resources; the expansion into new markets and
lines to help assure the continuing full use of resources; and finally
the development of a new structure to make possible continuing
effective mobilization of resources to meet both changing short-term
market demands and long-term market trends" (Chandler, 1973:385).
Essentially, structure, the design of organization through which the
enterprise is administered, follows strategy, "the determination of
the basic long-term goals and objectives of an enterprise, and the
adoption of courses of action and the allocation of resources neces-
sary for carrying out these goals" (Chandler, 1973:13-14). The most
complex type of structure is the result of the concatenation of
several basic strategies: expansion of volume, capital expansion or
geographical dispersion, vertical integration, and diversification.
The development of the corporation occurs in the context of capital
accumulation, changing from a workshop to a factory to a national
corporation to a multidivisional corporation and then to the multi-

national corporation. The accompanying results are: one, the

13

elaboration and extension of hierarchical systems of authority and
control; two, the development of central planning for survival and
growth; three, the concentration and centralization of control over
capital; and four, an increasing division of labor with particular
focus on administrative activities, i.e., "executive action and orders
as well as the decisions taken in coordinating, appraising, and planning
the work of the enterprise and in allocating its resources." In this
context, the four types of administrative positions in the large multi-
divisional corporations which have developed are the field unit, the
departmental headquarters, the division's central office, and the
general office. The major empirical concern in this thesis, exec-
utives in the general office effect entrepreneurial decisions and
actions (i.e., those which affect the allocation or reallocation of
resources for the corporation as a whole), set policies and procedures,
and are concerned with national and international economies. These
individuals also coordinate, appraise, and plan goals and policies

for a number of quasi-autonomous, relatively self-contained divisions
of the industrial corporation. As Chandler notes, the success or
failure in the allocation of funds provides a useful test of the per-
formance and ability of American corporate executives. Lower-echelon
managers, essentially functioning through the other offices in con-
trast to the executives above, concentrate on short-term activities,
using resources already allocated to the exclusion or to the detri-
ment of long-range planning, appraisal and coordination (Chandler,
1973:8-9, ll-12). This process operates in the context of and assumes,

first, a relatively competitive economy; second, the drive toward

14

capital accumulation; and third, inherent business cycles of expansion

and busts in the capitalist economy. In times of crises, organizations

may reorganize toward those structures mentioned above under the influ-

ence of organizational personalities and theorists; during the

expansion period one evidences the building of industrial empires.
Strategic growth in the corporation

resulted from an awareness of the opportunities and needs--
created by changing p0pulation, income and technology--to employ
existing or expanding resources more profitably. A new strategy
required a new or at least refashioned structure if the enlarged
enterprise was to be operated efficiently. The failure to
develop a new internal structure, like the failure to respond

to new external opportunities and needs, was a consequence of
overconcentration on operational activities by the executives
responsible for the destiny of their enterprises, or from their
inability, because of past training and education and present
position, to develop an entrepreneurial outlook (Chandler,
1973:16).

Furthermore,

if the need to use resources provided the dynamic force that
changed structure and strategy, the nature of the investment

in these resources helped to determine the course and direction
of growth and of subsequent structural change. The type of
investment, in turn, depended on the technology of production
and the techniques of marketing of the individual companies'
original product line or lines. Finally, the rate of growth and
the effectiveness in the use of the enterprise's resources
rested on the ability and ingenuity of its administrators to
build, adjust, and apply its personnel and facilities to broad
population, technological and income changes (Chandler, 1973:
384).

Antitrust laws, taxation, labor and welfare legislation, and com-
mensurable evidences of public policy, with relatively few exceptions,
had much less effect on the history of the large corporations in the
United States than have the market which shaped initial growth,
integration, and diversification, and the nature of the industrial

firms' resources and entrepreneurial talents. State action such as

15

defense or countercyclical spending which directly affected the market
by increasing the national income or by making the government itself
a large customer has had a significant effect on the growth of the
large corporation. And, antitrust legislation probably has had the
greatest impact on corporate structure and strategy in those rela-
tively rare cases where it transformed a monopoly into an oligarchy
(Chandler, 1973:382, 384).

In sum, the strategy of product diversification required the
reorganization of the large national corporation into a multidivisional
structure which permitted the large corporation to take on a new
product or area of production by adding a new division. Additionally,
the corporation could then discard a division with minimal disruption
to the remainder of the structure. This increased flexibility
enhanced the corporation's ability to plan and implement new strategy
and contributed to the growth of a central office or cortex (Levy,
1975:415). These changes in strategy and structure of the monopoly
or corporate sector have necessitated changes in most other social and
productive institutions, from government and organized labor down to
the structure of the family.

The Corporate Paradigm in Context of the
U.S. Political Economy

 

 

In the present corporation Baran and Sweezy have argued that
control rests in the hands of the board of directors, plus the chief
executive officers; that management is a self-perpetuating group;4
and that "each corporation aims at and normally achieves financial

independence, through the internal generation of funds which remain

16

at the disposal of management” (Baran 8 Sweezy, 1968:16-17). This
statement is a questionable proposition, however. For example, in
Sonquist and Koening's useful summary of financial interest group
theory:

Despite increasing amounts of capital generated from business
cash flows in the economic expansion since World War II, manage—
ment still remains heavily dependent on very large amounts of
short term capital. Hence, corporations have remained heavily
dependent on large financial institutions such as banks and
insurance companies. Capital is essentially the most general-
izable of resources, and has a widespread demand. Rapidly
changing needs (especially short term) for capital cannot be

met through the stock and bond markets, requiring access to bank
and insurance company financial reserves. The increasing
capital-intensity of many corporations and the seriousness of
uncertainty involving access to capital resources makes for an
intolerable situation for these corporations. Interlocks with
financial organizations help to stabilize this aspect of their
environment. Financial institutions take advantage of this to
arrange reciprocity agreements between clients and attempt to
manuever firms into profitable (for the bank) long-term large-
scale borrowing and dependence . . . . [B]anks and insurance
companies use their financial power to assure themselves of
competent company management in their portfolio companies, out
down on "wasteful" competition, and secure the banking business
of the company. At times this may generate needed business for
the bank at the portfolio company's expense; dependent companies
may be forced to act against their own self-interest by powerful
controllers of capital. Moreover, from the bank's point of view,
it can function as an intermediary to negotiate mergers and so
gain a piece of the action. This view essentially sees inter-
locks as devices for control and manipulation of investment by
financial institutions (Sonquist 8 Koening, 1975:198-199).

Similarly, Fitch has shown that corporate reliance on internal
finance actually decreased between 1964 and 1968, and that figures
made available by the Federal Reserve Bank of Cleveland in its
"Economic Commentary" indicate that since the end of 1968 corporate
nonfinancial businesses have placed even greater reliance on external
financing. "The total net change in the volume of financing in the

capital and credit markets was $40.6 billion during 1969 and $38.5

17

billion during 1970, compared with an average of only $23.6 billion
during the five years previous to 1969." Fitch argues that the
corporations cannot finance themselves through retained earnings and
depreciation allowances, nor can they rely on state expenditures on
infrastructure to keep them from the bankruptcy court (Fitch, 1971:
156, 156 fn. 8).

However, this does not detract from the fact that corporate
status is indicated, first, by size; second, by "rate of growth and
'strength' as measured by such standards as credit rating and the
price of a company's securities;" and third, by the reduction of
the first two indicators to the single common denominator of pro-
fitability. Internal expansion, acquisition, and merger are three
ways in which corporations grow, and growth is the road to size. Pro-
fits, the most visible measure of a company's strength, furnish the
internal funds for expansion and provide access to outside funds if
and when they are needed. Profit maximization is thus the criterion
of corporate rationality, the unifying, quantitative aim of corporate
policies and essential in the continuing competition among capital-
ists for markets and, accordingly, for survival. Given the system-
defining presuppositions of capitalism, the forces of competition
among capitalists inevitably compel owners of capital to protect them-
selves against their competitors through the process of increasing
productive capacity, and generating and reinvesting economic surplus.

Finally, the long corporate time horizon and the rational-
ization of management create certain characteristic attitudes and

modes of behavior, including a systematic avoidance of risk-taking

18

and an attitude of live-and-let-live toward other members of the
corporate world. Within the corporation, relations are direct,
hierarchical, and bureaucratic. Genuine--if short—term--planning
holds sway, with directives "flowing from the top down and respon-
sibility from the bottom up." Overall, however, monopoly capital is
as unplanned as its competitive predecessor. In other words, as
Baran and Sweezy state, the way the system works is still the unin—
tended outcome of the self-regarding actions of the numerous units
that compose it (Baran G Sweezy, 1968:40, 48, 53; cf. O'Connor, 1971
G 1973).

Some of the outstanding features of the pattern design of
postwar Western capitalism may now be outlined as follows. First, it
is now taken for granted by the state and by the average person in
the United States that each year should bring a noticeable increase
in the real income per head of the population. Second, the preoccu-
pation with social welfare, social control, and legitimacy leads to
the use of public funds on a rising scale, most notably to support
people who do not earn, either because they are young and being edu-
cated, old and retired, or unemployed or underemployed. Third, the
influence of the state on the management of the economic system has
greatly increased in the sense that government expenditures have been
considerably enlarged and determine directly a large segment of the
nation's economic activities. Fourth, in the monopoly sector the
violence of the market has been tamed, i.e., competition tends to be
increasingly regulated and controlled, and predictability increased

for the purposes of economic planning on the basis of common long-range

19

interests. Fifth, the characteristic attitude in large—scale economic
management, both inside the government and in the monopoly sector,
which has made itself increasingly felt during the postwar period is
the pursuit of intellectual coherence manifested in long-range
national planning (Shonfield, 1969:66-67) (although this appears more
true of certain European countries and remains an empirical question
as far as the United States is concerned). And sixth, the United
States has become characterized by shared monopolies in which four or
fewer firms control 50 percent or more of a market.
On the staggering extent of share monopolies in the United

States, one author has written:

. . . the multinational corporation, because of its great power

to plan economic activity, represents an important step over

previous methods of organizing international exchange. It demon-

strates the social nature of production on a global scale and as

it eliminates the anarchy of international markets and brings

about a more extensive and productive division of labor, it

releases great sources of latent energy . . . . But the multi-

national corporation is still a private institution with a

partial outlook and represents only an imperfect solution to

the problem of international cooperation. It creates hierarchy

rather than equality, and it spreads its benefits unequally.

As it crosses international boundaries, it pulls and tears at

the social and political fabric and erodes the cohesiveness of

national states (Hymer, l973:1).
This contention may be evidenced in part as follows. First, monopoly
overcharging results in an inequitable transfer cost. Specifically,
when consumers pay excessive prices for their purchases, monopoly
profits then redistribute income from the consuming public to the
shareholders of particular corporations. Second, there is very little
incentive for shared monopolies to be progressive on problems such as

pollution, given a heavy investment in existing capital assets and an

ability to exact monopoly-like returns. In any case, when an unknown

20

return is to be substituted for the standard 16 to 20 percent return,
there is little desire to embrace new technologies. Hence in this
context monopoly and oligarchy produce a state of mind and economy
where there is little pressure to seek out efficiencies. Third, "as
economic diversity decreases, the number of units contributing to
the political process decrease accordingly. And as political plural-
ism weakens, so does democracy." The larger firms which dominate an
industry are, by their "orchestrated" power, able to resist govern-
mental and public pressure more easily than smaller firms of lesser
political clout. Consequently, rather than competitive capitalism as
such, the U.S. political economy experiences price-fixing, parallel
pricing, mergers, excessive advertising, quotas, subsidies, and tax
favoritism (Green, 1973:2-4).

Furthermore, as the capitalist economy passes from its com-
petitive to its monopolistic state, certain characteristic features
and laws of motion come into operation: absorption of economic sur-
plus becomes increasingly difficult, the system is faced ever more
sharply with the alternatives of economic stagnation and mass unem-
ployment on the one hand or mounting production for socially wasteful
and destructive purposes on the other (Sweezy 8 Magdoff, l973z3),
and overseas exports and investment are increased to dispose of giant
surpluses. The relative importance of the larger corporations grow;
but as long as the system as a whole expands, this does not preclude
but actually requires an "absolute" proliferation of small businesses.
This is because, one, the giants prefer that there be an ample number

of suppliers competing among themselves to ensure low prices and good

21

quality for those items needed by the large firms, but which offer
little prospect of profit to them. Two, an element in the strategy
of dealing with seasonal or cyclical variations in the markets of
products is "to allow a number of smaller companies to enter the
industry and fill some part of the fluctuating demand;" acting as a
kind of stabilizer and balancer, they benefit from mon0poly price
umbrellas in times of high demand and may be eliminated in times of
low demand. And three, the function of technological innovation
under monopoly capitalism is to a considerable extent carried out
not by the large companies but by small firms, often specifically
organized to turn out a new product or to try out a new method of
production or distribution: Innovating is hazardous and its costs are
born by the smaller firms (Sweezy G Magdoff, 1973:4-5.

In the transition to a monopolistic economy three types of
complications are likely to emerge as foreign investment by multi-
national corporations continues to grow, and this is in addition to
the problem of disposal of an ever-increasing surplus product from
overseas investment. First, "the United States will become increas-
ingly interdependent with the world economy. The multinational
corporation is a medium by which laws, politics, foreign policy and
culture of one country intrude into one another." Second, the ability
of citizens to control large corporations will be reduced: large
corporations can manipulate transfer prices and move their productive
facilities from country to country. And third, "because the multi-

national corporation is associated with world stratification and

22

inequality in property, power and income, it creates a goal in those

lower down the hierarchy to try to change it” (Hymer, 1973z4).

Introduction: The ImpendingLCrises in
Monopoly Capitalism

 

 

It is seen, then, that success in the era of U.S. hegemony
means the integration of world capitalism, the creation of a system
in which business is less and less constrained by national boundaries,
3 system in which capital can move freely; the consequence has been
the develOpment of a general interdependence within world capitalism.
However, the continued Operation of a system of interdependence
requires stability and coordination, and without U.S. hegemony the
basis for stability and coordination no longer exists. The resulting
contradiction between an integrated capitalist system and a capitalist
system which has destroyed its basis for stability (illustrated by
U.S. capitalism's need for strong trading partners such as Japan and
West Germany, who have subsequently challenged the United States both
politically and economically) plays a central role in the crisis of
the 19705.5 In this sense it is not clear how any coordinated fiscal
policy can be developed among different governments: under conditions
of international integration and instability, the impact of any policy
is difficult to predict. Thus policy problems, trade and monetary
instability, and price shocks become the rule rather than the
exception (MacEwan, 1975:78-79). And, "with the weakening of U.S.
hegemony, it is no longer certain that the United States can organize
and discipline their competitors in order to generate an orderly treat-

ment of the deficit problem" (Crotty G Boddy, 1975:88).

23

In the most basic sense, domestically, crises can be said to
dominate the dynamics of capitalist development because capitalism is
a system of production for profit rather than production for use
(Alcaly, 1975:132). In the words of one author, monopoly capital or
major multinational corporations have a persistent tendency to increase
their productive capacity more rapidly than the natural rate of
increase of effective demand for their products, given capitalist
institutions which determine the distribution of purchasing power.
Hence, it is in the interest of monopoly capital to create new markets
for its surplus capacity (Zevin, 1975:149). The result is that the
capitalist market economy develops through sporadic phases of hectic
expansion followed by periods of recession and possibly depression.
As will be seen below, the contradictions in the system are such "that
balanced, full employment growth cannot be sustained. When an
economic expansion reaches the stage of relatively full employment,
a whole series of distortions and imbalances develop which destroy
the basis for the continuation of that expansion." Thus a recession
functions economically to correct the imbalances of the previous
expansion and thereby create the preconditions for a new one.
Recessions are inevitable in the unplanned economy of the United
States because they perform an essential function for which no adequate
substitute has thus far been available. As Crotty and Boddy write,
"the adoption in the postwar period of Keynesian approaches to managing
the economy has not changed the basic character of the system, nor

has the continued monopolization and concentration of market power in

24

the hands of the major corporations lessened the potential for

economic instability" (Crotty G Boddy, 1975:82-83).

Monopoly Capitalism in Crisis:
Theoretical Approaches

 

 

The crises in monopoly capitalism may be approached theor-
etically in three interrelated, but not necessarily congruous ways:
in terms of the Marxian law of the falling rate of profit; in terms
of the neo-Marxian law of the rising rate of surplus; and in terms
of the fiscal crisis of the state, i.e., a discussion of the logic
of the capitalist system as a whole. What is perhaps more important
here, however, is to delineate the consequences of these tendencies,
since they may be essentially the same for each approach.

On the falling rate of profit: quoting at length,

 

as accumulation of capital, or investment, proceeds, additional
physical capital and labor power are required in order to expand
production. The labor requirements depend on the pace of accumu-
lation and on the relative importance of labor in the production
process. The more rapid the rate of capital accumulation, and
the more labor-intensive the production process, the greater
will be the tendency for the demand for labor power to outrun
the supply, eventually exhausting the reserves of cheap labor
provided by the reserve army of the unemployed and the non-
capitalist sectors of production like subsistence farmers and
the self-employed. The exhaustion of the reserve army of the
unemployed, however, weakens a crucial element of capitalist
discipline on wages. As a consequence, wages could be expected
to rise, profits to fall, and the economic expansion to reverse
itself (Alcaly, 1975:134).

Yet the introduction of labor-saving technology as a response to the
reduction of profits, which is a result of the exhaustion of the
reserve army, is also a threat to the rate of profit and continued
expansion. This is because, first, the increased producing capacity

in terms of output, which is necessary to keep the whole cycle

25

operative, cannot be absorbed by the population given relatively
small incomes. In order to "realize" their profits, the major part
of which will enter into further accumulation, capitalists must sell
their output at its value. If this cannot be done, prices will fall,
production will be reduced, workers will be laid off, and accumu-
lation will decline; the consequence is recession. And second,
the increased use of physical capital per worker in the pro-
duction process tends to restrict the basis from which profits
are extracted. Profits arise essentially from the difference
between the amount capitalists must pay workers and the amount
they receive from the sale of the workers' output. The decreased
reliance on labor in the production process thus tends to
restrict the rate of profit unless there is a concomitant
increase in the profit generated by each worker, a situation
which will tend to occur to the extent that productivity rises.
Alcaly writes that these interconnected pressures on the rate of
profit preclude an uninterrupted expansion, tending rather to produce
the crisis-ridden pattern of development characteristic of capitalist

history (Alcaly, 1975:134-136).

On the rising_rate of surplus: Baran and Sweezy argue, however,

 

that the law of the rising rate of surplus is to be substituted for
the Marxian law of the falling tendency of the rate of profit, which
presupposes a classical, competitive capitalist system, because the
structure of the capitalist economy has undergone a fundamental
change since that theorem was formulated. What is most essential,
they write, about the structural change from competitive to monopoly
capitalism finds its theoretical expression in this substitution
(Baran G Sweezy, 1968:72).

To begin with, economic surplus is defined as what a society

produces minus the socially necessary costs of production;

26

operationally defined, economic surplus equals property income plus
wasteful business expenditures plus governmental expenditures plus
cost of sales effort plus output foregone due to unemployment.6
Potential surplus is defined as what the capitalist system is capable
of producing at full capacity; unemployment and productive capacity
have a potential of being realized in other words. In this perspec-
tive, then, unemployment exists because the general population does
not have adequate purchasing power to buy products. And, because
the capitalist system has no class-conscious mechanism to handle the
whole, the unit of analysis becomes the corporation-—the central unit
of power—-which functions in a controlled rather than a competitive
situation. Although corporations compete, it is not through price
reduction but rather through cutting costs, the gain of which can
then be placed in Research and Development to acquire a greater
proportion of the market. This explains a persistent increase in
profits which must be invested or reinvested. From the workers'
perspective, one confronts a corporation which is reducing costs

but increasing prices, thus buying power decreases while surplus
increases. The cost-cutting process develops automation, which
increases productivity, relegates workers to the secondary labor
sector, and consequently exacerbates the purchasing power problem;
therefore the tendency for the surplus to rise. In other words, "if
it is true . . . that oligarchies succeed in attaining a close
approximation to the theoretical monopoly price and if their never-
ceasing efforts to cut costs . . . are generally successful, then

it follows with inescapable logic that surplus must have a strong

27

and persistent tendency to rise” (Baran 8 Sweezy, 1968:67). The
monopoly capitalist economy imposes as severe cost discipline on its
members as did its competitive predecessor, and additionally engenders
new and powerful impulses to innovation, confirming the downward trend
of production costs under monopoly capitalism. The motivating factor,
again, behind cost reduction is to increase profits, and the monopo-
listic structure of markets enables the corporations to appropriate
the greatest part of the results of increasing productivity directly
in the form of higher profits. This means that "under monopoly
capitalism, declining costs imply continuously widening profit
margins. And continuously widening profit margins in turn imply
aggregate profits which rise not only absolutely but as a share of
national product." If aggregate profits are provisionally equated
with society's economic surplus, it is possible to formulate as a

law of monopoly capitalism that the surplus tends to rise both
absolutely and relatively as the system develops (Baran & Sweezy,
1968:71—72).

In this formulation surplus can be absorbed through private
consumption, investment, or through waste. Investment may assume
endogenous or exogenous forms or (more appropriately) both. Endo-
genous investment is that investment "which is channeled into outlets
that arise from the internal mechanisms of the system . . . . [T]hese
mechanisms tend to generate a steadily rising supply of investment-
seeking surplus, but that in the nature of the case they cannot
generate a corresponding rise in the magnitude of investment outlets.”7.

Exogenous investment is "all investment which takes place independently

28

of the demand factors generated by the normal workings of the system.
For example, some new technique of production is invested which will
allow a certain commodity to be brought to market more cheaply;
investment in plant embodying this technique may then take place
even though no change in the demand for the commodity has occurred.”
The three types of exogenous investment which have figured prominently
in economic literature are investment to meet the needs of an expand-
ing population, investment in new methods of production and new pro—
ducts, and foreign investment (Baran G Sweezy, 1968:88-89).
Similarly, under monopoly capitalism innovations are usually
introduced (or soon appropriated) by the large corporations which act
in accordance with careful calculations of the profit-maximizing
course, rather than under the compulsion of competitive pressures.
The rate at which new techniques will displace old techniques is
slower than traditional economic theory would lead one to suspect.
In other words, monopoly capitalism is "simultaneously characterized
by a rapid rate of technical progress and by the retention in use of
a large amount of technologically obsolete equipment" (Baran G Sweezy,
1968:95-96). Finally, under this conception the function of the
state is to stimulate demand, i.e., to serve the interests of
monopoly capital. "Consequently, the effect of government inter-
vention into the market mechanisms of the economy, whatever its
ostensible purpose, is to make the system work more, not less" (Baran
8 Sweezy, 1968:65-66). For example, income redistribution via the
state can only occur at the lowest wage level, otherwise problems of

discipline in the labor force would be created. To see income

29

redistribution as rational appears only in the form "the truth is in
the whole."

On the fiscal crisis of the state:8 Although the consequences

 

of the above argument have yet to be explicated, the argument is
nonetheless a functional one, not one of motivations and logic of
systems as a whole but one that discusses in terms of counterten—
dencies. It suffers from first, an inadequate theory of costs, which
is crucial to an understanding of monopoly capital. Second, the
above argument suffers from the absence of a theory of wages, i.e.,
labor as cost. Class struggle is important to the large corporations
who have been unable or unwilling to meet the demands of unions.
Hence, the federal government has met some of the demand via taxation,
evidenced in extensive unemployment insurance for example. Third, the
argument suffers from an inadequate theory of the state, for the large
corporations have socialized many of the costs of production. If
the state failed to confront the unemployment problem, the corporations
would have to. And fourth, the argument has failed to deal with claSs
struggles, which the trend toward mechanization and capital accumu-
lation can only be understood in the context of. History moves
through class struggle.

A theoretical approach which accounts for these inadequacies

can be found in O'Connor's The Fiscal Crisis of the State, which

 

first divides the American economy into the competitive, state, and
monopoly sectors. The competitive sector is characterized by small-
scale firms; unstable production; little market power or control; a

higher average rate of unemployment than the other sectors; low

30

productivity growth and less capacity for upgrading of productivity;
a marginal work force and problems of surplus labor; workers who
increasingly turn to the state but often are among the first victims
of the fiscal crisis; lower return on capital than the monOpoly
sector; high failure rate among industries; elastic demand for com-
modities; low public visibility; and a high percentage of black,
Latin, women, and older workers in the labor force (among other
references, Gold, 1975:126). As the San Francisco Bay Area Kapital—
istate Group has noted, the competitive sector has historically
demanded of the state that it adjudicate and expand markets, restrict
imports, provide social investment such as highways, severely dis-
cipline labor, and expand foreign trade (1975:150-151). The state
sector includes state organized production such as public education
and production which the state contracts out to private firms. It is
characterized by less competition than the other sectors;9 low capital
per worker in state organization; high capital per worker in state
contracts; low productivity in state organization; high productivity
in state contracting; inelastic demand for commodities; high public
visibility; high profits in state contracts; an intermediate labor
organization; intermediate wages in comparison to the other sectors;
a relatively stable demand for labor, subject to political shifts; and
mixed labor characteristics. The state sector does not directly
produce surplus, but rather appropriates it to maintain and enhance
the conditions for capital accumulation. But to do so, the state
requires legitimacy, achieved by providing broad social benefits, by

permitting out-groups to establish rights or claims on the state, or

31

by ideologically obfuscating the real purposes of state taxes and
spending (S.F. Bay Area Kapitalistate Group, 1975:151). The monopoly
sector is "composed of firms whose scale of production is very large
and who have substantial control over the markets on which they buy
and sell . . . . Firms in the monopoly sector grow primarily through
increases in the quantity and quality of their plant and equipment;
that is, via growth in capital and improvements in technology” (Gold,
1975:124). The mon0poly sector is characterized by high capital per
worker, inelastic demand for commodities, high public visibility,
high profits, strong labor organization, high wages, stable demand for
labor, and a high percentage of white adult males in the labor force.
Given these definitions and the previous discussion on the
law of the rising rate of surplus: the problem, then, of surplus
capacity is exacerbated by the fact that productivity growth is
slowest outside of the monopoly sector.
As the competitive and state sectors grow, there has been a
tendency for their costs of production to rise rapidly. With
production labor—intensive in these sectors, it is extremely
difficult to gain cost advantages with the systematic use of
capital and technology. Thus, the amount spent in these sectors
grows both because the sectors are being called on to do more,
particularly in the case of the state, and because what they do
costs more. In summary, surplus capacity is a problem because
total demand does not grow as fast as monopoly-sector potential,
and because the pattern of expenditures shifts away from the
monopoly sector (Gold, 1975:125).
A second, parallel process is at work: "While monopoly—sector growth
creates the problems that lead to the expansion of some key items of

the budget, at the same time budgetary expansion is an increasingly

important determinant of monopoly-sector growth. The state has taken

32

over more and more of the costs of investment and of the costs of
creating and maintaining a skilled labor force” (Gold, 1975:125).
More specifically, the capitalist state must attempt to "ful-
fill two basic and often mutually contradictory functions-—accumu-
lation and legitimation." The state must try to maintain or create
the conditions in which profitable capital accumulation is possible
via the category of expanditures called social capital. Social
capital assumes two forms: social investment or constant capital
(e.g., industrial parks) that increase the productivity of the labor
force and thus increase profits or surplus, and social consumption or
variable capital (e.g., social insurance) that reduces the repro-
duction costs of labor and thus increases profits or surplus.
Similarly, the state must also attempt to maintain or create the con-
ditions for social harmony, i.e., legitimation, through the category
of expenditures called social expenses (e.g., welfare and militarism),
which attempt to reduce hostility or threats to the system and
maintain social stability in the United States and where ever U.S.
interests are present throughout the world. The outcome of social
expenses is waste (or surplus absorption). Although necessary, social
expenses do not contribute to capital accumulation (O'Connor, 1973:
6; Gold, 1975:127-128). However, the accumulation process under
capitalism is intrinsically unequal because some groups and classes
acquire more of the benefits than others (Gold, 1975:127). "Because
of the dual and contradictory character of the capitalist state,
nearly every state agency is involved in the accumulation and legiti-

mation functions, and nearly every state expenditure has this twofold

33

character . . . . Precisely because of the social character of
social capital and social expenses, nearly every state expenditure
serves these two (or more) purposes simultaneously, so that few out-
lays can be classified unambiguously” (O'Connor, l973z7).

