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On the verge of World War I, three American banks helddominant positions in the corporate networkJP Morgan Chase board, 2001: plus ça change In 1912, JP Morgan’s partners collectively held 72directorships on 47 corporate boards First National of New York executives served on 49boards National City Bank executives served on 48 boards 1914: in the face of populist pressure and imminentlegislation, JP Morgan’s men resigned directorshipsin 30 of their “subject” companies9Mid-century theorists linked business networksexplicitly to political power10Network analysis shows that corporate elites reallydo all know each other GOLDEN WEST FINANCIAL CORPONEOK INC NEWWESTERN RESOURCES INC KSABM INDUSTRIES INCMURPHY OIL CORPREGIONS FINANCIAL CORPC. WrightMills, 1956“By the power elite, we refer to thosepolitical, economic, and military circleswhich, as an intricate set of overlappingcliques, share decisions having at leastnational consequences”ALASKA AIR GROUP INCAVISTA CORPSCHOLASTIC CORPThe Fortune1000 board ofdirectorsnetworkLANDSTAR SYSTEM INCTESORO PETROLEUM CORPPERFORMANCE FOOD GROUP COGEORGIA GULF CORPUNIVERSAL FOREST PRODUCTS INCTECH DATA CORPNATIONAL FUEL GAS COQUINTILES TRANSNATIONAL CORPWATSCO INCPROVIDENT FINANCIAL GROUP INCNASH FINCH COOLD KENT FINANCIAL CORPPINNACLE WEST CAPITAL CORPSILGAN HOLDINGS INCCHAMPION ENTERPRISES INCM&T BANK CORPGENERAL CABLE CORP NEWDEVON ENERGY CORP NEWJDS UNIPHASE CORPFAIRCHILD SEMICONDUCTOR INTL INCUNITED STATIONERS INCSERVICE CORP INTERNATIONALHUB GROUP INCPAYCHEX INCSIERRA PACIFIC RESOURCESGENESIS HEALTH VENTURES INCFOAMEX INTERNATIONAL INCPUGET ENERGY INCRGS ENERGY GROUP INCGREENPOINT FINANCIAL CORPPAYLESS CASHWAYS INCPHAR MOR INCPSS WORLD MEDICAL INCJABIL CIRCUIT INCUNIVERSAL CORPEMCOR GROUP INCVALERO ENERGY CORP NEWPENTAIR INCMICRON TECHNOLOGY INCMITCHELL ENERGY & DEVELOPMENT CORPMILACRON INCABERCROMBIE & FITCH CO DESTEELCASE INCCOVENTRY HEALTH CARE INCMASCO CORPLANDAMERICA FINANCIAL GROUP INCKELLY SERVICES INCGREAT LAKES CHEMICAL CORPTYSON FOODS INCPUBLIC SERVICE CO OF NEW MEXICOMAXXAM INCALTERA CORPMANPOWER INCMICROAGE INCSPARTAN STORES INCDEL WEBB CORPWHOLE FOODS MARKET INCALLIANT ENERGY CORPPERKINELMER INCHARTFORD FINANCIAL SERVICES GROUP ILEAR CORPMARSHALL & ILSLEY CORPINTERNATIONAL MULTIFOODS CORPPATHMARK STORES INCEMC CORPQUANTA SERVICES INCTELEPHONE & DATA SYSTEMS INC DEWHX CORPINTERSTATE BAKERIES CORPDIEBOLD INCLAM RESEARCH CORPTORO COCYPRESS SEMICONDUCTOR CORPPOLARIS INDUSTRIES INCTELLABS INCNIAGARA MOHAWK HOLDINGS INCBORDERS GROUP INC MIWESTERN DIGITAL CORPFURNITURE BRANDS