The Structure of the German Elites across Regime Changes
Identifieur interne : 000C91 ( Istex/Corpus ); précédent : 000C90; suivant : 000C92The Structure of the German Elites across Regime Changes
Auteurs : Erwin ScheuchSource :
- Comparative Sociology [ 1569-1322 ] ; 2003.
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DOI: 10.1163/156913303100418717
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Sozialpsychologie</title><publicationDate>1972</publicationDate></host><title>Die Herausstellung einer sozialen Gesinnung im Frühindustrialismus Ein Vergleich der Auffassungen französischer, britischer und deutscher Unternehmen</title><publicationDate>1972</publicationDate></json:item></refBibs><genre><json:string>research-article</json:string></genre><host><volume>2</volume><pages><last>133</last><first>91</first></pages><issn><json:string>1569-1322</json:string></issn><issue>1</issue><genre><json:string>journal</json:string></genre><language><json:string>unknown</json:string></language><eissn><json:string>1569-1330</json:string></eissn><title>Comparative Sociology</title></host><categories><wos></wos><scienceMetrix><json:string>economic & social sciences</json:string><json:string>social 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<p>The Structure of the German Elites across Regime Changes E RWIN K. S CHEUCH The turbulence of German history during the processes of modernization invites a closer look at the relation between regime changes and elite structures. The following changes are speci cally considered: 1918/1920, 1930/1936, 1945/1953, 1989/1992. These time periods mark changes mostly in the political and politically related (media, military) elites — and even there repredominantly only at the top level. Responses to regime changes of the elites in the economic sector, the high levels in administrations, as well as the cultural and academic elites are at these times rather incremental, continual. In these sectors the corporatist structure of the German society provides support against demands for change to t a new political situation. However, substantial social changes induced by regime changes do lead to changes in these latter sectors as well, although retarded — yet sometimes also in advance of changes in the polity. The non-synchronous nature of changes in elite sectors will be demonstrated in some detail leading up to the question: will the structural characteristics of corporatist Germany with its sectoral elites and their interlocks remain in an age of increasing internationalization — perhaps even globalization. (1) The disappearance of an establishment after the demise of the Kaiserreich (2) Recruitment of elites during the interbellum period (3) Elite changes after denazi cation in the Bundesrepublik (4) Elite Structure after Uni cation (5) Two Key Elites: Political and Economic (6) The Network Structure of In uence (7) The Top Elite and the media now Comparative Sociology, Volume 2, issue 1 also available online Ó 2003 Koninklijke Brill NV, Leiden see www.brill.nl</p>
<p>92 ² Erwin K. Scheuch The Disappearance of an Establishment after the Demise of the Kaiserreich Currently, Germany does not have an “establishment” — if we mean by this term a top elite with a largely homogeneous outlook on life, quite similar cultural standards, a limited pool from which members are recruited, and comparabel career lines. There are some indications that an establishment may again be in the making, but so far the last time this country had a “leading” elite to which persons at the top of in uence either belonged or tried to emulate it, was the period beginning around 1870, and ending in 1918. This establishment set Germany apart from its neighbours as it was dominated by an aristocracy at odds with the changes in the economy and in society-at-large. While these changes were closing the gap in modernity compared with Germany’s Western neighbours, the establishment could be characterized as anti-modern elites in a modernizing country. The dominating elites were those of Prussia, as the founding of the 2nd Reich in 1870 was not really a uni cation of Germany but an enlargement of Prussia. Central for the establishment of Prussia was not just the nobility but a nobility based on large estates east of the Elbe. There were two occupational preserves for the East Elbian “landed gentry” aristocracy, called the Prussian “Junkers”: the higher ranks of the military, and the top positions in the civil service. While legal restrictions against the advancement of commoners to of cer positions were loosening during the 19th century, the barriers in the civil service remained quite effective. 