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THE FRACTURING OF THE AMERICAN CORPORATE ELITE by Mark S. Mizruchi

THE FRACTURING OF THE AMERICAN CORPORATE ELITE

By Mark S. Mizruchi

Pub Date: May 7th, 2013
ISBN: 978-0-674-07299-2
Publisher: Harvard Univ.

An expert in sociology and organizational methods challenges the view that business has too much influence on government.

Mizruchi (Sociology and Business Administration/Univ. of Michigan; The Structure of Corporate Political Action, 1992) argues that somewhere between the second Nixon administration and the first Reagan administration, the American business community began to go seriously off track. The author claims that business has abdicated responsibility for developing and advocating practical solutions to national, as opposed to purely sectional, interests. His view will perhaps come as a shock to those accustomed to the ideological divides of our current political landscape. Mizruchi shows how, in the past, businesses had been prepared to cooperate with both government and labor organizations in the common pursuit of national objectives. The New Deal was not the beginning of government involvement in business. Rather, government organized the corporate form to facilitate its purpose of canal construction and then railroad expansion. World War I was a high-water mark of government involvement, and business under Eisenhower was not ideologically averse to the continuation of the New Deal. Mizruchi takes up the question of interlocking directorates as indicative of the formation of corporate elites and discusses how financial institutions and groups have affected particular sectors like manufacturing and trade groups. The author traces two opposing conceptions of the corporation in economic theory and law: the free market theory, which accords primacy to transactions, freely determined between individuals, not corporations, and the view that a corporation is an organization with rules and goals of its own. Emphasis on shareholders' returns has strengthened the first and undermined the capacities of the second through weakening management.

Intriguing reading for an academic audience.