INTERNATIONAL INCMARK IV INDUSTRIES INCADMINISTAFF INCVECTREN CORPBROADWING INCWILLAMETTE INDUSTRIES INCMERISEL INCDTE ENERGY COCARDINAL HEALTH INCWHIRLPOOL CORPFLOWSERVE CORPE W SCRIPPS CO OHMOHAWK INDUSTRIES INCSMURFIT STONE CONTAINER CORPAMERICAN ELECTRIC POWER CO INCHEILIG MEYERS COKENNAMETAL INCLSI LOGIC CORPHEALTH NET INCWESCO INTERNATIONAL INCTERADYNE INCSUPERVALU INCWORLDCOM INC NEWFOOTSTAR INCREYNOLDS & REYNOLDS JACOBSCOENGINEERING GROUP INCUNIFI INCQWEST COMMUNICATIONS INTERNATIONALAGCO CORP DEMANDALAY RESORT GROUPSTANDARD REGISTER CODOLLAR GENERAL CORPRITE AID CORPGALILEO INTERNATIONAL INCANIXTER INTERNATIONAL INCMCN ENERGY GROUP INCPRINCIPAL FINANCIAL GROUP INCAMERICAN AXLE & MANUFACTURING HLDGSCALPINE CORPSMITHFIELD FOODS INCIMATION CORPFMC CORPVOLT INFORMATION SCIENCES INCCABLEVISION SYSTEMS CORP NEWDQEOCCIDENTAL PETROLEUM CORPLINENSUNITED AUTO GROUPINCN THINGS INCAK STEEL HOLDING CORPSTATE STREET CORPLIZ CLAIBORNE INCMELLON FINANCIAL CORPA O SMITH CORPVALSPAR CORPALBERTSON S INCHEALTHSOUTH CORPRYLAND GROUP INCITT INDUSTRIES INCLA Z BOY INCHILLENBRAND INDUSTRIES INCHUMANA INCBANTA CORPNAVISTAR INTERNATIONAL CORPTRIGON HEALTHCARE INCSUNGARD DATA SYSTEMS INCMOLEX INCJ B HUNT TRANSPORT SERVICESRELIANTINCENERGY INCKINDRED HEALTHCARE INCSAFECOHARRAH S ENTERTAINMENTINCCORPFIFTH THIRD BANCORPTECO ENERGY INCPREMCOR USA INCTIMKEN COUTILICORP UNITED INCUAL CORPBIG LOTS INCPOLO RALPH LAUREN CORPMODIS PROFESSIONAL SERVICES INCRAYTHEON CO NEWBANK ONE CORPDOW CHEMICAL COABBOTT LABORATORIESUNOCAL CORPALLIED WASTE INDUSTRIES INCH & R BLOCK INCCINTAS CORPST PAUL COS INCROHM & HAAS COROCKWELL INTERNATIONAL CORP NEWU S BANCORP DEWASTE MANAGEMENT INC NEWMBNA CORPPOLYONE CORPCLOROX COTEXACO INC SARA LEE CORPEATON CORPEDISON INTERNATIONALDOVER CORPTELEFLEX INCBERGEN BRUNSWIG CORPMCLEODUSA INCAMERADA HESS CORPVIASYSTEMS GROUP INCARAMARK CORPWACHOVIA CORP NEWAMEREN CORPLINCOLN NATIONAL CORPFRONTIER OIL CORP WYPRIMEDIA INCCOLGATE PALMOLIVE COBANK OF AMERICA CORPROADWAY CORPDUN & BRADSTREET CORP DE NEWWINN DIXIE STORES INCJONES APPAREL GROUP INCEL PASO CORPAMERICAN GREETINGS CORPAUTONATION INC DEANNTAYLOR STORES CORPYELLOW CORPMERRILL LYNCH & CO INCQUORUM HEALTH GROUP INCNICOR INCKEYSPAN CORPRALSTON PURINA COSOUTHERN COCENTEX CORPSCHERING PLOUGH CORPAMES DEPT STORES INCENTERGY CORP DEPAYLESS SHOESOURCE INC NEWPROGRESSIVE CORPBEAR STEARNS COS INCPRICELINE COM INCAPPLERA CORPPEP BOYS MANNY MOE & JACKCIT GROUP INCBORDEN INCPROVIDIAN FINANCIAL CORPNORTHROP GRUMMANCORPTJX COSINCNEWTRW INCBOEING COOMNICOM GROUP INCSUNTRUST BANKSINC COLA ENTERPRISES INCCOCADIME BANCORP INCCOX COMMUNICATIONS