1903 30% of the applicants for promotion to an of cer’s rank were the sons of high civil servants, and 22% originated from the owners of large estates (Berghahn 1987). At the time of World War One 70% of the members of the German General Staff were of aristocratic descent (Derlien 1986, pp. 39-44). The interpenetration of the landed gentry, the high of cier’s corps and the top civil service in Imperial Germany was not unlike the bonds between the landed Gentry and the military elite in other countries, e.g. Britain. The establishment character of the elites in the administration, the military, and political elites was reinforced by legal rules of exclu- sion and inclusion. Until 1953 the high ranks in the civil service were reserved for applicants with two law degrees (i.e. quali ed to practice as an attorney or a judge), regardless of the branch of the civil service, making for a homogeneity of academic experiences. Un- til the closing days of the Kaiserreich Jews and Catholics were barred from posts in the higer civil service, including appointments as tenured</p>
<p>The Structure of the German Elites ² 93 professors (Goyau 1922). 1 This system of interpenetrating elites was anked by an electoral “system censitaire” (Dreiklassenwahlrecht), that gave the wealthy bourgeosie in effect control over policy (Vollrath 1931). The emerging elites especially in business tended to emulate this establishment with a militarized Landed Gentry as its core (Zapf 1965). Captains of industry such as the steel makers Krupp in the Ruhr-District, and Röchling on the Sarre ran their economic empires like a feudal estate — complete with company festivals, welfare provisions and surveillance of worker’s conformity to puritan standards (Stearns 1972, pp. 320-342). Max Weber pointed to the tendency of a “self-feudalisation” of the captains of industry and nance by way of buying estates in the Eastern parts of Germany in order to acquire a social standing for which mere economic success did not suf ce (Weber 1952, pp. 431-452). 2 To be nobilitated was the ultimate seal of acceptance for commoners successful in the economy and in High Culture. Of course, counter elites were surviving and also emerging that were not willing to t into this pattern. Germany was and is a federalistic so- ciety without a “real” capital. Those successful in business, science, ad- ministration and High Culture in Southern Germany and the Rhinelands, a largely self-taught leadership in the working class movement, and the Catholic intelligentsia were slowly gaining in in uence (Weber 1952, pp. 431-452). Since around 1983 the percentage of Reichstags-deputies with nobility status declined slowly, as is true also for those who were at one time or another high ranking civil servants, and correspondingly the share of functionaries in voluntary associations rose. However, until the loss of Word War One the establishment character of the ruling stratum — al- though eroding — remained. Since 1912 the changes in the composition of sectoral elites accelerated signi cantly in response to rapid changes in the social structure of the country (Best in: Best 1989, pp. 185-200). There is one additional feature of the German ruling stratum that needs to be added to the picture sketched here: the place of civil servants in decision making — especially in politics. Already in the rst German parliament, the “Paulskirche” of the ultimately unsuccessful revolution of 1848/49, civil servants were the numerically dominant group: 52 percent. Higher level civil servants (19.6%) and estate owners (6.6%) were until 1918 largely tantamount to nobility status. The other important message 1 The Archbishops Melchers of Cologne and Ledochowski of Posnam were in 1874 the last high ranking representatives of the Catholic Church to be jailed by a German government. 2 Max Weber’s empirical investigations of the agrarian conditions in the heartland of Prussia are considered the best source for the feudalistic milieu prevailing there.</p>
<p>94 ² Erwin K. Scheuch of an analysis of the Paulskirchen deputies is the dominance of a university training in law — and until after World War Two this remained a characteristic of the personnel in politics. This dominance of a legalistic training is a key to understand the way in which a signi cant part of the elite framed its understanding of the political process (Best 1990, p. 59). As Germany was a late-comer in its modernization compared to England, the establishment gave priority to catching up in key areas — via a sort of what we call today public-private-partnership. Two key areas were nance and the coal & steel industries. Government policy encouraged the very opposite what banking policy was in the USA at the time, namely the creation of big banks with no restriction in the scope of their business (Universal Banken), and big insurances. For business in general the establishment policy in the Kaiserreich was to encourage cartels rather than markets, and to