The golden era of the US corporate elite “Any President who wants to run a prosperous country depends on the corporation at least as much as—probably more than—the corporation depends on him. His dependence is not unlike that of King John on the landed barons of Runnymede, where Magna Carta was born.” Fortune magazine, 1952
Corporate elites and states after financialization Jerry Davis CRESC Seminar: Studying Elites University of Manchester 24 April 2009
© 2009 by The Regents of The University of Michigan • All Rights Reserved
2
3
4
Research question:
Outline of the talk • Industry and finance capitalism in the early 20th century • The evolution of local and national elite networks • The rise of market-based finance and the end of “bank hegemony” • Dense elite networks: conspiracy, or something more benign? • Finance turns states from sovereigns to vendors • Bespoke tailors, or prêt-à-porter?
WTF?? How have the links between corporate elites and the state evolved in the US? What part does “financialization” play? 5
6
Social critics have linked bank-based corporate networks to economic control for a century
Industry and finance capitalism in the early 20th century
7
Louis Brandeis, 1914
V.I. Lenin, 1916
“The practice of interlocking directorates is the root of many evils. It offends laws human and divine....It is the most potent instrument of the Money Trust”
“A very close personal union is established between the banks and the biggest industrial commercial enterprises…through the appointment of bank directors to the Supervisory Boards of industrial and commercial enterprises, and vice versa ”
8
On the verge of World War I, three American banks held dominant positions in the corporate network
JP Morgan Chase board, 2001: plus ça change…
• In 1912, JP Morgan’s partners collectively held 72 directorships on 47 corporate boards • First National of New York executives served on 49 boards • National City Bank executives served on 48 boards • 1914: in the face of populist pressure and imminent legislation, JP Morgan’s men resigned directorships in 30 of their “subject” companies
9
Mid-century theorists linked business networks explicitly to political power
10
Network analysis shows that corporate elites really do all know each other… GOLDEN WEST FINANCIAL CORP ONEOK INC NEW
WESTERN RESOURCES INC KS
ABM INDUSTRIES INC MURPHY OIL CORP
REGIONS FINANCIAL CORP
C. Wright Mills, 1956
“By the power elite, we refer to those political, economic, and military circles which, as an intricate set of overlapping cliques, share decisions having at least national consequences”
ALASKA AIR GROUP INC
AVISTA CORP
SCHOLASTIC CORP
The Fortune 1000 board of directors network
LANDSTAR SYSTEM INC
TESORO PETROLEUM CORP PERFORMANCE FOOD GROUP CO
GEORGIA GULF CORP
UNIVERSAL FOREST PRODUCTS INC
TECH DATA CORP
NATIONAL FUEL GAS CO
QUINTILES TRANSNATIONAL CORP WATSCO INC PROVIDENT FINANCIAL GROUP INC
NASH FINCH CO OLD KENT FINANCIAL CORP
PINNACLE WEST CAPITAL CORP SILGAN HOLDINGS INC
CHAMPION ENTERPRISES INC M&T BANK CORP GENERAL CABLE CORP NEW DEVON ENERGY CORP NEW
JDS UNIPHASE CORP FAIRCHILD SEMICONDUCTOR INTL INC
UNITED STATIONERS INC
SERVICE CORP INTERNATIONAL HUB GROUP INC
PAYCHEX INC
SIERRA PACIFIC RESOURCES GENESIS HEALTH VENTURES INC
FOAMEX INTERNATIONAL INC PUGET ENERGY INC
RGS ENERGY GROUP INC
GREENPOINT FINANCIAL CORP PAYLESS CASHWAYS INC
PHAR MOR INC
PSS WORLD MEDICAL INC JABIL CIRCUIT INC
UNIVERSAL CORP
EMCOR GROUP INC
VALERO ENERGY CORP NEW
PENTAIR INC
MICRON TECHNOLOGY INC MITCHELL ENERGY & DEVELOPMENT CORP
MILACRON INC
ABERCROMBIE & FITCH CO DE STEELCASE INC
COVENTRY HEALTH CARE INC
MASCO CORP
LANDAMERICA FINANCIAL GROUP INC
KELLY SERVICES INC
GREAT LAKES CHEMICAL CORP
TYSON FOODS INC PUBLIC SERVICE CO OF NEW MEXICO
MAXXAM INC
ALTERA CORP MANPOWER INC MICROAGE INC SPARTAN STORES INC
DEL WEBB CORP
WHOLE FOODS MARKET INC
ALLIANT ENERGY CORP
PERKINELMER INC
HARTFORD FINANCIAL SERVICES GROUP I
LEAR CORP
MARSHALL & ILSLEY CORP INTERNATIONAL MULTIFOODS CORP
PATHMARK STORES INC EMC CORP
QUANTA SERVICES INC
TELEPHONE & DATA SYSTEMS INC DE
WHX CORP
INTERSTATE BAKERIES CORP
DIEBOLD INC
LAM RESEARCH CORP
TORO CO
CYPRESS SEMICONDUCTOR CORP
POLARIS INDUSTRIES INC TELLABS INC NIAGARA MOHAWK HOLDINGS INC
BORDERS GROUP INC MI
WESTERN DIGITAL CORP
FURNITURE BRANDS INTERNATIONAL INC
MARK IV INDUSTRIES INC
ADMINISTAFF INC
VECTREN CORP BROADWING INC WILLAMETTE INDUSTRIES INC
MERISEL INC
DTE ENERGY CO
CARDINAL HEALTH INC
WHIRLPOOL CORP
FLOWSERVE CORP
E W SCRIPPS CO OH MOHAWK INDUSTRIES INC
SMURFIT STONE CONTAINER CORP
AMERICAN ELECTRIC POWER CO INC
HEILIG MEYERS CO
KENNAMETAL INC LSI LOGIC CORP
HEALTH NET INC WESCO INTERNATIONAL INC
TERADYNE INC
SUPERVALU INC WORLDCOM INC NEW FOOTSTAR INC
REYNOLDS & REYNOLDS JACOBS CO ENGINEERING GROUP INC
UNIFI INC
QWEST COMMUNICATIONS INTERNATIONAL
AGCO CORP DE MANDALAY RESORT GROUP
STANDARD REGISTER CO
DOLLAR GENERAL CORP
RITE AID CORP
GALILEO INTERNATIONAL INC
ANIXTER INTERNATIONAL INC MCN ENERGY GROUP INC
PRINCIPAL FINANCIAL GROUP INC
AMERICAN AXLE & MANUFACTURING HLDGS
CALPINE CORP
SMITHFIELD FOODS INC
IMATION CORP FMC CORP
VOLT INFORMATION SCIENCES INC
CABLEVISION SYSTEMS CORP NEW
DQE
OCCIDENTAL PETROLEUM CORP LINENS UNITED AUTO GROUP INCN THINGS INC
AK STEEL HOLDING CORP
STATE STREET CORP
LIZ CLAIBORNE INC
MELLON FINANCIAL CORP
A O SMITH CORP
VALSPAR CORP
ALBERTSON S INC
HEALTHSOUTH CORP
RYLAND GROUP INC ITT INDUSTRIES INC LA Z BOY INC
HILLENBRAND INDUSTRIES INC