INC DEBECTON DICKINSON & COMERCK & CO INCUS AIRWAYS GROUP INCMANOR CARE INC NEWAUTOMATIC DATAFLEMINGPROCESSINGCOS INCINCMARSH & MCLENNAN COS INCLOWE S COS INCLITTON INDUSTRIES INCENTERASYS NETWORKS INCTRIAD HOSPITALS INCAMERICAN WATER WORKS CO INCDYNEGY INC ILBOISE CASCADE CORPDIAL CORP NEWCENDANT CORPBELLSOUTH CORPDELTA AIR LINES INCAOL TIME WARNER INCFPL GROUP INCKEYCORP OHIO MCKESSON CORP DENACCO INDUSTRIES INCDIMON INCAPPLE COMPUTER INCUNITRIN INCKINDER MORGAN INC NEWTRANSOCEAN SEDCO FOREX INCWARNACO GROUP INCSAFEWAY INCGATX CORPAMR CORPMAY DEPARTMENT STORES COBAUSCH & LOMB INCCOCA COLA COANHEUSER BUSCH COS INCPITTSTON COLEGG MASON INCANALOG DEVICES INCAMSOUTH BANCORPORATIONSAFEGUARD SCIENTIFICS INCALLEGHENY TECHNOLOGIES INCAMERICAN EXPRESS COAMERICAN INTERNATIONAL GROUP INCCIGNA CORPKNIGHT RIDDER INCOWENS CORNINGBELO CORPVULCAN MATERIALS COFLUOR CORP NEWNORFOLK SOUTHERN CORPSTILWELL FINANCIAL INCGENTEK INCCOMMUNITY HEALTH SYSTEMS INCREVLONW W GRAINGERINCINCEOG RESOURCES INCSCIENTIFIC ATLANTAINCLUCENT TECHNOLOGIESINCPACCAR INCKROGER COTEXAS INSTRUMENTS INCEQUIFAX INCHARRIS CORP FLAWASHINGTON POST CONATIONAL CITY CORPENGELHARD CORPUNOVA INCMETRIS COS INCPOPULAR INCAMPHENOL CORPVERIZON COMMUNICATIONSFOOTINC LOCKER INCGOODYEAR TIRE & RUBBER CO FEDERAL HOME LOAN MORTGAGE CORPCORPUNION PACIFIC CORPBURLINGTONNORTHERNSANTAFE CORPGOODRICHPARKERHANNIFINCORPBLACK & DECKERCORPLANIER WORLDWIDE INCBRUNSWICK CORPUNISYS CORPKERR MCGEE CORPGRANITE CONSTRUCTION INCOWENS ILLINOIS INCNEWELL RUBBERMAID INCDUKE ENERGY CORPCIRCUIT CITY STORES INCQUAKER OATS COBANK OF NEW YORKCO INCCLARK CORPKIMBERLYRYDER SYSTEM INCFLOWERS FOODS INCCOORS COTRINITY INDUSTRIESADOLPHINCIT GROUP INCSPORTS AUTHORITY INCLONGS DRUG STORES CORPINCREEBOK INTERNATIONAL LTDSBC COMMUNICATIONS INCCHARLES SCHWAB CORPPG&E CORPTIFFANY & COJOHNSON & JOHNSONUNITEDHEALTH GROUP INCLUBRIZOL CORPHCA INC NEWDOMINION RESOURCES INC VAWESTVACO CORPHASBRO INCWYNDHAM INTERNATIONAL INCBMC SOFTWARE INCINTERPUBLIC GROUP OF COS INCCOMFORT SYSTEMS USA INCAON CORPBAXTER INTERNATIONALDPL INCSEARS ROEBUCK & COFEDEX CORPKELLOGG COBOSTON SCIENTIFIC CORPUNION CARBIDE CORP NEWMORGAN STANLEY DEAN WITTER & CO CATERPILLAR INCPROCTER & GAMBLE CODELL COMPUTER CORPSUNOCO INCCOOPER INDUSTRIES INCGENERAL MILLS INCGEORGIA PACIFICCORP RAND COINGERSOLLGENERAL DYNAMICS CORPBRISTOL MYERS SQUIBB COSYSCO CORPMATTEL INCWESTPOINT STEVENS INCUSA EDUCATION INCCSK AUTO CORPBEST BUY CO INCOGE ENERGY CORPLEGGETT & PLATT INCV F CORPINTERNATIONAL PAPER COINTERNATIONAL BUSINESS MACHINES CORCONOCO INCNATIONAL SERVICE INDUSTRIES INCWM WRIGLEY JR COCH2M HILL COMPANIES