favor the development of trusts (Scheuch and Scheuch 2001, p. 28f.). The establishment coopted only a few business leaders — such as Emil Rathenau (AEG), Werner von Siemens (Siemens & Halske), Georg von Siemens (Deutsche Bank) and Alfred Krupp (Krupp steelworks). However, business leaders in general remained outside the establishment of the Kaiserreich, and had to exert in uence by means of interest associations (Sheehan 1984, pp. 3-26) (Sheehan 1978). These policies in Imperial Germany had a lasting in uence later on the structure of the elite-system in Weimar, and for what among economists is derogatorily called “Germany Inc.” (“Deutschland AG”) in the Federal Republic. All European societies had to manage the transition from the corporatist structure of the late medieval societies to the contemporary nation state. The national characteristics of Western European states are largely the consequence of differences in accomplishing this. The one extreme is — in theory — the French Republic at the time of the Great Revolution where presumably all the institutions intervening between the central political authority and the citoyen were thought to be crushed. Germany retained all corporations, and even adding new one’s. Thus, the public health insurance is a conglomerate of insurances based on occupations, with the most general one (Allgemeine Ortskrankenkasse/AOK) being administered jointly by managers from business and unions. Certi cates for the distribution of industrial goods were issued by the private association DIN whose licenses have legal quality. Characteristic for this corporatist structure is the delegation of authority from the state to the corporations (Schmitter and Lehmbruch (eds.) 1979). 3 The feudalistic 3 The “classical” source on corporatism is Philippe C. Schmitter and G. Lehmbruch (eds.) 1979, Trends Towards Corporatist Intermediation. Beverly Hills. For an application of this notion to politics in Germany consult (Conradt 1993, pp. 183-288).</p>
<p>The Structure of the German Elites ² 95 minded establishment of Imperial Germany considered a society based on corporations as building blocks a guarantee for social and political stability, against the emergence of a mass society of footloose individuals. At the time of Imperial Germany this societal policy had a negligible impact on its national elites, but in later periods it in uenced fundamentally the continuity in the structure of the elites in Germany despite four regime changes. A lost war very often shatters the legitimacy of a regime, and especially in the case of Germany as the political and social system had already become contested. One of the most in uential German historians, Fritz Fischer, maintains, however, that this change of the political system from the Kaiserreich to the Weimar Republic had little in uence on the structure of the elite. “The in uence of the traditional elites, the alliance of elites in the economy, society, the administration, in the judicial system, and the armed forces remained intact in the Weimar Republic : : : This alliance between these dissimilar partners led to the Third Reich and permitted a second attempt of Germany to attain the status of a world power” (Fischer 1979, p. 92). We not only disagree with this view, but consider it grossly misleading: It was the very fragmentation of the elite that enabled Hitler to attain power by appointment. It is true: Germany became a republic by mere coup d’Etat, however, this being met with widespread acceptance. The Kaiser and his entrourage ed the country, and the Establishment fractionated. For two years after the cease re of 1918 a revolution remained a possibility, but by around 1920 emerged an uneasy coexistence of groups contesting each others in uence on the polity. Restructuring of Elites during the Interbellum Period A large part of the sectoral elites that were in uential already in the Kaiserreich, continued to be important. This is especially true for the military leadership, the higher civil service, and the leadership of large companies, as well as the important nancial institutions. The weight of the aristocracy and the nobility in general had declined with the regime- change to a republic, and because the re-establishment of Poland where the agricultural base of the former “Junkers” had been located. The most important changes could be observed in the political elites: The two political camps that in the Kaiserreich were looked upon as enemies of the state — the Social Democrats (SPD) and the Catholic Center Party (Zentrum) — became the key supporters for parliamentary governments in Weimar. The social structure of the intelligentia broadened, and in addition to the SPD the republican liberal parties Deutsche Demokratische Partei (DDP) and Deutsche Volkspartei (DVP) served to integrate leading</p>
