The World of America’s Most Wealthy

The World of America’s Most Wealthy A Magical Mystery Tour

Who Are the Wealthiest Americans? • David Koch $19 Billion • Charles Koch $19 Billion • Michael Bloomberg $20 Billion • Christy Walton and Family $23.2 Billion • Alice Walton $23.2 Billion • S. Robson Walton $23.3 Billion • Jim Walton $23.4 Billion • Lawrence Ellison $27 Billion • Warren Buffet $50 Billion • Bill Gates $57 Billion

What can $57,000,000,000 buy?

114,000 Homes (at $500,000 apiece) Enough to purchase a home for every man, woman, and child in Eau Claire, Chippewa Falls, and Altoona… combined.

285,000 Harvard Educations(at $200,000 apiece) Enough to educate every single man, woman, and child from Eau Claire, Chippewa, Dunn, Pepin, and St. Croix…counties.

633,333 Porsche 911 Carrera’s (at $90,000 apiece) Enough to buy a Porsche for every man, woman, and child in the city of Milwaukee… and Eau Claire… and Chippewa Falls

Of 195 nations in the world… $57 Billion is greater than the GDP of 123 of them.

If you spent $1,000,000 a day… It would take you more than 156 years to spend $57,000,000,000

The Classes • The upper and corporate classes • Who are the most wealthy? • Characteristics of individuals in the upper and corporate classes • Is there an elite “ruling class” in the U.S.?

Upper Class 1% Capitalist Class Corporate Class 14% Upper Middle Class Gilbert-Kahl Model of Class Structure (with modifications)* Mean Income 30% Middle Class Median Income 30% Working Class 13% Working Poor Poverty Line Underclass 12%

Characteristics of the Upper Class (Domhoff) • A listing in one of the various blue books or the Social Register • Any male member of the family attending one of a limited number of exclusive prep schools. • Any male member of the family belonging to one of the exclusive social clubs. • Any female member of the family belonging to an exclusive club or attending an exclusive prep school or • If the “father was a millionaire entrepreneur or $100,000-a-year corporation executive or corporation lawyer” and the person attended an elite prep school or belonged to an exclusive club on an extended list of these schools and clubs.

Characteristics of the Upper Class (Baltzell) • Descended from a small pool of successful individuals • Very wealthy (old money). • Attend the same schools and clubs and tend to intermarry. • Maintain a “distinctive” style of life and a high degree of group solidarity.

Characteristics of the Corporate Class • Part of an interpersonal web of relations at the top of large corporations. • Influence is not found in personal wealth (though many are wealthy) but in control of corporate resources. • Members sit on boards of directors of large corporations. • Many have moved in and out of halls of government. • Personal interests lie not just with one corporation but with the structure of corporate concentration as a whole

How Economic Power Became Concentrated (How is the Corporate Class Possible?) • Increased size and power of major corporations. • Concentrated control of stock in major corporations by other corporations • Network of interlocking directorates that ties top corporate personnel together.

Interlocking Directorates Board of Directors for Exxon Oil Board of Directors for Shell Oil ILLEGAL! Direct Interlock Board of Directors for Shell Oil Board of Directors for Exxon Oil Board of Directors for Coca Cola Indirect Interlock

Elite Power? • Elite Theory • Functional Elite Theory • Critical Elite Theory • Class Theory • Pluralist Theory

Do We Have A Power Elite? • Domhoff on Elite Power (Do the wealthy have the power to control us?) • Who Benefits? (Those who own and control the most resources have the most power.) • Who Governs? (Those who hold the most important positions in government and other important institutions have the most power.) • Who Wins? (When class conflict occurs, the winning side has more power.) • Mills on Elite Cohesion (Do the wealthy have common interests that unify those at the top?) • Social Psychological Mechanisms (Similar backgrounds lead to common interests.) • Structural Mechanisms (Institutional connections make it easy for the wealthy to move in and out of institutions.)

Who Benefits? Source: “Personal Wealth, 2001,” (http://www.irs.gov/pub/irs-soi/01pwart.pdf)

Who Benefits? “In 2003 the top 1 percent of households owned 57.5 percent of corporate wealth, up from 53.4 percent the year before, according to a Congressional Budget Office analysis of the latest income tax data. The top group's share of corporate wealth has grown by half since 1991, when it was 38.7 percent.” New York Times (January 29, 2006)

Corporation Assets and Income: Relatively Few Corporations Have Most Income and Assets Source: Internal Revenue Service Statistics of Income, Returns of Active Corporations, September 2004. Latest available figures are for tax year 2001 based on returns with accounting periods ending July 2001 through June 2002 and posted to the Internal Revenue Service Business Master File from the beginning of July 2001 through the end of June 2003.

Bush Cabinet Appointees

Social Psychological Mechanisms

Who Wins? Shares of Aggregate Income by Income Definition (2000) Source: Kerbo 2005.

Problems with Corporate Interlocks • Reduces competition between corporations • Represents outside influences over the corporation • Provides a means of sharing information about corporate plans and operations • Helps provide unity among top corporate officials in the economy • Helps provide unity in corporate dealings with the government

Pluralist Model • Potential power is widely scattered throughout society. • At least some resources are available to everyone. • At any time the amount of potential power exceeds the amount of actual power.

Characteristics of Pluralism • Power comes from many sources • These groups are politically autonomous (independent) and can work for any desired outcome. • There is much competition between groups that tends to cancel out the overall power of any one particular group. • These political groups are open (not closed) and constantly evolving. • Most groups rely on public opinion as a vital resource in fulfilling their agenda. • There is widespread agreement with regards to the rules of the game (voting laws, rights to vote, majority rule, etc.) which holds the overall system together.

Group Activity on Poverty and the Distribution of Resources • What do you consider a right as opposed to a privilege? • What responsibility, if any does the government have to the poor; that is, should there be government programs to help the poor? • Do the rich have a greater obligation to help/support the poor through things such as higher taxes, hiring the poor to work in their businesses, etc? • What, if anything, will you do to solve the freerider problem? • How much inequality of condition, if any, will be tolerated in your plan? • Will you allow inheritance of resources? • Will you distinguish between the worthy poor and the unworthy poor?

The World of America’s Most Wealthy