On the dynamics of the fiscal process and economic growth in
this context, O'Connor states that the growth of the state sector
and state spending is functioning increasingly as the basis for the
growth of the monopoly sector and total production. Conversely,
monopoly capital produces expansion of the state in terms of spending
and programming. To illustrate: greater social investment and social
consumption expenditures by the state generate greater private invest-
ment and private consumption spending in the private sector, which
in turn increases or generates surplus capital in terms of unutilized
capacity and unemployment, requiring a larger volume of social
expenses to insure mass loyalty to and the legitimacy of the state.
One concrete example is: x investment in highways by the state
increases private production and consumption of automobiles. This
not only increases the profits and social capital of monopoly capital,
but given the nature of the automobile industry, results in unutilized
capacity and subsequent unemployment; thus the increased social
expenses by the state to maintain the unemployed. In sum, para-
phrasing O'Connor, first, the growth of the mon0poly sector is irra-
tional in the sense that it is accompanied by unemployment, economic
stagnation, etc. Second, the growth of the state sector is indis-
pensible to the expansion of private industry, particularly monopoly

industries. Third, the growth of monopoly capital engenders increased

34

expansion of social expenses. And fourth, thus "the greater the
growth of social capital, the greater the growth of the monopoly
sector. And the greater the growth of the monopoly sector, the
greater the state's expenditures on social expenses of production”
(O'Connor, 1973:8-9).

Finally, in terms of class relations in the monopoly sector
and its impact on the working class, what did pp£_happen was this:
If there had existed a high degree of working class consciousness,
the likely outcome would have been a demand for higher wages at the
expense of profits, which would have meant price controls without
wage controls, thus increasing the wages of organized workers on
the one hand, and increasing the real income to all consumers on the
other because of controlled prices. However, given the actual situ-
ation of industrial union (interest group) consciousness, what in
reality has occurred is a demand for a share of the benefits accrued
from increased productivity. Here there are two alternatives: one,
force monopoly corporations to lower prices, thus increasing real
income to all consumers (which did not take place); and two, tie
wages to increases in productivity plus cost of living adjustments
(which did take place). This was adopted because unions had (and have)
no control over prices which are administered by the giant corpor-

ations. The qpid pro guo for this alternative was union absention

 

from fighting automation and also active collaboration in introducing
labor—saving innovations. The consequence is not only that the main
function of unions becomes maintaining labor discipline, while

granting capital the right to organize work, but also that one

LN
U1

evidences the bifurcation of the working class between the monopoly
and competitive sectors, and the lowering of real wages of unorganized
workers in the competitive sector. The contradiction confronting
union leaders here is that demands for increasing wages and control
over work conditions are in conflict because wage demands are based
upon increasing productivity, which requires management free to fire
redundant workers. Thus one possible outcome is wildcat strikes among

workers.10

Mon0poly Capitalism in Crisis: Contradictions
and the Irrational System

 

 

Monopoly capitalism as defined above is necessarily character-
ized by systemic contradictions. The discussion which follows,
although incomplete, will attempt to show why from the perspective
of, first, surplus absorption (eight points are considered), and
second, by the limited ability of the state to solve the current
economic crisis, caused in part by the problem of surplus absorption.

Surplus absorption poses the following dilemmas, summarized
here for the purpose of illustration. One, on technological progress
and investment outlets: Baran and Sweezy have shown that under
monopoly capitalism there is no necessary correlation, as there is
in a competitive system, between the rate of technological progress
and volume of investment outlets. Technological progress tends to
determine the "form" which investment takes at any given time rather
than its amount. Correspondingly, the surplus-absorbing capacity of
technological innovation is doubtable given the depreciation practices

of giant corporations. For the system as a whole, investment must be

36

at least as large as depreciation before it is even possible to dis-
cuss the absorption of surplus. In present-day monopoly capitalism
where the amount of depreciation is substantial, the authors argue

that it is very probable that business "can finance from this source
alone all the investment it considers profitable to make in inno—
vations (both new products and new processes), leaving no 'innovational'
outlets to help absorb investment—seeking surplus." Thus technological
progress is unlikely to make a significant contribution to solving

the problem of surplus absorption (Baran G Sweezy, 1968297, 99, 101-
102, 104).

Two, on foreign investment: Far from being an outlet for
domestically generated surplus, foreign investment is a most efficient
means for transferring surplus produced abroad to the investing
country. Under these circumstances, it becomes obvious that foreign
investment aggrevates rather than helps solve the surplus absorption
problem (Baran 8 Sweezy, 1968:108). Furthermore, as discussed pre-
viously, the desire for stability and coordination to dispose of
giant surpluses in the international market led monopoly capitalism
to develop strong trading partners, such as Japan and West Germany,
who now provide fierce competition for the same world markets.

And this is despite the fact that what the multinational corporations

desire is ”monppolistic control over foreign sources of supply and

 

foreign markets, enabling them to buy and sell on specially privileged
terms, to shift orders from one subsidiary to another, to favor this
country or that depending on which has the most advantageous tax,

labor, and other policies" (Baran G Sweezy, 1968:201).

37

Three, on civilian government: The normal condition under
monopoly capitalism is less-than-capacity production because the
system does not generate enough effective demand to insure full
utilization of either labor or productive facilities. The re—
employment of these idle resources can produce not only the necessary
means of subsistence for the producers, but also additional amounts
of surplus. If the state creates more effective demand, which can
assume the form of stimulation of the economy by creating Keynesian
deficits, direct governmental purchases of goods and services, or
"transfer payments" to groups who can somehow make good their claims
for favored treatment, it can increase its command over those goods
and services without impinging upon the income of its citizenry.
According to Baran and Sweezy, the main principles Operating here
are that the influence of the state on the level of effective demand
is a function of both the size of the deficit and the absolute level
of government spending; a temporary deficit has temporary effects;
and even a persistent deficit, unless it grows larger, will not cumu-
latively raise effective demand. As a consequence, what the state
absorbs is in addition to, not subtracted from, private surplus,
partly because of the fact that if no other outlets were available
to absorb surplus, the volume would not be produced at all.

Since a larger volume of government spending pushes the economy
nearer to capacity Operation, and since up to this point surplus
grows more rapidly than effective demand as a whole, it follows
that both the government and private segments of surplus can and
indeed typically grow simultaneously. It is only when government
absorption continues to expand after full utilization has been

reached . . . that private surplpi is encroached upon (Baran 8
Sweezy, 1968:143, 145, 147-148).

38

Four, on the military-industrial complex: Military expend-
itures provide one answer to surplus capacity given capitalism's
inability to generate enough purchasing power in the right hands to
purchase the goods the system is capable of throwing on the market,
but at the cost of considerable inflation (Mermelstein, 1975:365;
see especially Perlo, 1975:170—175 for the relevant argument) and
unemployment. "Many of the new technologies which are by—products of
military research and development are also applicable to civilian
production, where they are quite likely to have the effect of raising
productivity and reducing the demand for labor" (Baran G Sweezy,
1968:215).

Five, on advertising: Scitovsky notes, "the secular rise in
advertising expenditures is a sign of the secular rise of profit
margins and decline of price competition" (quoted in Baran G Sweezy,
1968:117). Price reduction, advertising and other forms of salesman—
ship are therefore means of stimulating demand to absorb rising sur-
plus. The economic significance Of advertising lies not in its
causing a reallocation of consumers' expenditures among different
commodities but in its effects on the magnitude of aggregate effective
demand and thus on the level of income and employment, which are of
two types: (a) those which affect the availability and nature of
investment opportunities. For example, ”by making it possible to
create the demand for a product, advertising encourages investment in
plant and equipment which otherwise would not take place.” In turn,
however, expansion because of increased productivity results in

higher, if not more efficient, capital accumulation, unutilized

39

capacity, and rising surplus, which if not absorbed results conse-
quently in unemployment. And (b) those which affect the division of
total social income between consumption and saving. That is, by
inducing changes in fashion, creating new wants, setting new standards
of status, and enforcing new norms of propriety, advertising engages
in a "relentless war” against saving and for consumption of dubious
value, creating social waste and pollution (Baran & Sweezy, 1968:
117, 124, 126, 128). In effect, monopoly capital is compelled to
lay out larger and larger portions of profits on selling expenses in
order to maintain and expand the volume of purchasing power by dis-
couraging savings (O'Connor, 1970:2).

Six, on the American educational system: To be consistent
with and support the capitalist mode of production, the educational
system attempts to inculcate in the general population certain per—
spectives on social reality (i.e., noncritical). It provides the
capitalist class with the quality and quantity of educational services
and training which its members want for themselves and their progeny.
Yet through class stratification and inferior education, the educa-
tional system also turns out "human material fitted for the lowly
work and social positions which society reserves for them." And it
supports the existing class structure by providing means where a
limited number of students can be accepted into upper-class univer-
sities and into the corporate structure. Although education in the
United States could beneficially absorb a larger proportion Of soci-
ety's surplus product to improve both its quality and educational

Opportunity for the lower classes, it is not likely to occur to

40

prevent this balance of class privilege from being over-turned (Baran
e Sweezy, 1968:170—172).12

Seven, on income redistribution: Three major social forces or
institutional mechanisms have forced blacks, among other minorities,
to be essentially confined to the competitive sector. (a) A con-
siderable number of small-scale businesses benefit, in the most
direct and immediate sense, from the continued existence of a segre-
gated proletariat. (b) "The socio-psychological pressures generated
by monopoly capitalist society intensify rather than alleviate
existing racial prejudices, hence also discrimination and segre-
gation." And (c) "as monopoly capitalism develops, the demand for
unskilled and semi-skilled labor declines both relatively and abso-
lutely," a trend which affects blacks more than any other group and
accentuates their "economic and social inferiority" (Baran G Sweezy,
1968:263). However, the National Association of Manufacturers and
other groups oppose governmental redistribution of income (as an
available option in the absence of the restructuring of the economy
to reduce disparities between groups, and as a form of surplus absorp-
tion) because it undercuts small business' need for a low wage labor
force. More generally, at some point governmental redistribution
also threatens the structure of the system as a whole and in this
sense will be Opposed by the large corporations as well.13

And eight, on the banking system: Paraphrasing Mermelstein,
an additional way to approach the problem of surplus capacity is via
a banking system willing to extend sufficient credit to business

corporations and consumers to enable goods to be distributed in

41

return for IOUS. The result, however, is a progressively shakier
debt structure and persistent inflation. The latter inevitably
results when monopolistic industries increase prices to avoid an
erosion of profits due to high employment-induced wage demands and
high rates of interest (Mermelstein, 1975:365).

Thus, the self-contradictory character of monopoly capitalism:
"it tends to generate ever more surplus, yet fails to provide the
consumption and investment outlets required for the absorption of a
rising surplus and hence for the smooth working of the system. Since
surplus which cannot be absorbed will not be produced, it follows
that the normal state of the monopoly capitalist economy is stagnation”
(Baran G Sweezy, 1968:108). Two implications follow from this dis-
cussion. First, the above costs are necessary costs of capitalist
production, but "an economic system in which spgh_costs are socially
necessary has long ceased to be a socially necessary economic system"
(Baran G Sweezy, 1968:141). And second, it has thus far ignored the
role of the state which must insure capital accumulation and protect
corporate interests. This is the basis of the fiscal crisis of the
state, which is a result both of the increased demands on the state
which arise from the process of accumulation and growth that char-
acterize monopoly capitalism, and of the inability of the state to
expand the sources of revenue fast enough to meet these increased
demands, including the costs of legitimation. As will be seen below,
"the ability of the state to 'solve' the current economic crisis is
limited by the contradictory nature of the system as a whole" (Gold,

1975:130, 132).

42

It is argued that the accumulation of social capital and
social expenses is a contradictory process which creates tendencies
toward economic, social, and political crises:14 "although the state
has socialized more and more capital costs, the social surplus
(including profits) continues to be appropriated privately." This
results in a fiscal crisis between state expenditures and state
revenues because of a tendency for state expenditures to increase
more rapidly than the means of financing them and large monopoly
resistance to the appropriation of this surplus. The fiscal crisis
is aggravated by the "private appropriation of state power for
particularistic ends," i.e., by making claims on the budget within a
political framework which are not coordinated by the market (O'Connor,
l973:9). In essence, "the basic cause of the fiscal crisis is the
contradiction of capitalist production itself--the fact that production
is social whereas the means of production are owned privately."

The confluence of tendencies which accounts for the severity
of the fiscal crisis is outlined as follows. First, in the long run,
monopoly capital socializes more and more capital costs and social
expenses of production; however profits are not socialized. Second,
in the medium run, state sector wage costs become increasingly
inflated because wage increases tend to outpace productivity increases.
And third, these factors have combined with the more general tendency
for a larger proportion of the population to become dependents of
the state (O'Connor, 1973:40). "The proximate source of the medium
and long-run tendencies is the relationship between labor and capital

in the monopoly sector. Monopoly capital and organized labor have,

43

in effect, 'exported' their conflicts to the competitive and state
sectors." More specifically, monopoly capital and organized labor
have both supported the growth of state-financed social investments,
the former because the greater the socialization of social investment
costs the greater the profits, and the latter because the greater the
socialization of these outlays the greater the rise in productivity
and wages. "Monopoly capital and labor have also favored socializing
social consumption expenditures such as medical costs and workers'
retirement income," and have advocated increased social expense
outlays (e.g., shifting pollution costs to the taxpayers to permit
profits and wages in monopoly industries to expand more rapidly).
That monopoly capital and the unions have concurred in the intro-
duction of labor-saving technology has resulted in an expansion of
employment not only in the competitive sector (and thus indirectly to
an expansion of welfare expenses, subsidies to underwrite low profits,
and an increased tax burden) but also in the state sector (which
increases wage costs because of expanding employment). However,
monopoly capital usually opposes establishing state industry because
it socializes profits. This is not the case with organized labor
which has "no vested interest in 'ripping off' production facilities
for the benefit of private capital: The growth of the state contract
system does not lead directly to increases in physical productivity
and hence to potential increases in wages (O'Connor, 1973:41-42).
Essentially, three means of raising the revenue to finance
expenditures are available to the state. First, it can produce and

sell goods and services and use the net proceeds for other

44

undertakings; second, the state can borrow from individuals, firms
and banks, and from abroad; and third, it can tax. However, the
state has not been able to use the first as a revenue raiser in the
United States because state enterprises draw on the government's
borrowing capacity for their expansion, and because the capitalist
class has successfully resisted the incursion of state enterprise
into areas that are profitable for private ownership. Essentially,
state enterprises tend to worsen the fiscal crisis. Government
borrowing as a source of state financing is also limited. Para-
phrasing Gold, bonds must have buyers, and governments have been
forced to raise the interest rates they pay in order to find the
necessary market, which not only raises interest costs but also must
come out of budget revenues. ”Government bonds compete with private
bonds for scarce funds, and this is frequently viewed as limitation
on the state's ability to expand its debt.” Furthermore, government
borrowing contributes to inflationary pressures, "particularly when
the federal debt is used as the basis for expanding the money supply
at a rapid rate. Inflation not only worsens the fiscal crisis, by
making government activity more expensive, but also imposes limits
on the ability of the state to finance its expenditures via issuance
of debt." Finally, taxation as the remaining source of revenue is
similarly limited as a method to lessen or alleviate the fiscal
crisis, in part because the main fruits of accumulation, profits,
are largely exempt from taxation (see particularly Vanik, 1973:1-23),
and in part because the expansion of existing tax sources are resisted

by those who would have to pay (Gold, 1975:129—130).

45

It should be apparent now that monopoly sector productivity
and productive capacity tend to expand more rapidly than the demand
for labor and employment, a tendency which is aggravated by the
expansion and the socialization of the costs of social capital. The
relations of production in the monopoly sector and the needs of
monopoly capital determine the extent of military and welfare
spending because the problems of surplus absorption and surplus pro—
ductive capacity (or surplus capital) create political pressures for
aggressive foreign economic expansion. Unemployment or surplus labor
increases political pressures for the growth of the welfare system.
In other words, "the welfare state tends to expand because of the
growth of the surplus population which has relatively little purchasing
power of its own, and the warfare state tends to grow because of the
expansion of the surplus capital which cannot be disposed of at home
in part because of the growth of the surplus population." Thus, ”the
function of the welfare system is not only to control the surplus
population politically but also to expand demand and domestic markets.
And the warfare system not only keeps foreign rivals at bay and
inhibits the development of world revolution (thus keeping labor-
power, raw materials, and markets in the capitalist orbit) but also
helps stave off domestic stagnation.” The national government in
this context can therefore be described as the "warfare-welfare
state" (O'Connor, 1973:150-151).

It will be seen below that the warfare-welfare "solution”
is incomplete, however, partly because increased welfare tends to

immediately undermine the class interests of the competitive sector,

46

and the militarization of the economy has tended to increase cyclical
instability (see Perlo, 1975:170-175). Yet, it is instructive to

review the state's options in this context.

CHAPTER II

DEVELOPING RESPONSES TO THE FISCAL CRISIS: PARTIAL
PLANNING, NATIONAL PLANNING, AND THE

SOCIAL-INDUSTRIAL COMPLEX

In seeking solutions to economic problems in the context of
the warfare-welfare state, the state has at its availability a wide
range of possible alternatives. For example, it may emphasize
individual and market incentives; effect partial "adjustments" such
as monetary manipulation, fiscal changes, tax incentives or deficit
spending (or any combination thereof); or reduce the costs of state
activities by reducing the costs of welfare and other agencies that
deal with the surplus population, or by cooperating with monopoly
capital to increase productivity in the private and state sectors.

In the same context, "the social infrastructure of the 19605 could be
substantially dismantled, or, at least, rendered ineffective, and be
replaced by a much more repressive structure of social control. This
was, at least officially, the position of the mainstream of the
Republican Party, and the perspective which [Richard] Nixon adopted
when he entered the White House" (S.F. Bay Area Kapitalistate Group,
1975:6). The state may curtail unnecessary military spending, end
favoritism for irresponsible private capital accumulation, and elimi—
nate budgetary ceilings dictated by the economy's inflationary

47

48

potential and the government's inequitable tax structure. It may
encourage capital to move freely in order to equalize wage rates as

a method of lowering costs, i.e., encouraging corporations to move
plants to low-wage nonunionized areas at home and abroad. Or, in the
words of Henry Fowler, the state could assiduously avoid discrimi-
nation against foreign corporations both in the conception and in

the administration of national business laws conditioning entry or
regulating business (1966:140). Or it can develop national and inter-
national monetary policies and machinery that will lessen restraints
both on repatriation of profits from host countries and on direct
investment from base countries imposed by balance-of-payments
stringencies--in sum, a continued lowering of trade barriers and an
enlargement of free trading areas. The state may attempt the short-
term control of demand to regulate unemployment, the balance of pay-
ments, and/or inflation. This is a "managed recession," the purpose
of which is to reduce wage and price increases and to reduce interest
rates. Or more radically, the state may institute wage and price
controls in those sectors whose wage demands are the greatest, or
instigate an across-the-board system of economic controls, including
wages, prices, executive compensation, profits and rents. The state
may nationalize certain unprofitable branches of the economy,
especially welfare, the political objective of which is civil order
in the cities, and the railroads. Or, it may institute an even more
"radical" concept, and that is government policy determining the
share of total income going to capital as opposed to labor, and per-

haps the distribution of labor income among workers as well; or, in a

49

more comprehensive program, government-directed allocation of raw
materials and credit, a detailed system of tax credits and subsidies,
anti-strike or even anti-collective bargaining legislation, and
administratively coordinated investment strategies among firms and
industries.15

In all, except for the last option, such policies amount to a
continuation of existing practices, i.e., piecemeal modifications of
the warfare-welfare apparatus in response to specific pressures. The
S.F. Bay Area Kapitalistate Group adds that the warfare-welfare state
could remain as the basic response to the problems of surplus
absorption and to the social and political manifestations of labor
unrest. This is an approach favored by Democratic mainstream members
and by many Republicans (1975:6). However, maintaining social peace
in the monOpOly, competitive and surplus labor sectors and sub—
sidizing them through the warfare-welfare state is extremely costly,
thereby introducing severe budgetary stresses. And while piece-meal,
incremental reform might have provoked the least resistance from
various political groups, it has also offered the capitalist class
the least hope for substantially improving a crisis-ridden political
economy.

Consider the alternatives discussed above. The effort to dis-
mantle the existing social infrastructure "faced the Obstacles of an
entrenched federal bureaucracy with a vested interest in maintaining
the social programs of the 19605, and a Congressional, party, and
bureaucratic system whose legitimacy was rooted in the pluralist

interest-group politics of federal programs" (S.F. Bay Area

SO

Kapitalistate Group, 1975:7). Second, substantial segments of
monopoly capital benefit from the military-industrial complex and
fight hard to retain their privileges, making it increasingly diffi-
cult to reduce the costs of state activities. Similarly, reducing
the costs of welfare and other agencies that contain the surplus
population in an attempt to increase the available pool of cheap
labor for competitive sector firms may cause social unrest, and
increase the danger of a developing class consciousness and the loss
of legitimacy of the capitalist order (Gold, 1975:131-132; cf.
especially Piven 8 Cloward, 1972). Thus the contradictory Objectives
of maintaining profitable conditions for capital accumulation as

well as ensuring the continued legitimacy of the American political
system (Alcaly, 1975:138). Third, while the monopoly and competitive
sectors may wish that the state hold down union wage demands in order
to bolster profits, many fear that such controls would lead to unfore-
seen constraints on the private sector (Welch, 1975:387). Fourth,
while ameliorating some of the effects of the fiscal crisis, the use
of fiscal and monetary policy to create a managed recession (i.e.,

to reduce aggregate demand, increase unemployment, and weaken unions
in the monopoly and state sectors in order to thereby reduce wage
increases and interest rates, and indirectly slow down the growth

of price inflation) does nothing to fill in the structural gap between
state expenditures and revenues. Additionally, a prolonged recession
may reduce capital expansion and increase the likelihood of depres-

sion, exactly the situation that state intervention is supposed to

51

prevent. O'Connor clearly summarizes the negative effects of a
managed recession:
One is the reduction of aggregate demand and sales, which creates
unused productive capacity. This tends to reduce labor pro-
ductivity and raise unit labor costs, which produces a special
kind of cost—push inflation. Another negative effect is to
increase unemployment and underemployment and thus the number of
people dependent on the state budget. Managed recession simul-
taneously reduces aggregate wage and profit income, lowers the
tax base, and cuts into tax receipts, which squeezes the budget
from the revenue side. In other words, recession creates demands
on the state budget at precisely the time when the state's
fiscal ability to meet these demands without recourse to large—
scale deficit financing is relatively weak (O'Connor, 1973:48).
Furthermore, past experience has shown that a managed recession
increases the absolute surplus population and unemployment in the.
competitive sector because of changes in the composition of the work
force (O'Connor, 1973:48-49; Gold, 1975:131).

Fifth, to impose wage and price controls on the monopoly
sector or in those sectors where wage demands are the greatest, in
order to reduce the risk of a downward spiral of employment, income,
production, and profits, does in fact create the advantage of easing
wage inflation in the state and monopoly sectors. Furthermore, "when
the state decides that a particular volume of investment (and savings)
is needed for high employment, or balance-of-payments equilibrium,
and establishes wages and prices accordingly, it effectively controls
the distributive share of income and guarantees a certain level of
profits" (O'Connor, 1973:49). However, wage and price controls are
extremely difficult to enforce and raise problems of legitimacy.

As O'Connor notes, "thousands of wage rates are determined not by

collective bargaining at the national level but by local management;

it is extremely difficult to define productivity and to win agreement

52

on measures of productivity; [and] fringe costs are not subject to
controls." Wage and price controls inhibit collective bargaining and
introduce an element of inflexibility in monopoly capital management's
ability to mobilize, allocate and accumulate capital profitably. And
they "transform antagonism between labor and capital at the point of
direct production into conflicts between labor and the state,"
creating possibilities for a unified working class (O'Connor, 1973:
49-50).

O'Connor suggests that perhaps the only practical Option
available to the state is to encourage productivity in the monopoly
and state sectors, i.e., to encourage the formation of the social-
industrial complex (see below). This is the attempt to stimulate
demand through spending on social rather than military projects, and
to care for the surplus population through expanded welfare and
income-supplement programs. Greater productivity would reduce the
costs of budgetary items in the state sector. Raising productivity
in the competitive sector is impractical because of the large number
of firms, the small scale of production, and the relative absence of
economic integration (O'Connor, 1973:51; Gold, 1975:130-131).

The corporate elite in the United States seem aware that
orthodox monetary and fiscal tools are inadequate, and that there is
a potential threat of a world—wide depression. One possible
ameliorative approach now being taken is facilitating more active
governmental financing of business and banking firms in danger of
collapse. This has certain limits, however, because it entails

increasing the money and credit stream and thus reinforcing the

53

inflationary trend. A second approach, also being taken, is creating
a firmer financial foundation for business so that corporations can
rely more on equity capital and less on debt. This approach not

only requires a greater rate of profit for business but also govern-
mental intervention to mobilize federal finances in order to

increase the equity position of industrial and financial firms and

to rationalize monopoly capital by eliminating the weaker firms
(Magdoff G Sweezy, 1975:209).

A related dilemma is that many U.S. leaders define the crisis
as basically a technical problem which can be solved without seri-
ously reassessing American values and institutions--and without
instigating the social upheaval that might be necessary to restruc-
ture them (as Horowitz 6 Erlich note, 1973z2). This is a hope which
has proved unfounded, however, because first, "a profound contra-
diction exists between the objective need for planned development
that is characteristic of present-day productive forces and the market
anarchy and spontaneity that is organically inherent to capitalism."
In other words, the requirements for a serious enlargement in the
scale of production, for long-range prediction and planning, and for
improved management of the economy are at variance with the unplanned
and disproportional nature of the development of the capitalist
economy, the competitive struggle among monopolies, and the complex
relationships that exist between the monopoly, competitive and state
sectors. And second, congruent with "the growth of productive forces
and the intensification of the processes of the international division

of labor . . ., there is an increasing contradiction between

54

requirements for the further internationalization of economic life
and the national forms of production management, state—monopoly
regulation on the scale of various countries, and the economic
policies of the governments of individual countries." Through the
economic integration of states and the expansion of international
monopolies, capitalism seeks a way out of this contradiction. How—
ever, this is a course which offers only limited possibility and
illustrates the inadequacy of present-day state-monOpoly regulation
because it invariably conflicts with the economic policy of states
and their efforts in the area of economic planning (Inozemtsev,
1975:116-117). For "no matter how far-flung their multinational
investments, and no matter how much world capitalism increasingly
comes to depend on expanded world trade, in the last analysis
capitalisms are national. The basis of power of the competing
ruling classes lies in their own states and in the control over 'their
own' workers that the repressive governmental apparatus makes
possible." As Roberts states, Lenin himself emphasized that the
fundamental problem for imperialism is the contradiction between
the expansive needs Of capital on an international scale and national
boundaries. "This is the essence of the present inflationary-
recessionary world crisis" (Roberts, 1975:103-104).

Other capitalist states, notably West Germany, Belgium, and
Italy, have sought to ameliorate these contradictions by attempting
to acquire a set of standard characteristics which taken together
might be said to constitute an "ideal neo-capitalist economy." Such

a model is characterized by, first, "a full employment economy, with

55

disruptions of activity involving unemployment or balance of payments
crises regulated or reduced to a minimum." Second, it is character-
ized by ”long- or medium-term formalized and institutionalized
planning, incorporating the close coordination of government expend—
itures with those of the larger private firms, plus various controls,
including wage policy, over private consumption. This planning aims
not only at influencing the overall growth rate Of the economy, but
also at bringing about structural changes in sector and regional
priorities and specific social expenditures designed to strengthen
the civil fabric of capitalism." Third, this model is characterized
by international monetary, trade and other types of coordination of
the principal capitalist economies. And fourth, it is characterized
by the "institutionalized integration of a bureaucratic trade-union
movement into the planning process, in exchange for limited, but
continuous economic and other gains for the working class-~provided
all independence of the movement is surrendered except over minor
matters" (Warren, 1972:7-8). A related model, which more closely
conforms to the experiences of Austria and France, incorporates such
elements as government-directed allocation and detailed management
of supply and resources, including raw materials, credit, and total
income; strong emphasis upon social welfare policies; de-emphasis of
market ideology which might obstruct the use of the instruments of
public authority to secure the economic policy aims of accelerating
long-term growth and controlling business fluctuations; and assumption
by the state sector of a superordinate role, i.e., centralized

economic authority and decision-making. This constitutes decisive

S6

and direct intervention by the state to regulate competition and
control the economy (Shonfield, 1969:66, 86, 123, 177, 199).

