Corporations, the Managerial Elite and Social Stratification
Our objective is to highlight the role of large-scale organizations in the stratification process in advanced industrial societies like the United States. We build on Sjoberg's essay about the rise of world bureaucratic capitalism in Abu-Lughod’s Sociology for the 21st Century. While corporations are the legal creations of the state, their activities transcend national boundaries. Further, the managerial sector typically has limited liability that protects their personal fortunes when say a corporation files for bankruptcy.
The impact of corporations on the stratification system comes into stark relief in light of the 2007-2009 Great Recession. In this Recession the federal government bailed out Wall Street overlooking the plight of the people on Main Street. No doubt the banking system is a critical feature of the modern economy and must somehow be sustained. The government might have opted to take over the big banks or capped their growth, but such was hardly feasible in the existing political climate.
This climate took root in the l970s and l980s when a number of forces converged to grow the financial sector. After Reagan’s election in l980 market ideology including deregulation came to the fore. Financial markets expanded at a major pace with investment banking encroaching on commercial banking, and vice versa. Technological revolutions including the development of the Internet and enhancements in transportation greatly facilitated this growth.
We also give attention to financial arrangements outside of banking: hedge funds, corporate tax havens, offshore banking. The latter two make it possible for corporations to escape regulation and taxation, allowing the managerial elite to make even more money. These patterns have been underwritten by the U.S. Supreme Court's decision Citizens United. Now the managerial/financial elite can more or less make unlimited contributions to political candidates who will protect and advance their economic and social power.