Intentioned Recession: An Ideologically Driven Re-Structuring
Janet Spitz*
School of Business
The College of Saint Rose
spitzj@strose.edu
518 454 2032
April 25, 2011
Revised August 15, 2011
Submitted to New Political Science: A Journal of Politics and Culture
December 2011 special issue on “The Great Recession: Causes, Consequences, and
Responses"
* The author would like to thank the College of Saint Rose for research support.
1
Janet Spitz is an Associate Professor of Business at the College of Saint Rose in Albany,
NY. Her primary area is Business Globalization although recent publications include
“CEO Gender and the Malt Brewing Industry: Return of the Beer Witch, Ale-Wife, and
Brewster” in the Forum for Social Economics (2010) and “Pharmaceutical High Profits –
The Value of R&D or Oligopolistic Rents?” in the American Journal of Economics and
Sociology (2011) with Mark Wickham.
2
Intentioned Recession: An Ideologically Driven Re-Structuring
Abstract
Viewing broad Middle Class economic losses from the Great Recession as an accident
leads many to imagine that a return to pre-recession policies and practices will restore
this group’s economic prosperity. Another perspective views these losses as part of a
larger pattern of economic and political disenfranchisement directed toward the American
Middle Class. To the extent that those who benefit from an event might be recognized as
having a hand in its creation, insight into the values and beliefs held by this recession’s
beneficiaries may prove useful in designing policy changes needed to stem or reverse the
continued enactment of these wider goals.
This paper uses responses to an original survey administered to faculty at major
research universities across the United States in 2008-2009, as a window into certain
values and beliefs held by academics across many departments and disciplines. Explored
are three interdependent elements pertaining to the enactment of citizen democracy
including population well-being, tolerance of contest and dissent, and citizen controlled
majority rule. The flip side of each are often found in business operations as support and
justification for hierarchy and inequality, intolerance of dissent, and valuing business
dominance and power over citizen democracy.
Academics in Business Schools show
stronger support for these latter values than faculty in other fields; as business has
emerged as a clear beneficiary from the Great Recession, this ideology may usefully
serve to guide policy change, if greater equality in population well-being, and increased
citizen-controlled democracy, are desired.
3
4
Intentioned Recession: An Ideologically Driven Re-Structuring
Introduction.
The Great Recession measurably diminished the American Middle Class: unemployment
grew significantly among young college graduates as well as other employees, while
middle class financial assets including retirement-oriented stock holdings and real estate
declined.
Thoughtful analyses of these events consider several causes, with design of
solutions similarly oriented to rather different next steps. One approach understands the
Great Recession as a happenstance fluke or mistake, caused if anything by the
misbehavior of a small number of particular agents. Overall, pre-recession structures,
policies and practices are understood to be sound. Solutions to recovery therefore
revolve around time since recessions have a way of resolving themselves in the long run;
if some policy adjustment is appropriate it is minor in scope, focusing on supporting
structures that enjoyed earlier success while pursuing punishment for agents whose
activities were sufficiently openly identifiable as to permit them to be caught. Following
this path, the U.S. chose to directly support primarily large monetary institutions to shore
up monetary supply.
Another approach, suggested here, is to understand recent economic losses as part
of a larger income and wealth re-distribution over the last several decades. Accelerated
by the Great Recession, these losses may be considered as a consequence of intentioned
5
efforts by certain groups influencing structures and policies, designed and practiced over
the last 50 or more years.
Many groups seek to influence structures and policies. The fact that a group may
cohere around a set of goals and engage in purposeful activities designed to advance their
status, does not ensure that they will succeed. The chaotic set of factors from a
multiplicity of sources contributing to any specific event, such as the Great Recession,
renders direct attribution of causality tricky at best. Among competing groups, agendas
overlap as well as contrast, making observed outcomes impossible to designate as
attributable to any particular agents or pattern of activity. Moreover, a group can believe
its actions to have been efficacious in attaining a goal and be mistaken in that, just as a
different group may blame non-group “others” for unfavorable outcomes which are
entirely spurious. Finally, the more successfully subtle the activities of any group, the less
obvious any causal influence will appear.
Lukes1 proposes a working solution to detangle causal responsibility for major
shifts or events: this is to recognize the observable betterment of some, at the same time
that others are made measurably worse off, and to utilize that differential outcome as an
indication of influence. Lukes’ writings suggest that he does not believe in coincidence,
particularly when sequenced over time. He suggests that the most effective forms of
power are those least visible, because they make outcomes appear either happenstance or
inevitable, and obscure the identity of the major actors while so doing.
Lukes defines the weakest form of power as the most visible in direct conflict,
weakest because it is most open to challenge and most plain in revealing the preferences
and identity of the parties involved. The second level of power he defines as involving
6
non-decision-making where potential issues involving more serious challenges are
headed off through a form of agenda control, and attention is focused instead on conflicts
whose resolution either way are of less consequence to those wielding this stronger
power form. The third level of power he discusses is the strongest because in this
dimension the group has attained a control of the agenda formation process through
being able to define what is even considered as a topic suitable to be discussed. At this
level, even disadvantaged groups do not challenge their status, not only because they see
themselves as unable to do so, but more because they have accepted their position and
role in the existing order of things; they cannot imagine a fundamentally different reality.
When power becomes a socially constructed reality, contest does not occur over
that structure,2 and the identity of the agents who enact that structure and broad
understanding set are obscured behind an almost universal acceptance of what is moral,
just, and right.3 This is Marx’ false consciousness: that the class which successfully
exploits hired labor by extracting the value of their contribution to the firm over their cost
(surplus value), is able to do this beyond visible threats such as those provided by the
reserve army of the unemployed, is because the workers themselves accept in their
consciousness this structured relational power form. Man’s essential powers of pure
thought become appropriated away from him, what is appropriated is human
consciousness itself.4
1
S. Lukes, Power: A Radical View (2nd ed) (NY: Palgrave MacMillian, 2005).
P. L. Berger and T. Luckmann, The Social Construction of Reality (New York: Anchor, 1966).
3
R. Eisler, The Chalice and the Blade. (San Francisco: Harper, 1987).
4
K. Marx, “Critique of the Hegelian Dialectic and Philosophy as a Whole” in “Economic and
Philosophical Manuscripts of 1844,” The Marx-Engels Reader 2nd Ed R. C. Tucker (ed) (NY: WW Norton,
1978) pp. 106-125.
2
7
This paper does not draw clear lines of causality between the many mechanisms
utilized by those whose benefit continues to soar, and those who actually benefit because,
most simply, their power rests on the acceptance of this inequality by those who are
through it disenfranchised most subtly and deeply.