HUMANA INC
BANTA CORP NAVISTAR INTERNATIONAL CORP
TRIGON HEALTHCARE INC
SUNGARD DATA SYSTEMS INC
MOLEX INC
J B HUNT TRANSPORT SERVICES RELIANT INC ENERGY INC KINDRED HEALTHCARE INC SAFECO HARRAH S ENTERTAINMENT INCCORP FIFTH THIRD BANCORP
TECO ENERGY INC
PREMCOR USA INC
TIMKEN CO
UTILICORP UNITED INC
UAL CORP
BIG LOTS INC
POLO RALPH LAUREN CORP MODIS PROFESSIONAL SERVICES INC
RAYTHEON CO NEW BANK ONE CORP
DOW CHEMICAL CO ABBOTT LABORATORIES
UNOCAL CORP
ALLIED WASTE INDUSTRIES INC
H & R BLOCK INC
CINTAS CORP
ST PAUL COS INC ROHM & HAAS CO
ROCKWELL INTERNATIONAL CORP NEW U S BANCORP DE
WASTE MANAGEMENT INC NEW
MBNA CORP
POLYONE CORP
CLOROX CO
TEXACO INC SARA LEE CORP
EATON CORP
EDISON INTERNATIONAL
DOVER CORP
TELEFLEX INC BERGEN BRUNSWIG CORP MCLEODUSA INC
AMERADA HESS CORP VIASYSTEMS GROUP INC
ARAMARK CORP
WACHOVIA CORP NEW
AMEREN CORP
LINCOLN NATIONAL CORP
FRONTIER OIL CORP WY PRIMEDIA INC
COLGATE PALMOLIVE CO BANK OF AMERICA CORP
ROADWAY CORP
DUN & BRADSTREET CORP DE NEW WINN DIXIE STORES INC
JONES APPAREL GROUP INC
EL PASO CORP AMERICAN GREETINGS CORP
AUTONATION INC DE
ANNTAYLOR STORES CORP
YELLOW CORP
MERRILL LYNCH & CO INC
QUORUM HEALTH GROUP INC
NICOR INC KEYSPAN CORP
RALSTON PURINA CO
SOUTHERN CO
CENTEX CORP SCHERING PLOUGH CORP
AMES DEPT STORES INC ENTERGY CORP DE
PAYLESS SHOESOURCE INC NEW
PROGRESSIVE CORP BEAR STEARNS COS INC PRICELINE COM INC APPLERA CORP
PEP BOYS MANNY MOE & JACK
CIT GROUP INC
BORDEN INC PROVIDIAN FINANCIAL CORP
NORTHROP GRUMMAN CORP TJX COS INCNEW TRW INC BOEING COOMNICOM GROUP INC
SUNTRUST BANKS INC COLA ENTERPRISES INC COCA
DIME BANCORP INC
COX COMMUNICATIONS INC DE
BECTON DICKINSON & CO
MERCK & CO INC US AIRWAYS GROUP INC
MANOR CARE INC NEW
AUTOMATIC DATA FLEMING PROCESSING COS INCINC MARSH & MCLENNAN COS INC
LOWE S COS INC LITTON INDUSTRIES INC
ENTERASYS NETWORKS INC
TRIAD HOSPITALS INC
AMERICAN WATER WORKS CO INC DYNEGY INC IL BOISE CASCADE CORP DIAL CORP NEW
CENDANT CORP BELLSOUTH CORP
DELTA AIR LINES INC AOL TIME WARNER INC
FPL GROUP INC
KEYCORP OHIO MCKESSON CORP DE
NACCO INDUSTRIES INC
DIMON INC
APPLE COMPUTER INC
UNITRIN INC KINDER MORGAN INC NEW
TRANSOCEAN SEDCO FOREX INC
WARNACO GROUP INC
SAFEWAY INC
GATX CORP AMR CORP
MAY DEPARTMENT STORES CO
BAUSCH & LOMB INC COCA COLA CO ANHEUSER BUSCH COS INC PITTSTON CO
LEGG MASON INC
ANALOG DEVICES INC
AMSOUTH BANCORPORATION
SAFEGUARD SCIENTIFICS INC
ALLEGHENY TECHNOLOGIES INC
AMERICAN EXPRESS CO AMERICAN INTERNATIONAL GROUP INC
CIGNA CORP
KNIGHT RIDDER INC
OWENS CORNING
BELO CORP VULCAN MATERIALS CO FLUOR CORP NEW
NORFOLK SOUTHERN CORP
STILWELL FINANCIAL INC GENTEK INC
COMMUNITY HEALTH SYSTEMS INC
REVLON W W GRAINGER INCINC
EOG RESOURCES INC
SCIENTIFIC ATLANTA INC LUCENT TECHNOLOGIES INC
PACCAR INC
KROGER CO TEXAS INSTRUMENTS INC EQUIFAX INC HARRIS CORP FLAWASHINGTON POST CO
NATIONAL CITY CORP
ENGELHARD CORP
UNOVA INC
METRIS COS INC
POPULAR INC AMPHENOL CORP
VERIZON COMMUNICATIONS FOOT INC LOCKER INC
GOODYEAR TIRE & RUBBER CO FEDERAL HOME LOAN MORTGAGE CORP
CORPUNION PACIFIC CORP BURLINGTON NORTHERN SANTA FE CORPGOODRICH PARKER HANNIFIN CORP BLACK & DECKER CORP
LANIER WORLDWIDE INC BRUNSWICK CORP
UNISYS CORP KERR MCGEE CORP
GRANITE CONSTRUCTION INC
OWENS ILLINOIS INC NEWELL RUBBERMAID INC
DUKE ENERGY CORP CIRCUIT CITY STORES INC
QUAKER OATS CO
BANK OF NEW YORK CO INCCLARK CORP KIMBERLY
RYDER SYSTEM INC
FLOWERS FOODS INC COORS CO TRINITY INDUSTRIESADOLPH INC
IT GROUP INC
SPORTS AUTHORITY INC
LONGS DRUG STORES CORP
INC
REEBOK INTERNATIONAL LTD SBC COMMUNICATIONS INC
CHARLES SCHWAB CORP
PG&E CORP
TIFFANY & CO
JOHNSON & JOHNSON UNITEDHEALTH GROUP INC
LUBRIZOL CORP HCA INC NEW
DOMINION RESOURCES INC VA WESTVACO CORP
HASBRO INC
WYNDHAM INTERNATIONAL INC
BMC SOFTWARE INC
INTERPUBLIC GROUP OF COS INC
COMFORT SYSTEMS USA INC
AON CORP BAXTER INTERNATIONAL DPL INC SEARS ROEBUCK & CO FEDEX CORP KELLOGG CO BOSTON SCIENTIFIC CORP UNION CARBIDE CORP NEW
MORGAN STANLEY DEAN WITTER & CO CATERPILLAR INC PROCTER & GAMBLE CO DELL COMPUTER CORP SUNOCO INC COOPER INDUSTRIES INC GENERAL MILLS INC GEORGIA PACIFIC CORP RAND CO INGERSOLL GENERAL DYNAMICS CORP BRISTOL MYERS SQUIBB CO
SYSCO CORP
MATTEL INC
WESTPOINT STEVENS INC
USA EDUCATION INC
CSK AUTO CORP
BEST BUY CO INC
OGE ENERGY CORP
LEGGETT & PLATT INC
V F CORP
INTERNATIONAL PAPER CO
INTERNATIONAL BUSINESS MACHINES COR CONOCO INC
NATIONAL SERVICE INDUSTRIES INC WM WRIGLEY JR CO
CH2M HILL COMPANIES LTD NOBLE AFFILIATES INC
AUTOZONE INC
QUEST DIAGNOSTICS INC
STORAGE TECHNOLOGY CORP
PRAXAIR INC
MCDONALD S CORP
FORD MOTOR CO
DARDEN RESTAURANTS INC D & K HEALTHCARE RESOURCES INC
UNIVERSAL HEALTH SERVICES INC
UGI CORP PA
HARMAN INTERNATIONAL INDUSTRIES INC
DANA CORP
J P MORGAN CHASE & CO
MGM MIRAGE
MEAD CORP GENERAL MOTORS CORP AVON PRODUCTS INC
AMERICA WEST HOLDINGS CORP
STRYKER CORP
HAWAIIAN ELECTRIC INDUSTRIES INC
GOLDMAN SACHS GROUP INC GANNETTSCIENCE CO INC APPLICATIONS INTERNATIONAL ESTEE LAUDER COS INC WALT DISNEY CO NEW
MOTOROLA INC
POTOMAC ELECTRIC POWER CO
CONEXANT SYSTEMS INC
PEPSIAMERICAS INC NEW FEDERATED DEPARTMENT STORES INC NEW
MINNESOTA MINING & MANUFACTURING CO
HARLEY DAVIDSON INC
DYNCORP
MARRIOTT INTERNATIONAL INC NEW
KMART CORP
MICROSOFT CORP ALLSTATE CORP
ELECTRONIC DATA SYSTEMS CORP
SUMMIT BANCORP NJ
W R BERKLEY CORP
PACTIV CORP ORACLE CORP DE
USG CORP
ARMSTRONG WORLD INDUSTRIES INC
ASHLAND INC
ARROW ELECTRONICS INC
PACKAGING CORP OF AMERICAOWENS & MINOR INC NEW
CDI CORP
SNAP ON INC
VIACOM INC HONEYWELL INTERNATIONAL INC XEROX CORP PNC FINANCIAL SERVICES GROUP INC J C PENNEY CO INC