LTDNOBLE AFFILIATES INCAUTOZONE INCQUEST DIAGNOSTICS INCSTORAGE TECHNOLOGY CORPPRAXAIR INCMCDONALD S CORPFORD MOTOR CODARDEN RESTAURANTS INCD & K HEALTHCARE RESOURCES INCUNIVERSAL HEALTH SERVICES INCUGI CORP PAHARMAN INTERNATIONAL INDUSTRIES INCDANA CORPJ P MORGAN CHASE & COMGM MIRAGEMEAD CORPGENERAL MOTORS CORPAVON PRODUCTS INCAMERICA WEST HOLDINGS CORPSTRYKER CORPHAWAIIAN ELECTRIC INDUSTRIES INCGOLDMAN SACHS GROUP INCGANNETTSCIENCECO INC APPLICATIONS INTERNATIONALESTEE LAUDER COS INCWALT DISNEY CO NEWMOTOROLA INCPOTOMAC ELECTRIC POWER COCONEXANT SYSTEMS INCPEPSIAMERICAS INC NEWFEDERATED DEPARTMENT STORES INC NEWMINNESOTA MINING & MANUFACTURING COHARLEY DAVIDSON INCDYNCORPMARRIOTT INTERNATIONAL INC NEWKMART CORPMICROSOFT CORPALLSTATE CORPELECTRONIC DATA SYSTEMS CORPSUMMIT BANCORP NJW R BERKLEY CORPPACTIV CORPORACLE CORP DEUSG CORPARMSTRONG WORLD INDUSTRIES INCASHLAND INCARROW ELECTRONICS INCPACKAGING CORP OF AMERICAOWENS & MINOR INC NEWCDI CORPSNAP ON INCVIACOM INCHONEYWELL INTERNATIONAL INCXEROX CORPPNC FINANCIAL SERVICES GROUP INCJ C PENNEY CO INCGENERAL ELECTRIC COPHELPS DODGE CORPPEPSICO INCPEPSI BOTTLING GROUP INCTHOMAS & BETTS CORPGPU INCEXELON CORPWEYERHAEUSER COEMERSON ELECTRIC COTEXTRON INCCITIGROUP INCSERVICEMASTER COTRANSMONTAIGNE INCAMERICAN STANDARD COS INCPUBLIC SERVICE ENTERPRISE GROUP INCUSEC INCLEXMARK INTERNATIONAL INCCHUBB CORPPHILIP MORRIS COS INCTEMPLE INLAND INCEASTMAN KODAK COKB HOMEKELLWOOD COBRIGHTPOINT INCBRM HOLDINGS INCUNITED TECHNOLOGIES CORPCVS CORPPFIZER INCFLEETBOSTON FINANCIAL CORPPETSMART INCHARCOURT GENERAL INCW R GRACE & CO NEWIMC GLOBAL INCCLEAR CHANNEL COMMUNICATIONS INCCONVERGYS CORPTARGET CORPHOUSEHOLD INTERNATIONALCSX CORP INCCUMMINS INCSTAPLES INCCONTINENTAL AIRLINES INCSTANLEY WORKSWASHINGTON MUTUAL INCFINOVA GROUP INCRADIOSHACK CORPDOW JONES & CO INCNORTHERN TRUST CORPE I DU PONT DE NEMOURS & COCOMCAST CORPAUTOLIV INCWALTER INDUSTRIES INCTRICON GLOBAL RESTAURANTS INCEXXON MOBIL CORPNEWMONT MINING CORPHOME DEPOT INCALCOA INCAT&T CORPJOHN HANCOCK FINANCIAL SERVICES INCLEHMAN BROTHERS HOLDINGS INCAES CORPINTERNATIONAL FLAVORS & FRAGRANCESTECUMSEH PRODUCTS COSTANCORP FINANCIAL GROUP INCAMERISOURCE HEALTH CORPWALGREEN COCAMPBELL SOUP COHERSHEY FOODS CORPAIR PRODUCTS & CHEMICALS INCINGRAM MICRO INCHERMAN MILLER INCAETNA INC PAILLINOIS TOOL WORKS INCWAL MART STORES INCSOLUTIA INCHORMEL FOODS CORPLIMITED INCTHERMO ELECTRON CORPMDU RESOURCES GROUP INCTRANS WORLD AIRLINES INCMERITOR AUTOMOTIVE INCCRANE COCONSTELLATION ENERGY GROUP INCWISCONSIN ENERGY CORPNEW YORK TIMES CORYERSON TULL INC NEWCHARMING SHOPPES INCTEKTRONIX INCLOUISIANA