In both models the intent is to introduce a greater degree
of coordination and rationalization of economic decision-making,
and to coordinate all expenditures in such a way as to facilitate a
smooth development of the economy with its hoped—for gains in
improved productivity. This movement towards economic planning by
most capitalist states occurred almost exactly alongside the movement
towards formalized wage control (from 1962 onwards). Both immedi-
ately followed a renewed bout of inflation, and after the 19505 had
demonstrated the futility of reliance on demand management alone to
control rising costs, prices and money wages. The logic of the move
away from deflationary, indirect control of wages, "dictated by the
retrogressive effects of deflation on the long—run dynamism of the
economy and by the successful resistance of the working class to such
methods," led towards attempts at longer-term planning; but so did
other factors. For example, the increasing size of corporations
"with the associated lengthier pay-Off period of investments increased
the advantages to the private sector of longer-term certainty and
fuller capacity utilization; and post—war reconstruction efforts
enforced various kinds of centralized resource allocation by
sectors" (Warren, 1972:3-6).

Whether or not capitalist planning in EurOpe and elsewhere
is successful in securing high and progressive rates of economic
growth and in containing inflation remains to be seen, but macro- ,

economic planning is a development of major importance. Given their

57

international character, the growth of multinational corporations
both stimulates and demands such policies on the part of the capitalist
state. Furthermore, past experience has shown that the economic
goals of capitalist planning are generally in accord with the inter-
ests of monopoly capital, especially regarding forward investment
planning and often in the overall macroeconomic allocation of
resources (Giddens, 1975:163-164). (On the other hand, as will be
seen below, the emergence of planning creates a whole series of
potentially new conflicts between the state and private sectors and
within the class structure more generally.)

Yet the United States, in contradistinction to France,
Norway, Sweden, the Netherlands, and Japan who have medium-term
planning, and West Germany, Belgium, and Italy, who conform most
closely to Warren's model above (see Warren, 1972:16), has only begun
to pursue comparable developments, which still fall short of formal
planning. The United States has shown little enthusiasm for an
increasingly organized pattern of economic behavior which would
replace the older methods of arriving at decisions through the
autonomous, if haphazard, movement of the market. In fact, the
tendency on the part of many leaders and businessmen in the United
States is to "evince an ostentatious antipathy for the whole process.
[of planning] and loudly advocate resistance to it. Their official
doctrines continue to carry a high content of simple traditional
capitalist folklore." Americans are generally committed to the view,
shared by both the Republican and Democratic parties, that private

enterprise must predominate in the economic sphere and that formalized

58

economic planning must assume a subordinate role in any situation
other than an evident national emergency (Shonfield, 1969:298).
Shonfield claims that in contrast to West Germany where public

power has been concentrated, the United States has tended towards
state noninterventionism. That is, ”if public authority [in the
United States] has a choice, it generally opts for the role of
referee rather than that of manager.” Additionally, in contrast to
the U.S. system, Great Britain possesses a unitary and hierarchical
form of executive government which is quite capable of projecting a
single set of centrally determined policies to cover the national
economy. Although the administrative action necessary to make
national planning successful has "not yet been much cultivated," the
basic prerequisites for planning do exist in that country. In the
United States there has been no reason in the past why the competing
centers of power concerned with different aspects of economic policy
should ever agree (Shonfield, 1969:330).

Yet, in the United States a capitalist class manipulates the
state to gain favorable laws, governmental expenditure, investment
and tax policy, which insures an unequal distribution of property
and further concentrates their economic and political power. As
one author pointed out, those who gain economic power win political
influence and those with such influences use it to further their
own economic interests. In this way the state reinforces economic
and political inequality rather than being neutral or in conflict with
it (cf. Muchnick, 1976; Adams, 1973; Andreano, 1973; Hymer, 1973;

Horowitz 8 Erlich, 1973). Finally, while a general government

59

economic policy is still effected at the macroeconomic level via
short-term fiscal and monetary planning, the extension of the public
sector is increasingly encountered at the microeconomic level in
that "individual industrials and even individual firms are singled
out repeatedly for special governmental favors while other sectors
are deprived."16

Given these conditions, it seems likely that national planning,
the containment of monopoly capitalism's contradictions, and the
amelioration of the fiscal crisis of the state would occur through
the development of the social-industrial complex, in which the state
becomes the planning mechanism functioning as the regulator of private
industry and in an essentially undemocratic fashion, and certain
large corporations operate under contract to the state.

In this context this would mean that, first, planning is not
socialism, where socialism is understood to be public ownership of
the means of production and comprehensive planning to make sure that
material and human resources are wisely used to meet the actual needs
of people rather than the artificial demands induced to enhance
private profit apd_a social system in which social, political, and
economic privilege has been eradicated (Mermelstein, 1975:370).
Second, planning will be accepted and adopted to the extent that it
does not imperil the profit motive, and does not embrace the whole
of economic life, substituting production to meet need for pro-
duction for profit (Tabb, 1975:411). Third, planning's policy
implications nevertheless would involve (to borrow a phrase used

previously) the contradictory Objectives of maintaining profitable

60

conditions for capital accumulation as well as ensuring the continued
legitimacy of a fundamentally exploitive system (Alcaly, 1975:138).
Thus planning would at best contain and not alleviate the contra—
dictions inherent in the monopoly capitalist system. Wage and price
controls are a useful illustration of this latter point. Apart from
politicizing income (the determination of income is transferred from
the free market where events are mystifying to the political arena
where blame can be placed), planning places capitalists in a double-
bind. "If controls work badly, all of the problems of unemployment,
inflation, and profitlessness continue apace. But if they work well,
the working class may begin to reassess its bias against real
socialism, so carefully cultivated all these years by the culture of
capitalism" (Mermelstein, 1975:369).

And fourth, a fundamental implication of such planning for a
contemporary Marxist theory of the capitalist state is that expansion
of state functions involves an increasingly tighter integration of
state structure with the economic, political, social and cultural
systems of capitalist society. "Since this tighter integration takes
place on the social basis of the dominance of capital, the result is
bound to be increasing authoritarianism," albeit of an informal nature
since no fundamental changes in the formal political structure is
needed. This perspective "rules out any view of the state as being
in some sense more 'independent' than before of the capitalist
class or its dominant groups," although the state "does exercise a

genuine if relative autonomy, inherent in its own specific and creative

61

functions, and activity, covering organizational, administrative,
intellectual, educational and other spheres" (Warren, 1972:29).

Thus, in contradistinction to the aforementioned European
countries' attempts to ameliorate fundamental contradictions through
a neo-capitalist model, historical realities in the United States
should lead her to adopt the social-industrial complex. An explication
of this model follows.

Paraphrasing O'Connor, politically the social—industrial
complex contains a gradually evolving alliance between portions of
monopoly capital and the surplus population, in conjunction with low—
paid monopoly sector labor. Economically it consists of the
"transformation of social expenses into social capital by mounting
socio-economic programs both to provide new subsidized investment
opportunities for monopoly capital and to ameliorate the material
impoverishment of the surplus population." And sociologically the
complex includes the creation of a new stratum of indirectly pro-
ductive workers. The desired long-term effect of the more rapid
deveIOpment of the social-industrial complex is an increase in pro-
ductivity throughout the economy. The reasoning that such growth
might help alleviate the fiscal crisis is "because each dollar of
government expenditure might be more 'efficient' in the sense of
adding to the economy's long-run productive capacity, thus expanding
total income and the tax base and easing the burden of financing the
budget" (O'Connor, 1973:221). However, increased productivity means
more adjusting budgetary priorities to benefit the monopoly sector than

it does increasing efficiency in current state activities, which in

62

turn requires centralized administrative control and budgetary
planning. Thus, social and related programs aimed at "expanding
productivity throughout the economy and financed in whole or in part
by the state would provide new investment opportunities for monopoly
industries" (O'Connor, 1973:53, 55). Surplus would be absorbed and
invested in the social-industrial complex by the monopoly sector
given guarantees by the state that such action will be profitable.
The social-industrial complex, as it develops, should gain ”wisdom"
and be able to control graft and cost overruns, as evidenced by the
San Francisco Bay Area Transit System.

Full development of the social-industrial complex would
require political changes, however. First, monopoly capital would
have to develop new and closer ties with the state.. Second, monopoly
capital, in not only strengthening the combined power of the state
and itself, would also have to weaken competitive capital, particularly
its influence and power in local and state government and in Congress.
For competitive capital has everything to lose and nothing to gain
from the development of the social-industrial complex. "In addition
to weakening small-scale capital in the marketplace and in local and
state politics, class as Opposed to special-interest political-
economic priorities will have to be developed within the monopoly
industries." Third, it is essential that monopoly capital devise
new relationships with organized labor to ensure that workers will
not be injured by (and resist) the growth of the social-industrial
complex. Fourth, changes in the tax system designed to strengthen

monopoly capital and competitive sector impoverished workers would

63

be required--at the expense of workers in the monopoly and state
sectors. Fifth, also required would be profound changes in the
political relationships between and within social classes (O'Connor,
1973:55—58). And sixth, a last requisite would be administrative
power effectively centralized within the executive branch (evidenced
in part now by the creation of the Bureau of the Budget, the intro—
duction of the administrative budget which coordinates expenditures
proposed by the executive, the gradual shift from line-item budgets
to program budgets, and aggregative fiscal policy). However, at the
present time budgetary priorities are still based on a mixture of
class and special-interest needs (O'Connor, 1973:74-75, 78). In
essence, through the social-industrial complex
corporate liberals seek a 'new social contract,’ one that involves
governmental decentralization and regionalization and the meshing
of private corporate management 'inventiveness' with the sovereign
power of the state. To achieve 'responsible decentralization,’
they would establish '1ocal control fronts'--nonprofit community
corporations linked to regional-planning agencies through which
federal funds would be channeled from the state treasury to
private corporations engaged in social-industrial investment.
More and more, the issue of the growth of the social—industrial
complex and regional planning are inseparable. And because
regional planning requires corporate-dominated regional government,
whether the fiscal crisis can be ameliorated by the complex
depends on whether large-scale capital and the federal executive
can persuade local government to cooperate or force it to submit
(O'Connor, 1973:227).

This suggests, in part, why it will be difficult for the
corporate elite to develop political means to propel the social-
industrial complex forward and into self-sustained growth. And even
this essentially ignores existing class relations, an intensifying

taxpayers' revolt, budgetary priorities established according to the

imperatives of private capital accumulation rather than the dictates

64

of social need, intensifying labor/management conflict in state and
local government (in terms of unionization of government workers, and
demand for a higher standard of living and self-determination in the
work setting), autonomous and jealously guarded local governments and
interests who benefit from current institutional arrangements
(O'Connor, 1973:236). Briefly, other problems include, first, that
federal monies will be available in sufficient quantities to finance
the regionally-based social-industrial complex; second, that the
large corporations and the federal government will be able to reduce
or eliminate the power of small-scale capital in local and state
government; and third, that "community-control movements, labor
groups, radical and revolutionary organizations, and other social
forces with everything to lose and nothing to gain will not be able
to stop top-down regional planning and government" (O'Connor, 1973:
214). Furthermore, many capitalists feel that their immediate
interests would be threatened by a massive shift in governmental
priorities. The S.F. Bay Area Kapitalistate Group notes that capital-
ists have always shied away from new departures in state policy over
which they felt they could not exert substantial control. Already

in the United States "the added burden on the government budget, the
possibility of mobilizing groups that so far had been denied access
to the organized political process, and the threat of changes in tax
laws and state regulatory activities, [have] produced an almost
united front of capital against developing a social-industrial complex
even though it might have been in their long-run interests” (S.F. Bay

Area Kapitalistate Group, 1975:7). Finally, even if the

65

social-industrial complex were to be implemented on a broad scale,
it would only change the form of class conflict, not eradicate it.
Such conflict will appear in another form.

The social-industrial complex further presupposes the exis-
tence or development of a class-conscious capitalist class (the
owners and controllers of the monopoly corporations, state con-
tractors, and key political leaders). Because interest consciousness
leads to contradictory policies, making it difficult or impossible
to plan the economy as a whole, a class-conscious political directorate
is needed to coordinate the activities of nominally independent
government agencies (O'Connor, 1973:67). However, because conflicts
within the capitalist class must be reconciled and compromised and
because of the complex and wide-ranging nature of the interests of
this class, economic policy at the present time is dictated not by a
single directorate but by a multitude of private, quasipublic, and
public agencies. And, "monOpoly capitalist class interests (as a
social force rather than an abstraction) are not the aggregate of
the particular interests of this class but rather emerge within the
state administration 'unintentionally.'" (In this important sense,
the capitalist state is not a means but a "structure" which regulates
interclass relations, maintains social order, and regulates the
relations between big and small capital (O'Connor, 1973:68-69).)

Two research directions immediately suggest themselves here.
First, in the absence of a developing social-industrial complex and a
worsening fiscal crisis with its attendant implications of social chaos,

it is imperative to explore the extent to which a class-conscious,

()6

unified working class movement can develop or be developed. This is

a movement which can clarify the class—exploitive character of current
social and state arrangements; which can formulate a more rational,
humane social order; which questions and challenges the rples_by
which monopoly capitalism is conducted; and which seeks "community
ownership of a community's wealth and social production to meet social
needs."17 And second, because the implementation of the social-
industrial complex--if it were to occur on an extensive scale--
presupposes the existence or development of a class-conscious
capitalist class, it is imperative to identify the parameters of that
class as a ruling class. This is especially pertinent because the
present period is one in which "the potential for cohesiveness of

the capitalist class and its capacity for common action and unified
policies is unprecedented" given "the rise of oligopolistic, cor-
porate capital," "the social and economic interweaving between
financial and industrial interests fused by the organization apparatus
of interlocking directorates," "the symbiosis between federal
regulatory agencies and industries," and the "institutionalization

of central planning through the political directorate" (Hill, 1974:

48-49).

CHAPTER III

CURRENT DIRECTIONS: A CONTENT ANALYSIS OF
CAPITALIST CLASS RESPONSES

TO ECONOMIC CRISES

Introduction: Brief Comments on the Integration/
Differentiation of the Capitalist Class and
Its Implications for Policy-Planniag

 

 

 

This is, in part, the theoretical framework within which the
problem of corporate policies or Objectives in the United States has
been conceptualized. It is intended toward the development of a
theory of the Objective necessities of corporate conduct and the
imperatives of the American political economy. However, policy
planning on the level of the social-industrial complex requires the
ability to transcend class differences and ideologies. Such differ-
ences are suggested in part by the family-controlled vs. management—
controlled corporation debate, and the U.S. Chamber of Commerce—-
N.A.M. mentality vs. the orientation of the liberal wing of the upper
class, and bear directly upon the integration/differentiation of the
capitalist class. (How the interests of the dominant economic class
are translated into the governing process is evidenced in the work
of Weinstein, 1969; Kolko, 1967; Knowles, 1973; Domhoff, 1971 G 1975;

Lundberg, 1968).

67

68

If control is understood as the power of determining the broad
policies guiding a corporation, which is distinguished from the manage-
ment of day-to-day affairs, then control also refers to social
relationships--which are relative and relational. It is the ability
on the part of an identifiable group Of proprietary interests to
realize their corporate objectives over time. Given this context,
then one may ask "whether the individuals who actually decide among
proposed long—range strategies and determine the 'broad policies and
objectives' of the corporations are merely members of 'management'"
(Zeitlin, 1974:1092). In other words, does management determine the
broad policies or do individuals, families, and/or proprietary
interests impose their conceptions of the issues and demand that their
objectives be pursued to maintain the material well-being of the
corporations and hence their own interests? While such a question
cannot be answered in this thesis, this is in fact the issue of the
separation of ownership from control as it bears upon the integration
and differentiation of the capitalist class (defined by Domhoff,

1974, if inadequately in "State and Ruling Class in Corporate
America") and thus on the development of policies to ameliorate or
contain the fundamental contradictions in the American economic
system. 'To the extent that effective economic planning can be pur—
sued depends in part on the validity of the alternative arguments
which focus on the relationship between owners and managers of the
large corporations. These are briefly summarized as follows.

First, the separation of ownership and control has occurred.

This issue poses the question: what is the relationship between the

69

new group of managers who are alleged to be different in many ways
from their capitalist predecessors and the third and fourth generation
capital-owning families from whom they are said to be increasingly
moving apart from? This question alerts one to possible structural
changes of class cohesion and conflict. The relationship, therefore,
is between propertied interests and bureaucracy, between capitalists
and managers. This general argument usually has three variations.

The first argues that managers are the most dynamic element of the
capitalist class and the corporation is the basic unit in the United
States political economy (Baran G Sweezy, 1966; Mills, 1957; Sweezy,
1956; for a relevant discussion, cf. comments mentioned on pp. 15-17
in this thesis and also below in footnotes 4 and 19, pp. 134 and 138
respectively). The second variation argues that managers now control
the corporations and are oriented toward social responsibility and

not profit (Dahrendorf, 1968; Galbraith, 1968; Gordon, 1966; Bell,
1962 G 1958).18 "Managerial discretion" posits different motives

and conduct for managers than owners in this perspective, and there-
fore differences in the profit orientations of owner-controlled

versus management-controlled corporations. It is suggested that there
is a greater emphasis on nonprofit goals by management. And the third
variation argues that management now controls the larger corporations,
but that there is a lack of correspondence between the older capital-
ist families and the new corporate power yielders. That is, managers
focus on the firm and profit to the exclusion of social responsibility
and lack a class-wide view more characteristic of the older capitalist

families (see pp. 1094—1097 in Zeitlin, 1974, for relevant authors).

70

The neo-Marxist reasoning in this context is that even where manage-
ment is in fact in control, it is compelled to seek the highest
profits possible because the conduct of the corporation is determined
by the market structure--the nature of competition, products produced
and in what volume, and the constraints of capital markets. Further—
more, profits constitute both the only unambiguous criterion of
successful managerial performance and an irreducible necessity for
corporate survival. 0n the other hand, the class-wide and more
socially responsible view is held by old wealth and family-oriented
firms and individuals (e.g., the Mellons, Rockefellers, Moores,
Fords, Veritys, Schevers, McCormicks, Pitcairns, Stuarts, Pews, and
Timkens, to name a few) (cf. Chandler, 1973; Baltzell, 1966 a 1964).
However, in addition to the fact Burch (1972) ingeniously
revealed that one cannot unequivocally state that management now
controls the corporations, the first variation of this argument has
been seriously questioned earlier (pp. 16—17) in this thesis.19
The dichotomy expressed in the third variation is not sustained by
the findings of this thesis, if the social-industrial complex is
considered a "socially-responsible" policy option (see Chapter IV).
And the following sources, among many, have seriously questioned the
validity of the social responsibility thesis expressed in the second
variation: Zeitlin, 1976 G 1974; Giddens, 1975; Hirsch, 1975;
Lundberg, 1973; Seider, 1973; Bernstein 8 Matusow, 1972; Domhoff,
1967; Kolko, 1964; Sweezy, 1956. For example, Seider states that
even if managers were not also owners, little reason exists to sus-

pect that they would act differently than the owners--or could, given

71

the power of major stockholders whose income, in part, is tied to the
price of the stocks, whether through stock options or deferred com—
pensation plans (1973:71). Hirsch adds that the acceptance of the
"social responsibility" ideology serves to legitimate corporate
morality to business professionals who would otherwise find their
effectiveness hampered by a "crippling sense of hypocrisy.” Further—
more, capitalist phiIOSOphy as it was advocated by the U.S. Chamber of
Commerce and the N.A.M. stated simply that the sole criteria for
business action is profitability. "But in an atmosphere of rapid
social change, cooperation between companies is essential for survival.
The AD Council and other 'corporate liberal' groups advocate a
'socially aware' ideology which emphasizes long-term profitability to
allow for collective action by the corporate world in meeting social
challenge" (Hirsch, 1975:71-72). Hence, in the discussion of
corporate conscience or social responsibility, it is important not

to mistake expedient public relations for a "corporate soul" (Mills,
1957:126, fn. 2). Furthermore, claims by some researchers that the
managers are more interested in stability and public image than are
the owners implies that the aims of members of the upper class are
less farsighted. Domhoff argues that this is simply not the case for
those working hardest to change the image of the corporation—-the
"business liberals"--are usually hereditary members of the upper
class (1967:58). Finally, perhaps the most significant aspect of
managerial theory was summarized in a comment by Miliband. Manager-

ialism simply means "that the most important elements of capitalist

72

property have now grown too large to be both wholly owned and effi—
ciently run by owner-entrepreneurs" (1969:38).

The alternative argument, then, is that the separation of
ownership and control has not occurred and instead constitutes a
"pseudo-fact" (Lundberg, 1946 8 1973; and especially Zeitlin, 1974
G 1976). Brief empirical studies which reject the separation of
ownership and control and argue that managers belong to the same social
class as the owners can be found in Domhoff (1967); Kolko (1964),
who also disputes the thesis that managers do not have the same
interests as the owners or stockholders, given executive compensation
plans and stock options, which are largely worthless without profits;
and Lundberg (above). Additionally, to the extent that the largest
banks and corporations constitute a new form of class property--Of
social ownership of the means of production by a single social class--
the "inner group" of interlocking officers and directors, and par-
ticularly the finance capitalists, become the leading organizers of
this system of class—wide property (cf. Knowles, 1973, on the financial
interest group as a vehicle of integration and policy planning). They
should be far more likely than ordinary corporate executives to be
drawn from the "upper" or "dominant" or "capitalist" class--the
social class formed around the core of inter-related principal owners
of capital (paraphrased from Zeitlin, 1976:901). In this perspective
interest groups should constitute the "basic unit of capital" rather
than the corporation as Baran and Sweezy (1966) argued (Zeitlin,

1974:1079-1080, fn. 6).20

73

Economic Planning as a Historical Phenomenon

 

A question which must be answered here is at what point in
time has (or does) economic planning become a salient issue, or is
seriously entertained as a national policy given the fiscal crisis
in the United States. Shonfield argues that the success of continental
Europe in avoiding serious cyclical fluctuations and in maintaining a
significantly higher rate Of economic growth than the United States
became a significant factor in American domestic politics by the
early 19605. At that time the entire focus of economic policy
shifted: "it came to concentrate on the objectives of full employment,
which was to be achieved by deliberately pushing up the demands on
the country's productive apparatus” (Shonfield, 1969165). Furthermore,
in the 19605, the state's expenditures had been enormously enlarged
and now determine directly a large segment of the nation's economic
activities. The preoccupation with social unrest has led to the use
of public funds on an ever increasing scale (cf. Piven G Cloward,
1972). Competition has increasingly come to be regulated and con-
trolled, especially in the monopoly sector, since the effort to secure
an enlarged area of predictability for business management, in a
period in which technological change is very rapid and individual
business investments are both larger in size and take longer to mature,
has encouraged long-range collaboration between corporations. And
there has been an increasing realization that in a full employment
economy, rapid technological progress can be sustained only "if
there is an active public policy designed to speed up the transfer

of people from jobs in which they are established to new forms of

74

management" (Shonfield, 1969:65-67). In summary, Shonfield argues
that there was a growing demand for better control over fluctuations
in business activity and employment, which manifested itself in 1961
with governmental stimuli to economic growth (1969:331).

The 19605 era seems even more appropriate given the following
political economic changes. First, as Andreano notes, conglomerate
mergers changed the character of the American economy and the role of
the United States in the international economy, although by the end of
the 19605 share prices began to decline and conglomerates faced severe
liquidity crises. Second, as early as the late 19505 and early 19605
it was becoming clear that Japanese and European goods were beginning
to compete effectively with U.S. products. By the late 19605 the
American political economy had begun to lose its position of inter-
national economic advantage and entered the "productivity crisis”
(Mermelstein, 1975:77; Barnet G Muller, 1975:152-162; Gordon, 1975:
396. MacEwan, 1975, Lens, 1975, and Zevin, 1975, Offer supporting
evidence.). In other words,

by the middle of Nixon's first term it was clear that U.S.
hegemony over the capitalist world was weakening . . . . By
1968, some capitalists and politicians were arguing, sometimes
publicly, for a pullback in Asia and a re—evaluation of U.S.
foreign policy in other potential trouble-spots. In addition,
the rising economic strength of other capitalist nations, par-
ticularly Japan and West Germany, and the threat of an expanded
and unified European Common Market made the danger of serious
competition a reality. At the same time, the potential of the
U.S. to reassert its own competitive position through the manip—
ulation of the economy with Keynesian economic tools seemed to
be exhausted. The expansionary economics of the Kennedy-Johnson
years produced a rising GNP but also increased inflation. Hence
this rising GNP did not represent a significant increase in
productivity. The expanding strength of other national economies
and the relative stagnation of the U.S. combined to transform
the situation into an arena of destabilizing competitive forces
that threatened to undermine the international system as a whole
(S.F. Bay Area Kapitalistate Group, 1975:4-5).

75

And third, the increasing instability of the world economy was accom—
panied by an upsurge of political struggles in the United States in
the late 19605 that threatened the stability of the internal social
structure: increased militancy of state workers and subsequent
demands for unionization, an increasing taxpayers' revolt, threats

by workers in general and blacks and other third world minorities in
particular, more militant challenges by university students, women
and gay people to the institutions and individuals who were oppressing
them, organization by poor people against the welfare system and
ghetto housing, and development of movements to socialize decision-
making from below (S.F. Bay Area Kapitalistate Group, 1975:5; cf.
O'Connor, 1973:227 6 Chapter 9).

In sum, "though such there might have been differing inter-
pretations as to the prime causes and effects of such phenomena, a
general consensus existed within the ruling class that there was a
crisis of empire abroad and a crisis of authority at home" (S.F.

Bay Area Kapitalistate Group, 197S:S). And, since it is generally
recognized that the use of state planning by Japan, West Germany,
Sweden, and France contributed substantially to their superior economic
performance in the 19605 and early 19705, there are long-run as well

as short-run forces pressuring the United States toward a planning
imperative (Crotty G Boddy, 1975:90).

15 the "planning imperative" being realized, however, and if
so, by whom and for whom? This is an important question, because who
formulates state planning policies beneficial to the capitalist class

on the whole (or whether there is an absence altogether of a long-range

76

planning orientation among relevant policy-makers) will support or
detract from any one of the positions enumerated earlier on the

integration/differentiation of the capitalist class, and thus have
important but as yet undelineated implications for the theoretical

perspective set forth in Chapters I-II.

The Data and Research Design

 

The actual direction(s) of the capitalist class in this con-
text has been researched through a content analysis of business

executive speeches in the journal Vital Speeches of the Day, inclusive

 

of the period October 15, 1961, through June 15, 1976. Vital Speeches

 

represents the most powerful and influential American multinational
corporations (Seider, 1974:805—806 G 1973; Kroos, 1970), and allows
for both comparison within the business community according to crucial
independent variables, such as class and type of corporate control,
and longitudinal analysis to investigate changes over time. It is a
data source that presents the policy-recommendations and ideologies

of high-ranking corporate executives in some detail and offers a
cross-section of monopoly capital.

Seider, in his Ph.D. dissertation, notes that "Vital
Speeches, published since 1934, presents the text, usually in full
form, of speeches generally given by businessmen, politicians,
military men, and educators. Most speeches used are unsolicited and
are deemed important by the publisher. The publisher claims that the
selection process has not changed since the journal's inception, and
since the publishing house has remained in the same family hands

since its start, that claim appears sound" (Seider, 1973:111—112).

77

In a personal communication, Thomas F. Daly (the Managing Editor of
Vital Speeches) stated that Vital Speeches "attempts to present both
sides of the question and is only limited by the number of speeches
given on a particular subject worthy of consideration" (June 8, 1976).
This in fact reflects the editorial policy Of Vital Speeches, which
appears on the inside cover of each issue and states in part:
The publishers of Vital Speeches believe that the important
addresses of the recognized leaders of public opinion constitute
the best expression of contemporary thought in America, and that
it is extremely important for the welfare of the nation that these
speeches be permanently recorded and disseminated. The publishers
have no axe to grind. Vital Speeches will be found to be
authentic and constructive.
It is the policy of the publishers to cover both sides of public
questions and to print all speeches in full. Where it is neces-
sary to condense a speech for reasons of unusual length, or the
use of extraneous matter, it will be so stated when printing.
They feel that it is only in the unedited and unexpurgated
speech that the reader can best obtain the views of the speaker.
This claim appears to have been substantiated by Seider (1973) in
terms of beliefs and ideological strains in business speeches, and
by this thesis in terms of the possible range of policy options which
one would expect to be expressed by monopoly capital, both conservative
and liberal, for and against. It is clear that all segments of the
large business community have been represented (cf. supporting
arguments below).

