The Maintenance of Privilege

from the book

Sharing the Pie

by Steve Brouwer



Where Did the Elite Come From?

The United States has always been a country with great distinctions between rich and poor. But when the nation was founded, it was much more egalitarian than any of the Old World countries from which the settlers were emigrating. Although candidates for our highest offices in the early years of the Republic were usually rich landowners, like Washington and Jefferson, the independence of the young nation and the fate of its democratic institutions depended on the existence of a new kind of "middle class" that had little power in the authoritarian aristocracies of Europe. In 1776 this middle class was made up of the large percentage of men who were small farmers, artisans, and shop keepers, people who held modest amounts of property and wealth and had control over their own work. It was only with this semblance of equality among small property holders in an agricultural society that it was possible to create the traditions of New England town meetings and a democratically elected House of Representatives.

In the parts of the United States that were not dominated by the slave economy - the Middle Atlantic and New England states - small property holders exerted influence in society because the distribution of wealth was much more equal at the time of the Revolution than it is today.

Things had clearly changed by 1870, as agrarian democracy was replaced with industrial capitalism. In the second half of the nineteenth century a rising group of capitalists and industrialists, the greatest of them known as the Robber Barons, came to dominate American life. As they ruthlessly exploited every chance to control the various sectors of American society, they sought to legitimize themselves as the true and worthy "upper class." This trend has only worsened over time, for the top 10 percent controls even more wealth today than it did in 1870.

Maintaining an Aristocracy

As the rich exercised the new power of industrial capitalism in the 1870s and 1880s, they created many institutions and social structures to protect their wealth and promote their exclusive status. What is remarkable is that most of these social props, antiquated as they seem, still survive in some form today and help maintain the aura of authority that allows the rich to dominate the rest of the population. Sociologist E. Digby Bartzell, a self-proclaimed member of the Philadelphia "aristocracy," subjected these upper-class institutions to lengthy analysis. He listed some of the important exclusive practices that arose in the 1880s and that have continued to define the upper class right up to the present day.

* The rich sent their children to elite private schools where they could be protected from association with children of other classes. Old schools like Andover, Exeter, and St. Paul's became popular in the early 1880s. Over the next twenty years, they were followed by a new crop of exclusive prep schools, including Groton, Taft, Hotchkiss, and Choate.

* The upper class began to meet to play games-usually golf and tennis-at exclusive clubs. The Country Club was first established in Brookline, Massachusetts, in 1882; one or more such clubs were soon constructed in every large metropolitan area.

* The rich escaped to exclusive summer resort communities: Northeast Harbor, and Kennebunkport, Maine; Newport, Rhode Island; and others.

* They left the cities for remote suburban residential areas: Tuxedo Park ; New York, followed by Chestnut Hill (Boston!, Shaker Heights (Cleveland), and many more.

* Parents wanted their children, graduates of the exclusive prep schools, to mix with young men of similar origins, so they sent them to the prestigious universities of Yale, Harvard, and Princeton. The list also included the rest of the Ivy League and a host of small, exclusive colleges.

* The Social Register, first published in 1887 in New York City, was a list of the families with whom the very wealthy felt it acceptable to associate; it also served as a sourcebook for debutante daughters making their social "debuts" and beginning their search for proper upper-class husbands. The Register was published in separate editions for the elite families of thirteen American cities; one large edition now covers the whole country.

* The "men's club" was born as a meeting place for men of business affairs in major American cities-for instance, the Century, Metropolitan, and Links clubs in New York; the Bohemian in San Francisco.

There were and are, of course, many other ways for the upper class to preserve its privilege. "High culture" is often purchased through large-scale philanthropic donations to symphonies, art museums, and historical organizations (some historical sites are nothing more than lavish mansions devoted to the acquisitions of one family, such as the Vanderbilts or Hearsts). In the realm of private philanthropy, about half of all money donated comes from multimillionaires. Although some charitable programs help the needy and neglected, the fact is that American philanthropy is not primarily devoted to such causes.

