The Leader of the Movementarians

Part 1 of my multiple-part series on various theories of Power covers Pluralism. Pluralism, according to G. William Domhoff’s article Who Rules America?: Alternative Theoretical Views, is a “society-centric”theory of power structures based on the competition of various groups in society. Just as capitalists have to compete for customers in a free market, so various groups in society have to compete for votes in elections: “most of these ‘society-centric’ analysts have been pluralists. That means the control of the state by private interests was not to be deplored because many different groups were involved….Who controls that state?…the American public through political parties, elections, interest groups, lobbying, and the force of public opinion (as pluralists claim).”  Pluralism is based on the idea of “countervailing” powers thus preventing it from being clustered into a small group at the top of a hierarchy:

It is usually concluded by most power analysts that elected officials, along with “interest groups” like “organized labor” and “consumers,” have enough “countervailing” power to say that there is a more open, “pluralistic” distribution of power rather than one with rich people and corporations at the top. (G. William Domhoff, The Class-Domination Theory of Power).

Effectively, pluralism is a defense of the current capitalist order in America:

Pluralist theory…emphasizes that there are freedoms and electoral possibilities in democratic capitalist countries that are not present in most societies. In that sense, it is mostly a defense of the American system. American capitalist democracy is not perfect, pluralists say, but it is about as good as can be done by human beings. (G William Domhoff, Who Rules America?: Alternative Theoretical Views).

Then, in Part 2 of this series, I discuss the State Autonomy Theory of Power. State Autonomy Theory says that the state is controlled by “elected officials, appointed officials, and career employees” (G. William Domhoff, Who Rules America?: Alternative Theoretical Views).  The most important part of this theory, I think, is that it views the government as having “independence from the rest of society” (ibid). In other words, the government officials are separated from all the other groups in society.  It is as if the government had a “mind of its own,” and the government is only looking out for its own interests. The government is not some puppet of the capitalist class interests or any other group such as labor, because the government is this autonomous and independent entity:

Thanks to these powers, government officials can enter into coalitions with groups in society, whether business, labor, or political parties, if they share the same goals as the state….For the state autonomy theorists, then, the state can and does act in its own interests, which are stability and expansion. In a capitalist world, the state’s leaders do their best to keep capitalism healthy because that is in their own interests in terms of state revenues and a happy civilian population, not because they are first and foremost concerned with capitalism and capitalists. (ibid)

In addition, my Part 2 article on State Autonomy Theory discusses at some length why I suspect that an overlap does exist between the Austrian School of Economics’s views on state power and State Autonomy Theory of Power.  I stress the fact that State Autonomy Theory creates a gap between the state and the different groups in society, such as the capitalist group and the labor group.  To me, the Austrian School view on state power deviates from the State Autonomy Theory on one major point: on how state autonomy might impact capital.

When I first described State Autonomy Theory, I followed Domhoff’s description of the autonomous state supporting capitalism because this is seen as being in the state’s interests: “the state’s leaders do their best to keep capitalism healthy because that is in their own interests in terms of state revenues and a happy civilian population.”

The Austrian School’s perspective that I presented in Part 2 is based on the views of Hans-Hermann Hoppe. I argued that Hoppe’s views are generally consistent with the State Autonomy Theory because the state is seen as an entity separate from capitalism and capitalists, and so Hoppe can have his anarcho-capitalist dream of abolishing the state while keeping capitalism in existence. He can separate “good” market entrepreneurs (good capitalists) from “bad” political entrepreneurs (bad capitalists) because State Autonomy Theory lets him separate the capitalists from the state.  The big difference is that Hoppe sees the “autonomous state” as a THREAT to capitalism, not its ally. Hoppe sees the autonomous state as a direct threat to capitalism because an autonomous state will:

  1. regulate capital
  2. tax capital
  3. set itself up as a monopoly on the use of force

It turns out that Hoppe’s fears of the “autonomous state” are probably correct, at least from the point of view of capitalists. The big fear of capitalists is that the autonomous state will develop a mind and will of its own and use that independent mind to help out the working classes:

It also comes close to explaining why capitalists then and now want a small domestic state they can dominate: they were/are afraid that a large and perhaps more autonomous state might help the working class. States that help workers are states that disrupt capitalist control of labor markets, and such disruption cuts into the profits and power of capitalists. If Skocpol and other state autonomy theorists could bring themselves to see the importance of this basic conflict in shaping how capitalists view the state, then they could better understand why the American state still lacks “autonomous administrative organs.” The capitalists and their allies have bitterly opposed the development of such organs throughout American history. It is “their state,” and they aren’t going to let it get away from them without a fight. (G. William Domhoff, The Death of State Autonomy Theory, bold emphasis mine)

Do capitalists actually worry about “controlling the labor market”? That seems to be the next logical question, and that is the subject matter of the Elite Theory of Power.