The procedure utilized for selecting the pOpulation (not
sample) of speeches, given a concern with economic planning in general
and policy divisions affecting the integration/differentiation of the
capitalist class in particular, is outlined as follows:

(1) Every speech in Volumes 28-42 of Vital Speeches (Oct. 15,

1961 through June 15, 1976) was briefly read if it was included under

78

any of the following indexed titles: balance of payments, budget,
business (social aspects, management and organization, political
aspects), capital, capital investment, capitalism, conglomerate
corporations, corporations, economic development, economic conditions,
economic policy, economic relations, finance, income, inflation,
international economic integration, investment, money, multinational
corporations, national planning, profits, taxation, trusts, and

wage and price controls.

(2) Those speeches were chosen which addressed at least in
part some aspect of the interrelationship between the business com-
munity and the federal government in terms of planning, free enter-
prise, economic policy, etc. apd_were made by individuals holding
high-ranking corporate positions or were key leaders of the U.S.
Chamber of Commerce or the National Association of Manufacturers.

(3) Eliminated were those speeches made by government leaders,
such as the President and Vice-President of the United States, the
Secretary of Treasury, the Secretary of State, and Secretary of
Commerce, and the presidents of the World Bank and Federal Reserve
Banks. Also eliminated were those speeches made by staff members of
such organizations as the Price Commission, the Council of Economic
Advisors, the Department of Housing and Urban Development, the Bureau
of the Budget, Economic Policy Research, the National Planning
Association, the Committee for a National Trade Policy, the U.S.
Federal Trade Commission, the Cost of Living Council, the Federal
Energy Office, the Board of Governors of the Federal Reserve System,

the Committee for Economic Development, The Brookings Institution,

79

the Nationwide Committee on Import-Export Policy, and the Policy
Planning Council of the Department of State. And eliminated were
those speeches made by staff members of private research organizations
such as Science Research Associates, Inc. A cursory reading suggests
that to some extent these speeches tend to be highly technical and
provide a substantially more complex review of fiscal and/or

monetary and/or economic policy and recommendations than does the
final thesis population. Since these organizations appear to address
the question of national economic planning to a greater extent than
the selection of this thesis (which is concerned with monopoly capital
and competitive capital, represented by the U.S. Chamber of Commerce
and N.A.M.), it would seem profitable to conduct a comparison/
contrast between the samples suggested in (2) and (3) and the thesis
population, and also determine to what extent these research organi-
zations are interlocked with monopoly capital. This task is too
complex for this thesis, however. This research becomes especially
important if it is ascertained that corporate leaders are far more
willing to express a desire for national planning in private, e.g.,
within the Board Room of the C.E.D., than in public speeches to
stockholders and bankers associations. The purpose here, however, is
to ascertain the planning orientation of high-ranking executives ip_

the corporations themselves. As it is, the "monopoly capital" group--

 

inclusive of the time period l961-l976--has 28 interlocks with the
C.E.D., the Business Council, and the Council on Foreign Relations

combined. The U.S. Chamber of Commerce and N.A.M. group has none.

80

(These figures include individuals who appear more than once in the
thesis population.)

(4) Finally, eliminated were those speeches by individuals
from corporations not on Fortune Magazine's 1000 Largest Industrials
List or the "Fifty Largest" lists in 1971.

The rationale for this population is as follows. (a) While
the organizations in (3) above may include a number of members of
monopoly capital and/or representative leaders of the U.S. Chamber
of Commerce or N.A.M., an extensive tracing of interlocks is pre-
cluded by the fact that this is a Masters project and, hence,
limited in sc0pe. The result is that the liberal segment of monopoly
capital may appear more conservative than they actually are in the
thesis population. However, if strong associations result from a
lambda test between monopoly capital (Fortune's lists) and competitive
capital for example, it would prove to be a more powerful test.

(b) Speeches made by key leaders of the U.S. Chamber of
Commerce and N.A.M. groups are taken to represent to some extent the
viewpoints of small business and the conservative wing of monopoly
capital for the following reasons. First, speeches by small business
executives are relatively rare in Vital Speeches, compared to those
made by monopoly capital, government leaders at the national level,
and the organizations mentioned above. For monopoly capital, this is
confirmed by Seider (1973:113-114). Second, N.A.M. today, older and
smaller than the U.S. Chamber of Commerce, has a membership of 13,000
manufacturers, utilities, and financial institutions. The U.S.

Chamber of Commerce, which was organized in 1912 with the encouragement

 

 

81

of the N.A.M., has a membership consisting of 56,500 businesses,
including retailers, service companies, and manufacturers (most N.A.M.
members are also Chamber members). On June 25, 1976, the directors
of the U.S. Chamber of Commerce and of the National Association of
Manufacturers voted to merge the business organizations into one
called the Association of Commerce and Industry to obtain greater
cohesiveness and political leverage. That this organization may in
fact be conservative is suggested by its opposition to the Humphrey-
Hawkins bill, by the fact that it considers the government business's
true adversary, by the fact that the two organizations merged because
of fear of government growth, and by the fact that ”the Chamber and
N.A.M. have been helping companies set up political action committees
to collect contributions from salaried employees and stockholders and
channel the money to political candidates who are economic con-
servatives" (Kohlmeier, 1976:l, 5). Third, Domhoff (1971) argues
that N.A.M. is representative of small business. However, Seider
shows that "while it may be true that the N.A.M. viewpoint tends to
be congruent with the views of smaller businessmen, those views may
also be adhered to by conservative big businessmen" (1973:19, fn. 10).
For example,
according to Richard Gable, the N.A.M. reached its highest enroll-
ment in 1948 (16,500 firms) when it represented six percent of
the manufacturing industries in the country. Single prOprietor—
ships were unlikely members of the Association, and it would be
fair to see the Association as over-representative of big business
in the United States. However, even within that specific group,
a conservative element stands likely to gain power. The Board of
Directors, the policy making arm of the N.A.M., 'has been heavily
weighted in favor of the active minority which represents con-

servative big business and which is an unrepresentative sample
of N.A.M. in terms of size, wealth, and number of employees .

82

28 firms (22 percent) of the minority group were among the 200
largest American corporations' (Seider, 1973:18).

Seider also notes,

from the Vital Speeches analysis, the NAM position does not seem
to enjoy such an overwhelming acceptance among the corporate
spokesman [sic], yet many of them undoubtedly hold at least
nominal membership in that organization. What should be empha—
sized here is the fact that the association representatives are
important spokesmen of ideology and function to provide firms
with a ready made outlook; but the firm is independent and does
the choosing. However, cleavages which aIready exist within the
business community may be heightened by the conflicting ideologies
which the differing associations provide. This may further serve
to blunt the distinctive interest and ideology of the individual
firm (Seider, 1973:296-297).

 

That the Committee For Economic Development, and not N.A.M., is the
major spokesman for monopoly capital has been demonstrated by Domhoff
somewhat indirectly in terms of interlocking ties and common corporate
directorships. The C.E.D. has 46 connections among the top 25 indus-
trials, while the N.A.M. has 10 (and only one of those 10 is one of
the top 10 industrials). And, the C.E.D. has 63 connections among

the tOp 25 banks, while the N.A.M. has a mere 9 (Domhoff, 1975:173-
184).

(c) That Fortune's 500 largest industrials list and the
"fifties" lists actually constitute monopoly capital can be evidenced
by the fact that the 500 in 1971 accounted "for 66 percent of all the
sales of all U.S. industrial companies, 75 percent of their total
profits, and 75 percent of all their employees" (The Fortune Directory
of the 500 Largest Industrial Corporations, 1972:2). The top 200

manufacturing corporations control roughly two-thirds of all assets

 

held by corporations engaged primarily in manufacturing (Green, 1973:

2); 90 percent of the thesis population of industrial corporations are

83

in the top 200 list. The 14 largest banking institutions, ”repre-
senting one-tenth of 1 percent of all commercial banks in the country,
hold 24 percent of all commercial bank deposits." Only 26 national
banks accounted for 61.2 percent of all trust assets in national
banks. And 20 large banks manage almost half of all noninsured private
pension and assets (Patman, 1973:1); 88.2 percent of the thesis
population of banking institutions are among the 14 largest national
banks. One hundred percent of the thesis population of insurance
companies are among the three largest life-insurance companies, whose
combined assets are larger than the next 17 largest life—insurance
companies combined (The Fortune Directory, 1972:68). The diversified
financial company included in the thesis population is ranked number
12 in overall assets (The Fortune Directory, 1972:70).21
(5) The final thesis population, then, includes 124 speeches,
of which 34 (27%) represent banks, 69 (55.6%) represent industrial
manufacturing companies, 15 (12.1%) represent spokesmen of the U.S.
Chamber of Commerce and N.A.M., 5 (4%) represent life-insurance
companies, and l (0.9%) represents a diversified financial company.
Except for the U.S. Chamber of Commerce and N.A.M. group, all com-
panies are on Fortune's 1000 largest industrials list or the fifties
lists.22 While the total number of speeches equals 124, these repre-
sent 92 different individuals; although there are 32 ”repeaters,"
the unit of analysis is speeches and not individuals. (For the
purpose of the tables which follow in Chapter IV, the banks, insur-
ance companies, and the diversified financial company are denoted by

"finance capital"; the manufacturing companies are denoted by

84

"industrial capital"; and the U.S. Chamber of Commerce and the N.A.M.
are denoted by "competitive capital.")

And (6) Virtually all of the speeches were delivered before
generally friendly or like audiences, e.g., the president of the U.S.
Chamber of Commerce before a local chapter in Pennsylvania, or the
director of General Motors Corp. before the Security Industry Associ—
ation. This lessens the methodological problems of differential
audience influence. (A complete listing of who the speeches were
delivered before is provided in Appendix B.)

The population of speechmakers has been divided into the
following categories, based on extensive biographical research:23

Upper Class (on the basis of the indicators developed by Domhoff,

 

1971:21-27, and including propertied owners), Competitive Capital

 

(represented by the U.S. Chamber of Commerce and N.A.M.), Executive
Managers (members of monopoly capital who are not also members of the
upper class), and Residual (those individuals who are unclassifiable,
given inadequate documentary data).24 These categories, rather than
other possible ones, are based on the following reasons. First, n's
for Old Wealth and New Wealth categories were too small for an
effective analysis to be carried out. In any case, "although there
is always some conflict between the main body of financial capitalists
and the new upstarts, Menshikov writes that 'analysis of forty—nine
of the new fortunes shows that only seven have served as a basis for
creating new independent financial groups [and that] the prevailing
tendency is the readiness of the new plutocracy to join the existing

system of the financial oligarchy.'"25 In O'Connor's view, the split

85

is explicable mainly in terms of the conflicts between capitalists
whose wealth depends mainly on the appropriation of surplus directly
on the one hand, and capitalists who appropriate surplus value

indirecply via the state budget on the other (O'Connor, 1971:128,

 

fn. 9). It was impossible to analyze differences along such a
dimension, however, because time considerations prevented detailed
research into defense contracting by monopoly capital.

And second, Johnson (1976) presents empirical evidence that
the alleged separation between family groups who dominate the large
industrial and financial corporations of the Northeast, and the
"Southern Rim" beginning with the development of Texas oil and con-
tinuing with the new industries of electronics and aerospace-defense,
represents a "pseudo—fact," given extensive corporate interlocks for
example. This, then, is not a viable category.

A more detailed explanation of the chosen categories follows.
Traditionally, the basic philosophy of competitive capital has been
one advocating free enterprise and the economy as a self-regulatory
mechanism-~if left alone, anti-government sentiment, individualism,
practicality, optimistic affirmation, materialism, economic pre-
eminence, stability, anti-populism, cost reduction and expansion of
revenues, development of new profit opportunities, and profitability
as the sole criteria for business action. Representing competitive
capital, the U.S. Chamber of Commerce and N.A.M. traditionally have
taken an anti-labor stance and in the past have usually opposed welfare
legislation. It has also been shown that these organizations repre-

sent the conservative tendency within the capitalist class, including

86

certain very large firms and more of the smaller of the big businesses.
This compares to the Committee For Economic Development whose member-
ship is limited to the largest corporations and several university
presidents, and which is involved with problems of fiscal policy and
governmental budgeting.26 [Formed in the early 19405, the C.E.D.

"was the outgrowth of a realization that serious planning would have
to take place if future depressions were to be averted, particularly
in the light of the industrial expansion necessary to prosecute

World War II" (Domhoff, 1971:189). And while the C.E.D. sees labor
unions as a useful stabilizing influence and functions to suggest

new economic policies and promote and improve economic education, the
N.A.M. in particular now represents interests within the capitalist
class "which have failed to come to terms with the New Deal and the
governmental needs of internationally oriented corporations" (Domhoff,
1967:74, 77, 153).]

The executive managers in this context are those individuals
who have lacked a propertied class position. Technical skill rather
than property, political position rather than wealth have become the
basis on which power is wielded (which is not to say that property
and wealth do not similarly wield power). Executive managers do not
themselves usually own more than, at best, a small part of the assets
they command but rather owe their position to appointment or the
ability to move through the organization. In other words, the pattern
of recruitment is the "bureaucratic career," or based on the strength
of some specialized education or university degrees. Dahrendorf

argued that these different patterns of recruitment "distinguish

87

managerial groups significantly from those of old-style owner-
managers as well as new-style mere owners. Their social background
and experience place these groups into different fields of reference,
and it seems at least likely that the group of professionally trained
managers 'increasingly develops its own functionally determined
character traits and modes of thought'” (Dahrendorf, 1968:46). This
is the basis upon which Dahrendorf develops the social responsibility
thesis questioned earlier. Other authors have argued that while
managers are experts, such as engineers, agriculturalists, economists,
and statisticians, i.e., high prestige technical elites who have risen
to positions of prominence, they are still largely recruited from the
middle and upper reaches of the class structure, and while without
significant property holdings, are often among the largest owners

of stock. Hence, they should maintain a strong interest in dividends
and stocks which steadily appreciate in value and systematically focus
on cost reduction, the expansion of revenue, and the increase of
profits. Executive managers are company men dedicated to the advance-
ment of the corporation, rationally applying unsentimental business
principles as rigorously as possible to the presumed goals of the

firm or organization, and attempting to balance out rival claims of
stockholders, workers, the public and the government. Bell argues
that the older property capitalists had a theory of "natural rights"
as a philosophical sanction but that the newer managers could not claim
this foundation. However, since power requires legitimation, and
rules and authority have to be invested with a sense of ”'justice,'"

the fact that the new managers have lacked a class position buttressed

88

by tradition has given rise to a need on their part to justify their
enormous power. Thus, on the symbolic level one evidences ”the shift
from 'private property' to 'enterprise,‘ as the justification of
power" (Bell, 1958:247). Christ summarizes the underlying dimension
here when he states, "the contemporary administrators of manager—
controlled firms are members in an emergent social class attempting
to legitimate its newly acquired position” (1970:244).

Finally, it is suggested that business executive managers in
the capitalist class will support state intervention in the economy
when necessary; seek to stabilize and rationalize a "too" competitive
and fluctuating economic system; seek cooperation among various
interest groups in the economy; accept the legitimacy of organized
labor (to undermine militant unions and lessen class conflict); be
reform-oriented; emphasize planning, although it may be partial and
short-term; and argue that social contributions and responsibility aid
profit maximization in the long run.27

The primary difference between business executive managers
and the upper class in this context is that while the former are an
emergent social class within the capitalist class in general, the
latter is an established and propertied social class with its
attendant implications. While new wealth may be included in both
classes, in this particular population pp_old wealth are to be found
outside of the upper class. (Five speechmakers could be identified
as either old or new wealth: the ratio is four and one respectively.
The four old wealth are also members of the upper class, the one new

wealth is of the executive manager class.) Upper class speechmakers

89

were identified on the basis of three of the indicators developed by
Domhoff (1971:21-27), who abstracted them from several other studies.
Thus, in this thesis, a speechmaker was considered a member of the
upper class if he attended any one of the 37 schools mentioned by
Domhoff on pp. 22-23, such as Lake Forest, Groton, Middlesex, or
Portsmouth Priory. A speechmaker was considered a member of the
upper class if he belonged to any one of the social clubs listed by
Domhoff on pp. 23-24, such as Brook, Century, Chicago, Detroit,
Links, Rainier, Rolling Rock, or Union. Or, a speechmaker was con-
sidered a member of the upper class if his father was a "millionaire
entrepreneur or a $100,000-a-year corporation executive or corporation
lawyer, apd_(a) he or she attended one of the 130 private schools

listed in the back of Kavaler's The Private World of High Society pr_

 

(b) he or she belongs to any one of the exclusive clubs mentioned by
Baltzell or Kavaler. The list of private schools and exclusive clubs
can be larger here than for the second, third, and fourth criteria
[in Domhoff, 1971] because it is known that the person is a member of
the second generation of a wealthy family" (Domhoff, 1971:26-27).

Two additional indicators developed by Domhoff were not used
here to identify members of the upper class among the speechmakers,
given insufficient or unavailable biographical information and time
considerations. They are: a person is considered to be a member of
the upper class if he, his parents, his wife's parents, or any of his
siblings are listed in any of the registers and blue books listed on
pp. 21-22; or if his sister, wife, mother, or mother-in-law attended

one of the schools or belongs to one of the clubs mentioned on

90

pp. 24-26 (Domhoff, 1971:21-22, 24-26). Therefore, while there are
probably few if any mistakes in classifying members of the upper
class in this study, there may well be speechmakers included in the
executive manager category who are actually members of the upper
class, since the two additional indicators were not included. Based
on available biographical data, however, of the 38 speechmakers
classified as executive managers, 31 clearly belong in this category
for such reasons as: the individual was a former coal miner or clerk
or treasurer who gradually rose through his company's ranks; the
speechmaker has no substantial stockholdings or wealth; he or his
parents were poor immigrants and only by attending a state university
to train for a lower-echelon management position was he able to
eventually assume a high-ranking management position; the speechmaker
was specifically mentioned as a member of the business-oriented
managerial class by such references as the N.Y. Times Biographical
Edition; or he epitomized in the corporate world the first-generation
self-made man, such as Dr. Simon Ramo of TRW, Inc. Seven individuals
in the executive management class are questionable, however. While
they do not belong to any of the social clubs mentioned by Domhoff
(1971:23-24), at least as revealed by Who's Who in America and Who's
Who in Finance and Industry (and there is little reason to suspect
here that these data were deliberately withheld, given the other
information available on the individuals), it is possible, given the
nature of their careers and education, they may have become members

of the upper class through intermarriage or as yet unidentified social

91

networking. What effect this caveat may have on the validity of the
findings of this thesis is not known.

Finally, material on and postulated differences between owner-
controlled vs. managerial-controlled corporations is discussed else-
where in the thesis; this may represent a significant division,
however. Thus, on the basis of Burch's (1972:36-37, 78-95, 160-179)
research (and reported in Zeitlin, 1974, as highly important), the
corporations represented in the speech population have been divided

into the following categories: Probably Family (PF) controlled vs.

 

Possibly_Family (F?) controlled vs. Probably Management (PM) controlled.

 

 

The obtained percentages are summarized as follows. Omitted from a
population of 124 speeches were 15 which represented the U.S. Chamber
of Commerce and N.A.M. and six which represented insurance companies
and a diversified financial company. No data was available to classify
them as PM-, PF—, or F?-controlled. This left 103 speeches. Of
that 103, 58 (56.3%) represented corporations classified as PM-
controlled, 34 (33%) as PF-controlled, and 11 (10.7%) as F?-controlled.
The obtained percentages for the "class" categories are sum-
marized as follows. For Executive Managers, n = 38 (30.6% of the
total speech population). Of the corporations represented here, 10
(26.3%) are PF-controlled 4 (10.5%) are F?-controlled, and 24 (63.2%)
are PM-controlled. For the Upper Class, n = 61 (49. % of the total
speech population). 0f the corporations represented here, 19 (31.1%)
are PF-controlled, 7 (11.4%) are F?-controlled, 30 (49.2%) are PM-
controlled, and 5 (8.3%) are not included in Burch (1972). For the

U.S. Chamber of Commerce and N.A.M., n = 15 (12.1% Of the total

92

speech population). Three (20%) of the individuals here belong to
the upper class, 8 (60%) are pp£_upper class, and 3 (20%) could not
be classified due to insufficient information. For the Residual
category, n = 10 (8.1% of the total speech population). Of the cor-
porations represented here, 5 (50%) are PF-controlled, 0 (0%) are
F?-controlled, 4 (40%) are PM-controlled and l (10%) is not included
in Burch (1972). Of the individuals represented in the Residual
category, 1 (10%) probably belongs to the upper class, 7 (70%) are
probably managers without class position, and 2 (20%) appear to have
no biographical data whatsoever available on them in standard refer-
ences.

The 124 speeches were coded according to the following
scheme28 (a detailed explanation of each one of the following policy
options appears in Appendix A). N's for any given speech equals the
total number of different policy options favored or advocated by its
author. This coding scheme is inclusive of all major policy options
mentioned in the 124 speeches. If a negative of one of the categories
is not included below, it is either because it is unrealistic (e.g.,
a request for "less efficiency in governmental administration"), or
because no speechmaker considered it a viable option (e.g., "increase
in and/or greater enforcement of anti-trust legislation"). While the
absence of certain policy options may be significant in itself, the
present length of this instrument prohibits their inclusion. For

each policy option, the table code word(s) follow in parentheses.

93

In Response to Economic Crises, the Author Appears to Favor or Advocate:

 

(1
(1
(1
(1
(1

(1
(1
(1

(1

(1

(1
(1

(1

(1

(1

(1

(1
(1

1.

2.

10.

11.

12.

13.

14.

15.

16.

17.

18.

”Free market" or "free enterprise” economics (Free Market).
Manipulation of fiscal and/or monetary policy (Adjustments).
Greater efficiency in governmental administration (Efficiency).
An effective capital recovery system (Capital Growth).

Creation of a stable international monetary system (Monetary
Syst.).

Protectionist policies and legislation (Protectionism).
Anti-protectionist policies and legislation (Free Trade).

Moderation in, restriction of, or reduction in the domestic
regulatory functions assumed by government (Anti-Regulation).

Re-assessment of, restraint in, or liberalization of anti-
trust regulation (Pro-Trust).

International agreement defining the proper role of the multi-
national corporation (Internat. Code).

Exercise of restraint in union activity (Union Restraint).

Restrictions on, or modification of the collective bargaining
structure of unions (Modify Unions).

Cooperation among, or partnerships of business, labor, govern-
ment, and/or the public in general (Cooperation).

Economic education for the general public (in order to facili-
tate a more favorable climate for business (Education).

Broad credit, wage and price guidelines or an incomes policy
(Guidelines).

Establishment of a permanent planning committee, board, or
public or quasi-public agency (Planning Bd.).

A standard comprehensive planning model (Nat. Planning).

The social-industrial complex (S-I Complex).

If this coding scheme is valid, it is reflecting primarily the

characteristic(s) which it is supposed to measure, with a minimum of

94

distortion by other factors either consistent or transitory. In this
study, most of the items coded represent relatively simple policy
responses and do therefore seem valid on their ”face," e.g., proposing
a substantially revised income tax program for corporations or calling
for a reduction of domestic trade barriers, such as tariffs. In the
speeches analyzed by this study, businessmen, especially in the large
corporations, tended to be very pragmatic. That is, having once
stated an economic or monetary problem, they then offered a clearcut
solution which they thought would effectively address the situation.
Some ambiguity existed in the U.S. Chamber of Commerce speeches,
because those individuals tended at times to either moderate what
they actually were thinking or obfuscated their recommended policy
solutions. This problem appeared most clearly in the earlier years
of the 19605 decade, although by the 19705 the U.S. Chamber of Commerce
seems to have become more willing to advocate outright policy
options which would strengthen their ideological position. In addi-
tion to face validity, the researcher should take measurements from
his/her scale and compare them with other results to determine if
the results of the new scale agree with findings from a well-accepted
measure of a given concept (criterion validation). This proved
impossible, however, because of the unavailability of other scales
purporting to measure the same phenomena or concepts as those in
this study.

Reliability usually means determining how much of the vari-
ation in scores among individuals is due to inconsistencies in measure-

ment. When independent but comparable measures of the same phenomenon

95

are obtained, they will yield the same results to the extent that
the measurements are free from random or variable errors. In the
case of different observers using the same instrument, it is assumed
that there are variations in the use of the instrument by those
different Observers. The reliability of a measurement procedure is
always contingent on the degree of uniformity of the given character-
istic within the population being measured. And high reliability is
more important if one wishes to make fine discriminations among
individuals than if one merely wishes to identify people who are at
the extremes (based on Sellitz et al., 1959:166-186). Reliability
in this study is based upon the idea that the categories are so con-
structed that when the same research process is repeated, it will
produce results within stated confidence limits. Given these
methodological considerations, all 124 speeches were arranged by
date of publication and page number, beginning with Oct. 15, 1961,
and then numbered from 1 to 124 (see Appendix B). A table of random
numbers (from Beyer, ed., 1966:341—343)29 was used to generate a
random sample of eight speeches, which was an arbitrarily chosen
number. This sample of speeches was coded by an independent reader
using the coding scheme, and a simple reliability coefficient R
computed based on the reader's and this study's results. R = .88,30
which appears to be an acceptable level in the context analysis
literature.

Finally, contingency tables have been created in order to
compare certain variables with each other. Those variables previously

discussed include "Class Divisions," "Type of Corporate Control,"

96

and "Policy Options." Additional ones include "Membership (or not) on
Key Policy-Formation Groups," and "Type of Capital."
Two variables are said to be associated if knowledge of values

of one helps the researcher to guess values of the other.

A coefficient of association should be a single number which

summarizes the degree to which knowledge of one variable helps in

guessing the other. If this knowledge makes [one's] guesses

perfect, the coefficient conventionally registers 1.00. If, on

the other hand, the knowledge provides no help at all, the

coefficient usually takes a value of 0. Increasing ability to

make accurate guesses of one variable on the basis of knowledge

of the other, then, is reflected by increasing values of the

coefficient from 0 to 1.00 (Freeman, 1968:71).
If a researcher studied all the possible cases that exist, then a
measure of association sufficiently summarizes the relationship
between the two variables (Nie et al., 1975:222). Guttman's Coef-
ficient of Predictability (or lambda, as it is more commonly called)
is such an index of the degree of association between two nominal
variables.31 For example, if the coefficient of predictability is
.51, the researcher has eliminated 51 percent of his errors through
guessing each of his variables on the basis of the other. 1.0 is
achieved only when each category of one variable is associated with
a single category on the other variable. Zero occurs when the dis-
tribution of cases of one variable has the same proportions within
each category of the other variable as it has in the total set of
cases (Nie et al., 1975:225-227; cf. Costner, 1965:351). The research
interest in this context is in predicting class or category membership,
not in guessing order. Guttman's Coefficient of Predictability is

singularly appropriate here because it imposes no restrictions on

the number Of classes in the scales, it requires no unrealistic

97

assumptions about the distribution of the variables, and it is directly
interpretable (Freeman, 1965:71). (See Costner (1965:350-352),
Freeman (1965:78), and Nie et a1. (1975:223-227) for a discussion of
other statistics to measure the degree of association between nominal
variables, including Yule's Q, Yule's Y, Pearson's C, Tschuprow's T,
Phi, and tetrachoric correlation. For reasons the authors discuss,
these statistics are not appropriate to this study.) However, lambda
itself is sensitive to only one of many forms that association might
take in nominal scales (Freeman, 1965:215), that is, to systematic
departures from independence or total nonpredictability. This point
takes on importance in the next chapter. Finally, a symmetric lambda
(which is a kind of average of two asymmetric values) rather than an
asymmetric lambda has been computed because it "makes no assumption
about which variable is dependent and it measures the overall improve-
ment when prediction is done in both directions" (Nie et al., 1975:

226).

CHAPTER IV

RESEARCH FINDINGS, TABLES, AND CONCLUSIONS

Results

In Table l, competitive capital appears to be more concerned
with emphasizing "free market" economics32 and restricting or reducing
the regulatory functions assumed by government (two categories which
are logically associated) than finance capital, which emphasizes
creating a stable international monetary system and developing anti-
protectionist policies and legislation (two categories which are
logically associated); lambda = .375. However, if finance capital
is combined with industrial capital and compared with competitive
capital on all four policy options in Table l, lambda = 0. If indus-
trial capital is compared with competitive capital on the same policy
options, lambda = .18. And if finance capital is compared with
industrial capital on the same policy options, lambda = .109. These,
then, are not strong associations.