GENERAL ELECTRIC CO
PHELPS DODGE CORP PEPSICO INC
PEPSI BOTTLING GROUP INC THOMAS & BETTS CORP
GPU INC EXELON CORP WEYERHAEUSER CO EMERSON ELECTRIC CO TEXTRON INC
CITIGROUP INC SERVICEMASTER CO
TRANSMONTAIGNE INC
AMERICAN STANDARD COS INC PUBLIC SERVICE ENTERPRISE GROUP INCUSEC INC
LEXMARK INTERNATIONAL INC
CHUBB CORP PHILIP MORRIS COS INC TEMPLE INLAND INC
EASTMAN KODAK CO
KB HOME
KELLWOOD CO
BRIGHTPOINT INC BRM HOLDINGS INC
UNITED TECHNOLOGIES CORP CVS CORP
PFIZER INC
FLEETBOSTON FINANCIAL CORP
PETSMART INC
HARCOURT GENERAL INC
W R GRACE & CO NEW
IMC GLOBAL INC
CLEAR CHANNEL COMMUNICATIONS INC
CONVERGYS CORP TARGET CORP
HOUSEHOLD INTERNATIONAL CSX CORP INC CUMMINS INC
STAPLES INC
CONTINENTAL AIRLINES INC
STANLEY WORKS
WASHINGTON MUTUAL INC
FINOVA GROUP INC
RADIOSHACK CORP
DOW JONES & CO INC NORTHERN TRUST CORP
E I DU PONT DE NEMOURS & CO
COMCAST CORP
AUTOLIV INC
WALTER INDUSTRIES INC
TRICON GLOBAL RESTAURANTS INC
EXXON MOBIL CORP
NEWMONT MINING CORPHOME DEPOT INC ALCOA INC AT&T CORP JOHN HANCOCK FINANCIAL SERVICES INC LEHMAN BROTHERS HOLDINGS INC AES CORP INTERNATIONAL FLAVORS & FRAGRANCES
TECUMSEH PRODUCTS CO
STANCORP FINANCIAL GROUP INC
AMERISOURCE HEALTH CORP
WALGREEN CO CAMPBELL SOUP CO HERSHEY FOODS CORP AIR PRODUCTS & CHEMICALS INC INGRAM MICRO INC HERMAN MILLER INC
AETNA INC PA
ILLINOIS TOOL WORKS INC WAL MART STORES INC
SOLUTIA INC HORMEL FOODS CORP
LIMITED INC
THERMO ELECTRON CORP
MDU RESOURCES GROUP INC
TRANS WORLD AIRLINES INC MERITOR AUTOMOTIVE INC CRANE CO
CONSTELLATION ENERGY GROUP INC
WISCONSIN ENERGY CORP NEW YORK TIMES CO RYERSON TULL INC NEW CHARMING SHOPPES INC
TEKTRONIX INC
LOUISIANA PACIFIC CORP
IBP INC TENNECO AUTOMOTIVE INC
KOHL S CORP
COUNTRYWIDE CREDIT INDUSTRIES INC
ZIONS BANCORPORATION
STARBUCKS CORP
UNUMPROVIDENT CORP
CABOT CORP JOHNSON CONTROLS INCCORP SPRINT
ECOLAB INC
TRIBUNE CO
PHARMACIA CORP DE
SAKS INC
CADENCE DESIGN SYSTEMS INC
OHIO CASUALTY CORP
USFREIGHTWAYS CORP BAKER HUGHES INC
MONY GROUP INC PITNEY BOWES INC
BRIGGS & STRATTON CORP
NEWPORT NEWS SHIPBUILDING INC SHERWIN WILLIAMS CO FIRST TENNESSEE NATIONAL CORP RUSSELL CORP
UNITED RENTALS INC NEW
SERVICE MERCHANDISE CO INC
SHOPKO STORES INC
GREY GLOBAL GROUP INC
GENTIVA HEALTH SERVICES INC CORNING INC
SCI SYSTEMS INC
NCR CORP
GRAND UNION CO
“As an elite, it is not organized, although its members often seem to know one another, seem quite naturally to work together, and share many organizations in common.”
IMS HEALTH INC
EQUITABLE RESOURCES INC AMERICAN HOME PRODUCTS CORP
POLAROID CORP ALLMERICA FINANCIAL CORP
NEIMAN MARCUS GROUP INC
KLA TENCOR CORP
JO ANN STORES INC
CERIDIAN CORP NEW MAYTAG CORP
WALLACE COMPUTER SERVICES INC
CMS ENERGY CORP
ADVANTICA RESTAURANT GROUP INC
XCEL ENERGY INC
DEERE & CO
WILLIAMS COMPANIES INC CHEMICAL CO EASTMAN
FEDERAL MOGUL CORP
NORDSTROM INC
WELLPOINT HEALTH NETWORKS INC NEW
READER S DIGEST ASSOCIATION INC
HUBBELLCOLLINS INC & AIKMAN CORP NEW
LYONDELL CHEMICAL CO
COMERICA INC
ON SEMICONDUCTOR CORP
R R DONNELLEY & SONS CO
WELLS FARGO & CO NEW
AVNET INC
DEL MONTE FOODS CO
CINERGY CORP
SEQUA CORP
MCCORMICK & CO INC
3COM CORP
ENCOMPASS SERVICES CORP
OXFORD HEALTH PLANS INC
JOY GLOBAL INC
CBRL GROUP INC
COMMERCIAL METALS CO
LENNOX INTERNATIONAL INC
STATER BROS HOLDINGS INC
HALLIBURTON CO
SEALED AIR CORPAMGEN NEW INC
DELPHI AUTOMOTIVE SYSTEMS CORP
CLAYTON HOMES INC
OSHKOSH TRUCK CORP ALLEGHENY ENERGY INC
QUESTAR CORP
INDUSTRIES INC STARWOOD HOTELS & RESORTSPPG WORLDWIDE
WGL HOLDINGS INC
NSTAR
SONOCO PRODUCTS CO PROGRESS ENERGY INC
NORTHWEST AIRLINES CORP NEW DEAN FOODS CO
TRUE NORTH COMMUNICATIONS INC SEMPRA ENERGY
USA NETWORKS INC ENRON CORP OR
LOCKHEED MARTIN CORP
BETHLEHEM STEEL CORP
LTV CORP
FIRSTENERGY CORP
PHILLIPS PETROLEUM CO SUN MICROSYSTEMS INC
BRINKER INTERNATIONAL INC
RELIANCE GROUP CO HOLDINGS INC GILLETTE
ENERGIZER HOLDINGS INC
TXU CORP
ALLERGAN INC
COMPUTER SCIENCES CORP VIAD CORP GENUINE PARTS CO OFFICE DEPOT INC
AMAZON COM INC CHEVRONTEXACO CORP
FISHER SCIENTIFIC INTERNATIONAL INC
METALS USA INC
UNITED PARCEL SERVICE INC CISCO SYSTEMS INC COMPAQ COMPUTER CORP
ELI LILLY & CO
GAP INC PETER KIEWIT SONS INC NEW WEATHERFORD INTERNATIONAL INC NEW
CONSOLIDATED EDISON INC SYNOVUS FINANCIAL CORP
SODEXHO MARRIOTT SERVICES INCLOEWS CORP
NISOURCE INC CONAGRA FOODS INC
TORCHMARK CORP
TRANS WORLD ENTERTAINMENT CORP
WACKENHUT CORP
REPUBLIC SERVICES INC
RAYONIER INC NIKE INC
CB RICHARD ELLIS SERVICES INC
ALLTEL CORP
AMERICAN GENERAL CORP
URS CORP
YORK INTERNATIONAL CORP
ULTRAMAR DIAMOND SHAMROCK CORP INTEL CORP
CHARTER ONE FINANCIAL INC
BURLINGTON INDUSTRIES INC
ELECTRONIC ARTS INC
PENNZOIL QUAKER STATE CO
FERRO CORP
BROWN SHOE CO INC
GOLDEN STATE BANCORP INC
HON INDUSTRIES INC
FIRST DATA CORP
CORN PRODUCTS INTERNATIONAL INC PHILLIPS VAN HEUSEN CORP OAKWOOD HOMES CORP
CARLISLE COMPANIES INC
IKON OFFICE SOLUTIONS INC ARCHER DANIELS MIDLAND CO
HILTON HOTELS CORP
BEVERLY ENTERPRISES INC NEW AMERICAN FINANCIAL GROUP INC NEW
APPLIED INDUSTRIAL TECHNOLOGIES INC EXPRESS SCRIPTS INC
CONSECO INC
AVERY DENNISON CORP
CONSOLIDATED FREIGHTWAYS CORP FIRST AMERICAN CORP PRECISION CASTPARTS CORP
BORGWARNER INC BECKMAN COULTER INC
RPM INC DOLLAR TREE STORES INC
IMPERIAL SUGAR CO TX
BERKSHIRE HATHAWAY INC NEW
TOYS R US INC NEW
BALL CORP
R J REYNOLDS TOBACCO HOLDINGS INC
RUDDICK CORP
AMERICAN MANAGEMENT NEXTEL SYSTEMS COMMUNICATIONS INC INC NEW COOPER TIRE & RUBBER CO
DST SYSTEMS INC
BANKNORTH GROUP INC ME