At the same time, some windows into aspects of these power mechanisms do
appear. Domhoff documented some of the ways in which families and other wealthholding Americans interact to co-ordinate their efforts at influence,5 while Poulantzas6
illustrates that not all such members must agree on everything as long as there is unity on
hegemony. Foster and Holleman note that the Pujo Committee in 1912 found “an
established and well-defined identity and community of interest” in finance which tightly
concentrated monetary control, while Brandeis wrote of their gradual encroachment,
well-concealed.7 McChesney, and Bagdikian discuss the mechanism of media ownership
and control;8 Pateman9 confirms the spillover from hierarchical subjugation at work to
disempowerment in political participation; Friere10 discusses the role of the educational
system in reproducing acceptance of oppression, subservience, and stifling dissent; and
Klein11 documents the opportunistic use of chaotic moments to entrench or advance
interests of the wealthy. Spitz documents ideological links between pre-eminent
universities’ faculty in economics, business and law, and critical affirmative action
rulings by Circuit Court justices affiliated with those departments or otherwise socially
5
G. W. Domhoff, The Bohemian Grove and other Retreats: A Study in Ruling-Class Cohesiveness (NY:
Harper Colophon, 1974).
6
N. Poulantzas, Political Power and Social Classes (London: Verso, 1978).
7
J. B. Foster and H. Holleman, “The Financial Power Elite” Monthly Review (May, 2010).
8
R. W. McChesney, The Problem of the Media: U.S. Communication Politics in the 21 st Century (NY:
Monthly Review Press, 2004) and B. H. Bagdikian, The Media Monopoly 6th Ed (Boston: Beacon Press,
2000).
9
C. Pateman, Participation and Democratic Theory (Cambridge: Cambridge Univ. Press, 1970.
10
P. Freire, Pedagogy of the Oppressed (NY: Continuum, 1970/1988).
8
identifying with them;12 Dugger and Peach explain the widespread acceptance of the false
tenet of economic scarcity in the face of factual abundance;13 while Thurow discusses the
concentration of ownership as a mechanism by which fully adequate resources are
restricted and made unequal.14 Finally, Hayakawa15 and Derrida16 explain control of
language so powerful that those whose consciousness offers them glimmers of opposition
cannot express their opposition in ways that even make adequate sense.
This paper addresses a separate window into just one power mechanism: the
reproduction of occupational social codes, values and beliefs facilitated by those charged
with the training of new group members. It is a mechanism whose contribution to the
economic and political inequality deepening across the U.S. and the world in the past
several decades, and advanced by the Great Recession, should not be casually dismissed
because of its influence and reach, as measured by changing distributions of income and
wealth, and political influence, which increasingly favor this group.
This paper follows Lukes’ conceptualization that utilizing observed outcomes of
enrichment enjoyed by some in both position and wealth over recent decades and
accelerated by recession events, contrasted with negative outcomes experienced by
competing others, may indicate who or which groups might have had a hand in designing
or influencing these events which generate favorable outcomes for them.
11
N. Klein, The Shock Doctrine: The Rise of Disaster Capitalism (NY: Picador, 2007).
J. Spitz, “Human Nature and Judicial Interpretation of Equal Employment Law” Managerial and
Decision Economics 19:7-8 (1998), pp.521-535.
13
W. M. Dugger and J. T. Peach, Economic Abundance (Armonk, NY: M.E.Sharpe, 2009).
14
L. C. Thurow, Generating Inequality: Mechanisms of Distribution in the U.S. Economy (NY: Basic,
1975).
15
S. I. Hayakawa, Language in Action (NY: Harcourt Brace, 1939).
16
J. Derrida, Monolingualism of the Other or the Prosthesis of Origin trans. P. Mensa (Stanford: Stanford
Univ. Press, 1996).
12
9
With this approach, solutions offered to address the income and wealth
redistribution resulting from recent trends and accelerated by policies springing from
Great Recession events, may be improved by considering the ideology of those
benefitting, through designing policy changes which challenge their values and beliefs
and thus mitigate that group’s power. Policy options declining to recognize the hand of
clear beneficiaries because it is sufficiently subtle in its work, may well fail to reverse
trends accelerated by this recession, through lack of attention to its contributing
ideological propellants.
Section one of this paper briefly summarizes the distribution of income and
wealth in the U.S. over the past 100 years, including the unprecedented mid-Century
compression, followed by increased polarization which, even prior to the 2007-2009
recession, recaptured pre-Great-Depression distributions. Section two explores some of
the reproductive activities of one of the groups who benefitted considerably – managers
of capital and business – including this group’s work in establishing structures to assist in
its reproduction. Section three identifies, through a new survey, some aspects of ideology
held by the segment of this group charged with maintenance and expansion by training
new group members, ideology pertaining to the distribution of wealth, opportunity, and
democracy on a global scale. Section Four concludes with some aspects to be considered
in developing effective domestic and international solutions to Great Recession outcomes
when the intentionality of agenda goals of this group are factored in.
Section One: A Century’s Worth of Distributions of Income and Wealth.
10
The compression of wealth and income that gave rise to the American Middle Class
during the central portion of the 20th Century was unprecedented. Pre-1929 some 40% of
America’s wealth was owned by just 1% of the American population, an ownership share
that declined to about half that by 1950.17 Similarly, the income share of the top 1%
reached 20% of the total gross US income earned in 1928 not counting capital gains, or
24% with, a level that fell to 10% without (about 19% with) in 1950.18 The top 10%
received 49% of all income earned in the U.S. in 1928, a rate that declined to between
32% and 37% during the 1940s, 50s, 60, and 1970s.19 These numbers are represented in
figure 1.
Figure 1: Twentieth Century Decline and Resurgence of Top U.S. Income and Wealth.
Those at the very top, where incomes are even more skewed, took an even larger
mid-Century hit: the top 0.01% enjoyed 5% percent of all income earned in the U. S., a
A. B. Atkinson and S. Morelli, “Inequality and Banking Crises: A First Look” paper in the top incomes
project http://g-mond.parisschoolofeconomics.edu/topincomes/ (2010), p. 34.
18
Ibid.
17
11
share that declined to 1% in 1943 and declined again to about 0.8% of U.S. income
between 1974 and 1978; the top 0.1% saw their incomes decline from 11.5% of U.S.
income in 1928 to just over 2% in the late 1970s.20
This decline in wealth and income held by those at the top was also a decline in
wealth and income difference between those who owned or managed large businesses and
those who were merely employed, as New Deal labor laws raised wages and workplace
conditions for the lowest paid. By the middle of the 20th Century, this decline in wealth
and income difference was so noticeable that it came to be identified as a unique period
of time, “The Great Compression,” where the wage structure narrowed both between and
within education and experience groups, driven largely by demand for unskilled labor.21
Income and wealth effects of the Great Compression continued for some 40 years until
the 1980s when both indicators began a steady rise for those at the top.
Many believed that the rise of the middle class resulting from the Great
Compression of incomes and wealth signaled a permanent shift. There is no question that
the ideology of the New Deal was fundamentally different from that which it, at least
temporarily, replaced.22 Thinking of wage compression as permanent leads to seeing the
increased income and wealth disparity since then, as an aberration. Taking a longer view
of these distributions suggests that the aberration instead was the Great Compression
itself.
E. Saez, “Striking it Richer: The Evolution of Top Incomes in the U.S., updated with 2008 estimates”
http://www.econ.berkeley.edu/~saez/saez-UStopincomes-2008.pdf (2010).
20
A. B. Atkinson, T. Piketty, and E. Saez, “Top Incomes in the Long Run of History” Journal of Economic
Literature 49:1 (2011) pp. 3-71.