The Elite Theory of Power

The purpose of the Elite Theory of Power seems to be to downplay the significance of class conflict, i.e., the conflict between capital and labor is minimized. Domhoff summarizes this theory about elites or leaders of all the large bureaucratic organizations that dominate current society as follows:

the lack of attention to class conflict leads elite theory to underestimate the differences between corporate-dominated organizations and organizations based in the working class, especially unions. The capitalists and the working class are interdependent, as elite theory stresses, which does set outer limits on what they can do to each other. Moreover, the leaders of unions do work with the leaders of corporate-oriented organizations once their unions are established, as elite theory emphasizes. (G. William Domhoff, Who Rules America?: Alternative Theoretical Views, bold emphasis mine)

So the discussion of elite theory will center around the question of whether the capitalists and the working class are interdependent or not.

My first impression of Elite Theory, based on how Domhoff describes it, is that it is an attempt to “smooth over” all the capital and labor related issues.  I will discuss this issue first.

My second impression of Elite Theory is that it helps explain modern day right wing libertarianism and especially Austrian School views on power. I will discuss my findings in this area later. But first, let’s look at labor and capital in the context of Elite Theory.

Elite Theory and Issues of Capital and Labor

Domhoff tells us that under Elite Theory, “the relationship between elites and non-elites is one of interdependence…elites are not omnipotent, and that there is no inherent opposition between elites and non-elites” (bold emphasis mine). If we take “non-elites” to mean “the working class” and “elites” to mean “capitalist owning class” then this seems to be the “harmony of interests” idea often presented by classical liberal writers. We definitely see it in Ludwig von Mises’s book Liberalism: The Classical Tradition (Liberty Fund edition), where he tells us that

in order to grasp the meaning of the doctrine of the class war, one must bear in mind that it is directed against the liberal doctrine of the harmony of the rightly understood interests of all members of a free society founded on the principle of private ownership of the means of production….Liberalism has demonstrated that the antagonism of interests, which, according to a widely prevalent opinion, is supposed to exist among different persons, groups, and strata within a society based on private ownership of the means of production, does not, in fact, occur. (125, 127)

When I did some digging into the “harmony of interests” idea, I found that it does seem to trace back to Bastiat, one of the Mises Institute “heroes” because they even have a special “Circle Bastiat” in honor of him.

We find in the Anarchist Writers, F.3.2 Can there be harmony of interests in an unequal society? a mention of this earlier formation of the “harmony of interests” doctrine:

Bastiat formulated his “harmony of interests” theory precisely when the class struggle between workers and capitalists had become a threat to the social order, when socialist ideas of all kinds (including anarchism, which Bastiat explicitly opposed) were spreading and the labour movement was organising illegally due to state bans in most countries. As such, he was propagating the notion that workers and bosses had interests in common when, in practice, it was most obviously the case they had not. What “harmony” that did exist was due to state repression of the labour movement, itself a strange necessity if labour and capital did share interests. (bold emphasis mine)

Domhoff also discusses the interaction between corporate elites and union elites, and I want to briefly talk about that aspect of capital/labor interaction under Elite Theory. Domhoff tells us in Who Rules America?: Alternative Theoretical Views that

the leaders of unions do work with the leaders of corporate-oriented organizations once their unions are established, as elite theory emphasizes.

However, many of the union leaders’ objectives remain class-based. There is major conflict between them and the corporate leaders, who see unions as deadly enemies and do everything they can to eradicate them. Moreover, the union leaders have been defeated again and again by the corporate community since the late 1930s, making them a secondary elite at best.  (bold emphasis mine)

This discussion of Elite Theory by Domhoff reminds me on a very important part of Italian anarchist history. Italy 1920: When 600,000 workers seized control of their workplacesby Tom Wetzel, tells us about the “biennio rosso” years, the “red years” in Italian history that provoked a fascist response.

The basic story in Italy begins with a “growing disaffection with the union leadership” caused by the union leadership behaving just as Power Elite theory predicts. The union became an elite force as well, disconnected from the rank-and-file memberships:

a growing aspiration for workers control, and for social transformation in an anti-capitalist direction, ran head on into the growing bureaucratization of official Italian trade-unionism….A professional union hierarchy had emerged, as permanent “representatives” of workers in regular bargaining with employers. The process of union bureaucratization, and an increasing gap between the leadership and the rank-and-file, was accelerated by the First World War. (bold emphasis mine)

We see the union leadership pretty much giving the managers what they want. I think this is an interesting point because we often hear about “profit,” “profit,” and more “profit,” when discussing these issues of class conflict, but when it comes to capital and labor “control” seems to be more important:

The employers were particularly willing to grant concessions on pay and hours in exchange for greater control over the labor process.

A similar observation was made by the Keynesian economist Michael Kalecki in his famous article Political Aspects of Full Employment where he stresses the fact that “‘discipline in the factories’ and ‘political stability’ are more appreciated than profits by business leaders” (3).

The relationship between the “leaders”–the union leadership, employer leaders, and the state leaders–begins to break down when the dissident union called the Italian Syndicalist Union or Unione Sindacale Italiana started to rebel with things such as “committees for direct action.” Things really start to spiral out of control for the capitalist “robber barons” such as the Perrone brothers, (“the Perrone brothers were the first big businessmen to start pouring funds into Mussolini’s fascist groups”), and we see the rise of fascism in response to this syndicalist movement in Italy–what amounted to a gigantic worker occupation movement.