CAREMARK RX INC ANADARKO PETROLEUM CORP
AFLAC INC PROTECTIVE LIFE CORP
NUCOR CORP
ROCK TENN CO
UST INC GROUP 1 AUTOMOTIVE INC
L 3 COMMUNICATIONS HOLDINGS INC BURLINGTON RESOURCES INC
ADELPHIA COMMUNICATIONS CORP
OFFICEMAX INC
E TRADE GROUP INC LABORATORY CORP OF AMERICA HOLDINGS
BROWN FORMAN CORP
STANDARD PACIFIC CORP
CHIQUITA BRANDS INTERNATIONAL INC
FREEPORT MCMORAN COPPER & GOLD INC MILLENNIUM CHEMICALS INC
COMDISCO INC
NORTHWESTERN CORP
FRANKLIN RESOURCES INC
PARK PLACE ENTERTAINMENT CORP
WENDY S INTERNATIONAL INC
TENET HEALTHCARE CORP
DELUXE CORP
HEWLETT PACKARD CO
CRESTLINE CAPITAL CORP CHARTER COMMUNICATIONS INC DE
BELK INC
BOWATER INC
ZALE CORP
JEFFERSON PILOT CORP
PENN TRAFFIC CO
HEALTH MANAGEMENT ASSOCIATES INC QUALCOMM INC APPLIED MATERIALS INC
JACK IN THE BOX INC DE
PIER 1 IMPORTS INC
CKE RESTAURANTS INC
ASTORIA FINANCIAL CORP
FLEETWOOD ENTERPRISES INC
CROWN CORK & SEAL CO INC
SCANA CORP DANAHER CORP
FIDELITY NATIONAL FINANCIAL INC EXIDE TECHNOLOGIES
GUIDANT CORP HOUSE2HOME INC
WILLIAMS SONOMA INC
BARNES & NOBLE INC WABASH NATIONAL CORP HARSCO CORP
ADC TELECOMMUNICATIONS INC TEREX CORP
DOLE FOOD CO INC
MARTIN MARIETTA MATERIALS INC
SOLECTRON CORP
BJ S WHOLESALE CLUB INC APACHE CORP
LANDS END INC
COMPUTER ASSOCIATES INTERNATIONAL I
WORTHINGTON INDUSTRIES INC CNF INC NORTHEAST UTILITIES COSTCO WHOLESALE CORP DE
HUGHES SUPPLY INC CAPITAL ONE FINANCIAL CORP
TEXAS INDUSTRIES INC
CDW COMPUTER CENTERS INC PIONEER STANDARD ELECTRONICS INC
COMPUWARE CORP
PACIFICARE HEALTH SYSTEMS INC NEW
TOWER AUTOMOTIVE INC
SYMBOL TECHNOLOGIES INC FISERV INC MICHAELS STORES INC
RENT A CENTER INC NEW PEOPLES ENERGY CORP SOUTHWEST AIRLINES CO
DILLARD S INC AMKOR TECHNOLOGY INC
SPHERION CORP
PPL CORP
BANK UNITED CORP
DURA AUTOMOTIVE SYSTEMS INC
SPX CORP
SEABOARD CORP
EXPEDITORS INTERNATIONAL OF WASH IN
MAXTOR CORP
MASTEC INC
POTLATCH CORP
NABORS INDUSTRIES INC
BJ SERVICES CO
COOPER CAMERON CORP
11
12
…and banks sit somewhere in the middle
The evolution of local and national elite networks
JP Morgan Chase
Bank of America
Citigroup
13
14
The 1920s stock market boom dispersed ownership in the largest US corporations • Corporate ownership grew increasingly dispersed during the 1920s as retail investors poured into the stock 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 lacked a single large ownership block, according to Berle and Means (1932)
Retail investors, AKA “widows and orphans”
15
16
The dispersion of ownership and the rise of the “managerial class” • Dispersed ownership and the rise of professional managers created a new system of “managerialism” • “The economic power in the hands of the few persons who control a giant corporation is a tremendous force which can harm or benefit a multitude of individuals, affect whole districts, shift the currents of trade, bring ruin to one community and prosperity to another. The organizations which they control have passed far beyond the realm of private enterprise--they have become more nearly social institutions.” Berle and Means, 1932 17
18
The same New York banks were the most central firms in the national board interlock network for decades
Did finance become irrelevant?
1982
1962
“Not ‘Wall Street financiers’ or bankers, but large owners and executives in their self-financing corporations hold the keys of economic power” C. Wright Mills, The Power Elite (1956)
1. 2. 3. 4. 5.
JP Morgan Chase Manhattan Chemical Bank First National City Bank Southern Pacific Railroad 6. Mellon Bank 7. Manufacturers Hanover 8. AT&T 9. Pennsylvania Railroad 10. Bankers Trust
And yet…
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
AT&T JP Morgan Chase Manhattan Citicorp IBM General Foods Chemical Bank Bankers Trust Manufacturers Hanover Mobil
10 most central public corporations (eigenvector centrality). Source: Mintz and Schwartz, 1985 (1962); Davis and Mizruchi, 1999 (1982)
19
20
In ~ every major city, local corporate executives staffed the boards of local banks…
…creating relatively dense urban elite networks Local Non-profit Local Bank
• Boston: Bank of Boston – – – – – – –
Computervision Dennison Manufacturing General Cinema Gillette Prime Computer Raytheon Wyman Gordon
• Pittsburgh: Mellon Bank – – – – – – – –
Air Products Allegheny International Alcoa Joy Manufacturing PPG Industries Quaker State Oil Sperry US Steel Data for 1986 from Davis (1991)
Minneapolis-St. Paul 2000 21
22
“The coming death of commercial banks,” ca. 1991 • Indicators of decline in traditional business included –
The rise of market-based finance and the end of “bank hegemony”
– –
Industry contraction: number of banks dropped from 12,380 (1980) to 7,926 (1994) due to bank closures and mergers Declining significance of bank loans to corporations: bank loans share of corporate debt dropped from 20.5% (1980) to 14.5% (1994) Alarmist claims by insiders: “The banking industry is dead, and we ought to just bury it” (Dick Kovacevich, CEO of Norwest)
• Reasons for decline include – –
23
More attractive (lower cost) alternatives for corporate borrowers (commercial paper, equity markets, etc.) More attractive (higher return) alternatives for depositors (mutual funds, 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 Chase
Of the 10 biggest US banks in 1989, 5 are now part of JP Morgan Chase
…plus ça change… 25
26
Bank consolidation and centrality: Most central firms, 1962-2002
Bank consolidation since 1990: How North Carolina National Bank became Bank of America
1982
1962 1. 2. 3. 4. 5.