PACIFIC CORPIBP INCTENNECO AUTOMOTIVE INCKOHL S CORPCOUNTRYWIDE CREDIT INDUSTRIES INCZIONS BANCORPORATIONSTARBUCKS CORPUNUMPROVIDENT CORPCABOT CORPJOHNSON CONTROLSINCCORPSPRINTECOLAB INCTRIBUNE COPHARMACIA CORP DESAKS INCCADENCE DESIGN SYSTEMS INCOHIO CASUALTY CORPUSFREIGHTWAYS CORPBAKER HUGHES INCMONY GROUP INCPITNEY BOWES INCBRIGGS & STRATTON CORPNEWPORT NEWS SHIPBUILDING INCSHERWIN WILLIAMS COFIRST TENNESSEE NATIONAL CORPRUSSELL CORPUNITED RENTALS INC NEWSERVICE MERCHANDISE CO INCSHOPKO STORES INCGREY GLOBAL GROUP INCGENTIVA HEALTH SERVICES INCCORNING INCSCI SYSTEMS INCNCR CORPGRAND UNION CO“As an elite, it is not organized, althoughits members often seem to know oneanother, seem quite naturally to worktogether, and share many organizationsin common.”IMS HEALTH INCEQUITABLE RESOURCES INCAMERICAN HOME PRODUCTS CORPPOLAROID CORPALLMERICA FINANCIAL CORPNEIMAN MARCUS GROUP INCKLA TENCOR CORPJO ANN STORES INCCERIDIAN CORP NEWMAYTAG CORPWALLACE COMPUTER SERVICES INCCMS ENERGY CORPADVANTICA RESTAURANT GROUP INCXCEL ENERGY INCDEERE & COWILLIAMS COMPANIESINC CHEMICAL COEASTMANFEDERAL MOGUL CORPNORDSTROM INCWELLPOINT HEALTH NETWORKS INC NEWREADER S DIGEST ASSOCIATION INCHUBBELLCOLLINSINC& AIKMAN CORP NEWLYONDELL CHEMICAL COCOMERICA INCON SEMICONDUCTOR CORPR R DONNELLEY & SONS COWELLS FARGO & CO NEWAVNET INCDEL MONTE FOODS COCINERGY CORPSEQUA CORPMCCORMICK & CO INC3COM CORPENCOMPASS SERVICES CORPOXFORD HEALTH PLANS INCJOY GLOBAL INCCBRL GROUP INCCOMMERCIAL METALS COLENNOX INTERNATIONAL INCSTATER BROS HOLDINGS INCHALLIBURTON COSEALED AIR CORPAMGENNEW INCDELPHI AUTOMOTIVE SYSTEMS CORPCLAYTON HOMES INCOSHKOSH TRUCK CORPALLEGHENY ENERGY INCQUESTAR CORPINDUSTRIES INCSTARWOOD HOTELS & RESORTSPPGWORLDWIDEWGL HOLDINGS INCNSTARSONOCO PRODUCTS COPROGRESS ENERGY INCNORTHWEST AIRLINES CORP NEWDEAN FOODS COTRUE NORTH COMMUNICATIONS INCSEMPRA ENERGYUSA NETWORKS INCENRON CORP ORLOCKHEED MARTIN CORPBETHLEHEM STEEL CORPLTV CORPFIRSTENERGY CORPPHILLIPS PETROLEUM COSUN MICROSYSTEMS INCBRINKER INTERNATIONAL INCRELIANCEGROUP COHOLDINGS INCGILLETTEENERGIZER HOLDINGS INCTXU CORPALLERGAN INCCOMPUTER SCIENCES CORPVIAD CORPGENUINE PARTS COOFFICE DEPOT INCAMAZON COM INCCHEVRONTEXACO CORPFISHER SCIENTIFIC INTERNATIONAL INCMETALS USA INCUNITED PARCEL SERVICE INCCISCO SYSTEMS INCCOMPAQ COMPUTER CORPELI LILLY & COGAP INCPETER KIEWIT SONS INC NEWWEATHERFORD INTERNATIONAL INC NEWCONSOLIDATED EDISON INCSYNOVUS FINANCIAL CORPSODEXHO MARRIOTT SERVICES INCLOEWS CORPNISOURCE INCCONAGRA FOODS INCTORCHMARK CORPTRANS WORLD ENTERTAINMENT CORPWACKENHUT CORPREPUBLIC SERVICES INCRAYONIER INCNIKE INCCB RICHARD ELLIS SERVICES