Corporate Political Power and Class Inequality in the Twenty-First Century, 1980-2018

• In Event: 3554 - States and Political Power

Abstract

Virtually every measure of U.S. inequality shows that the distribution of income and wealth is at historic high levels. Unlike the previous record high levels of inequality during the Great Depression, corporate profits are high, the unemployment rate is low, and some corporations report labor shortages. This paper addresses the following question: How did the reconfiguration of organizational and political-legal arrangements in the late 20th and early 21st centuries contribute to the rapid rise in class inequality?

To answer this question, the paper examines how corporations mobilized political to redefine organizational and political arrangements in ways that affect class-based inequality. The analysis moves beyond traditional stratification research that focuses on individuals’ characteristics to a focus on social structural changes. This paper also moves beyond prevailing explanations such as the transition from a manufacturing to a finance based economy, technological innovations, and Piketty and his colleagues who attribute the high rate of inequality in the 20th century to the distinction between capital income (e.g., dividends, interest, profits, rental property and royalties) and labor income.

While recognizing the importance of current structural explanations, the analysis examines a broader range of corporate-states relations that contribute to class-based inequality. Particular attention is given to the emergence of the managerial class, how those who control corporations use the resources held in them to advance their economic interest politically, changes in tax policy, legal changes that undermine labor’s capacity to mobilize politically, and the distribution of greater rewards to those who engage in value extraction over those who engage in value creation.

Author

• Harland Prechel, Texas A&M University