JP Morgan Chase Manhattan Chemical Bank First National City Bank Southern Pacific Railroad 6. Mellon Bank 7. Manufacturers Hanover 8. AT&T 9. Pennsylvania Railroad 10. Bankers Trust
Bank of America holds nearly 10% of all deposits in the US through its 5800 branches 27
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
AT&T JP Morgan Chase Manhattan Citicorp IBM General Foods Chemical Bank Bankers Trust Manufacturers Hanover Mobil
2002 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Dell Sara Lee Verizon Allstate AMR JP Morgan Chase Pfizer Morgan Stanley Dow Chemical Sears
28
The Fortune 1000 in 2003 GOLDEN WEST FINANCIAL CORP ONEOK INC NEW
WESTERN RESOURCES INC KS
ABM INDUSTRIES INC MURPHY OIL CORP
REGIONS FINANCIAL CORP
ALASKA AIR GROUP INC
AVISTA CORP
903/1034 firms in largest component
SCHOLASTIC CORP
LANDSTAR SYSTEM INC
TESORO PETROLEUM CORP PERFORMANCE FOOD GROUP CO
GEORGIA GULF CORP
Mean degree: 7.9
UNIVERSAL FOREST PRODUCTS INC
TECH DATA CORP
NATIONAL FUEL GAS CO
QUINTILES TRANSNATIONAL CORP WATSCO INC PROVIDENT FINANCIAL GROUP INC
NASH FINCH CO OLD KENT FINANCIAL CORP
PINNACLE WEST CAPITAL CORP SILGAN HOLDINGS INC
Why all the elites know each other: conspiracy, or something more benign?
CHAMPION ENTERPRISES INC M&T BANK CORP GENERAL CABLE CORP NEW DEVON ENERGY CORP NEW
JDS UNIPHASE CORP FAIRCHILD SEMICONDUCTOR INTL INC
UNITED STATIONERS INC
Mean geodesic: 4.0
SERVICE CORP INTERNATIONAL HUB GROUP INC
PAYCHEX INC
SIERRA PACIFIC RESOURCES GENESIS HEALTH VENTURES INC
FOAMEX INTERNATIONAL INC PUGET ENERGY INC
RGS ENERGY GROUP INC
GREENPOINT FINANCIAL CORP PAYLESS CASHWAYS INC
PHAR MOR INC
PSS WORLD MEDICAL INC JABIL CIRCUIT INC
UNIVERSAL CORP
EMCOR GROUP INC
VALERO ENERGY CORP NEW
PENTAIR INC
MICRON TECHNOLOGY INC MITCHELL ENERGY & DEVELOPMENT CORP
MILACRON INC
ABERCROMBIE & FITCH CO DE STEELCASE INC
COVENTRY HEALTH CARE INC
MASCO CORP
LANDAMERICA FINANCIAL GROUP INC
KELLY SERVICES INC
GREAT LAKES CHEMICAL CORP
TYSON FOODS INC PUBLIC SERVICE CO OF NEW MEXICO
MAXXAM INC
ALTERA CORP MANPOWER INC MICROAGE INC SPARTAN STORES INC
DEL WEBB CORP
WHOLE FOODS MARKET INC
INTERSTATE BAKERIES CORP
DIEBOLD INC
LAM RESEARCH CORP
ALLIANT ENERGY CORP
PERKINELMER INC
HARTFORD FINANCIAL SERVICES GROUP I
LEAR CORP
MARSHALL & ILSLEY CORP INTERNATIONAL MULTIFOODS CORP
PATHMARK STORES INC EMC CORP
QUANTA SERVICES INC
TELEPHONE & DATA SYSTEMS INC DE
WHX CORP
TORO CO
CYPRESS SEMICONDUCTOR CORP
POLARIS INDUSTRIES INC TELLABS INC NIAGARA MOHAWK HOLDINGS INC
BORDERS GROUP INC MI
WESTERN DIGITAL CORP
FURNITURE BRANDS INTERNATIONAL INC
MARK IV INDUSTRIES INC
ADMINISTAFF INC
VECTREN CORP BROADWING INC WILLAMETTE INDUSTRIES INC
MERISEL INC
DTE ENERGY CO
CARDINAL HEALTH INC
WHIRLPOOL CORP
FLOWSERVE CORP
E W SCRIPPS CO OH MOHAWK INDUSTRIES INC
SMURFIT STONE CONTAINER CORP
AMERICAN ELECTRIC POWER CO INC
HEILIG MEYERS CO
KENNAMETAL INC LSI LOGIC CORP
HEALTH NET INC WESCO INTERNATIONAL INC
TERADYNE INC
SUPERVALU INC WORLDCOM INC NEW FOOTSTAR INC
REYNOLDS & REYNOLDS JACOBS CO ENGINEERING GROUP INC
UNIFI INC
QWEST COMMUNICATIONS INTERNATIONAL
AGCO CORP DE MANDALAY RESORT GROUP
STANDARD REGISTER CO
DOLLAR GENERAL CORP
RITE AID CORP
GALILEO INTERNATIONAL INC
ANIXTER INTERNATIONAL INC MCN ENERGY GROUP INC
PRINCIPAL FINANCIAL GROUP INC
AMERICAN AXLE & MANUFACTURING HLDGS
CALPINE CORP
SMITHFIELD FOODS INC
IMATION CORP FMC CORP
VOLT INFORMATION SCIENCES INC
CABLEVISION SYSTEMS CORP NEW
DQE
OCCIDENTAL PETROLEUM CORP LINENS UNITED AUTO GROUP INCN THINGS INC
AK STEEL HOLDING CORP
STATE STREET CORP
LIZ CLAIBORNE INC
MELLON FINANCIAL CORP
A O SMITH CORP
VALSPAR CORP
ALBERTSON S INC
HEALTHSOUTH CORP
RYLAND GROUP INC ITT INDUSTRIES INC LA Z BOY INC
HILLENBRAND INDUSTRIES INC
HUMANA INC
BANTA CORP NAVISTAR INTERNATIONAL CORP
TRIGON HEALTHCARE INC
SUNGARD DATA SYSTEMS INC
MOLEX INC
CBRL GROUP INC
COMMERCIAL METALS CO
PREMCOR USA INC
GENTIVA HEALTH SERVICES INC NCR CORP UTILICORP UNITED INC
UAL CORP
POLO RALPH LAUREN CORP MODIS PROFESSIONAL SERVICES INC
RAYTHEON CO NEW BANK ONE CORP
FIRST TENNESSEE NATIONAL CORP
DOW CHEMICAL CO ABBOTT LABORATORIES
UNOCAL CORP
ALLIED WASTE INDUSTRIES INC
H & R BLOCK INC
ECOLAB INC
TRIBUNE CO
PHARMACIA CORP DE CINTAS CORP
SAKS INC
MARRIOTT INTERNATIONAL INC NEW
PACKAGING CORP OF AMERICAOWENS & MINOR INC NEW
ROCKWELL INTERNATIONAL CORP NEW
MBNA CORP
POLYONE CORP
JOHNSON & JOHNSON UNITEDHEALTH GROUP INC
TEXACO INC SARA LEE CORP
GOODYEAR TIRE & RUBBER CO FEDERAL HOME LOAN MORTGAGE CORP
SCIENTIFIC ATLANTA INC LUCENT TECHNOLOGIES INC
EATON CORP
TRANSOCEAN SEDCO FOREX INC
WARNACO GROUP INC
AMERADA HESS CORP
KERR MCGEE CORP
ROADWAY CORP PROVIDIAN FINANCIAL CORP
MARSH & MCLENNAN COS INC
DUN & BRADSTREET CORP DE NEW WINN DIXIE STORES INC
JONES APPAREL GROUP INC
EL PASO CORP AMERICAN GREETINGS CORP
NORTHROP GRUMMAN CORP TJX COS INCNEW TRW INC BOEING COOMNICOM GROUP INC
