Linking Wealth and Power: Direct Political Action of Corporate Elites and the Wealthiest Capitalist Families in the United States and Germany

Lukas Arndt (PhD, Sciences Po - CRIS & MPIfG Cologne)

CRIS Papers n° 2023-1, October 2023, 32p., doi 10.25647/osc.papers.05

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As Thomas Piketty argued, wealth concentration at the top of the distribution in many economically developed countries might lead to continuous concentration of large fortunes among a few super-rich families. At the same time, what he calls “superstar managers” receive astronomical salaries.

Do individuals with power in the economy translate it into political power in capitalist democracies? And if yes, what do these individuals want to achieve?
Are they just pragmatically using access to influence economic policy, maximizing their own profits? Or do they use their economic power to advocate for an ideological agenda that might be different from the rest of the voters?

This study inquires whether two groups of individuals with power in the economy directly translate it into political power in capitalist democracies: The corporate elite and super-rich capitalist families.

It does so by analyzing three potential “avenues of influence”: Lobbying or party donations through controlled firms, and individual party donations.

Shareholders and managers of the largest German and US firms are analyzed.

First, 6,227 members of US and German families with large assets are identified.
Second, the national corporate elites are identified.
Individual and firm data is then used to predict lobbying and party contribution in 2019-2021 with logistic regressions.

Results suggest that direct political action on the part of the super-rich and the corporate elite is much more prevalent and more ideological in the United States than in Germany. If they engage at all,
the super-rich tend to be a very conservative group who use all three avenues of influence complementarily. However, the magnitude of super-rich and elite money does not favor the idea of an “oligarchy” in either of the two countries, at least not through these direct and visible channels.