This period of Italian history–the biennio rosso–around 1919-1920 is a period of history that really needs to be studied a lot more. It certainly is fascinating to me, and I plan to study it a lot more. One of the pivotal statements to come out of all of this is that the elites can be overthrown by the proletarian class. Antonio Gramsci said:

The social hierarchies are broken. Historic values are overthrown. The classes [that had been mere instruments of others] are become directing classes….The workers themselves must build the first historic cell of the proletarian revolution.

Elite Theory and the Austrian School

My second observation is that there seems to be a lot of overlap between the Elite Theory of Power and what is coming out of the Austrian School with regard to issues of state power, “natural elites,” hierarchy and so on. Let’s begin with G. William Domhoff’s article entitled Power Structure Research and the Hope for Democracy by focusing on the section entitled: The Return of a Revised Elite Theory. 

My plan of attack is very simple. First, I want to summarize Domhoff’s findings with regard to the Revised Elite Theory. Then I want to point out the glaring similarities between the Revised Elite Theory and the material offered by some Austrian School economists, particularly Hans Hermann Hoppe and Murray N Rothbard. What initially drew my eyes to this was the fact that there are only two sources that I have read so far that stress the “circulation of elites,” namely, Rothbard and Domhoff.

Summary of The Revised Elite Theory (from Domhoff):

  1. Anti-Marxist
  2. Anti-Egalitarian
  3. Jaundiced view of human nature
  4. Cynical about politics
  5. Elites are inevitable in large-scale and bureaucratized societies
  6. Even parties advocating socialism are controlled by the leaders at the top
  7. The “Iron Law of Oligarchy” is used to describe the undemocratic tendencies in any organization
  8. “Men willing to use force (“lions”) come to leadership and create strong organizations, to be followed by cunning caretakers (“foxes”), who are cautious and mostly try to keep a good thing going. They are soon superseded by new lions, and so the cycle goes, a “circulation of elites.”
  9. The general citizenry has little or no impact and apparently does not deserve to have any
  10. “Elites merely circulate between lions and foxes while feeding on the sheep or masses.”
  11. Elites are seen as the leaders within organizations
  12. “Variations in elite structure and functioning are very important in determining the general nature of a society, such as its openness to compromises and its use of elections to settle policy disputes.”
  13. “The relationship between elites and non-elites is one of interdependence….elites are not omnipotent, and that there is no inherent opposition between elites and non-elites.”
  14. Elite theory argues that anarchy is impossible. It denies that non-hierarchical societies are possible.

Now consider the opening section of Murray N Rothbard’s paper Bureaucracy and the Civil Service in the United Statesand note how Rothbard clearly is writing in a Power Elite style (with its implied criticisms of democracy and libertarian socialism):

One of the most important sociological laws is the “Iron Law of Oligarchy”: every field of human endeavor, every kind of organization, will always be led by a relatively small elite. This condition will hold sway everywhere…In every area, the persons most interested and able, those most adaptable to or suited for the activity, will constitute the leading elite. Time and again, utopian attempts to form institutions or societies exempt from the Iron Law have fallen prey to that law…what we should try to achieve is not the absurd and anti-natural goal of eradicating such elites, but, in Pareto’s term, for the elites to “circulate.” Do these elites circulate or do they become entrenched? The free market economy provides an unparalleled example of a continuing healthy circulation of elites. (bold emphasis mine)

Similarly, if we look at another Austrian school economist, Hans-Hermann Hoppe, in his article entitled Natural Elites, Intellectuals, and the State, we find a similar resignation towards the inevitability of a small leading group of elites (I guess that the point is supposed to be that Marx was wrong when he claimed that socialism was “inevitable” because it turns out that elitist and hierarchical capitalism is, in fact, “inevitable”):

According to his view, states are the outgrowth of natural elites: the natural outcome of voluntary transactions between private property owners is non-egalitarian, hierarchical, and elitist. In every society, a few individuals acquire the status of an elite through talent. Due to superior achievements of wealth, wisdom, and bravery, these individuals come to possess natural authority, and their opinions and judgments enjoy wide-spread respect. Moreover, because of selective mating, marriage, and the laws of civil and genetic inheritance, positions of natural authority are likely to be passed on within a few noble families. It is to the heads of these families with long-established records of superior achievement, farsightedness, and exemplary personal conduct that men turn to with their conflicts and complaints against each other. These leaders of the natural elite act as judges and peacemakers, often free of charge out of a sense of duty expected of a person of authority or out of concern for civil justice as a privately produced “public good.” (bold emphasis mine)

In Part 4 of my series on power structures, I plan to look at Elite Theory in more detail, to see how anarchists (i.e., libertarian socialists, libertarian communists, mutualists, not anarcho-capitalists) might reply to this “inevitability of hierarchy and capitalism” thesis that is coming out of the Classical Elite and Revised Elite Theories.