SUNTRUST BANKS INC COLA ENTERPRISES INC COCA
AUTONATION INC DE
ANNTAYLOR STORES CORP
YELLOW CORP
MERRILL LYNCH & CO INC
AMES DEPT STORES INC ENTERGY CORP DE
PAYLESS SHOESOURCE INC NEW
PROGRESSIVE CORP BEAR STEARNS COS INC PRICELINE COM INC APPLERA CORP
QUORUM HEALTH GROUP INC
NICOR INC KEYSPAN CORP
RALSTON PURINA CO
SOUTHERN CO
CENTEX CORP SCHERING PLOUGH CORP
LOWE S COS INC
PEP BOYS MANNY MOE & JACK
CIT GROUP INC
BORDEN INC
AUTOMATIC DATA FLEMING PROCESSING COS INCINC
COLGATE PALMOLIVE CO BANK OF AMERICA CORP
KEYCORP OHIO MCKESSON CORP DE
NACCO INDUSTRIES INC
AMEREN CORP FRONTIER OIL CORP WY
MANOR CARE INC NEW
PITTSTON CO
EDISON INTERNATIONAL
LITTON INDUSTRIES INC
DIME BANCORP INC
COX COMMUNICATIONS INC DE
BECTON DICKINSON & CO LINCOLN NATIONAL CORP
DELTA AIR LINES INC AOL TIME WARNER INC
FPL GROUP INC
ANHEUSER BUSCH COS INC
NORFOLK SOUTHERN CORP ENGELHARD CORP
UNOVA INC
DIMON INC
ENTERASYS NETWORKS INC
TRIAD HOSPITALS INC
AMERICAN WATER WORKS CO INC WACHOVIA CORP NEW
MERCK & CO INC US AIRWAYS GROUP INC
CENDANT CORP BELLSOUTH CORP
PRIMEDIA INC
COCA COLA CO
LEGG MASON INC
APPLE COMPUTER INC
VIASYSTEMS GROUP INC
ARAMARK CORP
DYNEGY INC IL BOISE CASCADE CORP DIAL CORP NEW MAY DEPARTMENT STORES CO
BELO CORP VULCAN MATERIALS CO FLUOR CORP NEW
BAUSCH & LOMB INC
SPORTS AUTHORITY INC
DOVER CORP
TELEFLEX INC BERGEN BRUNSWIG CORP MCLEODUSA INC
SAFEWAY INC
GATX CORP AMR CORP
OWENS CORNING
KROGER CO TEXAS INSTRUMENTS INC EQUIFAX INC HARRIS CORP FLAWASHINGTON POST CO
NATIONAL CITY CORP
ANALOG DEVICES INC
UNITRIN INC KINDER MORGAN INC NEW
SAFEGUARD SCIENTIFICS INC
ALLEGHENY TECHNOLOGIES INC
AMERICAN EXPRESS CO AMERICAN INTERNATIONAL GROUP INC
CIGNA CORP
KNIGHT RIDDER INC PACCAR INC CORPUNION PACIFIC CORP BURLINGTON NORTHERN SANTA FE CORPGOODRICH PARKER HANNIFIN CORP BLACK & DECKER CORP
LANIER WORLDWIDE INC BRUNSWICK CORP
LONGS DRUG STORES CORP
AMSOUTH BANCORPORATION
VERIZON COMMUNICATIONS FOOT INC LOCKER INC
MORGAN STANLEY DEAN WITTER & CO CATERPILLAR INC PROCTER & GAMBLE CO DELL COMPUTER CORP SUNOCO INC COOPER INDUSTRIES INC GENERAL MILLS INC GEORGIA PACIFIC CORP RAND CO INGERSOLL GENERAL DYNAMICS CORP BRISTOL MYERS SQUIBB CO
LUBRIZOL CORP BANK OF NEW YORK CO INCCLARK CORP KIMBERLY
RYDER SYSTEM INC
UNISYS CORP
STILWELL FINANCIAL INC GENTEK INC
POPULAR INC AMPHENOL CORP
COMMUNITY HEALTH SYSTEMS INC
REEBOK INTERNATIONAL LTD SBC COMMUNICATIONS INC
CHARLES SCHWAB CORP
FLOWERS FOODS INC COORS CO TRINITY INDUSTRIESADOLPH INC
INTERPUBLIC GROUP OF COS INC
METRIS COS INC
NEWELL RUBBERMAID INC
DUKE ENERGY CORP CIRCUIT CITY STORES INC
REVLON W W GRAINGER INCINC
EOG RESOURCES INC
INTERNATIONAL BUSINESS MACHINES COR
HCA INC NEW DOMINION RESOURCES INC VA WESTVACO CORP
PG&E CORP
IT GROUP INC
OWENS ILLINOIS INC
J P MORGAN CHASE & CO
HASBRO INC
WYNDHAM INTERNATIONAL INC
BMC SOFTWARE INC
TIFFANY & CO
LEGGETT & PLATT INC
V F CORP
PRAXAIR INC
SYSCO CORP
MATTEL INC
WESTPOINT STEVENS INC
USA EDUCATION INC
CSK AUTO CORP
AUTOZONE INC
QUEST DIAGNOSTICS INC
STORAGE TECHNOLOGY CORP
INC
QUAKER OATS CO
CONOCO INC NATIONAL SERVICE INDUSTRIES INC
WM WRIGLEY JR CO
CH2M HILL COMPANIES LTD
HARMAN INTERNATIONAL INDUSTRIES INC
DANA CORP
AON CORP BAXTER INTERNATIONAL DPL INC SEARS ROEBUCK & CO FEDEX CORP KELLOGG CO BOSTON SCIENTIFIC CORP UNION CARBIDE CORP NEW
CLOROX CO MCDONALD S CORP
BEST BUY CO INC
OGE ENERGY CORP
UNIVERSAL HEALTH SERVICES INC
UGI CORP PA
CONEXANT SYSTEMS INC
PEPSIAMERICAS INC NEW FEDERATED DEPARTMENT STORES INC NEW
INTERNATIONAL PAPER CO
MGM MIRAGE
MEAD CORP GENERAL MOTORS CORP AVON PRODUCTS INC FORD MOTOR CO
DARDEN RESTAURANTS INC D & K HEALTHCARE RESOURCES INC
NOBLE AFFILIATES INC
KMART CORP
MICROSOFT CORP ALLSTATE CORP
MINNESOTA MINING & MANUFACTURING CO ST PAUL COS INC ROHM & HAAS CO
GOLDMAN SACHS GROUP INC GANNETTSCIENCE CO INC APPLICATIONS INTERNATIONAL ESTEE LAUDER COS INC WALT DISNEY CO NEW
MOTOROLA INC
U S BANCORP DE
WASTE MANAGEMENT INC NEW
USG CORP
ARMSTRONG WORLD INDUSTRIES INC
ELECTRONIC DATA SYSTEMS CORP
SUMMIT BANCORP NJ HARLEY DAVIDSON INC
POTOMAC ELECTRIC POWER CO
AMERICA WEST HOLDINGS CORP
CDI CORP
SNAP ON INC
VIACOM INC HONEYWELL INTERNATIONAL INC XEROX CORP PNC FINANCIAL SERVICES GROUP INC J C PENNEY CO INC
GENERAL ELECTRIC CO ASHLAND INC
PACTIV CORP ORACLE CORP DE STRYKER CORP
PEPSI BOTTLING GROUP INC THOMAS & BETTS CORP
GPU INC EXELON CORP WEYERHAEUSER CO EMERSON ELECTRIC CO TEXTRON INC
CITIGROUP INC SERVICEMASTER CO
PHELPS DODGE CORP PEPSICO INC
W R BERKLEY CORP
HAWAIIAN ELECTRIC INDUSTRIES INC
PUBLIC SERVICE ENTERPRISE GROUP INCUSEC INC
LEXMARK INTERNATIONAL INC
CHUBB CORP PHILIP MORRIS COS INC TEMPLE INLAND INC
EASTMAN KODAK CO
KB HOME DYNCORP
KELLWOOD CO
RADIOSHACK CORP
AMERICAN STANDARD COS INC
CVS CORP
PFIZER INC
FLEETBOSTON FINANCIAL CORP
PETSMART INC
HARCOURT GENERAL INC