INCALLTEL CORPAMERICAN GENERAL CORPURS CORPYORK INTERNATIONAL CORPULTRAMAR DIAMOND SHAMROCK CORPINTEL CORPCHARTER ONE FINANCIAL INCBURLINGTON INDUSTRIES INCELECTRONIC ARTS INCPENNZOIL QUAKER STATE COFERRO CORPBROWN SHOE CO INCGOLDEN STATE BANCORP INCHON INDUSTRIES INCFIRST DATA CORPCORN PRODUCTS INTERNATIONAL INCPHILLIPS VAN HEUSEN CORPOAKWOOD HOMES CORPCARLISLE COMPANIES INCIKON OFFICE SOLUTIONS INCARCHER DANIELS MIDLAND COHILTON HOTELS CORPBEVERLY ENTERPRISES INC NEWAMERICAN FINANCIAL GROUP INC NEWAPPLIED INDUSTRIAL TECHNOLOGIES INCEXPRESS SCRIPTS INCCONSECO INCAVERY DENNISON CORPCONSOLIDATED FREIGHTWAYS CORPFIRST AMERICAN CORPPRECISION CASTPARTS CORPBORGWARNER INCBECKMAN COULTER INCRPM INCDOLLAR TREE STORES INCIMPERIAL SUGAR CO TXBERKSHIRE HATHAWAY INC NEWTOYS R US INC NEWBALL CORPR J REYNOLDS TOBACCO HOLDINGS INCRUDDICK CORPAMERICAN MANAGEMENTNEXTELSYSTEMSCOMMUNICATIONSINCINC NEWCOOPER TIRE & RUBBER CODST SYSTEMS INCBANKNORTH GROUP INC MECAREMARK RX INCANADARKO PETROLEUM CORPAFLAC INCPROTECTIVE LIFE CORPNUCOR CORPROCK TENN COUST INCGROUP 1 AUTOMOTIVE INCL 3 COMMUNICATIONS HOLDINGS INC BURLINGTON RESOURCES INCADELPHIA COMMUNICATIONS CORPOFFICEMAX INCE TRADEGROUP INCLABORATORY CORP OF AMERICAHOLDINGSBROWN FORMAN CORPSTANDARD PACIFIC CORPCHIQUITA BRANDS INTERNATIONAL INCFREEPORT MCMORAN COPPER & GOLD INCMILLENNIUM CHEMICALS INCCOMDISCO INCNORTHWESTERN CORPFRANKLIN RESOURCES INCPARK PLACE ENTERTAINMENT CORPWENDY S INTERNATIONAL INCTENET HEALTHCARE CORPDELUXE CORPHEWLETT PACKARD COCRESTLINE CAPITAL CORPCHARTER COMMUNICATIONS INC DEBELK INCBOWATER INCZALE CORPJEFFERSON PILOT CORPPENN TRAFFIC COHEALTH MANAGEMENT ASSOCIATES INCQUALCOMM INCAPPLIED 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and banks sit somewhere in the middleThe evolution of local and nationalelite networksJP Morgan ChaseBank of AmericaCitigroup1314The 1920s stock market boom dispersed ownership inthe largest US corporations Corporate ownership grew increasingly dispersedduring the 1920s as retail investors poured into thestock market Number of shareholders in the US– 1924: 2.4 million– 1927: 5 million– 1930: 10 million By 1930, 44% of the 200 largest corporations lackeda single large ownership block, according to Berleand Means (1932)Retail investors,AKA “widows andorphans”1516