21
C. Goldin and R. A. Margo, “The Great Compression: The Wage Structure in the United States at MidCentury,” The Quarterly Journal of Economics 107:1 (1992), pp. 1-34.
22
B. Stipelman, “The New Deal’s Theory of Practice” New Political Science 32:2 (2010) pp. 237-260.
19
12
And starting in the late 1970s, the mid-Century compression of incomes and
wealth began to reverse. The top 0.01% who saw their share of U.S. earned income
decline from a high of 5% in 1928 to 0.8% in the mid-1970s, effected an increase in that
measure to more than 6% of all U.S. income in 2007, while the top 0.1% saw their
incomes increase from just over 2% in the late 1970s to more than 12% of all U.S.
income earned in 2007.23 To place these groups in context, the 0.01% of top income
earners include those with 2008 annual income over $9.14 million, while the top 0.1%
earned 2008 income of at least 1.7 million.24 Income shares of the larger group of the top
1% likewise increased from 9% of U.S. income in 1970, to about 24% of U.S. income in
2007,25 a group enjoying 2008 incomes over $368,238.26 In terms of yearly earned
income alone, even before the Great Recession, every segment at the top – the top 0.01%,
the top 0.1%, and the top 1% -- all more than restored their pre-1929 yearly income
gains.
This was facilitated by their taking the lion’s share of overall economic growth
between 1978 and 2007. The top 1% captured 58% of total U.S. income growth, and
many of these occupied positions in Business, where CEO compensation rose from an
average of $1.5 million in 1970, to an average of $40 million in 1999 for the top 100
CEOs.27 During this same 30 years of economic growth, real wages of the rest of the
population increased from $33,000 to $34,000.28
Atkinson, Piketty, and Saez, “Top Incomes”
E. Saez and T. Piketty. “Income Inequality in the United States, 1913-1998” Quarterly Journal of
Economics 118:1 (2003; tables and figures updated to 2008) pp. 1-39
http://www.econ.berkeley.edu/~saez/TabFig2008.xls
25
Atkinson, Piketty, and Saez, “Top Incomes” p. 30.
26
Saez and Piketty, “Income Inequality”
27
Atkinson, Piketty, and Saez, “Top Incomes”
28
Ibid.
23
24
13
Wealth compression was similarly reversed. Starting in 1962, the top 5% of
American households saw their holdings grow from 54.6% of all U.S. privately held
wealth, to 63.5% in 2009, while the bottom 80% saw their share of U.S. wealth decline
from 19.1% in 1962, to 12.8% in 2009.29 The top 1%, as shown in Figure 1, increased
their share of U.S. wealth to 35.6%.30
That the wealth share of the U.S. top 1% has remained steady since the 1980s at
about 35% is somewhat misleading. This is because the median U.S. household’s share
of wealth has, since then, significantly declined. In 1962 the ratio of U.S. wealth held by
the top 1% to U.S. wealth held by the median household was 125. By 2009 that ratio had
increased to 225, meaning that the top 1% held 225 times the wealth held by the median
(middle) U.S. household.
The Great Recession pushed this trend hard: between 2007 and 2009, the bottom
80% of U.S. wealth holders saw their assets decline by between 25-41%, while during the
single 2007-2008 year, this same group saw their real inflation-adjusted incomes fall
9.9%.31
In part because the average American family holds much of their accumulated
wealth in their home,32 their net worth declined during the two 2007-2009 Great
Recession years by 41%; their 2007 worth of $151,707 became just $62,200 in 2009.33
Nor did this loss fall equally across demographic groups: according to a recently released
S. A. Allegretto, “The State of Working America’s Wealth, 2011: Through volatility and Turmoil, The
Gap Widens” Economic Policy Institute Briefing Paper 292 (2011).
http://www.epi.org/publications/entry/the_state_of_working_americas_wealth_2011
30
Ibid.
31
Ibid; G. W. Domhoff, “Wealth, Income and Power” WhoRulesAmerica.net (July, 2011)
http://sociology.ucsc.edu/whorulesamerica/power/wealth.html
32
Allegretto, “The State of Working America’s Wealth”.
33
C. Isidore, “The Wealthy are Richer than You or Me” CNNmoney.com
http://money.cnn.com/2010/12/23/pf/rich_wealth_gap/index.htm
29
14
Pew Research Center report on household assets from all sources, the median net worth
of households who were white declined 16% from about $135,000 to $113,000; Asian
household median net worth declined 54% from $165,000 to $78,000; median Hispanic
households lost 66% of $18,000 to $6,200 net worth; and the median net worth of Black
households declined 53% from $12,000 to $5,600.34 Overall, Middle Class America took
a significant net worth loss.
Over the long run, then, a pattern can be seen where the historically unequal
distribution of income and wealth in the U.S. was severely attenuated mid-20th Century
and that compression, along with a host of related regulation governing labor markets and
workplace operations along with financial markets and tax obligations, enabled the
emergence of the American middle class. By the late 1970s that compression began to
reverse so that by the end of the 20th Century and the first decade of the 21st, income and
wealth inequality had risen to, or exceeded, its pre-1929 Great Depression status.
Employment, similarly, was significantly reduced as a Great Recession outcome.
The unemployment rate for men increased from 5.1% in December 2007 to 10.6% in
June 2009 and remains above 9%; Women’s unemployment rose from 4.9% to 8.3% over
the same period, and now resides at 8.5%.35 Today the economy has 6.8 million, or 5%
fewer jobs than it had before the Great Recession began, and many of these jobs entail
fewer hours per week.36 Indeed, the only reason the official unemployment rate is not
10.7% is that some 700,000 workers have simply given up participating in the labor force
R. Kochhar, R. Fry and P. Taylor, “Wealth Gaps Rise to Record Highs Between Whites, Blacks,
Hispanics: Twenty-to-One” Pew Research Center (July 26, 2011).
http://pewsocialtrends.org/2011/07/26/wealth-gaps-rise-to-record-highs-between-whites-blackshispanics/1/
35
R. Kochhar, “Two years of Economic Recovery” Pew Research Center (July 6, 2011).
http://pewsocialtrends.org/2011/07/06/two-years-of-economic-recovery-women-lose-jobs-men-find-them/
36
C. Rampell, “A Second Recession May Bite Deeper than the First” New York Times (Aug 9, 2011).
34
15
altogether; 2.8 million more continue to seek work but not actively enough to be
counted.37
Involuntary unemployment plays a critical role in class relations. Marx’ reserve
army of the unemployed is essential to the punitive dynamic of capital hiring labor at far
below the value of their contribution to the firm: the larger the employment queue, the
more real is the threat of easy replacement and the more hesitant a worker is to engage in
either voice (unionizing, requesting better wages and working conditions, etc) or
voluntary exit.38 Therefore, significantly increasing unemployment is a measure of
“other group disadvantage” if not direct advantage to those enjoying increased outcomes
at the top who, incidentally, enjoy an unemployment rate of between 3 and 4% in the top
20% of households by income.39
The stimulus money paid to large banks came with no requirement tying it to real
investments in the U.S. or to jobs, rendering the U.S. economy in worse shape than
before: industrial production is down 7% from December 2007 while U.S.
manufacturing overall has decreased more than 10%.40 But, 2010 corporate profits are
9% higher than in pre-recession 2007.41 According to the Bureau of Economic Analysis,
the reason for corporate profit increase per unit, is higher prices plus lower labor costs, as
non-labor costs remain unchanged.42 Meanwhile, CEO pay remains between 350 and
H. Shierholz, “Job growth still sputtering in lowest gear” Economic Policy Institute (Aug. 5, 2011)
http://www.epi.org/publications/entry/7417/.