W R GRACE & CO NEW
FINOVA GROUP INC
BRIGHTPOINT INC BRM HOLDINGS INC
UNITED TECHNOLOGIES CORP
TARGET CORP HOUSEHOLD INTERNATIONAL CSX CORP INC CUMMINS INC
STAPLES INC
CONTINENTAL AIRLINES INC
STANLEY WORKS
WASHINGTON MUTUAL INC
IMC GLOBAL INC
CLEAR CHANNEL COMMUNICATIONS INC
NORTHERN TRUST CORP
E I DU PONT DE NEMOURS & CO
COMCAST CORP
AUTOLIV INC
ARROW ELECTRONICS INC
WALTER INDUSTRIES INC
TRICON GLOBAL RESTAURANTS INC DOW JONES & CO INC
CONVERGYS CORP
LEHMAN BROTHERS HOLDINGS INC AES CORP INTERNATIONAL FLAVORS & FRAGRANCES
TECUMSEH PRODUCTS CO
STANCORP FINANCIAL GROUP INC MDU RESOURCES GROUP INC
AMERISOURCE HEALTH CORP
WALGREEN CO CAMPBELL SOUP CO HERSHEY FOODS CORP AIR PRODUCTS & CHEMICALS INC INGRAM MICRO INC HERMAN MILLER INC
AETNA INC PA
EXXON MOBIL CORP
NEWMONT MINING CORPHOME DEPOT INC ALCOA INC AT&T CORP JOHN HANCOCK FINANCIAL SERVICES INC LIMITED INC
THERMO ELECTRON CORP
GRANITE CONSTRUCTION INC
CONSTELLATION ENERGY GROUP INC
ILLINOIS TOOL WORKS INC WAL MART STORES INC
SOLUTIA INC HORMEL FOODS CORP
KOHL S CORP
COUNTRYWIDE CREDIT INDUSTRIES INC
COMFORT SYSTEMS USA INC
UNUMPROVIDENT CORP
CABOT CORP
WISCONSIN ENERGY CORP NEW YORK TIMES CO RYERSON TULL INC NEW CHARMING SHOPPES INC
TEKTRONIX INC
LOUISIANA PACIFIC CORP
IBP INC TENNECO AUTOMOTIVE INC CADENCE DESIGN SYSTEMS INC
ZIONS BANCORPORATION
STARBUCKS CORP
TRANS WORLD AIRLINES INC MERITOR AUTOMOTIVE INC CRANE CO
JOHNSON CONTROLS INCCORP SPRINT
RUSSELL CORP
UNITED RENTALS INC NEW
SERVICE MERCHANDISE CO INC
TRANSMONTAIGNE INC
BAKER HUGHES INC
MONY GROUP INC PITNEY BOWES INC
BRIGGS & STRATTON CORP
NEWPORT NEWS SHIPBUILDING INC SHERWIN WILLIAMS CO
OHIO CASUALTY CORP
USFREIGHTWAYS CORP
CORNING INC
SCI SYSTEMS INC
TIMKEN CO
BIG LOTS INC
SHOPKO STORES INC
GREY GLOBAL GROUP INC EQUITABLE RESOURCES INC AMERICAN HOME PRODUCTS CORP
ALLMERICA FINANCIAL CORP
NEIMAN MARCUS GROUP INC
KLA TENCOR CORP
JO ANN STORES INC
CERIDIAN CORP NEW MAYTAG CORP
POLAROID CORP NORDSTROM INC SEQUA CORP
IMS HEALTH INC
ADVANTICA RESTAURANT GROUP INC
XCEL ENERGY INC
DEERE & CO
WILLIAMS COMPANIES INC CHEMICAL CO EASTMAN WALLACE COMPUTER SERVICES INC
CMS ENERGY CORP
GRAND UNION CO
MCCORMICK & CO INC
TECO ENERGY INC WELLPOINT HEALTH NETWORKS INC NEW
READER S DIGEST ASSOCIATION INC
HUBBELLCOLLINS INC & AIKMAN CORP NEW
LYONDELL CHEMICAL CO
COMERICA INC
FEDERAL MOGUL CORP CINERGY CORP
JOY GLOBAL INC
LENNOX INTERNATIONAL INC
3COM CORP R R DONNELLEY & SONS CO
WELLS FARGO & CO NEW
AVNET INC
KINDRED HEALTHCARE INC SAFECO HARRAH S ENTERTAINMENT INCCORP FIFTH THIRD BANCORP
ON SEMICONDUCTOR CORP
OSHKOSH TRUCK CORP ALLEGHENY ENERGY INC
STATER BROS HOLDINGS INC
HALLIBURTON CO
SEALED AIR CORPAMGEN NEW INC
DELPHI AUTOMOTIVE SYSTEMS CORP J B HUNT TRANSPORT SERVICES RELIANT INC ENERGY INC DEL MONTE FOODS CO
OXFORD HEALTH PLANS INC
QUESTAR CORP
INDUSTRIES INC STARWOOD HOTELS & RESORTSPPG WORLDWIDE
WGL HOLDINGS INC
NSTAR ENCOMPASS SERVICES CORP
CLAYTON HOMES INC
SONOCO PRODUCTS CO PROGRESS ENERGY INC
NORTHWEST AIRLINES CORP NEW DEAN FOODS CO
TRUE NORTH COMMUNICATIONS INC SEMPRA ENERGY
USA NETWORKS INC ENRON CORP OR
LOCKHEED MARTIN CORP
BETHLEHEM STEEL CORP
LTV CORP
FIRSTENERGY CORP
PHILLIPS PETROLEUM CO SUN MICROSYSTEMS INC
BRINKER INTERNATIONAL INC
RELIANCE GROUP CO HOLDINGS INC GILLETTE
ENERGIZER HOLDINGS INC
TXU CORP
ALLERGAN INC
COMPUTER SCIENCES CORP VIAD CORP GENUINE PARTS CO OFFICE DEPOT INC
AMAZON COM INC CHEVRONTEXACO CORP
FISHER SCIENTIFIC INTERNATIONAL INC
METALS USA INC
UNITED PARCEL SERVICE INC CISCO SYSTEMS INC COMPAQ COMPUTER CORP
ELI LILLY & CO
GAP INC PETER KIEWIT SONS INC NEW WEATHERFORD INTERNATIONAL INC NEW
CONSOLIDATED EDISON INC SYNOVUS FINANCIAL CORP
SODEXHO MARRIOTT SERVICES INCLOEWS CORP
NISOURCE INC CONAGRA FOODS INC
TORCHMARK CORP
TRANS WORLD ENTERTAINMENT CORP
WACKENHUT CORP
REPUBLIC SERVICES INC
RAYONIER INC NIKE INC
CB RICHARD ELLIS SERVICES INC
ALLTEL CORP
AMERICAN GENERAL CORP
URS CORP
YORK INTERNATIONAL CORP
ULTRAMAR DIAMOND SHAMROCK CORP INTEL CORP
CHARTER ONE FINANCIAL INC
FIRST DATA CORP
BURLINGTON INDUSTRIES INC
ELECTRONIC ARTS INC
CORN PRODUCTS INTERNATIONAL INC PHILLIPS VAN HEUSEN CORP PENNZOIL QUAKER STATE CO
FERRO CORP
OAKWOOD HOMES CORP
CARLISLE COMPANIES INC
BROWN SHOE CO INC
GOLDEN STATE BANCORP INC
HON INDUSTRIES INC
IKON OFFICE SOLUTIONS INC ARCHER DANIELS MIDLAND CO
HILTON HOTELS CORP
BEVERLY ENTERPRISES INC NEW AMERICAN FINANCIAL GROUP INC NEW
APPLIED INDUSTRIAL TECHNOLOGIES INC EXPRESS SCRIPTS INC
CONSECO INC
AVERY DENNISON CORP
CONSOLIDATED FREIGHTWAYS CORP FIRST AMERICAN CORP PRECISION CASTPARTS CORP
BORGWARNER INC BECKMAN COULTER INC
RPM INC DOLLAR TREE STORES INC
IMPERIAL SUGAR CO TX
BERKSHIRE HATHAWAY INC NEW
TOYS R US INC NEW
BALL CORP
R J REYNOLDS TOBACCO HOLDINGS INC
RUDDICK CORP
AMERICAN MANAGEMENT NEXTEL SYSTEMS COMMUNICATIONS INC INC NEW COOPER TIRE & RUBBER CO
