Today's economic elite

Content

Introduction

1. A Brief Overview of Elite Theories
1.1 The Classical Theories
1.2 The Functional Theories
1.3 The Critical Theories

2. Today's Economic Elite
2.1 German Economic Elite
2.1.1 Extrinsic Reasons for the Composition of German Elite
2.1.2 Intrinsic Reasons for the Composition of German Elite
2.2 European Economic Elite

3. Résumé

Appendix

References

Resources from the Internet

Introduction

Currently a hotly debated topic dominates the domestic section of the media in Germany: the growing perception of social inequality. Part of this discussion is the debate about rising manager salaries, which have more than doubled in Germany since 1998 (Simon 2007: 40-43, Papendick 2006: 32). Additionally incidents such as the Zumwinkel-Affair, the closure of the efficient Nokia plant in Bochum and the infamous victory-sign of Josef Ackermann in court heat up the discussion, and change the image of managers and the economic elite in general for the worse. Accordingly the question is of interest, who is the economic elite of today.

Another controversial and current debate, which is also of interest, is the so called Exzellenzinitiative of the German government, which explicitly aims to support the development of elite.

Against this background this paper analyses the composition of today's economic elite and the accessibility and openness of this echelon of society. The paper starts with giving an overview of different elite theories.

Section two will answer the question, who are the members of German economic elite, referring to the widely noticed work of Michael Hartmann and the Potsdamer Elitenstudie conducted 1995 by Wilhelm Bürklin et alii. This section also compares the German economic elite with those of other European countries. The work ends with a critical résumé.

1. A Brief Overview of Elite Theories

Elite theories can be divided into classical, functional and critical theories. The focus of elite theories in general is to whom power is available, to what extent and how it is maintained.

1.1 The Classical Theories

The first paradigm of elite was developed by Gaetano Mosca.

Mosca suggests that society is divided into two classes comprising the elite and the masses. Thus he creates a dichotomous picture of society. He postulates the thesis that a minority of leaders will always rule the majority of a society. This would also hold fo r democracies. Mosca also points out that the elite in earlier times was formed by the physically strong, whereas in the present time the rich form the elite.

He explains the formation of elite with the ability of few to organise, while the rank and file stay unorganised (Etzioni-Halevy 1993: 20/Hartmann 2004: 19f). The findings of Pareto remind in many aspects to those of Mosca, but Pareto takes into account the differing resources available to individuals within society. The more endowed are those who are typically chosen as leaders, thus forming the elite of society, he writes. As long as the elite would remain open and admit the most capable into their ranks, it would maintain the ability to renew itself and fulfil its duties and responsibilities. By and large capability and elite positions would correspond.

However, if the circulation of the elite is hindered, and elite secludes itself from the public, it will not be the most capable, but the most powerful who will rule society, he states. As a result society as a whole would be disturbed; capacity and elite positions would depart (Etzioni-Halevy 1993: 19f).

Robert Michels is concerned with democracy and elites, and focuses on political parties. Through studying the SPD at the beginning of the 20th century he observed that at first voted leaders are merely the executives of groups, but in the long run become the elite with almost unrestricted power.

His conclusion is that the size of organisations, the complexity of its duties and responsibilities and the need for quick decisions are the causes for this development. The solving of complex problems would especially lead to a further improvement of the already developed expertise within the elite. Combined with inside information, means of communication, leadership skills and a general apathy of the masses the result would be a nearly invulnerable position of the elite (Etzioni-Halevy 1993: 21f). Therefore he formulates his famous law of oligarchy: "Who says organization says oligarchy" (Michels 1915: 418).

What the classical theorists have in common is the dichotomous separation of society into elite and masses. They consider the elite as necessary for the stability of society and the rule of the elite over a majority as inevitable (Hartmann 2004: 9)

1.2 The Functional Theories

Of the many functional elite theories the approaches of Suzanne Keller and Otto Stammer are the most elaborated and detailed.

They describe a society, which has several competing and powerful elites ranging from politics to economy, science, religion, the military, et cetera. Among these elites the economic elite had lost its previous dominant position, since modern societies are too differentiated to handle for one sole elite, they argue. Whereas many parallel existing, specialized and - sometimes more, sometimes less - competing elites would be able to meet the requirements of such societies.

Also the characteristic of the elite had changed. Where the membership of elite once depended on wealth and origin, it would now appear that the capability and ambition of individuals are the determining factors allowing entry to the elite, which is thus equally open to all strata (Hartmann 2004: 60f).

1.3 The Critical Theories

In his book The Power Elite published 1959 C. Wright Mills establishes the term "power elite", which describes a mutual coalition of the upper political, military and economical personnel. Though the interests of these groups might not necessarily be identical, they are dependent on each other and able to manipulate the will of the masses (Etzioni-Halevy 1993: 22).

Other contemporary theorists have followed the idea of Mills, and suggested concepts akin. Dye and Zeigler for instance agree and posit also a procedural consensus among elites: "Elites share a consensus about fundamental norms underlying a social system. They agree on the "rules of the game"" (Dye et alii 1987: 4).

Further to this, Mills writes that the stability and the emergence of elite is based on "Gleichheit von Herkunft und Weltanschauung, dem gesellschaftlichen Umgang und den persönlichen Beziehungen in den Führungsgruppen der drei Hierarchien" (Mills 1962: 327).

Pierre Bourdieu ties in with this perspective of Mills theory. But unlike Mills he centres his analysis of elite on the means of reproduction. As a result he focuses mainly on common social origin and habitus. Bourdieu argues that the habitus derives from the fact that common origin leads to common preferences, in taste, humour, education and the like. Thus members of the elite favour members from the same stratum over others when filling vacancies et cetera. Accordingly elite perpetuates itself. (Hartmann 2004: 84f).

Both theorists share not only the opinion that just one power elite or ruling class respectively exists. They also agree in that respect that the basis for being elite is not achievement, but lies within origin. The core difference is that Mills acts on the assumption, that the elite's actions are accurately and actively planed, whereas Bourdieu assumes an unconscious mechanism.

2. Today's Economic Elite

Section two will analyse the German Economic Elite and compare it with it's European counterparts.

2.1 German Economic Elite

In his book Der Mythos von den Leistungseliten, published in 2002, Michael Hartmann analyses the structure of German elite. As his findings show that 90 percent of today's economic elite of Germany consist of lawyers, economists and engineers and the majority of these executives completed their degree between the 1950s and the 1980s, he refers to this group in his survey (Hartmann 2002: 23).

[...]