<p>96 ² Erwin K. Scheuch gures from this milieu into the Republic (Zapf 1965). 4 At the same time as the number of sectoral elites that mattered increased, the regional balance in the composition of the elite in general shifted to the Western and Southern parts of Germany. The result of this mix between continuity and change was a high degree of segmentation (Best 1992, p. 197, fn 54). Contrary to the developments later in the Federal Republic there was less general interlocking than is traditional in Germany, given the strong corporatism there. The short span of life of the Weimar Republic was responsible for this. Add to this a bitter ideological shism in responding to the political system of Weimar and the social changes occurring at the time. “Thus, in a society such as the German one of 1920-1940, several types of authoritarian political systems might have been compatible with the same strati cation system and system of major cleavages; a stable democracy was not compatible” (Scheuch 1988, p. 52). A correspondence analysis of Reichstags-deputies and their support in the voting public revealed three major clusters in 1928. A “clerical cluster” had its strongest representation with catholics, and in Bavaria; a “liberal/conservative cluster” was strongest with those not part of the work force; and a “left cluster” with most of its supporters among the gainfully-employed. The National-Socialists (NSDAP) obtained in the 1928 Reichstag elections only 2.6% of the vote (the Communist polled 10.6%), and remained until 1930 a mere noisy splinter group (Best 1989, p. 210). In retrospect it is surprising that the SPD-Zentrum-DDP-DVP coalitions were able to keep a liberal political regime alive for so long, given major burdens: the quite foolish peace treaties of Versailles, Trianon, and Sévres, plus major changes in the strati cation system, including in 1923 a world-record in ation wiping out a large part of the traditional middle class. Then “Black Friday” (October 25, 1929) on Wall Street triggered a global crisis of the economies — the “Great Depression” — which in Germany caused unemployment to rise up to 18%. On March 27, 1930 the resignation of Chancellor Hermann Müller (SPD) put an end to parliamentary democracy in the Weimar Republic. From then on until the appointment of Hitler on January 30, 1933 the country was governed by emergency decrees issued by appointees of President Hindenburg. Nearly three years of a moderately autocratic regime with intermittent outbursts of street ghting, largely between Communists and Nazis, followed. A feeling of helplessness prevailed among the elites. As the policy of economic austerity by interim chancellor Heinrich Brüning was unsuccessful, and in view of an overnight increase of the 4 Op. cit., especially section II.</p>
<p>The Structure of the German Elites ² 97 Nazi-vote in the elections of June 1932 to 37.4% (the Communists polled 14.5%), circles around von Hindenburg, such as the “Herrenclub,” pondered ways to integrate Hitler and the National-Socialists into the political system. Even though in the elections of November 1932 the Nazi vote had already declined (and the Communist increased), the former Hindenburg-appointee von Papen managed in a conspiratorical way within a few weeks to engineer a consent with the media mogul Alfred Hugenberg and banker von Schröder to have Hitler appointed Chancellor on January 30, 1933 (Hentschel 1980). By surrounding him and two further Nazi ministers with a cabinet of eight Conservatives, the propagators of this appointment expected to have at last one of the revolutionary threats under control. While the details of this conspiracy, and Hitler’s nal seizure of power by around 1936, are of primary interest to historians, some features are of general interest for an understanding of structural properties of the elite level of German society. In addition to the dominance of an embeddedness in corporatist groupings, and fragmentation as a consequence, there is always a felt need to compensate this through groupings bridging the boundaries of corporatism. In the Kaiserreich, the guidance provided by the Junkercaste served this purpose for the establisment-minded parts of the elite, and for the Catholics associations as the Görres-Gesellschaft. During most of the 19th century the liberal elements of the German bourgeosie met across occupational divides in “Lesegesellschaften” (Scheuch in: Best (ed.) 1993, pp. 119-142 and 143-207). 5 In times of crises and/or blokade such groupings with often a very limited number of followers can temporarily exert a decisive in uence — as was the case with the intrigues leading to the appointment of Hitler as chancellor. While majorities in the elites had looked down upon Hitler, there was a widerspread consensus that something had to be done — but complete dissent as to what this should be. This is and has been at least in Germany the moment for determined minorities to realize their ideas. 