In Table 2, while competitive capital appears to be more
concerned with a return to "free market" economics and with a
reduction in or restriction of domestic regulation, executive
managers seem more concerned with developing anti-protectionist
policies and legislation, re-assessing or restraining anti-trust
legislation, and facilitating cooperative partnerships (categories

98

99

Table l.--Competitive Capital Compared to Finance Capital on Selected

Policy Options.

 

Policy Options

 

 

Type of Capital

 

 

Competitive Capital Finance Capital
1. Free Market 50% (9) 6 1% (2)
5. Monetary Syst. O 0% (O) 27.3% (9)
7. Free Trade 11.1% (2) 57.6% (19)
8. Anti-Regulation 38.9% (7) 9.1% (3)
TOTAL 100% (18) 100.1% (33)

 

Lambda = .375.

Percentage totals greater than 100% due to rounding.

N = policy options.

Table 2.--Selected Policy Options and Class Divisions (1).

 

Policy Options

Class Divisions

 

 

Competitive Capital Executive Managers
1. Free Market 40.9% (9) 8.3% (3)
7. Free Trade 9.1% (2) 36.1% (13)
8. Anti-Regulation 31.8% (7) 13.9% (5)
9. Pro-Trust 0.0% (0) 16.7% (6)
13. Cooperation 18.2% (4) 25% (9)
TOTAL 100% (22) 100% (36)

 

Lambda = .23.

N = policy options.

100

which are logically interrelated). This association is not partic-
ularly Strong, however: lambda = .23. If the upper class is compared
with competitive capital on all five policy options in Table 2,
lambda = .15. If the upper class is compared with executive managers
on the same policy options, lambda = 0. And if the upper class is
combined with executive managers and compared with competitive
capital on the five policy options, lambda = .08.

In Table 3, orientation toward any form of comprehensive
planning occurs predominantly within the "Upper Class" and "Executive
Managers" categories (n = 4 within the ”Residual" category), i.e.,
toward establishment of a permanent planning committee, board, or
public or quasi-public agency, elaboration of a standard model of
comprehensive planning, or the creation of the social—industrial
complex (policy options 16, 17, and 18 combined). Competitive capital
did not advocate these alternatives, which is logically consistent
considering their emphasis on "free market" economies. This associ-
ation is weak, however: lambda = .23. If the upper class is combined
with executive managers and compared with competitive capital on
policy options 1 vis-a-vis l6, l7, and 18 combined, lambda = .16;
and if the upper class is compared with executive managers on the
same policy options, labmda = 0.

In Table 4, for the time period 1961—1970, a strong associ-
ation exists between PF-controlled corporations and PM-controlled
corporations. That is, the former was predominantly concerned with
developing an effective capital recovery system and the latter with

creating a stable international monetary system (if the other policy

101

Table 3.--Selected Policy Options and Class Divisions (11).

Class Divisions

 

 

 

Pol1cy Opt1ons U er Class Executive Competitive
pp Managers Capital
1. Free Market 45.5% (5) 42. % (3) 100% (9)
16-18. Planning Bd., 54.5% (6) 57.1% (4) 0.0% (0)
Nat. Planning,
S-I Complex
TOTAL 100% (11) 100% (7) 100% (9)
Lambda = .23.

N = policy options.

Table 4.--Selected Policy Options and Type of Corporate Control in
1961-1970.

Type of Corporate Control in 1961-1970

 

Policy Options

 

PF F? PM
4. Capital Growth 100% (6) 50% (1) 28.6% (2)
5. Monetary Syst. 0.0% (0) 50% (1) 71.4% (5)
TOTAL 100% (6) 100% (2) 100% (7)

 

Lambda = .50

N = policy Options.

102

options are not considered); lambda = .50. However, in the time
period 1971 to 1976, this relationship disappears altogether: lambda =
0. It is suggested here that this disappearance can be accounted for
by the internationalization of corporations in the 19705, i.e., the
increasing importance of overseas markets for corporate well-being and
the necessity to insure their stability. This relationship appears to
make sense given that the PM-controlled group includes the majority
of the financial institutions in the thesis population and several
corporations who have a substantial investment in overseas operations,
such as IT 8 T.

In Table 5, no lambda association appeared, comparing the
variable "Type of Capital" with the variable ”Policy Options";
lambda = .054. However, slight percentage differences did occur.
For example, competitive capital tended to favor ”free market”
economics, fiscal and/or monetary policy manipulation, the develop-
ment of an effective capital recovery system, and a restriction of or
a reduction in domestic regulatory functions assumed by government
(a combined percentage of 62.8) above other alternatives. The major
emphasis on the part of banks and financial companies appears to be
fiscal and monetary policy manipulation (although monetary consider-
ations predominate in this category), creation of a stable inter-
national monetary system, anti-protectionist policies and legislation,
and increased cooPeration among business, labor, government, and/or
the general public (combined: 60%). Industrial capital appears to
favor most heavily an effective capital recovery system, anti-

protectionist policies and legislation (with the exception of some

103

Table 5.--Policy Options and Type of Capital.

 

Type of Capital

 

Policy Options

 

Competitive Finance Industrial
Capital Capital Capital
1. Free Market 18.8% (9) 2.1% (2) 3.8% (7)
2. Adjustments 16.7% (8) 30.5% (29) 13% (24)
3. Efficiency 4.2% (2) 1.1% (l) 1.6% (3)
4. Capital Growth 12.5% (6) 7.4% (7) 10.9% (20)
5. Monetary Syst. 0.0% (0) 9.5% (9) 1.1% (2)
6. Protectionism 0.0% (0) 0.0% (0) 2.2% (4)
7. Free Trade 4.2% (2) 20% (19) 15.8% (29)
8. Anti-Regulation 14.6% (7) 3.2% (3) 4.3% (8)
9. Pro-Trust 0.0% (0) 3.2% (3) 8.7% (16)
10. Internat. Code 2.1% (1) 0.0% (0) 2.7% (5)
11. Union Restraint 6.3% (3) 3.2% (3) 1.6% (3)
12. Modify Unions 6.3% (3) 1.1% (l) 2.2% (4)
l3. Cooperation 8.3% (4) 9.5% (9) 15.2% (28)
14. Education 6.3% (3) 2.1% (2) 8.7% (16)
15. Guidelines 0.0% (0) 5.3% (5) 1.6% (3)
16. Planning Bd. 0.0% (O) 1.1% (1) 2.7% (5)
l7. Nat. Planning 0.0% (0) 0.0% (0) 0.5% (1)
l8. S-I Complex 0.0% (0) 1.1% (l) 3.3% (6)
TOTAL 100.3% (48) 100.4% (95) 99.9% (184)

 

Lambda = .054. Percentage totals greater/less than 100 per-
cent due to rounding. N = policy options.

104

steel companies), and increased cooperation among business, govern-
ment, labor, and/or the general public (41.9% combined). If com-
petitive capital is excluded from consideration here, differences
among monopoly capital regarding policy orientation indeed seem
minimal, because the favored options (which are by no means "radical")
are not antithetical to each other, but reflect instead the nature of
business of banks and financial companies, and industrials,
respectively.

In Table 6, no lambda association appeared, comparing the
variable "Member (or not) of One or More of Three Key Policy-
Formation Groups" with the variable "Policy Options"; lambda = .005.
However, percentage-wise, there was a slight tendency for nonmembers
to favor "free market" economics more so than members of the C.E.D.,
the Council on Foreign Relations, and/or the Business Council (6.9%
compared to 2.8%). An unexpected finding is that no members--the
corporate liberals--advocated the social-industrial complex, whereas
six nonmembers did, although the percentage difference is quite
small: 2.7 percent. The dominant orientation among both groups was
to favor fiscal and/or monetary policy manipulation, anti-protectionist
policies and legislation, and cooperative partnerships among business,
government, labor and/or the general public (members: 47.9% combined;
nonmembers: 47.5% combined)--categories which are internally con-
tradictory (see below). The "Residual" category gave equal emphasis,
in addition to the above policy options, to educating the general
public as to how the profit and 1055 system works in order to

facilitate a more favorable climate for business.

105

Table 6.--Policy Options and Member (or not) of One or More of Three
Key Policy-Formation Groups.

 

Membership Status

 

Member of the
C.E.D., Council
on Foreign Rela-

tions, and/or

the Business

Residual (not

identifiable as

Nonmember belonging in
one of the first

two categories)

Policy Options

 

Council*
1. Free Market 2.8% (2) 6.4% (14) 5.4% (2)
2. Adjustments 16.9% (12) 20.1% (44) 13.5% (5)
3. Efficiency 2.8% (2) 1.8% (4) 0.0% (0)
4. Capital Growth 7% (5) 11% (24) 10.8% (4)
5. Monetary Syst. 7% (S) 2.7% (6) 0.0% (0)
6. Protectionism 1.4% (l) 1.4% (3) 0.0% (0)
7. Free Trade 15.5% (11) 16% (35) 10.8% (4)
8. Anti-Regulation 5.6% (4) 5% (11) 8.1% (3)
9. Pro-Trust 8.5% (6) 5% (11) 5.4% (2)
10. Internat. Code 1.4% (l) 1.8% (4) 2.7% (1)
11. Union Restraint 1.4% (l) 3.2% (7) 2.7% (l)
12. Modify Unions 4.2% (3) 1.8% (4) 2.7% (1)
l3. Cooperation 15.5% (11) 11.4% (25) 13.5% (5)
14. Education 4.2% (3) 5.9% (13) 13.5% (5)
15. Guidelines 2.8% (2) 2.7% (6) 0.0% (0)
16. Planning Bd. 2.8% (2) 0.5% (l) 8.1% (3)
l7. Nat. Planning 0.0% (0) 0.5% (l) 0.0% (0)
18. S-I Complex 0.0% (0) 2.7% (6) 2.7% (1)
TOTAL 99.8% (71) 99.9% (219) 99.9% (37)

 

Lambda = .005.} Percentage totals less than 100 percent due
to rounding. N = policy options.

*The reason for the choice of these policy-formation agencies
is that they in particular provide key input in the formulation of
legislation initiated by the executive branch (O'Connor, 1973:68).

106

In Table 7, no lambda association appeared, comparing the
variable "Class Divisions" with the variable "Policy Options”; lambda =
.03. However, slight percentage differences did occur. For example,
competitive capital appeared to favor "free market" economies, and
moderation in, restriction of, or reduction in the domestic regulatory
functions assumed by government more so than the other class divisions
(33.4% compared to the upper class's 6.2% and executive managers'
9.1%). And no n's appeared in categories 16-18, which suggest
planning on a national scale. On the other hand, the upper class and
eXecutive managers more adamantly supported anti-protectionist
policies and legislation, cooperative partnerships, and some form of
national planning (although caution must be exercised in this latter
case because n's are quite small) than competitive capital. Otherwise,
the favored response among all_class divisions appears to be fiscal
and/or monetary policy manipulation by a small margin. In fact, for
the upper class and executive managers, a combination of fiscal and/or
monetary policy manipulation, anti-protectionist policies and legis-
lation, and cooperative partnerships among business, government, labor,
and/or the general public accounts for the largest majority of
responses to manage economic problems (53.2% and 44.3%, re5pectively).
This relationship also maintains for the "Residual" (unidentified)
category (46.5%). While integrative in the short-term, these policy
options are a contradiction in the long-term, since they are post-
Keynesian nation-state measures in a time of internationalization of
capital. Hence, the position of monopoly capital is internally con-

tradictory and there is a possibility of this consensus on policy

107

Table 7.-—Policy Options and Class Divisions.

Policy Options

Class Divisions

 

 

 

Upper Class E;:::;::: coggggizive Residual
1. Free Market 3.1% (5) 3.4% (3) 18.8% (9) 3.2% (1)
2. Adjustments 19.4% (31) 19.3% (17) 16.7% (8) 16.1% (5)
3. Efficiency 1.9% (3) 1.1% (1) 4.2% (2) 0.0% (O)
4. Capital Growth 8.1% (13) 12.5% (11) 12.5% (6) 9.7% (3)
5. Monetary Syst. 3.8% (6) 5.7% (5) 0.0% (O) 0.0% (0)
6. Protectionism 1.9% (3) 1.1% (l) 0.0% (0) 0.0% (O)
7. Free Trade 19.4% (31) 14.8% (13) 4.2% (2) 12.9% (4)
8. Anti-Regulation 3.1% (5) 5.7% (5) 14.6% (7) 3.2% (l)
9. Pro-Trust 6.9% (11) 6.8% (6) 0.0% (0) 6.5% (2)
10. Internat. Code 0.6% (1) 3.4% (3) 2.1% (1) 3.2% (1)
11. Union Restraint 2.5% (4) 1.1% (1) 6.3% (3) 3.2% (1)
12. Modify Unions 2.5% (4) 1.1% (1) 6.3% (3) 0.0% (O)
13. COOPeration 14.4% (23) 10.2% (9) 8.3% (4) 16.1% (5)
14. Education 5% (8) 6.8% (6) 6.3% (3) 12.9% (4)
15. Guidelines 3.8% (6) 2.3% (2) 0.0% (0) 0.0% (0)
16. Planning Bd. 1.9% (3) 0.0% (O) 0.0% (0) 9.7% (3)
l7. Nat. Planning 0.6% (l) 0.0% (0) 0.0% (0) 0.0% (O)
18. S-I Complex 1.3% (2) 4.5% (4) 0.0% (O) 3.2% (1)
TOTAL 100.2% (160) 99.8% (88) 100.3% (48) 99.9% (31)
Lambda = .03. Percentage totals greater/less than 100 per-

cent due to rounding.

N = policy options.

108

options breaking down sometime in the future. That there is no
split between the upper class and executive managers at present,
however, supports the thesis of integration of monopoly capital at
the level of ideology. There is a noticeable split between monopoly
capital and competitive capital on the question of advocating a
laissez-faire economy or not.

In Table 8, no lambda association appeared between the vari-
able "Type of Corporate Control" compared with the variable ”Policy
Options"; lambda = .018. However, if the time period 1961-1976 is
considered in whole, slight percentage differences were found to
exist. For example, PF-controlled corporations were more likely to
favor developing an effective capital recovery system, and somewhat
less likely to advocate anti-protectionist policies and legislation
than either F?-controlled or PM-controlled corporations. F?-
controlled corporations were somewhat less likely to advocate an
effective capital recovery system or economic education for the general
public than the other two types of corporate control. On the whole,
however, the general trend among PF-, F?-, and PM-controlled corpor-
ations was to advocate or support fiscal and/or monetary policy
manipulation, anti-protectionist policies and legislation, and
increased cooperation among business, government, labor, and/or the
general public (combined percentages, respectively: 48.8%, 64.3%, and
46.4%). This finding in particular discredits the arguments of Bell
(1962, 1958), Dahrendorf (1968), and Galbraith (1968) that there are
differences in the policy orientations of owner-controlled versus

management-controlled corporations given that managerial discretion

109

Table 8.--Policy Options and Type of Corporate Control.

 

Type of Corporate Control

Policy Options

 

 

PF F? PM
1. Free Market 4.5% (4) 3.6% (1) 2.6% (4)
2. Adjustments 18.2% (16) 25% (7) 17% (26)
3. Efficiency 1.1% (l) 0.0% (0) 2.0% (3)
4. Capital Growth 15.9% (14) 3.6% (l) 7.2% (11)
5. Monetary Syst. 0.0% (0) 3.6% (1) 6.5% (10)
6. Protectionism 2.3% (2) 0.0% (0) 1.3% (2)
7. Free Trade 13.6% (12) 21.4% (6) 18.3% (28)
8. Anti-Regulation 3.4% (3) 7.1% (2) 3.9% (6)
9. Pro-Trust 8% (7) 3.6% (1) 7.2% (11)
10. Internat. Code 1.1% (l) 3.6% (l) 2.0% (3)
11. Union Restraint 1.1% (l) 0.0% (0) 2.6% (4)
12. Modify Unions 0.0% (0) 0.0% (0) 3.3% (5)
l3. Cooperation 17% (15) 17.9% (5) 11.1% (l7)
14. Education 8% (7) 3.6% (l) 6.5% (10)
15. Guidelines 0.0% (0) 3.6% (l) 3.9% (6)
16. Planning Bd. 3.4% (3) 0.0% (0) 2.0% (3)
l7. Nat. Planning 0.0% (0) 3.6% (l) 0.0% (0)
l8. S-I Complex 2.3% (2) 0.0% (O) 2.6% (4)
TOTAL 99.9% (88) 100.2% (28) 100% (153)

 

Lambda 8 .018.

cent due to rounding.

Percentage totals greater/less than 100 per-
N a policy options.

110

posits different motives for managers than owners. Rather, Domhoff
(1967) and Zeitlin (1976, 1974) are correct in arguing that propertied
owners and the managerial class are integrated at the level of
ideology (at least as expressed in the speeches).

In Table 9, no lambda association appeared, comparing the
variable "Class Divisions" with "Type of Corporate Control"; lambda =
.011. In this table, however, it is seen that the majority of exec-
utives in PF-, F?-, and PM-controlled corporations tend to be of the
upper class. But if the "Residual" category consists mostly of
executive managers and not upper class members (as is suspected here),
then the upper class would constitute only a small majority in each
of the cases. In other words, there would be a relatively equal
distribution of upper class and nonupper class executives in the PF-,

F?-, and PM-controlled corporations.

Table 9.--Type of Corporate Control and Class Divisions.

 

 

 

Type of Class Divisions

Corporate Executive .

Control Upper Class Managers Re51dual TOTAL
PF 55.9% (19) 29.4% (10) 14.7% (5) 100% (34)
F? 58.3% (7) 41.7% (5) 0.0% (0) 100% (12)
PM 52.6% (30) 40.4% (23) 7.0% (4) 100% (57)

 

Lambda = .011.

N 2 individuals.

111

In Table 10, no lambda association appeared for the
time period 1961-1970, comparing the variable "Type of Corporate
Control" with the variable "Policy Options"; lambda = .041. Similarly,
for the time period 1971-1976 Lambda = .021, and for the table as a
whole lambda = .028. Even after testing several possible subtables,
no lambda associations appeared (cf. Tables 1-4 for examples). While
the n's in Table 10 are too small to provide reliable generalizations,
because this study is based on knowledge of a total population (Of
speeches) these differences are noted in passing. For example, in
the time period 1961-1970, F?-controlled corporations tended to
emphasize fiscal and/or monetary policy manipulation (40%; n = 6), but
in the time period 1971-1976 the percentage had dropped to 7.7
(n = 1). Increased emphasis was placed, rather, on restricting or
reducing domestic regulation, developing cooperative partnerships
among business, government, labor, and/or the general public, and
providing economic education for the general public. The latter two
policy options would seem to facilitate the attempt to reduce
domestic regulation. PF-controlled corporations also did not favor
fiscal and/or monetary policy manipulation in 1971-1976 to the extent
evidenced in 1961-1970, but like F?-controlled corporations, began
emphasizing economic education more so than previously. This was
also the case for PM-controlled corporations. Additionally, more so
than the others, in 1971-1976 PM-controlled corporations became
increasingly concerned with regulations, particularly in terms of what
the proper role of the multinational corporations should be in the

international arena, and with suggesting restraint in or advocating

112

 

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115

outright restriction of union activity. Yet, among all the corpor-
ations, the predominant emphasis on fiscal and/or monetary policy
manipulation, anti-protectionist policies and legislation, and
cooperative partnerships did not change fundamentally over time if
considered in combination.

In Table 11, no lambda associations appeared, comparing the
variable "Class Divisions" with the variable "Policy Options" for
the years 1961-1970 and 1971-1976; lambda = .024 for 1961-1970, .06
for 1971-1976, and .067 for the table as a whole. Testing several
possible subtables, such as those numbered 1-4, similarly yielded no
significant associations. Although generalizations are risky given
very small n's, several minor trends are noticeable in Table 11. For
example, competitive capital in 1971-1976 appears to have de-
emphasized fiscal and/or monetary policy manipulation in favor of
advocating a return to "free market" economics. There also appears
to be a new, if slight, emphasis on anti-protectionist policies and
legislation, and on cooperative partnerships (0% in 1961-1970 and
12.1% in 1971-1976 for cooperative partnerships; 0% in 1961-1970 and
6.1% in 1971-1976 for anti-protectionist policies and legislation).
That competitive capital advocates both "free market" economics and
cooperative partnerships (in at least one case in the same speech)
appears to be a logical inconsistency, especially because the clas-
sical position views government as a traditional adversary. The
underlying dimension may be the familiar double-standard that govern-

ment is not to intervene in the private economy for others, but if such

116

 

588 58.8 588 58.8 588 58.8 588 58.8 588 58.8 88588858 .582 .55
558 55.5 558 55.55 588 58.8 558 58.5 588 58.8 .85 88588858 .85
588 55.5 588 58.8 588 58.8 588 58.8 588 58.8 5885588588 .55
558 55.5 588 58.8 558 55.5 558 55.5 558 55.8 885588885 .85
5558 55.55 558 55.55 558 58.55 5558 58.85 588 58.8 88558588888 .55
558 58.5 588 58.8 588 58.8 558 55.5 558 55.8 588588 555882 .55
558 58.5 558 55.55 558 55.5 558 55.5 558 55.55 585855588 88588 .55
588 58.8 588 58.8 588 58.8 588 58.8 588 58.8 8888 .58858585 .85
588 5 .8 558 55.55 558 55.5 558 5 .8 588 58.8 55855-858 .8
588 5 .5 588 58.8 558 55.5 558 55.5 558 55.55 8855858588-558< .5
5558 58.55 558 55.55 558 58.55 5858 55.85 588 58.8 88855 8858 .5
558 55.8 588 58.8 588 58.8 558 55.5 588 58.8 8558855885858 .8
588 55.8 588 58.8 558 58.5 588 58.8 588 58.8 .5555 55858882 .5
5558 55.5 558 55.55 588 55.85 558 55.5 558 55.55 853858 5855888 .8
558 55.5 588 58.8 588 58.8 558 58.5 558 55.8 5888585555 .5
5558 55.85 558 55.55 588 555 5558 58.55 588 55.85 55888558588 .5
558 55.5 588 58.8 558 55.5 558 58.5 558 55.55 585582 8858 .5
8585-5885
2 5.8.8.5 555.8555” .528 .888 255555553

 

5:0555>50 55850

5C05500 585508

 

.5005588 855% 50 5:0555>50 55850 0:8 5:05590 >855omnn.55 o5nmh

117

 

588 55.5 588 58.8 558 58.5 558 55.5 558 55.8 588588 555882 .55
558 55.5 588 58.8 588 58.8 558 55.5 558 58.5 585855588 88588 .55
588 55.5 558 55.8 558 55.5 558 55.5 558 58.5 8888 .58858585 .85
5858 58.5 558 55.8 558 55.5 588 55.5 588 58.8 55855-858 .8
5858 5 .5 558 55.8 588 55.5 588 5 .5 558 55.55 8855858588-5588 .5
5558 55.55 558 555 558 58.55 5558 55.85 558 55.8 88855 8858 .5
558 5 .5 588 58.8 558 58.5 558 58.5 588 58.8 8558855885858 .8
558 5 .5 588 58.8 558 55.5 558 58.5 588 58.8 .5555 55858882 .5
5558 5 .55 558 55.5 558 58.8 5858 55.55 588 55 55 853858 5855888 .8
558 58.5 588 58.8 558 58.5 558 55.5 558 58.5 5888585555 .5
5858 585 588 58.55 558 58.55 5858 55.55 588 55.55 55888558588 .5
5558 58.5 558 55.8 558 55.5 558 55.5 558 55.55 585582 8858 .5

8585-5585

55858 55.88 558 5885 5858 55.885 5558 58.88 5558 5885 88585

558 55.5 558 55.55 558 58.5 558 58.5 588 58.8 5858888 5-5 .55
mnomwcmz 5855080
2 58385580 o>5uaooxm 55850 5800: o>555pomaou

5:05umo 585588

 

5:0555>50 55850

 

.888855888--.55 85885

118

.5005500 505500 u z

.mc580305 05 850 5080550 005 08:5 5585\585855m 558505 ow85coonmm

5050;: 8 58 85985 0:5 50% moo. u 809285 .onm5u5nm5 50% m8N0.

.500. u 809E85

888885 .8585-5885 588

 

 

58558 55.885 5858 58.88 5850 58.88 5850 5885 5558 5885 5<5o5
550 55.5 588 58.8 558 58.5 580 58.8 580 58.8 5858880 5-5 .85
550 58.8 588 58.8 580 58.8 555 55.5 580 58.8 88588858 .582 .55
550 58.5 558 55.8 580 58.8 558 58.5 588 58.8 .88 88588858 .85
585 55.8 585 58.8 550 58.5 555 58.5 588 58.8 5885588588 .55

5850 58.8 580 58.55 550 58.8 588 58.8 555 55.8 885588885 .85
5558 58.85 580 58.55 580 55.5 5550 55.85 588 55.55 88558588880 .55
558M808: 5855580
2 58:8558m o>55008xm 55850 5800: 8>555550500

 

500555>5o 55850

5005550 505508

 

.083G55C00uu.55 m5p8h

119

action increases one's own profits or market share, it is in fact
justifiable.

The upper class appears over the two time periods to have
also de-emphasized fiscal and/or monetary policy manipulation in the
sense of advocating other alternatives, such as an effective capital
recovery system (which in fact has appeared in advertisements in
national magazines in the past year),33 and to a very slight extent,
reduction in or restriction of domestic regulations. Executive
managers, on the other hand, while also de—emphasizing fiscal and/or
monetary policy manipulation, also de-emphasized an effective capital
recovery system (from 16.7% to 9.6%) in favor of reducing or
restraining domestic regulations, defining the prOper role of the
multinational corporations in the international arena, and educating
the general public on the economic facts of life (these three latter
categories are logically consistent). Yet, on the whole, there is
still consistency among the class divisions despite changes over time:
the upper class and executive managers both favor fiscal and/or
monetary policy manipulation, anti-protectionist policies and legis-
lation, cooperative partnerships, and economic education above other
alternatives. Competitive capital, while also emphasizing fiscal
and/or monetary policy manipulation and economic education (and in
the latter time period—~197l-1976--evidencing a noticeable increase
in cooperative partnerships), continues to be the conservative
ideologue in arguing for "free market" economics.