DST SYSTEMS INC
BANKNORTH GROUP INC ME
CAREMARK RX INC ANADARKO PETROLEUM CORP
AFLAC INC PROTECTIVE LIFE CORP
NUCOR CORP
ROCK TENN CO
UST INC GROUP 1 AUTOMOTIVE INC
ADELPHIA COMMUNICATIONS CORP
OFFICEMAX INC
BROWN FORMAN CORP
STANDARD PACIFIC CORP
CHIQUITA BRANDS INTERNATIONAL INC
FREEPORT MCMORAN COPPER & GOLD INC MILLENNIUM CHEMICALS INC
COMDISCO INC L 3 COMMUNICATIONS HOLDINGS INC BURLINGTON RESOURCES INC E TRADE GROUP INC LABORATORY CORP OF AMERICA HOLDINGS
FRANKLIN RESOURCES INC
PARK PLACE ENTERTAINMENT CORP
WENDY S INTERNATIONAL INC
NORTHWESTERN CORP
TENET HEALTHCARE CORP
DELUXE CORP
HEWLETT PACKARD CO
CRESTLINE CAPITAL CORP CHARTER COMMUNICATIONS INC DE
BELK INC
BOWATER INC
ZALE CORP
JEFFERSON PILOT CORP
PENN TRAFFIC CO
HEALTH MANAGEMENT ASSOCIATES INC QUALCOMM INC APPLIED MATERIALS INC
JACK IN THE BOX INC DE
PIER 1 IMPORTS INC
CKE RESTAURANTS INC
ASTORIA FINANCIAL CORP
FLEETWOOD ENTERPRISES INC
CROWN CORK & SEAL CO INC
SCANA CORP DANAHER CORP
FIDELITY NATIONAL FINANCIAL INC EXIDE TECHNOLOGIES
GUIDANT CORP HOUSE2HOME INC
WILLIAMS SONOMA INC
BARNES & NOBLE INC WABASH NATIONAL CORP HARSCO CORP
ADC TELECOMMUNICATIONS INC TEREX CORP
DOLE FOOD CO INC
MARTIN MARIETTA MATERIALS INC
SOLECTRON CORP
BJ S WHOLESALE CLUB INC APACHE CORP
LANDS END INC
COMPUTER ASSOCIATES INTERNATIONAL I
WORTHINGTON INDUSTRIES INC CNF INC NORTHEAST UTILITIES COSTCO WHOLESALE CORP DE
HUGHES SUPPLY INC CAPITAL ONE FINANCIAL CORP
TEXAS INDUSTRIES INC
CDW COMPUTER CENTERS INC PIONEER STANDARD ELECTRONICS INC
COMPUWARE CORP
PACIFICARE HEALTH SYSTEMS INC NEW
TOWER AUTOMOTIVE INC
SYMBOL TECHNOLOGIES INC FISERV INC MICHAELS STORES INC
RENT A CENTER INC NEW PEOPLES ENERGY CORP SOUTHWEST AIRLINES CO
DILLARD S INC AMKOR TECHNOLOGY INC
SPHERION CORP
PPL CORP
BANK UNITED CORP
DURA AUTOMOTIVE SYSTEMS INC
SPX CORP
SEABOARD CORP
EXPEDITORS INTERNATIONAL OF WASH IN
MAXTOR CORP
MASTEC INC
POTLATCH CORP
NABORS INDUSTRIES INC
BJ SERVICES CO
COOPER CAMERON CORP
29
Six degrees of JP Morgan Chase:
30
From worst to best in four steps
Shortest paths from the Fortune 1000
Chase #
N of firms
Cumulative
1
34
4.5%
2
233
34.1%
3
374
81.8%
4
121
97.2%
5
17
99.4%
6
2
99.6%
7
2
99.9%
8
1
100%
On average, any two Fortune 1000 boards are connected by 4 degrees through shared directors
Business Week rated Conseco as one of the worst boards and Colgate as the best 31
32
A benign interpretation of the “small world of the corporate elite”
From worst to second-worst
• Corporate directors really do all know each other, or have friends in common, with predictable consequences (contagion of practices; common political views; easier collective action) • But: because of the “small world effect” and a few regularities in recruiting, this will be true even if all New York banks disappear, all prep schools are closed, and the Bohemian Grove it turned into an anti-globalist training camp by the Ruckus Society • And: the “inner circle” is heavily populated with women and minorities, not white male bankers 33
34
What do “post-industrial” corporations look like?
Finance turns states from sovereigns to vendors
35
Headquarters:
Hong Kong
Incorporation:
British Virgin Islands
Annual meeting:
Barbados
Manufacturing:
Mexico and China
Stock listing:
New York Stock Exchange
36
What would states that emulated postindustrial corporations look like?
• • • • •
Financially driven Attentive to their brand Focused on their core competence Skilled at outsourcing Ties to place are provisional
Tuvalu receives $2.2M per year (about 15% of GDP) from VeriSign for the use of its Internet domain name “.tv”
37
38
Delaware allows anonymous incorporation over the Internet for Russian money launderers, making it the Amazon.com of financial crime
Placebrands helps create “brand equity” for state clients including Botswana, Croatia, and Malaysia [Note: “brand equity” formerly known as “imagined community”]
39
40
How is the US government like Nike? • The Federal Activities Inventory Reform Act of 1998 (“FAIR Act”) encourages all Federal agencies to hire private contractors for tasks not “inherently governmental” • The number of Federal employees declined by 350K under Clinton • The definition of “inherently governmental” has proved flexible…
The ship registry for “Liberia” is operated out of an office park near Dulles Airport
41
42
Government tasks that can be (and have been) outsourced in the US • Operating prisons • Collecting taxes • Hiring other contractors and investigating charges of contractor fraud • Interrogating prisoners at Abu Ghraib • “Aggressively” protecting diplomats:
States today: Bespoke tailors, or prêt-à-porter?
“We cannot operate without private security firms in Iraq. If the contractors were removed, we would have to leave Iraq.” -Patrick F. Kennedy, Under-Secretary of State for Management
43
44
45