6 Hitler as a possible solution 5 Scheuch, Erwin K. 1993. “Vereine als Teil der Privatgesellschaft” and Otto Dann: “Vereinsbildung in Deutschlands historischer Perspektive,” both in Heinrich Best (ed.): Vereine in Deutschland. Bonn, pp. 119-142 and 143-207. 6 The revolutionary law changing the structure of the German academic system, the “Hochschulrahmengesetz” of December 12, 1974, is a case in point. A very small group of left educators wanted to combine the transition from an elite system to a system of mass education with a change in the decision structure analogous to the rule of Codetermination in industry. When the majority of the deputies passed a proposal in this vein, they did not even know the text they were approving, but they did want the issue to go away. The very same is true for the legislation in 1990 structuring the process of reuni cation, the “Einigungsvertrag.”</p>
<p>98 ² Erwin K. Scheuch in a situation of blockage was all the more accepted as he was not really taken serious but viewed as a mere stop gap. 7 In 1924 the extremely conservative and anti-democratic political philosopher Moeller van den Bruck had founded in Berlin the “Deutsche Klub,” later led by H. von Gleichen. The professed goal of the club was to establish personal links between the aristocracy, leading gures in the economy and academia, top bureaucrats and top in uentials in politics. The Deutsche Klub/“Herrenklub” enabled then von Papen to reach a rapid consensus across the sectoral divisions among a small part of the elite to try the experiment of coopting Hitler into the political class. Hitler had always professed to be a revolutionary, and in his goals he certainly was — but for a while much less so in his modus operandi. The burning of the Reichstag on 27/28 of February 1933 by arson through an unknown perpetrator gave Hitler the opportunity to conjure the danger of a communist insurrection, and obtain a large majority in the Reichstag for suspending the constitution and bestowing him with dictatorial powers (“Ermächtigungsgesetz”). Already in March 1933 the strongest political opponents were incarcerated in the new concentration camps — around 25 000 persons, — and antisemitism became the of cial governmental policy. However, in both instances for several years the repressions were selectively practiced. Early in July 1933 the French Ambassador André Francois-Poncet reported to Paris: “Adolf Hitler has won the game, and he won the game with little effort: All he needed to do was to puff — and the edi ce of German politics collapsed like a house of cards” (Wollstein 2001). In order to win respectability Hitler sacri ced in part his private civil war militia, the hooligan elements in the SA. Maintaining a Putsch by the SA, Hitler had their leadership of about 200 persons murdered on June 30, 1934. Quite correctly, Hitler diagnosed that a large part of the sectoral elites did not trust him, and consequently he kept emphasizing that he attained power in a completely legal fashion, that he respected the law, and tried to avoid in general head on collisions with the larger parts of the sectoral elites, opting for a stepwise enlargement of power ( Jasper 1988). The elites in Germany were not adventurous and preferred predictability, and until 1936 the regime left room for wishful thinking in this direction. 7 The economic views that Hitler propagated befor his appointment e.g., the “Frei- wirtschaftslehre” of the obscure theoretician of the left Silvio Gesell, were ludicrous in the extreme. After his appointment as chancellor, Hitler just ditched these views and accepted the advice to conduct a Keynesian easy money policy. Part of Hitlers success in gaining complete control by around 1936 was his opportunism in very many areas — such as his handing over the secular primary school system of Weimar over to the churches in 1933.</p>
<p>The Structure of the German Elites ² 99 In Weimar political parties adhering to systematic political ideologies since the mid twenties increasingly tried to penetrate corporate boundaries, and by far the most successful in attempting this were the National Socialists (Best 1989, pp. 218f.). Upon attaining power, the politisation of all realms of society became the of cial policy. In mass communication and in the network of voluntary association the government had zero tolerance for open dissent. However, with the elites in general the Nazis preferred penetration to wholesale replacement: As many Nazis as possible were to be in ltrated into the sectoral elites. The result of this policy of penetration was quite uneven by sector: It is estimated that around 80% of the top clergy