38
R. B. Freeman and J. L. Medoff, What Do Unions Do? (NY: Basic, 1984).
39
A. Sum, I. Khatiwada and S. Palma, “Labor Underutilization Problems of U.S. Workers Across
Household Income Groups at the End of the Great Recession” (Flint, MI: C.S. Mott Foundation, Feb.
2010).
40
Federal Reserve Statistical Release G. 17 (419) “Industrial Production” (July 15, 2011).
41
Bureau of Economic Analysis, “U.S. Economic Accounts, National Corporate Profits, July (2011)
Revision Basis” http://www.bea.gov/national/index.htm#corporate
42
Bureau of Economic Analysis “News Release: Gross Domestic Product June 24, 2011”
http://www.bea.gov/newsreleases/national/gdp/2011/gdp1q11_3rd.htm
37
16
500 times the pay of the average (not minimum) American worker, up from 42 times that
rate in 1960.43
This is a clear case of a zero sum game, where jobs losses and decreased income
for retained employees compose a monetary transfer to increased business profits. In
Lukes’ terms, it is possible therefore to identify the beneficiaries, as well as the losers, of
this aspect of Great Recession results.
These numbers have contrasted average U.S. Household income and wealth with
the income and wealth of those, like Business CEOs, at the very top. But equally as
important for purposes of identifying beneficiaries and those experiencing loss, is the
dispersion pattern characterizing those closer to the mean of the middle class: the second
and fourth household population quintiles. The second quintile is the 20-40th percent of
all U.S. households; the fourth quintile is the 60-80th percent. Not the very top nor the
lowest, these two quintiles measure the well-being of those at the edges of the American
Middle Class.
The average household income of the second quintile rose from $24,891 in 1967
to $29,257 in 2009, a modest rise measured in 2009 adjusted dollars.44 The fourth
quintile as the leading edge of the middle class, however, enjoyed more substantial gains.
From a mean household income of $55,599 in 1967, their income rose to $78,694 in
2009.45 More noticeable is the change in the lower and upper limits of the second and
fourth quintile, or the edges of the middle class: the lower edge increased from $16,909
Domhoff, “Wealth, Income and Power”.
Census.gov, “Income Statistics, Table A-2, Selected Measures of Household Income Dispersion: 1967 to
2009 (Income in 2009 CPI-U-RS adjusted dollars” Current Population Reports, Series P60-204, The
changing Shape of the Nation’s Income Distribution. (Sept. 16, 2010)
http://www.census.gov/hhes/www/income/data/historical/ineuality/taba2.pdf
45
Ibid.
43
44
17
in 1967 to $20,453 in 2009, while the leading edge went from $66,735 to $100,000 in the
same period of time.46 This dispersion of middle class incomes over the last several
decades is visible in figure 2:
Figure 2. Income Dispersion in the American Middle Class
Meanwhile, the bottom quintile (lowest 20%) fared even worse, with household
income rising from an average of $8,984 in 1967 to $11,552 in 2009.47 While the Great
Recession affected all groups, the effects on income at the bottom quintiles resulted in a
record increase in the number of children living in poverty, up some 1.38 million in 2009
from just one year before; that most states plan to spend even less on social services in
2012 than they did in 2011,48 deepens barriers to future mobility of these youth and
enlarges the next generation’s reserve army of the unemployed.
46
Ibid.
Ibid.
48
C. M. Blow, “The Decade of Lost Children” The New York Times (Aug. 6, 2011).
47
18
Section Two: The Rise of American Business Schools and the Importance of
Occupational Social Codes.
While many factors contributed to this reversal of mid-20th-Century fortunes in income
and wealth, one of these factors was the rise in the number and proportion of American
Business School graduates occurring at the same time.
In 1956 there were 42,813 graduates of U.S. Business Schools with Bachelor’s
degrees, 3,280 with an MBA, and 129 with a Business Doctorate; by 2009 that number
had grown to 347,985 graduates with a Bachelor’s degree, while MBA graduates
numbered 168,375 and those graduating with a Doctorate had grown to 2,123.49 This is a
53 year increase of 8.13 times for undergraduate business managers, and an increase of
51.3 times for those earning an MBA. Those with Doctorates increased 16 times over.
These increases are shown graphically in Figure 3.
BA/BS
MBA
Doc
1956
42813
3280
129
2009
347985
168375
2123
National Center for Educational Statistics, “Digest of education statistics 2010: Degrees in business
conferred by degree-granting institutions, by level of degree and sex of student: Selected years 1955-2009”
(2010) http://nces.ed.gov/programs/digest/d10/tables/dt10_312.asp?referrer=list; NCES “Digest of
Education Statistics: Table 285. Bachelor’s, Master’s, and Doctor’s Degrees conferred by degree-granting
institutions, by field of study and year – selected years 1970 – 2009”
http://nces.ed.gov/programs/digest/d10/tables/dt10_285.asp; and NCES “Digest of education statistics,
2010 –Table 250: master's degrees conferred by degree-granting institutions, by discipline division:
Selected years” (2010). http://nces.ed.gov/programs/digest/d05/tables/dt05_250.asp
49
19
Figure 3: Increase in Business Degrees, Mid-Century Compression to Great Recession
Educational attainment increased broadly across fields as part of the rise of the
middle class, so the increase in business school enrollment was not unique: engineering
undergraduates increased from 52,246 in 1950 to 84,636 in 2009 and English majors
increased from 17,240 to 55,462 over the same period50 while other fields showed
generally smaller increases in the sciences and larger increases in the social sciences and
humanities.
However, within that general expansion of educational degrees, business took
larger and larger educational shares. Viewed as a percentage of all graduates, in 1971,
13.7% of Bachelor’s degrees were granted in Business; that increased to 21.7% in 2009;
the percentage of MBA graduates grew from 11.5% of all Master’s degrees granted in the
NCES “Digest of Education Statistics: Table 316 “Degrees in Engineering and engineering technologies
conferred by degree-granting institutions, by level of degree and sex of student, 1949-50 through 2008–09”
(2010) http://nces.ed.gov/programs/digest/d10/tables/dt10_316.asp?referrer=list ; Table 318 “Degrees in
English language and literature/letters conferred by degree-granting institutions, by level of degree and sex
of student, 1949-50 through 2008–09”
http://nces.ed.gov/programs/digest/d10/tables/dt10_318.asp?referrer=list
50
20
U.S. in 1971, to 25.6% in 2009.51 By the end of the first decade of the 21st Century, more
than one-quarter of all Master’s degrees awarded in the U.S. were in the field of
Business.