Charitable philanthropy directly serves the rich. Teresa Odendahl, in her book Charity Begins at Home, calculated that over two thirds of philanthropic giving goes to "elite non-profit institutions-Ivy League universities, museums, symphonies, think tanks, private hospitals, prep schools, and the like." Through such donations, which are invariably tax-deductible, "the wealthy end up funding their own interests." Of the $124 billion spent on private philanthropy in 1991, only 10 percent went for "human service" projects that serve the poor. Furthermore, as the richest citizens began making more money they began giving away less of it. In 1979 individuals who earned more than $1 million gave away about 7 percent of their after-tax income; by 1996, that figure had fallen to just 4 percent. Likewise, it should come as no surprise that in 1995, when corporate profits jumped a record of 30 percent to over $600 billion, corporate philanthropy went up only 8 percent, accounting for just $7 billion of the $144 billion given by all sources.

The Foundation of Public Opinion

The corporate rich have another philanthropic outlet that allows them to influence the political arena. G. William Domhoff, in his various studies of the upper class and the "power elite," reached the conclusion that rich donors "spent far more on their horses and dogs than they did on politics." He meant that most upper-class individuals have expensive hobbies that they find more exciting than direct involvement in electioneering. For this reason, indirect methods of concentrating the resources of the upper class have been devised; among them are the numerous elite policy-discussion groups, nonprofit foundations, and research institutes funded by the largest fortunes.

The staying power of great industrial fortunes has been formidable when they've been invested in such places as the Ford Foundation, the Rockefeller Foundation, and the Carnegie Corporation. These organizations are devoted to exploring and recommending new directions in public policy; while they generally support the agenda of the corporate world in business matters, they are often liberal on social issues regarding race and gender, a point of great consternation to many conservatives.

Among the older philanthropic organizations there are also those, such as the Lilly Foundation and the Pew Memorial Trust, that fund more conservative approaches. Just before Ronald Reagan was elected, two new foundations began delineating far-right social policies for the United States-the American Enterprise Institute and the Heritage Foundation, the latter formed by Joseph Coors and Richard Mellon Scaife, heirs to two of America's richest fortunes and supporters of the Religious Right. The Heritage Foundation differs from other charitable foundations in spending a larger portion of its budget, about 60 percent, on putting out an explicitly political message. According to the Wall Street Journal, the Heritage Foundation, "more than other think tanks, has extended its political influence by spending more money on raising funds and promoting its thoughts than on researching them."

Related to the big foundations are the policy groups such as the Council on Foreign Relations, which publishes the journal Foreign Affairs and selects promising politicians and academics to rub shoulders with America's corporate and investment leaders. One half of the group's members come from the New York City area, where they represent the economic powerhouses of finance and industry. This moderately conservative organization seeks to keep the worldwide capitalist system running smoothly and protect and expand open investment patterns around the globe. Its counterparts in influencing domestic economic policy, which are also dominated by the very biggest corporations, are the Business Council and the Council for Economic Development.

To many critics on the right and left, this kind of upper-class cooperation looks like an immensely powerful conspiracy. The far-right critique suggests that the Council on Foreign Relations is secretly selling out the United States to foreign interests. In reality it is a relatively transparent organization where elite leaders openly gather opinions about how to proceed on key issues of public policy. G. William Domhoff has explained how academic experts serve the group: "The experts involved in the policy issue were not working independently. They were working for a ruling-class organization that had hired them to provide corporate leaders with the best possible advice they could suggest for making corporate capitalism function more smoothly and expansively." The Council on Foreign Relations has operated with a much lower profile in the 1990s. Its agenda, the opening of world markets and the globalization of commerce, is now firmly established and enforced by the operations of the World Bank and the International Monetary Fund.

Members of the upper-class corporate and banking families can be quite candid about their special right to intervene in the political process. Stewart Alsop (he and his brother Joseph were products of the upper class and two of America's most influential syndicated newspaper columnists from the 1930s to the 1970s) put it this way: "I suspect that a great power needs an elite, a class of self-confident and more or less disinterested people who are accustomed to running things.''


Sharing the Pie