In Table 12, no lambda associations appeared, comparing the

variable "Type of Capital” with the variable "Policy Options" for

120

 

550 55.5 550 58.5 550 55.5 580 58.8 .88 58588858 .85
580 55.5 580 58.8 580 58.5 580 58.8 5885588580 .55
580 58.8 580 58.8 550 55.5 550 55.8 885588885 .85
5850 58.55 5550 55.55 550 55.5 580 58.8 88558588880 .55
558 58.5 550 5 .5 580 58.8 550 55.8 588588 555882 .55
550 58.5 550 5 .5 550 55.8 550 55.85 585855588 8858: .55
580 58.8 580 58.8 580 58.8 580 58.8 8880 .58858585 .85
580 58.8 580 58.55 550 5 .5 580 58.8 55855-858 .8
580 55.5 550 5 .5 550 55.5 550 55.55 8855858588-558< .5
5550 58.55 5550 58.55 5850 55.55 580 58.8 88855 8858 .5
550 55.8 550 5 .5 580 58.8 580 58.8 8558855885858 .8
580 55.8 550 58.5 580 58.5 580 58.8 .5555 55858882 .5
5550 55.5 550 55.85 550 58.8 550 58.55 853850 5855880 .8
550 55.5 550 58.5 550 58.5 550 55.8 5888585555 .5
5550 55.85 5850 55.85 5550 55.85 580 55.85 55888558588 .5
550 55.5 550 58.5 550 55.5 550 55.55 585582 8858 .5
8585-5885
5855080 5855080 5855080
2 5855550005 0008050 0>555500000

 

5855080 mo 0059

5005500 505508

 

.5005500 005% 50 5855080 mo 0055 008 5005500 505500uu.~5 05085

121

 

550 55.5 550 58.8 580 58.8 550 58.5 585855588 8858: .55
580 55.8 580 55.8 580 58.8 550 58.5 8880 .58858585 .85
5850 58.5 550 55.5 550 55.8 580 58.8 55855-858 .8
5850 58.5 550 58.8 550 55.8 550 55.85 8855858588-558< .8
5550 55.85 5850 58.85 5850 55.55 550 55.8 88855 8858 .5
580 58.5 580 55.5 580 58.8 580 58.8 8558855885858 .8
550 55.5 580 58.8 580 58.55 580 58.8 .5555 55858882 .8
5550 55.55 5550 55.55 580 58.8 580 55.55 853850 5855880 .8
580 58.5 550 55.5 580 58.8 550 58.8 5888585555 .8
5850 585 5550 55.55 580 58.85 580 55.55 55888558588 .5
5850 58.5 580 55.8 550 55.5 550 55.55 588582 8858 .5
8585-5585
55850 55.88 5880 55.88 5580 55.885 5850 5885 58585
550 55.8 588 55.5 550 55.5 588 58.8 5858880 5-5 .85
580 58.8 580 58.8 580 58.8 580 58.8 88588858 .582 .55
5855080 5855080 5855080
2 5855550005 0008050 0>555500000

 

5855880 58 8855

5005500 505508

 

.888855880--.55 85885

.5005500 505500 u 2

.80500005 05 030 5000500 005 0805 5505\5058058 558505 0885000500

.88. 8 888885
.85883 8 58 85885 885 585 M558. 8 888885 .8585-5585 585 5555. n 888885 .8585-5885 588

 

 

58850 55.885 58550 55.88 5880 55.885 5550 5885 58585

a. 550 55.5 550 58.5 580 58.8 580 58.8 5858880 5-5 .85
m” 550 58.8 550 58.8 580 58.8 580 58.8 88588858 .582 .55
550 58.5 580 55.5 580 58.8 580 58.8 .88 88588858 .85

580 55.5 550 58.5 550 55.8 580 58.8 5885588588 .55

5850 58.8 5550 58.85 550 55.8 550 55.8 885588885 .85

5550 58.55 5550 58.85 550 58.8 580 55.55 88558588880 .55

580 55.5 550 58.5 550 55.8 550 55.8 588588 555882 .55

5855880 5855880 5855880
2 5855550805 0008050 0>555500000

5005500 505508

 

5855880 58 8855

 

.888855880--.55 85885

123

the years 1961-1970 and 1971-1976; for 1961-1970 lambda = .112,

for 1971-1976 lambda = .051, and for the table as a whole, lambda =
.05. Testing several possible subtables indicated that there

appears to be no associations attributable to year, although there
are some percentage differences. (Competitive capital is excluded
from discussion here because the percentages in this table for that
category are identical to those in Table 11.) For example, industrial
capital appears to have developed an interest in international agree-
ment defining the proper role of multinational corporations during the
1971-1976 time period (from 0% in 1961-1970 to 4.5% in 1971—1976).
Combining finance capital and industrial capital, it is seen that the
two became less concerned over the years with urging unions to volun-
tarily restrain their wage and other demands (from 8.2% in 1961-1970
to 0.9% in 1971-1976). And, as evidenced in other tables, economic
education for the general public became an increasing concern in the
latter time period. Oddly enough, there was a declining demand in
1971-1976 for some form of national planning (see categories 16-18).
Finance capital combined with industrial capital in the period 1961-
1970 favored this alternative (16-18 combined) more so than in 1971-
1976 (12.3% compared to 5.4%).

In summary, while finance capital tends to favor fiscal and/or
monetary policy manipulation more so than industrial capital for both
time periods, and anti-protectionist policies and legislation more
so than industrial capital in the second time period, and while
industrial capital appears to favor cooperative partnerships with

government, labor, etc. more so than finance capital in both time

124

periods, these remain nevertheless the dominant policy orientations
for bg£h_groups in both 1961-1970 and 197l~1976. (While Tables 10-12
are based on time periods, a more extensive analysis should divide
the time span into cyclical fluctuations in the U.S. economy if

possible.)

Conclusion

 

While the degree to which quantitative differences in the
wealth and qualitative differences in the social origins of management
officials and upper class business executives serve as barriers to the
complete integration of the managerial elite into the upper class is a
question too complex to be answered in this thesis, the two appear to
functionally operate as a harmonious interest group at the apex of
the economic pyramid. If so, then Baran and Sweezy are correct in
writing of the combined power of management and the very rich (1966:37),
and the U.S. political economy cannot be characterized in simplistic
managerialism terms. It appears that monopoly capital business
executives share, for the most part, a common class orientation and
interest in favoring essentially traditional and "nonradical" or neo-
Keynesian policy measures over others available to resolve economic
crises (given some variation due to historical and industrial idio-
syncracies). While competitive capital (represented by the U.S.
Chamber of Commerce and the National Association of Manufacturers)
continues to profess a conservative ideology in their official
philosophy, in practice they often advocate policy which differs little
from the more liberal wing of monopoly capital (although the extent

to which this promotes capitalist class cohesion, self-consciousness,

125

consensus on social issues, and what goals to pursue cannot be deter-
mined in this study). It appears, then, that monopoly capital, in its
tendency in the speeches to state political economic problems in one-
dimensional terms,34 has limited the different forms of possibilities
available to them in the 19705. Rather, its members tend to favor
past policies which have proved successful in maximizing profit
opportunities, and they certainly wish to avoid European planning
models. Apparently, much of what monopoly capital in the United
States regards as acceptable planning consists in stabilizing or
making more certain market influences through oligopolistic position,
price leadership, and governmental aid. In summary, then, it was
suggested previously that both executive managers and the upper class
in the United States would support state intervention in the economy
when necessary, seek to stabilize and rationalize a "too" competitive
and fluctuating economic system with orthodox measures, accept the
legitimacy of organized labor (without justifying why organized labor
should exist in the first place), and emphasize partial and short-
term planning. It appears that this is in fact the case.

It also appears that specific differences among the dominant
classes are safely contained within a particular ideological spectrum,
and do not preclude a basic political consensus in regard to the
crucial issues of economic and political life. Nor is there the
slightest evidence to suggest that the managerial element in the
U.S. capitalist society deviates in any respect from this underlying
agreement to strengthen the private ownership and control of the

largest possible part of society's resources, and on the need to

126

enhance to the highest possible degree the profits which accrue from
that ownership and control. In the context of policy-formation, this
is a dominant economic class possessed of at least some degree of
cohesion and solidarity, with common interests and common purposes
which far transcend their specific differences and disagreements (cf.
Miliband, 1969:38, 47-48). Perhaps one of the reasons why this is
so can be evidenced in Figure l, where it is shown that 39 of the S6
corporations represented in the thesis population are directly inter-

locked with each other; if other corporations other than the popu-

 

lation of 56 are included, the network becomes even more tightly
interlocked. For example, Sears, Roebuck 6 Company has directors
serving on the boards of American Can Company, Bank of America, The
Chemical Bank, Continental Illinois National Bank and Trust Company,
the Quaker Oats Company (which was not included in the original dia-
gram), and TRW, Inc.

The importance of these corporate interlocks should not be
underestimated. For example, they increase the likelihood of a
coordination of economic decisions within a given or hypothetical
interest group (which in the case of banks can be researched by
examining patterns of timing exhibited in announcing interest rates
and other price changes). They provide a convenient medium within
which collusive bargaining can occur. They add an important dimen-
sion to the subject of reciprocal buying (which can be tested by
examining patterns of inter-firm purchases among firms within and
outside an interest group). And they may provide significant oppor-

tunities for companies to "enjoy the substance of vertical integration

127

Fig. l.--Director Interlocks Among the Corporations Represented in the
Population of Speeches Analyzed in This Study.

KEY: "Proctor & Gamble + General Motors" means that a Proctor
G Gamble executive serves on the board of directors at GM. (Corpor-
ations in the thesis population not interlocked with the above include
Armco Steel Corp., The Boeing Co., Eastern Gas 8 Fuel Associates, First
National Bank in Dallas, Ford Motor Corp., General Electric, Koppers
Co., Inc., Ling-Temco-Vought Inc., Litton Industries, PPG Industries,
The Quaker Oats Co., Sun Oil Co., U.S. Steel, and White Motor Corp.
One additional corporation, First Pennsylvania Corp. did not appear in
Dun G Bradstreet's Reference Book of Corpprate Managements, 1975-1976,
the source of this data.)

128

 

 

 

 

  
    

 

 

 

ALC0A< Gulf Oil—§ Allegheny <——— Rockwell
Corp. Ludlum Indus- International
tries, Inc.
Burroughs Chrysler(—-Mfrs. Han- Union General
Corp. Corpu————9’over Trust Carbide Foods
INA Corp.
Bendix LOF Timken II
Corp. Glas§__ Co.
\ Fidelity
National Bank Bank, Phila-
of Detroit delphia
VI \QE:::;\\\
Proctor & ‘_ Generalzi Allied <$————————ITT
Gamble ’i’ Motors ‘ Chemical
1“ / l
Eastman GAF Chase Man- Chas. Pfi-
Bank of Kodak Corp. hattan Bank zer 8 Co.,
///;8America N‘ Inc.
TRW, Eaton AmAF—-Bankersé__1nter- Pruden—
Inc. Corp. Can-—>Trust national tial
Co. (NYC) Paper Life

Xerox lst Nat.
Corp. .9 City Bank

 

 

/(NYC)
E. I. Du“
Pont Chemical.<i Exxon
§ Bank Corp.
v
Bethlehem Equitable
Steel 5? Life As-
\ Continental 111. Bank surance
and Trust Co., Chicago Society
/ .1, \ of the U.S.
IC Industries, International Inland
Inc. Harvester Steel

Figure l.

129

without having to integrate formally" (which, as in the case of
reciprocal buying, can be researched by examining data on inter-firm
purchases for firms within and outside a hypothetical interest group)
(Knowles, 1973:40-41). Finally, interlocks and reciprocity create
possibilities for minimizing the costs of selling in the capital
goods sector of the economy, and for coordinating investment plans
with the aim of reducing or preventing over—investment in productive
capacity. "'Finanee capital performs this function [of forward and
backward integration] by abolishing the market and 'soeializing'
industrial decision-making'" (O'Connor, 1971:42).

However, by responding to crises (and there is some recognition
in the speeches of the seriousness of the problem),35 the capitalist
class reveals its weaknesses, provides some insight into the con-
straints on its exercise of power, and "reveals how the system itself
is biased against those who do not participate in the institutions and
decisions which affect their lives." By being forced to respond to
crises, monopoly capital is faced with a challenge to its own legiti-
macy from the general public (Dreier, 1975:241). In other words, the
motives, objectives, and constraints of the capitalist class under
American capitalism are prescribed for them by the specific historical
form of their control over the means of production (Sweezy, 1956:339).
For example, despite the longer—range planning implications of corporate
interlocking, one of the underlying dimensions in the speeches appears
to be that many corporate executives tend to respond after-the-fact
to economic crises and not anticipate them (although other corporate

executives admonish them for doing 50). Given traditional market

130

ideology in the United States, this is an expected pattern of
behavior. Therefore, while in one sense monopoly capital tends to
think alike (and expectedly so, given the imperatives of the American
political economy and extensive social "networking" among business
executives, whatever the class divisions), this suggests that economic
crises are likely to continue and that the business "dissidents"

have yet to convince the center that planning on an extensive scale

is in the national interest. In fact, the trend in the 19705,
although slight, is toward reaffirming classical economics. Even
discussion of the social-industrial complex is essentially concen-
trated during the period of social, political, economic, and urban
unrest of the mid- to late 19605. That economic crises are likely to
continue is more apparent when it is shown who advocated comprehensive
planning and when.

Combining policy options 16, 17, and 18 (development of a
permanent and comprehensive planning agency, national planning on a
broad scale, and the social-industrial complex, respectively) gives
a n of 14. In 1965 one corporate executive in the speech population
advocated the formation of the social-industrial complex (and pre-
dictably enough, he was an executive from the Boeing Company, whose
financial instability, periodic lay-offs, and relationship to the
state are almost legendary). Between the years 1967 and 1972, a
period of social, political, and urban unrest, eleven calls were
evidenced for one of the three options above. In 1973 an executive
from American Can Company called for national planning (policy Option

17). And in March of 1974, the last call for some form of comprehensive

131

planning occurred, and this was for a national planning agency on the
part of Rockwell International, another company heavily involved in
state contracting. Furthermore, 29 percent (n = 4) of these responses
occurred in 1968, a year which experienced the assassinations of
Robert Kennedy and Dr. Martin Luther King, Jr., the Democratic Con-
vention and the Chicago 7, campus unrest and extensive urban rioting.
The corporations from which these policy options came can be pre-
dicted. The best examples include the Equitable Life Assurance
Society of the U.S., who advocated the social-industrial complex in
1967 in the context of the Medicare program; Quaker Oats Company (a
Chicago-based firm) who did so in 1968, as a probable response to
social turmoil in Chicago that year; Eastern Gas 6 Fuel Associates
likewise in 1969, who obtained extensive tax concessions from the
federal government, not only to help finance public housing in Boston,
but to also supply that housing with their own gas lines; and TRW,
Inc. (1971 and 1972) and General Electric Company (1968), who are
electronics companies strongly involved in government and defense
contracting. (A similar pattern can be interpreted for policy option
l6--estab1ishment of a permanent planning committee, board, or agency--
considering the dates and companies: Bank of America in 1968; General
Electric Company in 1968; IC Industries, Inc. (based in Chicago) in
1970; Allied Chemical Corp. in 1971; GAF Corporation in 1972; and
Rockwell International in 1974.)

Finally, as with corporate interlocking, the importance of
documentary research such as this study (but not necessarily this

study) should not be underestimated. Documentary research36 is

132

invaluable in its potential to increase one's understanding of American
political economy; to trace some of the actual political and economic
implications of vast concentrations of power; to develop a more
accurate account of present and past reality; to dispel myths and
penetrate "pseudo-facts," such as the managerial doctrine of corpor-
ate power offered by Galbraith (1968) and Berle and Means (1967)
(which is an uncritical acceptance of the socially plausible) and

the social responsibility thesis of Bell (1958, 1962), Galbraith
(1968), Dahrendorf (1968), and others; and to pose critical questions
about the integration/differentiation of the capitalist class and the
institutional and class structure of the U.S. political economy. It
is toward this end that this thesis has been intended. This is
especially important because pseudo-facts may serve to deflect
attention from critical aspects of social structure, determinant
social relations, and basic social processes, and encourage an unques-
tioning acceptance of the essential assumptions, propositions, and
inferences of managerial and other theory and Keynesian economics.
Documentary research enables one to be able to answer whether or

not a capitalist class exists in the United States and to what extent,
and in what ways-~if any-~that class has really "decomposed" as the
managerial theorists have assumed. It can contribute to a theory of
how power is conceptualized and used in American society so as to
avoid reading "'politics in an extraordinarily abstract fashion,'"

to therefore become aware of internal structural sources of class
cohesion and conflict and to determine the capacity (or not) for the

development of unified policies and the capacity for organized action

on the part of the capitalist class. Finally, in the words of Zeitlin
who stated this issue most concisely, documentary research "may help
to reveal theoretical gaps and errors, as well as inadequate method-
ologies in the present body of research and writing and [allow
researchers] to clarify, elaborate, and specify given generalizations.
These studies may provide the basis for a given comparative theory of
capitalist classes that is more comprehensive and valid than the
extant one embodied in the 'astonishing consensus among social

scientists'" (Zeitlin, 1974:1074, 1080, 1108—1112).

FOOTNOTES

FOOTNOTES

1Mermelstein provides a useful summary of Keynesian economics:
John Maynard Keynes maintained that depressions were caused by a lack
of aggregate demand--in particular, insufficient private investment.
The solution, "according to modern Keynesians, is to counter the drop
in private investment by increases in government spending, decreases
in taxes or increases in the availability of credit." Inflation and
unemployment are seen as basically separate problems with a set of
diametrically opposite solutions. Since World War II, Keynesian
economics has also come to refer to a set of policies designed to '
reduce or halt inflation by doing the opposite of the above. However,
"in spite of a growing gap between the theory and the reality,
Keynesian economics remains the reigning orthodoxy of the day"
(Mermelstein, 1975:365, 436).

2The crisis in the system of monetary relations is manifested
in "repeated unilateral devaluations and revaluations of a number of
national currencies, in the sharp fall (in the early 19703) of the
dollar's exchange rate and the virtual elimination of a firm rela-
tionship between the dollar and other currencies, in the rapid rise
in gold prices, and in numerous panics on currency exchanges"
(Inozemtsev, 1975:115).

3Cf. Chapter 3 in Seider (1973), "Historical Studies of
Business Ideology in the United States," for a useful if overly brief
review of the period from the Civil War to the Progressive Era.
Seider argues in this context that business ideology underwent his-
torical changes in American society in response to economic and
structural changes.

4Lest Baran and Sweezy be accused of simplistic managerialism,
note O'Connor's comment that these authors write of "'the combined
power of management and the very rich: the two are in fact integrated
into a harmonious interest group at the top of the economic pyramid'
(Monopoly Capital/New York, 1966), p. 37, emphasis added). This is
hardly the 'factual premise of simplistic managerialism'" (O'Connor,
1971:122, fn. 4).

 

 

5Warren writes that some Marxist thought has assumed "that
the increased interdependence of the capitalist economies has been

134

135

thought of mainly as the prior condition of renewed crisis or stag-
nation. However, such an outcome need not be expected on a priori
grounds particularly if state control of the economy at [the] national
level is paralleled by capitalist state co—operation at [the] inter-
national level. That this co-operation, just as with national state
economic control, generates new contradictions need not be doubted"
(Warren, 1970:211). Their precise characterization and the capitalist
class strategies they imply, together with the implications for social-
ist strategy, is the theme of Warren's essay.

6Cf. Lundberg (1973:720-721) for a similar summary.

7That is, Baran and Sweezy write, surplus swells when
capacity is fully utilized, and rapidly shrinks when investment out-
lets fail and aggregate demand declines. "As surplus shrinks, the
investment-seeking part of it shrinks more than in proportion. On
the downswing, in other words, the ratio of consumption to both sur-
plus and total output rises, and this sooner or later puts a stop to
the contraction. The lower turning point is reached when the amount
of surplus seeking investment is exactly absorbed by available invest-
ment outlets. At this point, a temporary equilibrium is reached
which is characterized by the existence of excess productive capacity
and unemployed workers. The reverse side of the coin is that an
upswing, however initiated, generates a similar absolute and relative
increase of surplus. As soon as the investment-seeking part of the
surplus exceeds available investment outlets, the expansion comes to
an end. And it should be remembered that this upper point may be
reached long before full utilization of capacity or full employment
of labor is achieved" (Baran 6 Sweezy, 1968:88; cf. pp. 79-89).

8Three points should be noted here. First, the state in this
context stands for a number of particular institutions which, together,
constitute its reality, and which interact as parts of what may be
called the state system. The state system consists of the following
elements: the government, the administration, the military and the
police, the judiciary, and the various units of sub-government.

It is in these institutions that state power lies, and that power is
wielded by the persons who occupy the leading positions within each
institution. "Most important, these are the people who constitute
the state elite, as distinct from those who wield power outside of
state institutions" (Quinney, 1974:22).

Second, the state, then, is "a complex structure of authority
relations bearing (perhaps requiring) a certain degree of autonomy."
It is by no means a simple instrument for specific capitalists or even
capitalists as a whole: "while it must engage in foreign and economic
policies which advance the interests of the monopoly sector, the
state must also attend to the sometimes inconsistent needs of the
competitive sector, and above all to the political demands of surplus
labor and capital." As a distinct set of political relationships
which do not flow directly from production relationships, the state

 

136

cannot be simply reduced to economic class relationships. However,
"the state plays a clear class function. Late capitalist class
relations are in fact predicated on the state's partial autonomy.

The state both enforces the market, as of old, and supercedes it
where the market produces destabilizing political repercussions.
Although the state guarantees profits, it finds this task complex
and contradictory" (San Francisco Bay Area Kapitalistate Group, 1975:
149-150, 154).

And third, the state is epitomized by a contradiction between
democracy and efficiency in the state sector. Quoting at length,
"state capital by definition encompasses both economics and politics;
the state is a synthesis of base and super-structure, due to its
double character. On the one hand, the state socializes costs and
subsidizes demand, and thus is subject to the business norms of
efficiency, profitability, etc. On the other hand, the state governs
politically, and thus is subject to the political norms of debate,
open hearings, free elections--in short, formal democracy. The ten-
dency is for the latter to give way to the former, and for the crisis
of bourgeoisie democracy to deepen still further. Indicative of the
fact that the state increasingly makes political decisions on the
basis of business norms, and hence restricts bourgeois democratic
rights is the U.S. Court of Appeals decision (April 16, 1968) limiting
the right to free speech for governmental employees because of the
'increasing indispensible services rendered by government employees.‘
According to the Court, 'uninhibited public speech . . . by government
employees may produce intolerable disharmony, inefficiency, dissention,
and even chaos'" (O'Connor, l970:9).

9"The constraint on demand is from the state budget and is
more explicitly a political one, and there is less pressure for cost
efficiency in production." Therefore, if the production process has
a logic, it is one derived from the politics of the budget (Gold,
summarizing O'Connor, 1975:127).

10Rick Hill, "O'Connor's Model of Class Relations in [the]
Monopoly Sector and Impact on [the] Working Class" (1975:Mimeo).

11Cf. Lundberg (1973:724-728).

12Cf. especially Herbert Gintis's "Repressive Schooling as
Productive Schooling," pp. 208-213 in Gordon (1971).

13The theoretical context of this argument is well-summarized
in three articles in Gordon (1971). They are: Michael Piore's "The
Dual Labor Market: Theory and Implications," pp. 90—94; Harold Baron
and Bennett Hymer's "The Dynamics of the Dual Labor Market," pp. 94-
101; and Barry Bluestone's "The Characteristics of Marginal Indus-
tries," pp. 102-113.

137

14The discussion which follows is heavily indebted to O'Connor's

The Fiscal Crisis of the State and is little changed from its original
form. This is not to say, however, that O'Connor's analysis does

not suffer from shortcomings. See the S.F. Bay Area Kapitalistate
Group (1975:155-157) for a relevant critique.

 

15This brief and incomplete summary has been abstracted from

more extensive writings. Relevant references for this discussion
include: Crotty and Boddy (1975:90-91), Lens (1975:112), Gold (1975:
131-132), Mermelstein (1975:370), Welch (19752391), Tabb (1975:409,
411), Muchnick (1976:32), Warren (l972:5), Fowler (1966:140-141),
O'Connor (1973:46—48), and the S.F. Bay Area Kapitalistate Group
(1975:6).

16Untitled mimeo from Sociology 866a, Fall Term, 1975,

Michigan State University.

17Rick Hill, "Summary Presentation: Midwest Conference/

Alternative State and Local Public Policy" (197S:Mimeo).

18Galbraith concludes that "power in the modern corporation

is diffused among a large group of managers and experts. This
'Technostructure' does not aim to maximize profits but to advance

its 'social goals' and its own security through corporate expansion,
technological development, and control of its own capital and con-
sumer markets. For control of the larger economic environment, the
corporations call on the government to provide a necessary level of
aggregate demand and support for expensive technology . . . . The
overall result is policies formulated and implemented by an expanding
ruling group--the corporate 'Technostructure' and state managers"
(summarized by Bernstein G Matusow, 1972:573). This group focuses

on developing better products, on technical efficiency, on workman-
ship, on becoming responsible to stockholders, employers, customers,
the general public and the corporation itself as an institution, and
on achieving status--not primarily on making money. Bell argues that
the technical goals of innovation and growth have replaced the profit
motive as the driving force of economic production: ". . . the devel-
opment of science and science based technology undermines the power

of property paving the way for the rise to dominance of a professional-
technical-science class whose power is rooted in a new system of
social stratification based upon technical skill and sanctioned by a
meritocratic principle of distributive justice. Growth and innovation
replace the profit motive as the driving force of post-industrial
political economy. Increasing technological complexity and social
interdependence shift the locus of significant decision-making from
businessmen staffing corporate headquarters to government technocrats
lodged in the political directorate. In the process, the ethic of
economizing and individual utility falls sway to an ethos of social
welfare and community interest" (summarized by Hill, 1974:42). Talcott

138

Parsons also argued the shift of control by the founding families to
technical and managerial personnel: "since the decisions of these
operating personnel are constrained by the impersonal and technical
dynamics of the market (competitive innovation and the like), the
manager's control over these basic economic entities is not partic-
ularly responsive to the vested interests of the firm's founding
family" (summarized by Merlie G Silva, 1975:151; above quote is the
authors').

19Zeitlin writes, "the conceptualization of the largest cor-

porations, banks, and insurance companies as independent institutions
may obscure the actual coalescence of financial and industrial capital
which has occurred." The large banks and insurance companies, rather,
are frequently principal shareholders in the large corporations, and
the very same individuals and families may be principle shareholders
in large banks and_corporations, even when these do not have insti-
tutional holdings in one another. The banks may be merely units in,
and instrumentalities of, the whole system of propertied interests
controlled by the major capitalist families. This raises at least
three important questions: To what extent does this represent a
"community of interests?" Do finance capitalists coordinate the
interests of these corporations? And to what extent do they differ
from other outside directors that interlock the largest corporations
between themselves as well as with other firms? (Zeitlin, 1974:1101-
1103).

20Zeitlin poses a fascinating question here. If, as Baran
and Sweezy argue, "(a) the large corporations tend, in their inter-
action, to produce a 'surplus' of investment funds in excess of pri-
vate investment outlets; and (b) this disparity between a rising
surplus and available investment outlets is a chronic threat of
crisis in our political economy, how would this tendency be affected
. . . by 'interest groups' able to coordinate the prices, production,
sales, and investment policies of ostensibly independent corporations?"
(Zeitlin, 1974:1079-1080, fn. 6).

1In a more extensive analysis, Seider demonstrated that "as
for representation, the business speeches, about two to an issue,
tend to come from firms in the upper reaches of the Fortune 500 and
the leading firms in transportation, utilities, banking, insurance,
and retailing. To assess more precisely the representativeness of
Vital Speeches, [he] compared businesses whose executive speeches
were found in that periodical and businesses listed in Fortune
Magazine's compilation of leading corporations. For the time period
1954-1970, the following results were tabulated: of S8 industrial
speeches, 48 (83 percent) represented firms in the Fortune 500 (by
sales) and 35 (60 percent) were in the top 100; three out of four
utility speeches were from firms in the leading 50 utilities (by
assets) and all nine bank speeches came from spokesmen whose firms
ranked in the top 50 banks (by assets). Based on this evidence, the

 

 

 

139

vital speech makers may be rightfully viewed as representing the most
powerful American corporations" (Seider, 1973:112-114).

22This discussion of the distribution of speeches does not
"break down" the U.S. Chamber of Commerce and N.A.M. group. It should
perhaps be noted here that of that group, one speechmaker has assumed
a position at Chase Manhattan Bank; four are in positions other than
business executive ones on a full-time basis; and two have not been
identified at all given insufficient information. Six individuals
represent companies not included on Fortune's 1000 largest list; one
represents a company on Fortune's 500 list; and one represents an
insurance company on Fortune's 50 largest list of insurance companies.
Because the speeches were made as official spokesmen of the U.S.
Chamber of Commerce or the National Association of Manufacturers, and
not the firm with which the individual was/is associated, the relevant
companies are not listed in these percentages.

23Current Biography Yearbook, 1970 8 1971. Who's Who in
Banking, 1972. Dun 8 Bradstreet's Reference Book of Corporate
Management, 1975-1976. Who's Who in the West, 1976-1977. Who's Who
in the East, 1975-1976. Who's Who in the South 8 Southwest, 1975-1976.
Who's Who in America, 1972-1973: Vols. 1-2. Who Was Who in America,
1961-1968: Vol. IV. Who's Who in Finance and Industry, 1975-1976,
1972-1973, 8 1971-1972. New York Times Biographical Edition, 1975,
1974, 1973, 1972, 1971, 8 1970. SEC Official Summary of Security
Transactions 8 Holdings (Feb. 11, 1976-March 10, 1976: Vol. 42, No. 3)
8 (Dec. 11, 1968-Jan. 10, 1969: Vol. 35, No. 1). Lundberg (1973:4-5,
37, 40-42, 46-47, 87, 106, 110-112, 159-163, 201-202, 910, 931, also
Chapters 2 G 4-5).

Some additional comments on these and other sources through
which to research an individual's stockholdings and biography follow.
For example, on stock ownership: A given company's Prospectus lists
directors and managers, and their stockholdings in the corporation,
although its dominant emphasis is in providing detailed information
on the corporation's business, history, financial condition, and
union relations. Any one company's Proxy Statements include the
salaries and stockholdings of all directors up for re-election at the
corporation's annual meeting. Moody's Manuals describe the company
in terms of its history, financial condition, stock and bond issues
over the years, and the transfer agent, registrar, and trustee for
each issue, and list the executive management; however, little or no
biographical data is provided on individuals. I.C.C., F.C.C., and
F.P.C. Statements may provide information on stockholdings of officers,
directors, and managers of large corporations and are probably useful
in cross-referencing. But this usually requires detailed and
meticulous research in the Documents Section of a large library.
Assessor's Books, which provide the assessed value of a company's
land and buildings, and the tax bill for the year, also provides
addresses, descriptions of the property, and lists of ownership.