As is the case with other occupations, business to a large extent delegates the
reproductive function of the field to a specific educational sequence in order to train new
members of this occupational group. This education, as in many fields, combines a
technical how-to instructing students in the finer points of field-specific expertise, with a
standpoint consisting of values, orientation, judgment and beliefs. The need for
additional managers of expanding and more numerous business enterprises gives rise to
an opportunity to spread those occupational identity norms.
Social norms are an important part of a meaningful and positive workplace
identity; the connections we maintain to our jobs become essential elements of who we
are and how we think of ourselves.52 Because we desire to hold a positive self-image,
both pre- and post-career choice mechanisms operate to equalize workplace and personal
norms.
Many people self-select into jobs, careers, or college majors where at least part of
the attraction is the fit between personally held values and expectations, and occupational
social codes.53 Once employed, social codes at work “tell people how they are supposed
51
Ibid.
J. E. Dutton, L. M. Roberts and J. Bednar, “Pathways for Positive Identity Construction at Work: Four
Types of Positive Identity and the Building of Social Resources,” Academy of Management Review 35:2
(2010) pp. 265-293; B. E. Ashforth and F. Mael, “Social identity theory and the organization,” Academy
of Management Review 14 (1989) pp. 20-39; C. L Ridgeway, “The Emergence of Status Beliefs: From
Structural Inequality to Legitimizing Ideology” in The Psychology of Legitimacy J. T. Jost and B. Major
(eds), (Cambridge, GB: Cambridge University Press, 2001) pp. 257-277.
53
T. A. Judge and R. D. Bretz, “Effects of Work Values on Job Choice and Decisions,” Journal of Applied
Psychology 77 (1992) pp. 261-271; J. A. Lindholdm, “Perceived organizational fit: Nurturing the minds,
hearts, and personal ambitions of university faculty,” Review of Higher Education 27:1 (2003) pp. 12552
21
to think of themselves and how they are supposed to interact with each other.”54 These
social codes help shape how business students approach and conceptualize opportunities,
problems, and concerns, the types and structures of solutions that seem situationreasonable, and how they understand themselves.55
Social codes establish guidelines for behavior, functioning as legitimating tools
for control and maintenance of hierarchical status.56 As newcomers join an established
order, they learn through the everyday process of workplace interaction, what are the
expected behaviors in line with majority views.57 Essentially, training in almost any field
includes conveying to students a socially constructed reality defining what that field is,
what concerns or problems are legitimately studied, and which processes are
appropriately used to expand field knowledge.58
Across academic fields, both College and Graduate Students’ views have been
found to shift into greater congruence with their teachers’ as they absorb personal views
of professors whom they otherwise admire and respect, and change their behavior to act
accordingly.59
150; A. Kezar, “Investigating Organizational Fit in a Participatory Leadership Environment,” Journal of
Higher Education Policy and Management 23:1 (2001) pp. 85-101.
54
G. Akerlof and R. Kranton, Identity Economics: How Our Identities Shape Our Work, Wages, and WellBeing. (Princeton: Princeton Univ Press, 2010).
55
G. Petriglieri and J. L. Petriglieri. “Identity Workspaces: The Case of Business Schools,” Academy of
Management Learning and Education 9:1 (2010) pp. 44-60.
56
G. Salaman and K. Thompson. Control and Ideology in Organizations. (Cambridge, MA: MIT Press,
1980). J. R. Lincoln and A. L. Kalleberg Culture, Control and Committment. (Cambridge, England:
Cambridge University Press, 1990). S. R. Barley and G. Kunda, “Design and Devotion: Surges of Rational
and Normative Ideologies of Control in Managerial Discourse,” Administrative Science Quarterly, 37
(1992) pp. 363-399.
57
C. L. Ridgeway, “Interaction and the Conservation of Gender Inequality: Considering Employment,”
American Sociological Review 62:April (1997) pp. 218-235.
58
T. S. Kuhn, The Structure of Scientific Revolutions (Chicago: University of Chicago Press, 1962).
59
R. J. Light, Making the Most of College. (Cambridge, MA: Harvard University Press, 2001). B. S.
Hong. and J. P. Shull, “A retrospective study of the impact faculty dispositions have on undergraduate
engineering students,” College Student Journal 44:2 (2010) pp. 266-278. G. D. Kuh and S. Hu. “The
Effects of Student-Faculty Interaction in the 1990s,” The Review of Higher Education 24:3 (2001) pp. 309-
22
In the case of Business education, emphasis on hierarchy and short-term quarterly
profit impacts students’ personally held values and beliefs, altering these toward material
gain, personal comfort and pleasure, and away from issues benefitting the larger society
or even in being interpersonally helpful or polite.60
Business student values become more individualistically competitive and
mercenary and less oriented toward the common good, partly from direct business
community influence on business school practices.61 For example, business leaders who
drastically downsized their organization’s workforce during recent times of significantly
positive earnings, earned 42% more on average than the other Chief Executive Officers in
the Standard and Poor’s largest 500 corporation list.62 This cannot fail to be noticed by
students who select business careers, and self-identify with business leader success.63 If
social identity is strengthened by a person’s caring about the status of a group, and that
person’s desire to become more like the members of that group,64 then on average
business students will socially identify with that field.
Social norms, values and beliefs in academia thus matter to the resulting values
and beliefs of those receiving instruction. That this research is able to glean patterns of
332; A. M. Villegas, “Dispositions in Teacher Education,” Journal of Teacher Education 58:5 (2007) pp.
370-380.
60
T. R. Mitchell and W. G. Scott, “America’s Problems and Needed reforms: Confronting the Ethic of
Personal Advantage,” Academy of Management Executive 4:3 (1990) pp.23-35. T. Kasser, The High Price
of Materialism. (Cambridge, MA: MIT Press, 2002). D. Callahan, The Cheating Culture: Why More
Americans are Doing Wrong to Get Ahead. (Orlando: Harcourt Pub., 2004). V. R. Krishnan, “Impact of
MBA Education on Students’ Values: Two Longitudinal Studies,” Journal of Business Ethics 83 (2007)
pp. 233-246.
61
S. L. Rynes and C. Q. Trank. “Behavioral Science in the Business School Curriculum: Teaching in a
Changing Institutional Environment,” Academy of Management Review 24:4 (1999) pp. 808-824.
62
S. C. Anderson, S. Collins, S. Pizzigati, and K. Shih, “CEO Pay and the Great Recession: 17 th Annual
Executive Compensation Survey” (Washington DC: Institute for Policy Studies, 2010).
63
F. Mael, “A Conceptual Rationale for Domains and Attributes of Biodata Items,” Personnel Psychology
44 (1991) pp. 763-792.
64
M. Shayo, “A Model of Social Identity with an Application to Political Economy: Nation, Class, and
Redistribution” American Political Science Review 103:2 (2009) pp. 147-174.
23
values and beliefs directly from academic faculty, enables us to view a segment of some
of the social codes carried forward by graduating students and, presumably, utilized in
decision choices once employment is gained.