The dispersion of ownership and the rise of the“managerial class” Dispersed ownership and the rise of professionalmanagers created a new system of “managerialism” “The economic power in the hands of the fewpersons who control a giant corporation is atremendous force which can harm or benefit amultitude of individuals, affect whole districts, shiftthe currents of trade, bring ruin to one communityand prosperity to another. The organizations whichthey control have passed far beyond the realm ofprivate enterprise--they have become more nearlysocial institutions.”Berle and Means, 19321718The same New York banks were the most central firmsin the national board interlock network for decadesDid finance become irrelevant?19821962“Not ‘Wall Street financiers’ or bankers, but largeowners and executives in their self-financingcorporations hold the keys of economic power”C. Wright Mills, The Power Elite (1956)1.2.3.4.5.JP MorganChase ManhattanChemical BankFirst National City BankSouthern PacificRailroad6. Mellon Bank7. Manufacturers Hanover8. AT&T9. Pennsylvania Railroad10. Bankers TrustAnd yet 1.2.3.4.5.6.7.8.9.10.AT&TJP MorganChase ManhattanCiticorpIBMGeneral FoodsChemical BankBankers TrustManufacturers HanoverMobil10 most central public corporations (eigenvector centrality).Source: Mintz and Schwartz, 1985 (1962); Davis and Mizruchi, 1999 (1982)1920

In every major city, local corporate executives staffedthe boards of local banks creating relatively dense urban elite networksLocal Non-profitLocal Bank Boston: Bank of Boston–––––––ComputervisionDennison ManufacturingGeneral CinemaGillettePrime ComputerRaytheonWyman Gordon Pittsburgh: Mellon Bank––––––––Air ProductsAllegheny InternationalAlcoaJoy ManufacturingPPG IndustriesQuaker State OilSperryUS SteelData for 1986 from Davis (1991)Minneapolis-St. Paul 20002122“The coming death of commercial banks,” ca. 1991 Indicators of decline in traditional business included–The rise of market-based financeand the end of “bank hegemony”––Industry contraction: number of banks dropped from 12,380 (1980) to7,926 (1994) due to bank closures and mergersDeclining significance of bank loans to corporations: bank loansshare of corporate debt dropped from 20.5% (1980) to 14.5% (1994)Alarmist claims by insiders: “The banking industry is dead, and weought to just bury it” (Dick Kovacevich, CEO of Norwest) Reasons for decline include––23More attractive (lower cost) alternatives for corporate borrowers(commercial paper, equity markets, etc.)More attractive (higher return) alternatives for depositors (mutualfunds, money market accounts, pension plans, etc.)24