The SEC Official Summary of Security Transactions and Holdings,

 

 

 

 

 

 

 

140

available in the Documents Library, lists stock transactions made by a
company's officers and directors. But unless an individual has made
a transaction, he will not be included (and if he is, it will be at
the date of the transaction). The Official Summary also supposedly
contains those individuals who own ten percent or more of a company's
stock, but this may not prove useful since evidence is available to
show that only three to five percent may be necessary to control a
corporation. Furthermore, if one does own as much or more than ten
percent of a company's stock, chances are that it has been placed
under or disguised within nominee lists, trusts, or foundations.
Finally, Chain-Banking: Stockholder and Loan Links of 200 Largest
Banks; Twenty Largest Stockholders of Record in Member Banks and the
Federal Reserve System is available in the Documents Library and while
useful in tracing interlocks and while having implications for
financial interest group theory which may be pursued, is problematic
in the sense that the stockholders mentioned tend to be financial
institutions, nominees, trusts, foundations, or holding companies, and
thus is somewhat limited in biographical research.

On biographical research: Standard and Poor's Register of
Corporations, Directors and Executives is not particularly helpful in
biographical research, since the Register provides little or no bio-
graphical data; this is similarly the case with Dun and Bradstreet's
Million Dollar Directory. (Note: While Dun and Bradstreet's
Reference Book of Corporate Magggements also provides no biographical
data, it is quite useful for tracing corporate interlocks, and because
it is published periodically, degree of interlockedness can be
researched over time.) As general sources, Who's Who in America and
Who's Who in Finance and Industry for any given year are quite useful.
Who's Who in America usually lists place of birth, education, social
clubs, awards, present position, directorates for the given year, and
membership in policy-formation groups such as the C.E.D. (which are
useful indicators in attempting to locate an individual in the class
structure). Who's Who in Finance and Industry, which appears for the
most part to be inclusive of Fortune's 1000 Largest Industrials List
and its "Fifties" lists, provides similar biographical data and
additionally the various positions an individual has assumed in his
corporate career and where. Furthermore, it often includes executives
who normally would not be included in Who's Who in America. Very
high-ranking corporate executives such as Henry Ford 11 may, however,
appear in name only in any of the various editions and versions of
Who's Who. The information provided is voluntary and hence to that
extent limited in scOpe. Self-reporting in Who's Who implies to some
extent that the respondent is attempting to make a favorable impres-
sion, in part because he/she is "on the record," a perforce which
limits the degree of generalization possible.

Current Biography Index is useful and necessary in locating
biographies on relevant individuals in the Current Biography Yearbook,
which presents biographical summaries from several other sources.

It has been my experience that such biographies are for the most part
brief, usually omit important information such as stockholdings, and
may or may not include background information on the individual's

family. This information, if known, makes it considerably easier to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

141

locate an individual in the class structure, especially in differ-
entiating between the established upper class and high-ranking exec-
utive management. (Cf. the Business Periodicals Index, which provides
easy access to biographies of business executives in Fortune,

Business Week, and other similar material.) On the whole, if one
doesn't trace its footnotes to the original sources, Current Biography
Yearbook appears to be limited in power structure research because

it includes a wide spectrum of occupations, both business and non-
business, and noted individuals in the arts and sciences, both
nationally and internationally. However, the N.Y. Times Biographical
Edition is considerably more useful in this context, in part because
it tends to include a fair-sized proportion of members from the
business community, but also because those biographies usually
include information on the individual's place of birth, parents'
occupation, social origins, education, occupational status, present
position, outlook on life, and in some controversial cases, extent of
stockholdings and wealth. They have not, in my own research, listed
social clubs which is one of the most convenient indicators to locate
an individual in the class structure. Finally, Ferdinand Lundberg's
The Rich and the Super-Rich not only includes useful criteria by which
one can distinguish old wealth from new wealth, upper from other
classes, etc., but also a substantial number of names who have been
identified as belonging to these categories, although my own experi-
ence has been that if one is concerned with contemporary individuals
on an extensive basis, such as in 1976, that his lists will not only
be incomplete but also outdated. E. Digby Baltzell's The Protestant
Establishment: Aristocracy and Caste in America and Philadelphia
Gentlemen: The Makingggf a National Upper Class suffer from similar
limitations. All three works are useful in historical research,
however.

 

 

 

 

 

 

 

 

24It is important to recognize in the division between monopoly
capital and the "U.S. Chamber of Commerce--N.A.M." that the former may
contain representatives of the conservative element of monopoly
capital. If significant differences are achieved, the test should be
more powerful. But if they do not obtain, it could mean that the
categories are not sufficiently differentiated. The other alter-
native, of course, is that there aren't any significant differences
between the categories to begin with.

25This is not to argue that there are no differences between
"old" and "new" wealth. Old wealth has been characterized as those
members belonging to a financially prominent family of third- and
fourth-generation wealth. Within America's Eastern upper class, for
example, the "old families" are the descendants of eighteenth and
early nineteenth century merchants and manufacturers and barons of
dry-goods, utilities, coal, oil, and railroads. Because "old family"
is usually found to be synonymous with "old money," the leading
capitalists in the pre-Civil War period were the "old family"
founders in the United States. The heir is usually born into the
ownership of an enterprise and apart from perhaps a few years

142

experience in some of its departments, has known nothing but the
property he/she has inherited. Some authors have argued that the
members as an old-moneyed aristocracy are established in huge
financial centers of power allianced with other wealthy inheritors,
forming closely integrated "interest groups." Characteristically,
all were born American citizens. All are inheritors in greater or
less degrees and (except for the Du Ponts) are far better educated
than their family founders. It is postulated that they have a broader
awareness of the world and its vagaries, are quite worldly-wise, and
"wear their ethnicity and religiousity debonairly." Old wealth
members generally have long been the main supporters nationally of
the Republican Party, and they are considered by Domhoff (1967) to be
the "business liberals" in the large corporation who are working
hardest to change the image of the corporation. Finally, emphasis
is placed on family lineage; the old-money world, i.e., the descendants
of the Fords, Rockefellers, Carnegies, Mellons, and others, have
remained aloof from the larger and more opulent world of the newly
rich via intermarriage, primary group solidarity, and social activ-
ities (Lundberg, 1973:163, 201-202; Domhoff, 1967:58; Knowles, 1973:
3; Mills, 1957; Baltzell, 1964; Baltzell, 1966:17-18, 20, 384).

New wealth, with few exceptions, rose on the basis of oil
and its generous depletion allowances. Much of the new wealth is
concentrated in real estate, promotional effort, and uncertain oil
prospecting; few members of the new wealth are in manufacturing or
banking. These constitute noninherited fortunes, although they
generally date back before World War II, and indeed the bulk of them
before 1929. For example, most of the Texas oil fortunes were
founded between 1910 and 1925. Characteristically, members of new
wealth were born in the United States, usually had comfortable
beginnings, a large number were school drop-outs, few were in military
service, and most are usually Protestant or religiously disinterested.
Lundberg argues that the new wealth have for the most part a naive
view of the world and one's part in it; a man of action, the new
wealth member is "compulsive and repetitive in his single minded
acquisitiveness" and "usually devoid of a sense of humor" (Lundberg,
1973:37, 46-47, 87, 106, 110-112).

26This brief summary is based upon Seider (1973 2-3, 17) and
Domhoff (1971 124, 189, 193, 195, 219, 325, 340).

27This brief summary is based upon Sonquist and Koening (1975:
199), Seider (1974:808), Allen (1976:891), Bell (1958:238-250),
Lundberg (1973:910, 931), Domhoff (1967:40), Baran and Sweezy (1968:
24, 30-31, 35), Sheehan (1973z3), Miliband (1969:29-30), Baltzell
(1966:42), Seider (1973:46), and Menshikov (1969).

28Relevant references from which the coding scheme was
developed, in addition to an extensive reading of Vital Speeches to
obtain some indication of the range of policy options most often
mentioned by business executives, include: Fowler (1966:140-141),
Crotty and Boddy (1975:391), Lens (1975:112-113), Gold (1975:131-

 

143

132), Mermelstein (1975:370), Welch (1975:391), Tabb (1975:409, 411),
Muchnick (1976:32), Warren (1972:7-8), O'Connor (1973:46-48), S.F.
Bay Area Kapitalistate Group (l975:6), and Shonfield (1969:61, 66,
86, 123, 177, 199).

29The random number units were chosen from Line 2 Col. 2,
Line 3 Col. 3 . . .; Line 15 Col. 1, Line 16 C01. 2 . . .; Line 29
Col. 1, Line 30 C01. 2 . . .; Line 43 Col. 1, Line 44 C01. 2 . . .;

and Line 57 Col. 1, Line 58 C01. 2, using the arbitrarily selected
digit order 1, 3, and 5. On this basis, speeches ll, 57, 19, 61, 36,
109, 46, and 52 were chosen.

30A discussion of and the formula for the computed reliability
coefficient can be found in North et a1. (1963:49-50).

31The formula for the computed symmetric lambda is as follows:

2 f + 2 f - (F + F )
1‘ C 1‘

2N - (Fr + FC)

Lambda = c , where

 

f = the maximum frequency occurring within a row

f1. = the maximum frequency occurring within a column
F: = the maximum frequency occurring in a row total

Fc = the maximum frequency occurring in a column total
N = the total number of cases (Freeman, 1965:76-77).

32The term "free market" economies is one commonly used by

spokesmen in the U.S. Chamber of Commerce and the N.A.M.; its meaning
approximates the ideal of laissez-faire or classical capitalism.
See Appendix A for a more detailed explanation.

33E.g., Bethlehem Steel, in Newsweek, Aug. 9, 1976, p. 74.

34The one-dimensionality of the approach may be a fraction of
the speech form. A pursuant analysis is thus necessary to answer
such questions as: What factors operate to constrain speeches as a
source of data? What purposes do the speeches serve? Are policy
options expressed in the speeches different from those stated in
private? What does a speech mean as a form of communication in
the network of class solidarity and consciousness?

ssCf. as examples the following comments made by a few of
the business executives in Vital Speeches:

R.A. Peterson of the Bank of America: "As our actions produce
increasing foreign holdings of dollar reserves there is a tendency
toward lessening confidence in the dollar. As confidence falls,

 

144

dollar reserves are used to buy gold. And as this process gains
momentum the entire structure of the free world economy is in danger
of destroying itself in a maelstrom of contracting liquidity and
world-wide depression" (1/15/1966: Vol. XXXII, No. 7, p. 218).

Robert Dunlop of Sun Oil Company: "To put it very bluntly,
we face today a national financial crisis . . . . The hard fact is
that as a nation we are continuing to refuse to face up to the
realities of our political and economic situation" (2/1/1968: Vol.
XXXIV, No. 8, pp. 240-241).

William Johnson of IC Industries, Inc.: ”An effort must be
made to set up on firm ground a system of national priorities for
obtaining essential, long-range social and economic objectives.
Presently, we are lurching erratically from one crisis to the next

. In the absence of priorities, stopgap solutions to problems of
current public concern are continued hurriedly even though the problems
should have been anticipated a decade earlier and resolved primarily
by logical analysis . . . . Nothing short of a deliberate and
rational process of evaluation will guide us safely through the series
of crises that will continue to beset us in our own time" (8/1/1970:
Vol. XXXVI, No. 20, pp. 615, 619).

Dr. Simon Ramo of TRW, Inc.: "We work from crisis rather than
planning in the United States and a crisis is here" (ll/15/197l:

Vol. XXXVIII, No. 3, p. 85).

Donald Flatten of The Chemical Bank: "Unless we begin soon to
put the pieces back together, the current disarray in our methods of
financing international trade and investment could lead to worldwide
economic paralysis" (1/1/1972: Vol. XXXVIII, No. 6, p. 179).

36Cf. Webb et a1. (1971) for a useful discussion of the
methodological and other problems a researcher is likely to encounter
and some of the possible types of measures he/she might take to
enhance the credibility of his/her findings in documentary research.
For example, in content analysis the researcher may introduce biases,
such as in terms of increasing skill at researching over time,
increasingly strong expectations of what a respondent means, differ-
ential coding with practice, and changing accuracy of recording and
interpretation. Or, in the case of Vital Speeches, there may be
systematic biases which exist among editors (cf. also the extraneous
events of history). However, on the other hand, in content analysis
the initial measurement activity does not introduce real changes in
what is being measured, does not require the cooperation of the
respondent, and is easily amendable to replication. Furthermore,
the material of content analysis tends to remain relatively stable
over time (although it may be sensitive to public opinion).

 

APPENDIX A

KEY FOR THE CONTENT ANALYSIS CODING SCHEME

APPENDIX A

KEY FOR THE CONTENT ANALYSIS CODING SCHEME

1. "Free market" or ”free enterprise" economics:

This approach, which ideologically approximates classical or
laissez-faire capitalism, may be evidenced by such statements as the
following. Freed of political interference, profits serve as a
built-in guide to an efficient and socially useful allocation of the
nation's resources; in other words, one should rely on a competitive
market place because it is self-regulating. As a consequence, one
will evidence here active opposition to guidelines and mandatory con-
trols, and requests that they end because normal market controls of
supply and demand exert a powerful-enough influence on wages and
prices. The governmental role must be limited because the growth
of government cripples the private sector. And national planning--
or even the suggestion of it--strikes at the very foundation of free
enterprise. In this context, rather, the government is to provide a
favorable climate for the private economy and for profit maximization.
As alternatives to, and pp£_in conjunction with, governmental inter-
vention, this position may argue that business must manage its affairs
effectively so as to make government intervention unnecessary; that
it must increase efficiency in the factories by encouraging techno-
logical change and automation, or support on-the-job training to
improve individual productivity; that business must tie wage increases
to increasing productivity, and refine and improve the ability to
measure productivity itself; or that business should follow a policy
of benign neglect or maintenance of the status quo. Essentially,
economic crises will solve themselves if the economy is left alone.

 

2. Manipulation of fiscal and/or monetary policy:

The major emphasis in this approach is in achieving more
responsive or efficient management of, and better balance in, fiscal
and monetary policies as a major weapon against serious economic
instability. These are essentially manipulatory and partial adjust-
ments and may be evidenced in a number of ways: by emphasizing
sound monetary and fiscal policy; by establishing fiscal policies that
adjust to the changing demands of a changing world; by evaluating
current policy for its long- and short-term benefits to the economy
and implementing necessary changes if found lacking; by passing spend-
ing ceilings or reappraising Federal spending programs or by insisting
upon frugal, responsible and efficient spending (often in terms of

 

14S

146

national priorities); by reducing government expenditures; by coor-
dinating more closely government expenditures with those of the private
sector, especially in terms of government spending overseas being
brought into better balance with the private sector's predicted
surplus in private transactions; by curtailing military spending
overseas in an effort to achieve a balanced budget (these latter two
are distinguishable from Category 7 because their major emphasis is

in redressing the balance of payments deficit); by reviewing the
whole range of government activities which affect prices and incomes;
by firming up interest rates; or by requesting reform of budgeting
procedures in general or implementing zero-based budgeting in par-
ticular. This category excludes discussion of capital recovery,

which is usually treated as a separate and specific issue in the
speeches, but includes questions of income tax increases and decreases
for the general population.

3. Greater efficiency in governmental administration:

Here the major emphasis is in achieving better coordination
of and reducing inefficiency in the governmental process, which is
seen as contributing to economic crises. This category is evidenced
by statements calling for coordinating and eliminating overlapping
functions and agencies within the government, with clear guidelines
for the remainder; or for more efficiently managing government opera-
tions in general.

 

4. An effective capital recovery system:

This is a call for a re-assessment of and/or recommendations
for revision of corporate income tax policy in order to encourage_
capital formation andgrowth. Since the corporations are multi-
national, growth usually means both foreign and domestic. Examples
include a long-range policy of tax incentives; adequate capital
recovery allowances; full-cost write-offs for pollution control
expenditures; liberalized depreciation of fixed capital assets to
accelerate capital investment; reform of excessive progressivity in
tax rates or a reduction in taxes; an increase in and/or making
permanent the investment tax credit; removal of economic controls
specifically hampering profit rates; elimination of the double
taxation of dividends and/or the earnings on foreign investment;
maintenance of the foreign tax credit; or increased incentives in
general. This is a search, in essence, for an enlightened and coherent
Federal income tax program for monopoly capital.

 

 

 

 

5. Creation of a stable international monetary system:

This option involves rethinking the present banking and
monetary system and is evidenced by such examples as: seeking greater
coordination and efficiency of the international money and capital
markets and a stable dollar; arranging for a new international pay-
ments system; building a new, rational, international monetary system
which provides for the continued integration across traditional
boundaries of the world's productive facilities; creating a system to
assure increased international liquidity; and coordinating by central
banks of their monetary policies in order to moderate fluctuations
in the business cycle.

 

147

6. Protectionist policies and legislation:

This is simply a call for supporting protectionist policies
and legislation, usually to protect certain industries from import
competition (cf. its opposite immediately below).

 

7. Anti-protectionist policies and legislation:

This approach may be evidenced by a request for an in-depth
review of and/or recommendations for the nation's trade policies and
legislation, i.e., adjusting trade policies to the realities of an
international economy. Exemplary statements include increasing
exports and encouraging foreign investment into the United States;
eliminating tariff and nontariff barriers of relevant nations in
international trade; expanding and liberalizing the facilities for
the financing of U.S. exports; eliminating restrictions on direct
investment overseas; stimulating the flow of private investment over-
seas; providing incentives, such as credits for investment in under-
developed countries; and requesting supportive policies or a clear-cut
economic trade policy for U.S. firms engaged in international trade
and investment and in developing foreign markets. In this context,
the government should foster fair rules of international competition
(to the benefit of multinational corporations). Furthermore, there
may be a call for understanding and agreement from international
partners on goals and targets and/or the creation of a permanent
and continuing forum for multinational corporations of all nations to
work together on proposed solutions to mutual trade problems. Others
may argue that efforts to assist those who have suffered from import
competition need and deserve the strongest support from the United
States and that multinational corporations can be a positive force
in developing underdeveloped countries, if_the developing nations
adopt policies of positive receptivity to the investment of both
domestic and foreign capital.

 

 

8. Moderation in, restriction of, or reduction in, the domestic
regulatory functions assumed by government:

This area may take the following forms, among others: arguing
for the simplification of the "regulatory web of finance"; dismantling
the "excessive" controls on commercial banks; restraining new laws
which protect the consumer against fraud and deception or raise or
expand minimum wage rates any further until their impact is understood
on employment levels; or restraining or reducing the number of regu-
latory agencies presently in existence because the growth of govern-
ment cripples the private sector.

 

 

9. Re-assessment of, restraint in, or liberalization of
antitrust regplation:

The intent here is to re-examine antitrust policy which may
be hindering the ability of corporations to compete on an international
scale, and to foster freedom to build size, diversity, and financial
strength to take advantage of the economies of size. In this context
the authors are seeking a rational, responsive antitrust policy, given
the multinational corporation as an integrator of national economies.
Hence, they may request that antitrust laws be liberalized or

 

 

148

overhauled or that any antitrust policy which would discriminate in
favor of exports as against foreign investment or would attempt to
restrict normal commercial relations between parent and subsidy must
be rejected. Part of the underlying concept here is a desire for a
more positive and constructive role toward conglomerates and multi-
national corporations on the part of the Federal government.

10. International agreement defining the proper role of the
multinational corporation:

This category represents a call for international agreement
to regulate the behavior and activities of the multinational cor-
porations in the interest of international relations. A speech-
maker may request clarification and/or standardization of laws,
regulations, and administrative actions--the "rules of the game" for
multinational corporations--in order to achieve reasonable uniformity
and stability in such matters as business practices and environmental
protection. Or, he may ask that a common code of behavior and a
proper role for multinational corporations be defined. While rules
and regulations of these corporations are necessary, this code is
essentially benign rather than interventionistic, i.e., that which
is helpful insofar as competition or economic efficiency is concerned.
The focus here is not on the effects of antitrust litigation, but on
the moral, environmental, and political consequences of multinational
corporate conduct in the pursuit of international trade. The most
forthright example in this context would be a call for the formation
of an authorized tribunal to subject the multinational corporation to
review and political censure--and not by the public press-~as one
executive emphasized. This would supposedly regularize operating
discipline and encourage high moral standards in the execution of
business.

 

 

11. Exercise of restraint in union activity:

Accepting unions as a permanent structure in monopoly capital-
ism, the authors §§k_that unions be more moderate in their wage
demands in the absence of productivity increases or that they volun-
tarily exercise restraint in their power to strike. There is no
suggestion here that unions be restructured or that "labor union
monopolies" such as the United Auto Workers be outlawed.

 

12. Restrictions on, or modification of the collective
bargainingstructure of unions:

This form of action is evidenced by such statements as: the
collective bargaining structure of unions must be modified, and the
use of "force, violence, or coercion" or the seeking of "excessive"
wage demands by labor stopped. Management must strongly resist
"uneconomic" wage demands. There must be a thorough overhaul of labor
laws and regulations and/or the extension of antitrust laws to include
unions. Or, the government should outlaw "labor union monopolies"
altogether. The sentiment here is that labor is much to blame for the
present economic crises, such as spiraling inflation.

 

 

149

13. Cooperation among, or partnerships of business, labor,
gpvernment, and/or the public in general:

While this category is perhaps too broadly defined, it essen-
tially means the seeking of a coordinated position between business,
labor, government, and/or the general public. For example, unions
and management should work together in helping collective bargaining
be responsive to the needs of economic growth. Business should work
productively and efficiently with and/or advise the government in
resolving problems, such as those that arise from technology. Or
government should work with industry to seek the most efficient modes
of operation consistent with the demands of society. The rudiments
of the social-industrial complex may also be evidenced here.

Speech makers may acknowledge corporate responsibility in anti-
poverty programs and that corporations should take part to insure

their good use; or that social problems offer the chance for pro-
fitable contribution and meaningful accomplishment (without committing
a company to government contracting pr_that the Federal government
underwrite a corporation's risk); or that business can help devise
sound and creative approaches to public problems, using proven business
techniques to achieve social goals.

 

 

14. Economic education for the general public (in order to
facilitate a more favorable climate for business):

What business executives propose here is the necessity for
business to "present the facts" as to how the profit and loss system
works, as to how free enterprise functions, and to reaffirm "what is
right about America." This is so to create a more informed public
who therefore will not erect barriers which obstruct business and
hence help create economic crises.

 

 

15. Broad credit, wage andprice guidelines or an incomes
policy:

This category is based on the idea that government has
developed (or should develop) some kind of reasoned definition as to
what kind of conduct by wages and other income is needed in the
national interest. Therefore, this may entail (on the part of
business) active cooperation with government restraint programs;
support of a halfway approach between running the risk of letting
the problem solve itself and commitment to rigid capital and exchange
controls; support for government surveillance of pricing policies or
voluntary credit controls (this also entails developing a new concept
of the government-industry relationship in which surveillance or
auditing with the public interest in view is encouraged); or develop-
ment of an incomes policy, i.e., a broad government-initiated program
designed to influence prices, wages, and other incomes more directly
than monetary and fiscal policies but which would step short of
wage and price controls. It would include some kind of norms or
guidelines.

 

150

16. Establishment of a permanent planning committee, board,
or public oryquasi-public agency:

Several variations on a theme may be requested here: a federal
agency to plan and weigh competing programs and to establish prior-
ities from some statement of national goals; a comprehensive program
of planned budgeting from a centralized office to ration the funds
available for domestic and foreign needs; a national economic planning
board which would estimate the country's future resources, protect
what consumer items the economy demands, and then propose the com-
bination of taxes, investment credits, and interest rates likely to
nudge industry in whatever directions the board deemed the right
ones; or formation of quasi-public agencies, such as AMTRAK, on a
more comprehensive scale to perform public functions. This is a
revamping of the institutional forms through which the Federal govern-
ment carries out its economic policy. The intent here is to contain
economic crises.

 

 

17. A standard comprehensive planning model:

Although there may be variations, such a model typically
involves coordination by a national planning structure of the follow-
ing elements: establishment of an incomes floor under which no family
would be allowed to fall; full labor participation in the planning
process given an incentive system for productivity; a system of
comprehensive health services that combine the best that the public
and private sectors can provide; total renovation of the educational
system (although toward what goals was never specified by its author);
investment policy adequate to generate necessary capital; and
acceleration of technology to meet national goals. Since this model
implies cooperation among public and private sectors, if an author is
included here, he is not to be included under Category 13 in order to
guarantee that the categories are mutually exclusive.

 

18. The social-industrial complex:

Advocating the social-industrial complex typically means
adjusting budgetary priorities to benefit the monopoly sector and
creating subsidized investment opportunities for monopoly capital,
requiring centralized administrative control and budgetary planning.
However, the state assumes a subordinate role. That is, corporations
essentially control the planning process and operate under contract
to the state, which guarantees profit or underwrites risk. These
actions require changes in present relationships between monopoly
and competitive capital, monopoly capital and competitive sector
workers, monopoly capital and unions, monopoly capital and the govern-
ment (i.e., partnership or cooperation instead of the adversary role),
and between social classes. Since the implementation of the social-
industrial complex requires intricate cooperation--which the authors
readily admit who advocate this policy option--inclusion here means
exclusion from Category 13 to avoid redundancy. Category 13 then
more clearly means cooperation for the sake of reducing adversary
roles, and not necessarily for specific ends such as national planning.