Section Three. Values and Beliefs: Well-Being, Dissent, and Citizen Majority Rule
Three functionally interdependent elements of the Business belief system which pertain
to population well-being, tolerance of contest and dissent, and citizen controlled majority
rule are explored in a recent survey: the flip side of each are support and justification for
inequality, intolerance of dissent, and valuing business dominance and power over citizen
democracy.
While economic well-being is not itself determinant of voting behavior,
meaningful participation in democracy requires that “all citizens have approximately
equal opportunity to act, using ‘opportunity’ in a realistic rather than legalistic sense.”65
As Dahl notes,
Equal opportunity to act is not, however, a product merely of legal
rights. It is a product of a variety of factors that make for differences
in understanding the key points in the political process, access to
them, methods of exploiting this access, optimism and buoyancy
about the prospect of success, and willingness to act. Some of these
factors probably cannot be rationally influenced given the present
state of knowledge and techniques. Three that to some extent can are
income, wealth, and education.66
65
R. Dahl and C. E. Lindblom, Politics, Economics and Welfare. (New York: Harper Torchbooks, 1943;
1963 reprint) p. 314.
66
R. Dahl, “Further reflections on ‘The elitist theory of democracy’” American Political Science Review
60:2 (1966) pp. 296-305, quote p. 302.
24
Income and wealth emerge as key ingredients in promoting democratic participation.67
Beyond an economic level of well-being sufficiently removed from desperate
straits to facilitate intellectual concern with the polity, also needed for effective citizenbased democracy is a widespread involvement in debate and dissent, broad access to
information, and a level of empowerment that enables citizens to feel able to influence
policy and election outcomes and therefore hold a sense that it is worthwhile to vote.
Not all agree with that assessment, however: Converse argues that large portions
of voters do not even have meaningful beliefs so that the absence of detailed information
and abstract thought relevant to those beliefs is largely irrelevant.68 Similarly, Zeller
suggests that because average levels of information among voters are extremely low,
what matters is what the public thinks it is becoming informed about; in the absence of
controversy, people tend to follow the elite consensus.69
Certainly business leaders, while being forced to bargain collectively with
unskilled workers and pay them the wages and benefits that constituted middle class life
during the Great Compression, never accepted this arrangement as a permanent part of
the American economic landscape.70 Along with increasing income and wealth
dispersion since that time, then, has come justification for that change.
Structured inequality forms a core element of management education as the
hierarchical method of organizing production or service delivery. Unequal relationships
reflect differences in power, knowledge and information, with managers in upper levels
67
L. M. Bartels, Unequal Democracy (NJ: Princeton Univ. Press, 2008).
P. E. Converse, “The Nature of Belief Systems in Mass Publics” in D. E. Apter (ed.) Ideology and
Discontent (London: Free Press of Glencoe, 1964) pp. 206-261.
69
J. R. Zeller, The Nature and Origins of Mass Opinion (Cambridge: Cambridge Univ. Press, 1992).
70
T. Frank, One Market Under God: Extreme Capitalism, Market Populism, and the End of Economic
Democracy (NY: Anchor, 2000).
68
25
engaged in decision making activity which affects large numbers of subordinates neither
participating in, nor having information about, that choice.
Inequality in organizations is not at contest in business schools. Hierarchy is
justified through the belief that managers occupy these positions of power based on talent
and skill. By filling the small percentage of critically important jobs requiring
considerable specialized training, they guide, administer, manage, direct and organize
production and service, delivering a greater social and economic good.71 Such views from
management theorists at the time business schools were forming compose core
curriculum today.
Justification which legitimates core values and beliefs is required for these
occupational codes to be carried forward by new group members beyond the training
environment. Such values and beliefs act to increase the probability that a certain set of
outcomes (or types of outcomes) will occur even in arenas not subject to direct control of
that training group,72 such as when business graduates make decisions in their new firms.
Similarly, when freedom is successfully redefined as lack of government regulation in
business activity or as consumerist marketplace choice,73 a set of outcome types with
respect to government regulation of business activity becomes more probable.
One critical component of this extension beyond the immediate group is what
Hafer and Choma term “a strong Belief In a Just World” – that is, the ability of a group
71
M. Weber, From Max Weber: Essays in Sociology, H.Gerth and C. W. Mills (eds). (NY: Oxford Univ.
Press, 1946). J. Burnham, The Managerial Revolution. (Bloomington: Indiana Univ. Press, 1941).
72
H. Thorisdottir, J. T. Jost and A. C. Kay, “On the Social and Psychological Bases of Ideology and
System Justification” in Social and Psychological Bases of Ideology and System Justification, J. T. Jost, A.
C. Kay and H. Thorisdottir (eds) (Oxford: Oxford Univ. Press, 2009) pp. 3-23.
73
J. Spitz and M. Wickham, “Pharmaceutical High Profits: The Value of R&D or Oligopolistic Rents?”
forthcoming American Journal of Economics and Sociology (Nov, 2011); S. Maxwell, “The Social Norms
of Discrete Consumer Exchange” The American Journal of Economics and Sociology 58:4 (2006) pp. 9991018.
26
enjoying special opportunities and rewards, to justify not only to themselves that this is
deserved, but to convince the larger population more generally to support policies and
institutions that work to this group’s advantage and to the direct disadvantage of that
larger population.74
Particularly under conditions of challenge or change, one of the ways inequalities
are perpetuated, maintained or, in this case, expanded, is through beliefs about
entitlement (higher rewards justified because of who a person is) and deservingness
(higher rewards justified because of what they do).75
Second, the acceptance of hierarchy and inequality combined with justification
for that, generates a sense that dissent is inappropriate, with conformity and subordination
valued more.
Third, if those in charge of business really are more skilled, have access to better
information, and are more deserving of the power to decide, then business really is better
than citizen controlled democracy in this view.
This structure of unequal power, restricted access to information, excessively
stretched rewards, and removal of decision-making debate from all but a select few, is a
set of practices entirely at odds with the standards required for effective citizen-based
democracy, even if those standards are not always attained. Along with the level of
empowerment that enables citizens to feel able to influence policy and election outcomes
C. L. Hafer and B. L. Choma, “Belief in a Just World, Perceived Fairness, and Justification of the Status
Quo” in Social and Psychological Bases of Ideology and System Justification, J. T. Jost, A. C. Kay and H.
Thorisdottir (eds) (Oxford: Oxford Univ. Press, 2009) pp. 107-125; T. R. Tyler, “A Psychological
Perspective on the Legitimacy of Institutions and Authorities” in The Psychology of Legitimacy: Emerging
perspectives on Ideology, Justice, and Intergroup Relations J. T. Jost and B. Major (eds) (Cambridge:
Cambridge Univ. Press, 2001) pp. 416-436.
75
L. T. O’Brien and B. Major, “Group Status and Feelings of personal Entitlement: The Roles of Social
comparison and System-Justifying Beliefs” in Social and Psychological Bases of Ideology and System
74
27
and therefore worthwhile to vote, and an economic level of well-being sufficiently
removed from desperate straits to facilitate intellectual concern with the polity, is not
supported by hierarchical workplace practices including substandard pay, or by other
aspects of business ideology and beliefs, as shown below.
