Power, and Interests of the British Establishment

Power, and Interests of the British Establishment

The necessary, if not sufficient, basis of the power of the dominant, elite group or the ‘establishment’ is the strategic control of the enterprises which form the oligopoly sector of the British economy. This sector of ‘big business’ consists of the one thousand largest firms in the economy, these firms dominating the various markets in which they operate. The structural basis of the petit bourgeoisies, is distinct from but dependent on this big business sector. The sector of small and medium sized firms is based, in part, on the conditions of competitive capitalism. But the basic constraints upon the business decisions of the firms are the activities of the large enterprises which supply raw materials, by finished goods or offer credit. It is the structure and operations of the oligopoly sector which generate the wealth and hence privileges, including power holding or access to it, enjoyed by the dominant status group.

 

In respect of land ownership, the effect on the nature of the ‘establishment’ of the agricultural depression of the nineteenth century, which lasted well into this century, is important. “The long drawn out nature of the agricultural depression forced the break-up of the large estates, a process which was hastened by a number of fiscal changes introduced by LLOYD GEORGE.”¹ It is estimates that between six and eight million acres of land changed hands between 1918 and 1926, much of this land passing to smaller owner-occupier farmers. Following the pressures from manufacturers, and the successful compromise with them which we discussed earlier, the traditional landowners this time dealt with the situation in which they would otherwise be left with diminished estate by a skilful management of the sale of their land which ensured that their total wealth would hardly be affected. Wealth released from the land in this way was reinvested in trade, industry or overseas property. These landowners became active in the twentieth century “in large industrial enterprises which increasingly dominate the productive use of this land even where they do not actually own the land. Marketing and food-producing firms, together with fertilizer and seed suppliers, exercise a pervasive influence over the many owner-occupier and tenant farmers. Farming, like many small and medium sized businesses, is becoming more and more dependent upon big business. In this way land and agriculture are integrated fully with the rest of the monopoly sector.”2

 

Until the 1930’s it was still possible in many cases, to find successors to executive positions in companies from within the large families who owned them. After 1940 there was a smaller base of recruitment because of the general decrease in family size and the massive losses of men in two wars. Increasingly, members of the founding families were forced to appoint executives from outside the family circle.

 

Family holdings in the family company have gradually become more and more diluted and family members have diversified their investment portfolio, so their particular interest in their company becomes less all-pervasive in relation to their other interests. The historic attachments of such families to other base companies become loosened and their broader interests in the wider corporate system lead many such entrepreneurial capitalists to adopt a business style similar to the finance capitalists. This of course is a further integration for the landed class, this time with the City, focusing on ‘institutional’ shareholdings. Insurance companies traditionally held their assets in the form of government securities and company debentures, but the higher yield which could be earned on ordinary shares encouraged insurance companies in this century to shift the balance of their investments towards such equity holdings. Insurance companies were soon taking a large proportion of new share issues and dominated the market in corporate securities. As a result, the proportion of the population which held shares has become progressively smaller. The “squeezing out of individual shareholders is a result of the increased buying by the various institutional shareholders. Initially, the insurance companies bought into the largest companies, and by 1942 they held about a half of the issued shares of the 30 largest companies.”3

    1. 1.J. SCOTT, The Upper Classes, Property, and Privilege in Britain.(London: Mcmillan, 1992), p.104. 
    2. 2.ibid., p.133. 
    3. 3. ibid., p.135.

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