Bank consolidation since 1990:Q: What is the date of this article?How (almost) every New York-based commercial bank became JP Morgan ChaseOf the 10 biggestUS banks in 1989,5 are now part ofJP Morgan Chase plus ça change 2526Bank consolidation and centrality:Most central firms, 1962-2002Bank consolidation since 1990:How North Carolina National Bank became Bank of America198219621.2.3.4.5.JP MorganChase ManhattanChemical BankFirst National City BankSouthern PacificRailroad6. Mellon Bank7. Manufacturers Hanover8. AT&T9. Pennsylvania Railroad10. Bankers TrustBank of Americaholds nearly 10%of all deposits inthe US throughits 5800 branches271.2.3.4.5.6.7.8.9.10.AT&TJP MorganChase ManhattanCiticorpIBMGeneral FoodsChemical BankBankers TrustManufacturers HanoverMobil20021.2.3.4.5.6.7.8.9.10.DellSara LeeVerizonAllstateAMRJP Morgan ChasePfizerMorgan StanleyDow ChemicalSears28

The Fortune 1000 in 2003GOLDEN WEST FINANCIAL CORPONEOK INC NEWWESTERN RESOURCES INC KSABM INDUSTRIES INCMURPHY OIL CORPREGIONS FINANCIAL CORPALASKA AIR GROUP INCAVISTA CORP903/1034 firms inlargest componentSCHOLASTIC CORPLANDSTAR SYSTEM INCTESORO PETROLEUM CORPPERFORMANCE FOOD GROUP COGEORGIA GULF CORPMean degree: 7.9UNIVERSAL FOREST PRODUCTS INCTECH DATA CORPNATIONAL FUEL GAS COQUINTILES TRANSNATIONAL CORPWATSCO INCPROVIDENT FINANCIAL GROUP INCNASH FINCH COOLD KENT FINANCIAL CORPPINNACLE WEST CAPITAL CORPSILGAN HOLDINGS INCWhy all the elites know each other:conspiracy, or something morebenign?CHAMPION ENTERPRISES INCM&T BANK CORPGENERAL CABLE CORP NEWDEVON ENERGY CORP NEWJDS UNIPHASE CORPFAIRCHILD SEMICONDUCTOR INTL INCUNITED STATIONERS INCMean geodesic: 4.0SERVICE CORP INTERNATIONALHUB GROUP INCPAYCHEX INCSIERRA PACIFIC RESOURCESGENESIS HEALTH VENTURES INCFOAMEX INTERNATIONAL INCPUGET ENERGY INCRGS ENERGY GROUP INCGREENPOINT FINANCIAL CORPPAYLESS CASHWAYS INCPHAR MOR INCPSS WORLD MEDICAL INCJABIL CIRCUIT INCUNIVERSAL CORPEMCOR GROUP INCVALERO ENERGY CORP NEWPENTAIR INCMICRON TECHNOLOGY INCMITCHELL ENERGY & DEVELOPMENT CORPMILACRON INCABERCROMBIE & FITCH CO DESTEELCASE INCCOVENTRY HEALTH CARE INCMASCO CORPLANDAMERICA FINANCIAL GROUP INCKELLY SERVICES INCGREAT LAKES CHEMICAL CORPTYSON FOODS INCPUBLIC SERVICE CO OF NEW MEXICOMAXXAM INCALTERA CORPMANPOWER INCMICROAGE INCSPARTAN STORES INCDEL WEBB CORPWHOLE FOODS MARKET INCINTERSTATE BAKERIES CORPDIEBOLD INCLAM RESEARCH CORPALLIANT ENERGY CORPPERKINELMER INCHARTFORD FINANCIAL SERVICES GROUP ILEAR CORPMARSHALL & ILSLEY CORPINTERNATIONAL MULTIFOODS CORPPATHMARK STORES INCEMC CORPQUANTA SERVICES INCTELEPHONE & DATA SYSTEMS INC DEWHX CORPTORO COCYPRESS SEMICONDUCTOR CORPPOLARIS INDUSTRIES INCTELLABS INCNIAGARA MOHAWK HOLDINGS INCBORDERS GROUP INC MIWESTERN DIGITAL CORPFURNITURE BRANDS INTERNATIONAL INCMARK IV INDUSTRIES INCADMINISTAFF INCVECTREN CORPBROADWING INCWILLAMETTE INDUSTRIES INCMERISEL INCDTE ENERGY COCARDINAL 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