Because working people spend so much of their time engaged in work, and
because most families’ well-being depends on workplace earnings, the extent to which
workplace practices undermine democratic participation and citizen-driven election
outcomes can and does influence outcomes in areas not directly workplace-controlled,76
extending business managers’ reach beyond economics, into the democratic process.
In order to assess some of the values and beliefs of faculty across academic fields,
an anonymous survey was administered during the 2008-2009 Academic Year. The
survey was sent to academics in major research universities in three waves.77 Surveys
were sent hardcopy to, and received from, academics in every discipline listed in the
major universities selected; these included a broad array of the sciences, humanities,
social sciences, and of course business. There was an overall total response rate of
12.55%.78 For this paper, only those respondents who identified their locality as the U.S.
were included, and since we contrast responses of academics in Business with responses
Justification, J. T. Jost, A. C. Kay and H. Thorisdottir (eds). (Oxford: Oxford Univ. Press, 2009) pp. 427443.
76
C. Pateman, Participation and Democratic Theory (Cambridge: Cambridge Univ. Press, 1970).
77
The first was mailed with cover letter and stamped return envelopes, to faculty in every department at
seven major U.S. universities, with faculty names taken from Department Websites. The second wave
consisted of emailed invitations to participate in the survey online, again sent to academics in major
research universities, with names and email addresses gleaned from University websites. The third wave
was sent to a purchased mailing list from the Academy of Management divisions of Business Policy and
Strategy, and International Management, to over-sample business academics. A fourth wave was
administered in Australia, excluded from this US-based analysis.
78
This rate does raise the concern of non-response bias. Unfortunately, no resources were available for
follow-up contact; worse, errors in envelope printing omitted a return address on more than half of the sent
envelopes, an error which both decreased the response rate and prevented return-to-sender activity.
28
of academics in other fields, those which omitted academic field were excluded, as were
those whose surveys were incomplete. This resulted in a final sample size of 1149
respondents who identified their residence as the U.S., identified their academic field, and
who held a PhD.
Value-laden statements were offered in this survey, with which respondents were
invited to Strongly Agree, Agree, Disagree, or Strongly Disagree. These were coded 2, 1,
-1, and -2, respectively. Respondents marking the center between the four options were
coded 0. There were also informational boxes for demographics.
What we find in the self-reported values and beliefs from this survey is that there
are notable differences between values and beliefs held by faculty in business, and the
values and beliefs held by faculty in other disciplines, which are loosely grouped into the
Sciences, the Humanities, and the Social Sciences.
Business faculty were consistently less supportive of population economic wellbeing, valued justification for inequality more, were less tolerant of dissent, and less
supportive of citizen majority rule, preferring business dominance over democracy.
These differences are readily visible in Table 1 which lists the actual survey
statements on the left, and on the right, the mean or averaged responses of the faculty in
that discipline group to each of the listed questions. The mean response of each
discipline group to each question is tested with an independent samples t-test, comparing
that group’s mean response to the average or mean responses of all other faculty for that
question. The levels at which the answers differ (if they do) by disciplinary group, are
indicated with two stars if the differences between the means of that discipline’s
responses, and the responses of the other groups, is highly statistically significantly
29
different at the 99% level of analysis, one star if the means are significantly different at
the 95% level of analysis, and a tilde mark (~) if the difference is significant at the 90%
level of analysis. Using this guide, it is possible to see for which survey questions,
Business faculty answers differ significantly from the answers of faculty in other
disciplines.
[insert Table 1 about here]
Business faculty are significantly less supportive of a “living wage” level of
compensation than are faculty in other fields: the mean agreement with the statement that
“Businesses should pay all employees enough to live well” was .63 among academics in
business, compared to the higher levels of agreement of 1.04 in the Sciences, 1.54 in the
Humanities, and 1.22 in the Social Sciences. In other words, while all four groups of
faculty showed on average some level of agreement with that statement, on average
Business faculty were statistically significantly less supportive of paying all employees
enough to live well, than were faculty in the other fields.
Being paid enough to live well is required to provide working people with a
reasonable life, as of course is medical care. It is revealing of the business ideology that
business faculty are also less supportive than faculty in the Humanities and Social
Sciences of everyone having medical care, although the survey question wording made
clear that this medical care, unlike wage levels, was not at business expense. This lack of
support for population economic and physical well-being is matched with positive
support for unequal distribution in other ways: business faculty agree more than other
30
faculty that it is OK for some to enjoy luxuries while others do without; Humanities
faculty actually hold on average a negative view of this statement.
Business faculty are more supportive of a general system justification for
hierarchy as well. Hierarchy is only justified if everyone gets a fair chance so that those
who are seen to succeed are understood to have been deserving of that, while those who
fail are at fault. Faculty in other disciplines are less persuaded that chances are fair, or
that the wealthy deserve their status. Faculty in non-business disciplines are also less
willing to condemn those for whom success may have proved somewhat elusive.
Second, business faculty are more intolerant of dissent, valuing conformity and
subordination more than faculty in other fields. This is a value in direct opposition to the
active participation in debate and dissent so essential for effective democracy. Business
faculty prefer, more than other faculty, that employees not question their managers, and
that those people whose values are different should leave. Beyond active expression of
dissent, business faculty appear intolerant of the intellectual diversity and idea differences
arising from a group of people working together, toward shared goals, whose own
personal values are not entirely aligned with the personal values others hold. This seems
a rather extreme form of intolerance.
Third, we observe differences in values more directly relating to democratic
process and outcomes. Pre-Citizens-United,79 many would understand democratic
elections to mean that individual private citizens cast single votes for candidates they
select to carry out policies favored by those voters, that this is done on the basis of a
79
CITIZENS UNITED v. FEDERAL ELECTION COMMISSION ( No. 08-205 ) decided by the U.S.
Supreme Court, Argued March 24, 2009—Reargued September 9, 2009––Decided January 21, 2010.
31
reasonably informed citizenry, and that election outcomes would accurately reflect that
majority count.
Indeed, teams of international election observers are regularly dispatched world-wide to
assess the fairness of elections using just that standard. Like views about wealth and
income compression, business faculty disagree: there is a tendency instead to believe that
businesses should be able to influence election outcomes.
Nor do business faculty believe, on average, that on the international scene,
developing nations should have a voice of sufficient power and strength to be equal to
that of the United States.
Finally, business and non-business faculty differ in their views about corporations
and violence. In the U.S., businesses have a long history of hiring agents to engage in
violent acts against employees, union organizers, or the local citizenry,80 a history much
mediated in more recent times. Globally, however, corporate violence is alive and well,
particularly in less developed nations when employees try to unionize or citizens object
to business activity in their geographic locale.81
While faculty in many disciplines find the use of private military forces (which
have, after all, just one ultimate use) repugnant, business faculty are significantly less
negative in their response.
What is interesting about the responses from faculty in the several discipline
groups, is that differences across fields on average are relatively small, most around half
80
R. Hunter, Violence and the Labor Movement, (NY: Macmillan, 1914); R. M. Smith, From Blackjacks
To Briefcases: A History of Commercialized Strikebreaking and Unionbusting in the United States
(Athens: Ohio Univ. Press. 2003); S. Martelle, Blood Passion, (NJ: Rutgers University Press, 2008).