 

APPENDIX B

LIST OF SPEECHES USED FROM VITAL SPEECHES,

 

PLUS OTHER RELEVANT SUMMARY DATA

5.5.2 58 8850 85888880 588850

.855-855 .88 .58 .55520 8885 .5 .888
5500000 55005530 058>580 580050
.888-888 .88 .585 .5220 8885 .55 5588
55585885 588858 588885 8855882 588850
.858.858 .88 .58 .5520 8885 .85 .888
505550005 .00 50 55050000 5m0050
.885-585 .88 .58 .2550 8885 .5 .888
5050555505 00580508 050500855 550050
.885-885 .88 .58 .2520 8885 .5 .888
588588880 58 5888880 85855 .555 588850
.855-555 .88 .58 .5220 8885 .5 .888
5.8552 858558588 58 .8888 .582 558850
.88-55 .88 .58 .5220 8885 .5 .582
588558588888 .5882 885588 588850
.888-885 .88 .585 .25550 8885 .5 5588
5.80 .8885580 8858858552 588850
.558-588 .88 .585 .555>xx0 8885 .5 55588
588558588888 .8552 588888 558850
.885-885 .88 .55 .555>xx0 5885 .55 .888
588588880 58 5888880 8555885 558850
.88-88 .88 .58 .555>520 5885 .55 .582

 

5050500 0050>5500 000umw,005588508m5o
”00>50 583 000005 0050: 05 580>0
5000000w 5855> 05 00558055000 50 0580

 

 

5280

.00 05550050 5850000
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5280

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5280

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5880

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55055000 058500500 50 00850

 

8552 8858588888 8558

 

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00500 0058 .55
555850 500000
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555850 500000
50055502 5055800 .0
5.502 .00800
588 55055> .8
5.582 .88550
005553 0000 .5
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55855880 .88800
.58 .88555 8855880 .5
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50058: 0000 .0
5.5m: .00x00
0050000 08005 .5
555850 500000
0008: 5055080 .8
55855880 .88800
500082 0580050 .5

 

588555888 888500
000005 00 50050<

 

x00

<H<0 >m<223m Hz<>mqmm mmIHO m300 .mmzumm0m 5<H5> 2000 00m: mmzumm0m 0o HmHA

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151

152

55585588 58 8850 85888880 588850
.858-888 .88 .555 .552220 8885 .55 .888
5.00 0000500000 5855550005 .582 500050
.888-558 .88 .555 .555250 8885 .55 282
500558500550 5500080 00805 500050
.888.588 .88 .585 .552220 8885 .5 282
55585588 58 8850 85888880 588850
.858-888 .88 .555 .552220 8885 .5 55588
5.5.2 58 8850 8588888 588850

.55~-88~ .88 .58 .552220 8885 .55 .888
525550005 08055000 50 55050000 550050
.855.855 .88 .55 .552220 8885 .55 .888
58850 85888888 5585588 558850

.555-N55 .88 .58 .552220 5885 .5 .888
52585885 588858 588885 8855882 558850
.885-585 .88 .58 .552520 5885 .5 .888
55585588 58 8850 85888888 558850

.85-8 .88 .55 .552220 5885 .55 .580
5.5885 85888858 885558 8 258858882 558850
.588-888 .88 .555 .52220 5885 .85 .888
5.8888 8588888 .555 558850

.855.555 .88 .555 .52220 5885 .55 8888
5550005000 0>55000500 00 2505005 550050
.888-888 .88 .585 .52220 5885 .5 582
20055550000 00850 0050500 .582 580050
.585-585 .88 .58 .52220 5885 .5 .888
58055000 50 .5502 2500050 580050
.885-885 .88 .58 .52220 8885 .55 .888

 

5050000 0050>5500 00000w 005588508550
500>50 582 000005 00502 05 58020
50000005 5855> 05 00558055000 50 0580

 

 

5580

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5280

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55055000 058500500 00 002H0

 

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5.502 .00x00
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5.502 .00200
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85855850 288588 .55
555850 500000
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555850 500000
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550000 280 .05
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153

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.VNN-~NN .aa .55 .>Hxxxu momfi .mH .cmw
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.vmv-mmv .mm .AQH .HHHxxxV mama .H xmz
m.vm mocmuomcoo Hmfluumswcm .umz ”nomav

.mmm-omm .mm .AHH .HHHxxxv “cad .mH scum:

mmu5ufiumcH Eswfionuom :mofiume< moomfiv
.omm-~mm .mm .nm .HHHxxxV nomfi .H .nom
Anewucm>cou oumhb cmfiouom .umz moomdv
.Nmfi-mvfi .mm .fim .HHHxxxv coma .mH .uoo
Amaflxcmm mo Hoozom .:.z-p:oeuo> moomfiv
.wm-vm .mm .AH .HHHxxxv coma .mH .uoo

 

chommm vmum>flfioo :uommw :ofiumNflcwwuo

 

mzav

.ou owuuomfim kuocoo
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xcmm xufiu .umz “mafia
”sag

.ucH ..ou w powfima .mm;u
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xcmm xpfiu .pmz amp“;
Azmv

wuwnoe< mo xcmm

nzmv

mufluoe< mo xcmm

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.00 “Mo cam

omfiq ofinauflscm

mouoesou mo nonemau .m.:

flung

.ou mmmao no;
”say

«cake—5‘ mo xflmm
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v—Gmm :muuwzcmz Ommfiu
Away

.00 “Mo cam
52mg

muwhofid mo v—cmm
Away

xcmm xpwu .umz umuwm

 

”:o>fiu ma: coommw cows: cw umo>v
mozooomw Hmufi> :« :oflumowfinsm mo oumo

 

fifionucou ouwuomuou mo oQXHV

 

cu“: copmfloomm< an“;

mflmsvwmomv
xufipouufixuz .m .w .0?
ammmau pmmmzv
whooz owhooo .mm
m.uw2 .umxmv
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mmmmau mommav
“new; cumzo: .w .nm
mmmmHu Mommav
camumuom .< .m .om
Ammmau Hommsv
muonn:34 mfisoq .mm
m.um2 .uoxmv
my moficso phenom .vm
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spasm xuco: .w .mm
mfimpflmmu .aeouv
mpo>ߣm cmH~< .Nm
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ammmau pommsv
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fi.umz .omxmv
meacso phenom .wm
mmmmfiu Homaav
compouma .< .m .um
fl.umz .omxmv
:owHo Mama .om

 

ficoflufimoa mmmfluv
:ooomw mo nocus<

 

xox

154

mcofiumfluomm< .uewz :wuwpoa< mommav
.Hom-mmm .mm .flwfi .H>xxxv onmfi .H xflsm
A.m:ou aflocsou mgoonmEm flflmzw: monmfiv
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fi.>.z mo nsfiu afieocoom mohmfiv

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mxpumsqu :mofluos< mo mmmpwcoo “momav
.owm-~wm .ma .nm .H>xxxv onmfl .mH .nmmv
m.o:H .Hfiocsou mumge :mflopom .pmz ”momfiv
.ooH-th .mm .flo .H>xxxv ouma .fi .cmw
A.eu< mmocflmsm mo Hoogum um: ”momfiv
.nmfi-vmfi .mm .Am .H>xxxv momfi .mH .ooo
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mmufi>pmm cofiumflfifiocou w coflumfluoz .wmm ”momfiv
.mHH-mHH .mm .mv .H>xxxv mama .H .uwo
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.em-mw .ma .flm .H>xxxv mama .mH .>oz
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floonmsaou mo Honemno xx03ucmx ”momav
.omn-wmu .mg .flmm .>xxxv mama .mH .pmom
Anson w mamwpmflpnu mo .mcou .umz ”momfiv
.wom-oom .mm .mmfi .>xxxv mama .H xfisn
moucouomcou moamcwm :mfifimnum:< ”moody
.ofiv-mfiv .mm .nmfl .>xxxv mama .mH ”Hua<
fl.e< mo xuofiuom mcofiumfiom ofiHnaa ”womfiv
.VNH-HBH .mm .flo .>xxxv mood .H .cmq
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.mn-mn .ag .Am .>xxxv mama .mH .>oz

 

monomom wouo>fifioo :uommm newumNficmwao
”:m>flu mm: zooumm saws: am Hmm>v
monuoomw Hmuw> cw newuwowaasm mo mama

 

 

AZQV
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mufiuos< mo xcmm

Aggy

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fizmv

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Ammv

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mzmv

:oflumnomuou HRH

mzmv

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flung

xcmm :wwumccmz mmmsu
Anny

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away

.mnou none: whom

Asmv

mafiuoa< mo xcmm

flung

.ou mumo Roxana och

flung

xcmm cmppmncmz ommzo

 

nHonucou vuwnomwoo mo omxwv

 

nu“: woumeOmm< sham

m.pwz .uoxmv

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mmmmHu Mommav
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nooogm mo nonpz<

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155

moopmeaou mo yonamnu .ccmm “Ammav

.ooH-an .mm “Am .HHH>xxxv Humfi .mH .ooe
fi.:mm< Hmofisosu ncmao>ofiu w
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.om-om .gg .fim .HHH>xxxv Humfi .mH .>oz
flpfloyuoa mo nafiu owEocoum “Huafiv
.Ho-wm .mg .mm .HHH>xxxV “hmfi .H .>oz
hommoficu ..muz Dado .ooxm “Humfiv
.mm-~m .ag .flm .HHH>xxxv ”nod .H .>oz
mopsuwumcH oofl>uom :mfiouom “Amway
.mmn-©~n .mm .flmm .HH>xxxV finmfi .mH .pmom
fl.:mm< Hmufiumfiumum cwofluma< “Ahmfiv
.mvm-ovm .gm .flmH .HH>xxxU finmfi .fi xflsw
fl.ooxm .an “floppoo mo nsfiu ofleocoom “Humfiv
.mnm-ohm .mm .ANH .HH>xxxV Humfi .H Hflpa<
AmopoEEou mo umnamnu .uw musnmupfim mammav
.Hom-wm~ .ma .fiofi .HH>xxxU Hnafi .H noun:
fl.>.z mo psfiu ofleocoom use “Humfiv
.omm-mm~ .mm .fim .HH>xxxv Han .H .nom
moouoEEou mo Honsmcu whomuum: Monmouo nonmav
.VNN-HNN .mm .AN .HH>xxxv Hnmfi .mH .can
Acmmmfi cw ounmaeoo
mo “onemcu .E<\xumfloom .E< :mmmn mommav
.mvn-oeh .mm .mvm .H>xxxv oumfi .H .uuo
A.Hmu ..<.g .Hfimz szoe monmfiv
.mfio-mfio .ma .Aom .H>xxxv onmfi .H .w=<
floouoeeou mo umpgmgu opapm .w.z monafiv
.mom-fiom .mg .flwH .H>xxxu onmfi .H xfisn

 

monommm woum>wamo nooomw :ofiuwuflnwwuo
":o>wo mm: :uoumm :ufinz cw umo>v

 

Away
mofiuumswcH can

Anny

.muou HmoMEogu onHH<
AZQV

.ocH .3mh

Aggy

.muou Hmoum .m.:

Asmv

.mpoo wwcm>axmccmm pmhfim

Asmv

:oflpMHomhou coumm

AZQV

.mfificm .xcmm xuflfimufim 0:9

.2.<.z

flZQV

.m:@:~ Esfiwsa x:o:moHH<
Asav

Hmoum .m.=

Aggy

:oflumuomuou HHH

Asmv
NUwhmp—E mo Ximm

Ammv
.oaH .mmfluumswcH UH

om“; ofinapfiswm

 

 

mocomomw Hmufl> a“ :owumowfinzm mo ovum

mfiouucoo mumuomuou mo omxyv

 

nufiz wouafloomm< 59“;

Ammmau nogmzv
noxmm .m .m .mo

mmmmfiu Hommav
poccou .H axon .mo
A.pwz .umxmv
05mm coefim .Ho .50
Ammmfiu uommzv
xuumg spam: .a .00
m.uw2 .umxmv
.pm .mcfluczm .m .w .mo
ammmfiu nommzv
uwcwzmv .2 .m .vo
A.um2 .uoxmu
mEmw< cashmcm .m .mo
“Hmuflmmu .msoov
chowomm: omuoou .mo
Ammmau Hommav
xoficm: .a .m .fio
mmmmfiu Mommav
xnumq game: .m .oo
n.9mz .ooxmv
coocmo vacuum .mm

ammmdu pmmmsv
comsmfiu .3 .< .wm

ammmfiu Hommsv
:omcnom .m .52 .mm

nfimawflmmmv
uponow mwocmum .om

 

mcofluflmom mmmfiuv
:uommwxmo nosus<

 

xox

156

mvcmauouuwzm
.m>m:ou .mouoeeou mo penemzu .E< “mnmfiu
.Hmm-mhm .mg .ANH .xfixxxv mnmfi .fi Hflum<
mpsfiu ufisocoom aflouumo amnmfiv
.ovm-nmm .mm .AHH .xHxxxv mumfi .mH noun:
fl.m~mz .mfiscm noon mo .amm< .umz “mnmfiv
.mmm-fimm .am .AHH .xHxxxv mnmfi .mH :oumz
Acofiucm>cou owmhh cmfiouom “Numfiv
.wNH-HNH .mm .flv .xHxxxV thfi .H .uoa
AxuumswcH Hmoflsocu mo xuofioom “Numfiv
.mm-nw .mm .flm .xHxxxV thfi .mH .>oz
fl.mu ..<.q mo .cmm< xpflo Hmuuaou ”mnmfiv
.mw-om .mg .nm .xHxxxv Numfi .mH .>oz
hmzmuuo .muumEEou mo Honsmcu cmflwwcmu ”Numav
.mm-om .mm .AH .xHxxxv Numfi .mH .uoo
n.50flz mo Hflocsou gopmomom mcoNflufiu “Nnmfiv
.dm-wa .ma .AH .xHxxxv Numa .mH .uuo
figmpsnmuufla .umccfio xmo Hmofiaonu ”Numfiu
.oom-omv .ma .fiofi .HHH>xxxv thfi .a oasw
5.».2 ..om moaoaomcoo one “Numdg
.mflv-mo¢ .mm .fimfi .HHH>xxxv Numfi .mH Hfiua<
Ammofiflou scan: “:50: “NBmHU
.ovm-~vm .ma .AHH .HHH>xxxv «Baa .m~ noun:
mwmmn< capo: HaflnumsucH
may no mocmuomcou mmso: mews: one ”Numfiv
.wfim-mfim .mm .flofi .HHH>xxxv tha .H noun:
nuanfiom mo xuwmuo>fica
cmofipoa< may mo .cmm< Massfi< “Hhmfiv
.NmH-m~H .aa .flo .HHH>xxxV Numfi .H .cmw

 

monomom vmno>waoo coommm :owumNficmwuo
“=o>«u mm: cuommw gown: :« umo>v
mogumumm Hmuw> ca cowuaofiaasm mo mama

 

 

Asmv
xcmm Hmofiean one

.2.<.z

.:.<.z
fizmv

.ou owuuomfim Hmuocoo
azmv

:ofiumnomnou m<u

Azmv
mofiuoe< mo xcmm

oopmeeou mo passwgo .m.=
Aggy

aflouuoo mo xnmm .umz
Amav

.ocH .ou mammmox

fizmv

:owumuomuoo HHH

Hung

.ou :mxefie och

Azmv
.ocH .zme

fi2mv
xcmm Hmofiemgu one

 

mfiouucou oumnomnou mo omwmw
saw: woumwuomm< Sham

 

A.um2 .uoxmv
copumam wfimcoo
flfimpfimmu .meouv

mocxmm unsm
fifimuflamu .meouv
uofifidm pgwfluz .<
Ammmfiu nommsv
zuuom .n .m
”Hasnflmomv
Rocha: mmmow .Ho
mmmmau Romany
comamfiu .2 .<
Afimpflmmo .meouv
mzoq Emflflfiflz
mmmmau “mamnv
HH~ pmcmwm .mmnu
Ammmau Hommav
Eouxm Moguumfim

A.uw2 .ooxmv
Honw< .6 vumzoz

ammmau hommsv
zofixumz .m .:

A.Hm2 .omxmv
05mm :oEfim .Ho

A.nwz .ooxmv
:muumaa vfiacoo

.mw

.Hw

.ow

.mn

.wn

.55

.05

.mn

.wn

.mn

.Nn

.fln

.on

 

“cofluflmom mmmfiuv

 

:uoomw mo nonus<

Nmm

157

fl.:mm< .uEmz wcwmwnousm .umz mvnmfiv
.qmv-omq .am .flmfi .xxxxv whmfi .mH xmz
Amfimmfiucfinm
Hoogom xmmvcooom mo .cmm< .umz mvnmav
.mov-~ov .mm .fimfi .xxxxv «Rafi .mH Hflpm<v
mopsufipmcH Hmmpm w couH .a< nvnmfiv
.wmm-omm .ma .ANH .xxxxv vnmfi .H Hfium<
Afiflucsou mufiufimm wofififlpmflo mvnmfiv
.omm-mmm .mm .Aw .xxxxv vaH .H .nmm
fiznumsncH cmufihoa< mo mmmuwcou “mnmfiv
.mvm-nvm .am .flw .xxxxv vnma .H .nom
AmHOHHmom Hmflnumswca mo xuowoom “mnmfiv
.me-owH .mm .fio .xxxxv quad .H .cmn
nousuflumcH mo>flusomxm Hmwocmcflm ”mnmfiv
.ovfi-mvfi .mm .flm .xxxxv mnmfi .mH .uoo
AmoHoEEou mo Hmpsmnu cowcoq “mnmfiv
.oHH-~oH .am .Aq .xxxxv mnmfi .H .uoo
Amsoflpmz wmufica ”mnmfiv
.HN-wH .mm .AH .xxxxv mnmfi .mH .poo
Ammflufluaoom mumpomuou mo xuofiuom .E< “mnmfiv
.omo-mmo .mm .AHN .xHxxxv whoa .mH .ms<
flooHoEEou mo honemso :mowhma<ucmfiufinm "mnmav
.Hmm-wmm .mm .nmfi .xHxxxu mnmfi .mH xfisw
fiomaofigu mo asao o>flu=ooxm "mnmflv
.vvm-fiqm .ma .HBH .xHxxxv mnmfi .mH 0:35
m.:mm< xupmsvcH xufinsuom ”mnmfiv
.nmm-vmm .mm .ABH .xHxxxv mnmfi .mH mash
amocoommm Hmufi> cw :m>fim no: mmnmfiv
.vq¢-mmv .mm .nvfi .xHxxxv mnmfi .H xmz

 

monommm vmuo>wuoo nowomw scaumufiamwpo
":o>wu ma: noommw guaaz cw umo>v

 

mung
HmcoflumcnmucH Hamzxoom

Away

xcmmeou :mu :wowuoa<

Aggy
.ou Hooum wcmficH

mumeEou mo nmnsmzu .m.:

Away

.00 gamma Hm:0wumcuouqu
”say

:ofiumnomnou Homum .m.=
fizmv

.mnou muouoz Hmuocou
fizmv

xcmm HMUMEmnu was

Aggy

mnsoeoz mo anon :v .H .m
awmv

xnmmeou :wu :mowumE<
cofiumuomhou <2H

oUHoEEou mo Honamcu .m.=

AZQV
.mnou muouoz Hmuocou

fizmg
mofiums< mo xcmm

 

 

monooomm Hmufi> cw coaumofiansm mo mama

naouucou mumnomnou mo omxwv

 

nu“: wmumfiuomm< snag

mamsuflmmmv
memflfififlz econ

Ammmfiu Hommsv
km: .m Emfififiwz
n.9wz .umxmv
mxofimh xofiumvonm
flfimufimmu .QEOUV
umsm .m vumzwm
mfimsvwmmmv

Sufism chomunmum .w
A.Hmz .uoxmv
nommm Hmwum
Ammmau Honmsv
mumncmumpoo .0 .m
fl.uwz .uoxmv
:ouumam vfimcoo
mamanfimmav
onflmmsm m=fl>uH
mmmmau ummmav
xmz .m amfifififlz
Ammmfiu Hmmmav
ammuso .H anon
fifimufiamu .meouv
zpoom nuu<
mmmmau Hummav
mnoom moemw
mmmmau Hummav
cmmsmfiu .3 .<

.om

.mm

.vm

.mm

.mm

.Hm

.om

.mw

.wm

.nm

.ow

.mw

.vm

.mw

 

ficofluwmom mmmauv

 

:uoomm mo pogus<

wa

158

Amocouomcou Hmcofiwmm
cgmummz Hooaom mmwcwmzm vpm>umz ”mnmav
.mom-~om .mg .flofi .Hxxxxv mnmfi .H «:35

flowmowcu mo nsfiu oweocoum mmnmav
.mnm-onm .mm .ANH .Hxxxxv mmmfi .H Hagg<
mongoeeou mo Homemcu ..;o .mouom ”mnmfiv

.mom-wmm .am .fioH .Hxxxxv mhmfi .H saga:
Aoupoeeoo

wo ponemcu flumccfiocflu Hmumonu ”mnmav

.mnm-mn~ .mm .flm .Hxxxxv mnmfi .mH .nom

fiuflouuoo mo psfiu ofieocoom menmfiv

.om-nw .am .am .Hxxxxv vnmfi .mH .>oz

Ansfiu muflmem-:mflnmcmu mqnmfiv

.om-vw .ma .flm .Hxxxxv chmfi .mH .>oz

Ammoflfiou pm: Hmcoflpmz use mvnmflv

.mN-om .mm .AH .Hxxxxv Quad .mH .puo

A.Hmu ..<.4 .Hfim: czoe “whmfiv

.won-oon .am .mqm .xxxxv «Baa .H .uuo

m.:mm< mumxcmm :mUflHoE< mvnmfiv

.Hmn-ovn .mg .fivm .xxxxv «Baa .H .uoo

A.Cmm< muovmom mapumu owmpoHou uvnmfiu

.NNN-QHN .ma .flmm .xxxxv vnmfi .mfi .umom

Amoconmmcoo Hmflocmcfim cmfivmcmu mvmmav

.moo-~oo .mg .AHN .xxxxv gum“ .mH .m:<

5.:mm< AuumsvcH mmfiuflusoom mvnmav

.Nvm-ovm .mm .HBH .xxxxv cnmfi .mfi mean

mama mo Hoocum macflmuw> mo xufimpm>wcz mummav

.ovm-mmm .mg .ABH .xxxxv quad .mH mash
Anzac quSQmm vum>pmz

usawucsou mmocflmsm Hmcofiumcfiufisz menmfiv

.Nmm-mmm .mg .ABH .xxxxv vnmfi .mH ocsn

 

monommm wouo>flaoo :uoomw :ofluwuficwwuo

Away

.muoo :oxxm

Aggy

xcmm :muumncmz ommcu

oopoEEou mo Homemcu .m.:

Asmv
.mpou Howe: mafia:

”may

musoamz mw ucom 5w .H .m
Away

.mpou :oxxm

oupoEEou mo Hmnemcu .m.:
Asmv

.mpou Hompm Eonmfinumm
Asmv

umspe w xcmm .HHH .ucou

oomeEou mo Honemcu .m.:

AZQV
«monk po>ocmz .mpmz

Ammv
.ahou Hoflmxpnu

fizmv
:oflumnomuou HHH

Ammv
.muou Hfio mfisu

 

 

":o>flo mm: numomm coax: a“ me>v

 

mmcooomw Hmuw> a“ :owuwofiansm mo ouao

mfiopucou mpmnqmwou mo omxHV

 

nu“; copmfloomm< Egg“

m.pw2 .omxmv

.95 .:H>umu .u .u
A..mz .omxmv
Honousm unmafifiz
flfimpfimmu .meouv
.un .gufiEm mofipmcu

mmmfiu ummmav
comwscx .m .m
fiHmsufimomv
opfiamnm mcfi>pH
mmmmHu ummmsv
cowowsmw .x .n
flfimpflmmo .meouv
.pw .cuflEm .mmzu
mmmmfiu Mommav
.Hw .ummz uflnmwmnm
Ammmfio Romany
mum»: xmm
fiflmufimmu .msouv
:uoom zuu<
ammmau Mommav
omsm: Hofinnmo
mmmmfiu Mommav
ucomczoh sax;
A.Hmz .uoxmv
Nuuocx pnonnmz

mmmmfiu nmmmav
ooq .m moemw

.OHH

.moH

.on

.noH

.ooH

.moH

.voH

.moH

.NoH

.HOH

.ooH

.mm

.mm

.m@

 

ncofiuflmom mmmfiov

 

cumomm mo Honps<

.Nmm

159

A

.wmn-mmn .mm .fivw .Hxxxxv mhmfi .H .900
fl.:mm< Epomumfim choflumcumucH

.vmh-fimh .ma .flmm .Hxxxxv whoa .mH .ummm

mnmfiv

.mnou mvfinnmu :oflca

QUHOEEOU MO HODENSU .m.D

Ampflmwm< mayo: you Hflucsou “flopuoo monmfiv Azmv A.gm2 .ooxmv

.qu-wmv .mm .flvfi .HHxxxxV onmfi .H km: .mpou xflwcom one Hmzucoesfim .z .2 .VNH
Apflogpmo mo asap afieocoom monmav Afimufimmu .QEOUV

.wmv-m~v .am .AQH .HHxxxxv onmfi .fi xmz .2.<.z mccox mmflmnoo .m .mNH
fluflOEHoo mo nsfiu ofleocoum monmfiv Asmv A.Hmz .uoxmv

.ofiv-cov .am .flmfi .HHxxxxU osmfl .mH Hfipm< .mpou Homum .m.: “oomm pmmmm .NNH
a.».z we gzfiu Hoocom mmmcfimsm «finesflou monmfiv Asmv A.uwz .ooxmv

.wmm-mmm .mm .AHH .HHxxxxU osmfi .mH nuumz .ou umspy mpmxcam HHH :flmupfigm nopmfi< .HNH
“mouufleeou ofleocoum pcflow “mnmfiv AZQU A.pmz .umxmv

.nwfi-mmfi .gm .Ao .HHxxxxv cumfi .H .=aw .mpou mpOgoz “muocou xcapsz mmEozk .ONH
mxpflmgm>flcs oscpsm ”mnmflv Aggy fiamsuflmmmv

.oom-fion .am .Avm .Hxxxxv mhmfi .H .puo .ou xmuox cmepmmm xo>pmz mmfimsoa .mHH
fl.>.z .wpmom monopomcou any mmhmflv Asmv A.~m2 .uoxmv

.oon-wmh .mm .flvm .Hxxxxv mnmfi .H .uoo “mane w xcmm .HfiH .pcou fimmoflz uopmfi< .mHH
A.Hmu mo Dado guflwozcoEEOU ”mnmfiv fizmv flawsnfimomv

coma“; xuuom .m .BHH
nfimpflmau .aeouv
“osmog wumsofim .OHH

fl.u.o .coumcflcmmz .nsfiu xgmpom asepczoo “mnmfiv flzmv Ammmau “muggy
.mmo-nmo .mm .ANN .Hxxxxv mnmfi .H .umom .myou Hoopm sosmfinumm Aom mflzoq .mHH
AmouufiEEou mcmmz vcm mxmz mmso: ”mnmfiv Aimv A.pwz .uoxmv
.mmo-omo .aa .AHN .Hxxxxv mnmfl .mH .ms< .ou ufigpoofim Hmumcmu mmcow wflmcflmmm .VHH
”Hoogum :oupmnz “mnmfiv AZQV fl.umz .umxmv
.mHo-oHo .mm .mom .Hxxxxv mhmfi .H .m:< .ou uappuofim Hmpmcou mmaon vfimcflmom .mHH
mouumEEou mo nonemzu ufionumo gouache “mnmdv AZQV n.um2 .umxmv
.vmm-fimm .am .flmfi .Hxxxxv mhmfi .mH xflsa .mpou muouoz Hmpocou xgmgsz masozp .NHH
Amocopomcou owmph vfinoz 0mm0fizu mmnmfiv away Ammmfiu mommav

.mmm-omm .mm .ANH .Hxxxxv mhmfi .mH «saw H0um¢>9mz HmcoflumcpoucH

onEHouuz mxooum .HHH

 

flouomom wopo>flHoo zomomw coflumNMcmwno
”co>wo mm: :uoumm coax: ca pmm>v
monomomw Hmufl> :M cofluMUflHDSQ mo mama

 

 

 

flcofiufimom mmmfiuv
zomomm mo nozus<

flHopucou oumpomuou mo omva
nu“: copmfloomm< spam

 

 

 

xox

LI ST OF REFERENCES

LIST OF REFERENCES

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Alcaly, Roger. 1975. "The Relevance of Marxian Crisis Theory." In
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Allen, Michael Patrick. 1976. "Management Control in the Large
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Andreano, Ralph, ed. 1973. Superconcentration/Supercorporation: A
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Baltzell, E. Digby. 1964. The Protestant Establishment: Aristocracy
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Baran, Paul A., and Paul M. Sweezy. 1966. Monopoly Capital: An Essay
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Barnet, Richard J., and Ronald Muller. 1975. "The Negative Effects
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Bell, Daniel. 1958. "The Power Elite--Reconsidered." American
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Bell, Daniel. 1962. The End of Ideology. New York: The Free Press.

 

Berle, Adolph, Jr., and Gardner C. Means. 1967. The Modern Corpor-
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Bernstein, Barton J., and Allen J. Matusow, eds. 1972. Twentieth-
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Beyer, William H., ed. 1966. CRC Handbook of Tables For Probability

 

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Burch, Phillip H., Jr. 1972. The Managerial Revolution Reassessed:
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Chandler, Alfred 8., Jr. 1973. Strategy and Structure: Chapters in
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Christ, Thomas. 1970. "Thematic Analysis of the American Business
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Costner, Herbert L. 1965. "Criteria for Measures of Association."
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Crotty, James, and Raford Boddy. 1975. "Who Will Plan the Planned
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Dahrendorf, Ralph. 1968. Class and Class Conflict in Industrial
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Domhoff, G. William. 1967. Who Rules America? Englewood Cliffs,
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Domhoff, G. William, ed. 1975. "Special Issue on Power Structure
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(Dreier, Peter. 1975. "Power Structure and Power Struggle." The
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Dun G Bradgtreet's Reference Book of Corporate Management, 1975—1976.
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Edwards, Richard et a1. 1971. "A Radical Approach to Economics."
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Fitch, Robert. 1971. "Who Rules the Corporations? Reply.”
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The Fortune Directory of the 500 Largest Industrial Corporations.
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Fowler, Henry. 1966. "National Interests and Multinational Business."
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Freeman, Linton C. 1968. Elementary Applied Statistics. New York:
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Galbraith, John K. 1968. The New Industrial State. New York:
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Giddens, Anthony. 1975. The Class Structure of the Advanced
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Glaser, Barney G., and Anselm L. Strauss. 1970. "Discovery of a
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With the Social World, edited by William Filstead. Chicago:
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Gold, David. 1975. "James O'Connor's The Fiscal Crisis of the State:
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Gordon, David. 1975. "Capital vs. Labor: The Current Crisis in the
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Gordon, David, ed. 1971. Problems in Political Economy: An Urban
Perspective. Lexington, Mass.: D. C. Heath 8 Co.

 

 

Gordon, Robert. 1966. Business Leadership in the Large Corporation.
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Green, Mark. 1973. "The High Cost of Monopoly." In Superconcen-
tration/Supercorporation, edited by Ralph Andreano. Andover,
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Hill, Richard. 1974. "The Coming of Post-Industrial Society." The
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Hirsch, Glenn. 1975. "Only You Can Prevent Ideological Hegemony:
The Advertising Council and Its Place in the American Power
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