81
L. Skeen, “Coca-Cola Sued for ‘Campaign of Violence’ in Guatemala, North American Congress on
Latin America (April 7, 2010) https://nacla.org/node/6504; B. Adams and S. Richardson, “Indonesia:
Investigate Escalating Violence in Papua” Mines and Communities (March 17, 2006)
http://www.minesandcommunities.org/article.php?a=3681
32
or a quarter point although some are larger such as the difference between views on a
living wage between academics in business, science, the humanities and the social
sciences, the latter groups of which are far more supportive of population well-being and
notably less supportive of inequality. On all but two of the listed survey statements,
differences are statistically significantly different from zero, indicating that even the
smaller differences have meaning.
Small difference sizes may be seen as one indication of widespread acceptance of
some of these system-justifying beliefs. These ideological elements are at their most
powerful when they are broadly consensual82 and when those whom are thereby
disadvantaged cannot really imagine alternatives to that scheme.83
Academics across fields thought well of their own skills.
Section Four: Essential Elements of Effective Solutions.
As solutions to changes wrought by the Great Recession emerge, awareness of
ideological factors helping to drive these effects is crucial to effective solution design.
Assumptions that the declining wealth, income and power of the American middle class
are an unforeseen error, lead to solutions which perpetuate and exaggerate that dispersion
of income and wealth while leaving the precepts of neoliberalism intact.84 This approach
leads to effort, funds, and regulation misdirected because this result is no error at all: if
not directly caused by activities consonant with ideologies reproduced in business
Ridgeway, “Emergence of Status Beliefs.”
Lukes, Power.
84
H. Patomaki, “Neoliberalism and the Global Financial Crisis” New Political Science 31:4 (2009) pp.
431-442.
82
83
33
schools, then it is certainly the case that policy changes derived from that recession will
benefit the wealthy at the expense of the middle class even more.
Wealth and power inequality was greatly attenuated during a different but
historically temporary period of time: the Great Compression. Lasting from the 1940s
until the 1970s, this compression of income and wealth fundamentally altered the
economic landscape in the U.S. Ushered in by democratic elections which resulted in the
New Deal, large changes in tax, employment, and education policy led to the decline of
top incomes and wealth, and to the rise of the American Middle Class. While
ideologically empowering and pleasing to many, a well-organized minority turned to
business education as a mechanism to convey and institutionalize in policy a different set
of ideological views, along with practical business training, to reverse this mid-Century
trend.
It worked. Polarization of incomes and wealth, pushed farther apart by the Great
Recession, are the results of these and other like-minded efforts, which have restored topend wealth and incomes to pre-1929 proportions. Current proposals on the political
horizon will exacerbate this trend, using the Great Recession’s impact to further slash
budgets for education and housing, along with tax cut extensions for corporations and the
very wealthy whose effective tax rate has declined to about 17%.85
Perhaps coincidentally, but certainly consistent with business ideological views,
the Supreme Court decision in Citizens United begins a relaxation of strictures against
business control of election outcomes even in the U.S. With budgets for local police
C. Aldeman, “Effective Tax Rates of the Richest 400 Americans” QuickEd Education Sector (February
18, 2010) http://www.quickanded.com/2010/02/effective-tax-rates-of-the-richest-400-americans.html ; J.
Novak, “Richest 400 Earn More, Pay Lower Tax Rate” Forbes.com (January 29, 2009)
http://www.forbes.com/2009/01/29/irs-high-income-personal-finance-taxes_0129_wealthy_americans.html
85
34
departments slashed as well, domestic corporate employment of private military forces
cannot be far behind.86
Values, preferences and beliefs of faculty across disciplines are transmitted to
their students in the education process. When those values are anti-democratic and held
by a group of faculty whose reach is unusually long, whose policy influence as experts is
unusually strong, and whose students are unusually numerous, then counteraction to be
effective must be similarly comprehensive.
To effectively begin a reversal of pre-1929 distributions of power and wealth,
three segments of policy require attention:
1. A basic standard of population well-being must be established which extends
to all members of the U.S. population a minimum living wage and other compensation
sufficient, as is done in the other OECD countries, to live well.
2. Sufficient progressive tax gains must be enacted on those who can most easily
afford to pay – wealthy corporations and tax filers – to reliably fund public education for
all children at a level adequate to encourage not just the acquisition of factual knowledge,
but the development of critical thinking skills, the practice of debate and informed
dissent, essential ingredients to an effectively functioning electorate.
3. Legislation mandating return to internationally accepted standards of citizen
controlled democracy, where election outcomes are the result of accurate counting and
individual vote majority rule, should be placed high on our policy priority list. Elections
dominated by business influence through funding and control of key resources,
K. Bohn, “Police Face Cuts as Economy Falters” CNN Justice (2008) http://articles.cnn.com/2008-1023/justice/police.economy_1_officer-jobs-police-chiefs-training-budget?_s=PM:CRIME ; NJ.com
“Camden Council Approves Laying Off Nearly Half of Police Force” (2010)
http://www.nj.com/news/index.ssf/2010/12/camden_approves_layoffs_of_nea.html
86
35
campaigns of misinformation or violence, will serve to lower the voting participation rate
as citizens lose their sense that votes actually matter.
Only by approaching reform comprehensively can the wealth and income effects
of the Great Recession and the past half-century be turned back, and the legitimacy of the
new normal, already gaining traction as a ‘jobless recovery’ with a new, higher level of
structural unemployment and lower taxes for the very rich, be reversed.
36
Table 1: A Comparison of Faculty Values and Beliefs Between Academic Fields
Actual Wording of Survey Statements,
to which respondents could Strongly
Agree (2), Agree (1), Disagree (-1), or
Strongly Disagree (-2)
Mean Scores by Disciplinary Division,
Responses to Survey Statements by Faculty
Social
Business Sciences Humanities Sciences
1. Population Well-Being:
Businesses should pay all employees
enough to live well
.63**
1.04~
1.54**
1.22**
Everyone world-wide should have
medical care
.93**
0.98
1.36**
1.28**
It is OK that some enjoy luxuries
while others do without
.74**
0.49
-.28**
.17**
People who have wealth deserve it
-0.03**
-.42*
-.69**
-.48*
Everybody gets a fair chance today
-.82**
-.93~
-1.35**
-1.20**
When people fail, it is usually their
own fault
-.22**
-.24
-.75**
-.61**
.89
.83
.87
.92
Employees should not question their
managers
-1.46*
-1.48
-1.61**
-1.52
People who do not share others’
values should leave
-1.28**
-1.50*
-1.59**
-1.58**
Businesses should be able to influence
election outcomes
-.90**
-1.04
-1.29**
-.97
Developing nations should have a
voice equal to the USA
-.09**
.06
.59**
.43**
Nations should have the right to deny
business opportunities.
.32
.33
.38
.57*
It is reasonable for businesses to hire
private military forces
-.84**
-1.13
-1.22**
-.92
1a. Justification:
My own skills are excellent
2. Intolerance of Dissent:
3. Business Domination:
**p<.01 *p<.05 ~p<.10
37
38