in the protestant church were in favor of the national socialist ideology, while the catholic clergy was largely immune (Besier 2001). The civil service was deeply penetrated through a melange of opportunism by of ce holders, and by party patronage. In communication as well as in the arts and in intellectual life there was a large loss of talent due to emigration, while those remaining became either protegés of the regime or had to lie low. Until 1936 the Nazi regime avoided a confrontation with the leadership in business. By 1936 the Nazis had achieved a true monopoly of political power and felt strong enough for head-on collisions also with big business. Collision no. 1 was the declaration that drafts issued to nance the de cit spending policy since 1933 (the Mefo-Wechsel) would not be honored. Collision no. 2 was the insistence that low grade iron ore was to be processed regardless of cost. When industry declined the government developed a network of state-owned rms, the “Hermann Göring Werke.” Fearful that the government would go still further in the direction of a “state capitalism,” industry decided to go along and participate in the spoils of a policy of rapid rearmament (Petzina 1969, p. 105). Göring appointed top managers of the chemical near-monopolist IG Farben in his Hermann-Göring-Werke, and IG Farben in turn adjusted its personnel policy to the wishes of the Nazi party. Collision no. 3 in the very same year was the introduction of a “Four Years Plan” as the stearing instrument for all of the economy. The economy was devided into sectors, each with a Nazi appointee at the head. Each larger rm within a sector was assigned production goals, and was allotted the material deemed necessary. Prices were controlled, cost had to be calculated according to a binding government scheme; but ownerhip remained private with its meaning being reduced to the organisation of the work, and the right to add a 6% pro t to the cost calculated by using a standard government accounting scheme for cost prices, later the</p>
<p>100 ² Erwin K. Scheuch LSÖ (Riedel 1973). 8 This was a rather ingenious form of expropriation by reducing capital owners to the status of rent collectors — but business went along. It was not necessary for the Nazis to change the elites of business, they could be bought! 9 An even stronger case for this is the reaction of the German business elite to the program of forced sales of companies owned by Jews. If a jewish family wanted to emigrate after 1936, and it owned substantial property, state permission to leave the country was granted provided the property was sold to an “Aryan.” It was usual to exploit this situation in offering cut rate prices to the Jewish seller. Taking advantage of the desperate situation of well-to-do Jews was by no way limited to businessmen with Nazi connections. This program of “Arisierung” strengthened the position of the Hitler-Regime in the business community at large. In retrospect is is clear that the regime was less concerned with its current standing with one or the other of the sectoral elites than with the popularity of its policies with the general public (Kershaw 1988, p. 125ff.). A major instance was the reaction to the “Reichskristallnacht” during the night of November 9 to 10, 1938. On November 7 a young jew had assassinated a minor German diplomat in the Paris Embassy. The day after his death the street ghters of the NSDAP, the SA, staged a rampage against Jews. More than 200 Synagoges were burnt to the ground, 7500 stores and of ces of Jewish owners were looted, and 91 Jews were murdered (Allen in Peukert and Reulecke (eds.) 1981, p. 397). The report of the underground organization of the social democrats to the headquarter of the SPD-in-exile in London read: “Since the Third Reich took power, there has never been such a unanimous and open rejection of the methods of the national socialists” (Deutschlandberichte der SPD 1980, p. 1352). The of cial les of the German Government agreed with this evaluation of reactions both in the population and among the elites, and the action which was to test the readiness to support a violent purging of jews was discontinued immediately (Allen, op. cit. p. 409). 10 8 LSÖ is the abbreviation for “Leitsätze für die Preisermittlung aufgrund der Selbstkosen bei Leistungen für öffentliche Auftraggeber” of November 15, 1938, replacing the earlier LSP. Both were accounting schemes which had to be followed in calculating a cost price in submitting a bid or in seeking a contract with a public body, and in the nal accounting. The successful bidder/contractor was allowed to add 6% to the cost price as his pro t. 9 Of course, there were also ideological Nazis in the business elite, and they were preferentally rewared. An example of this was the CEO of Germany’s largest cigarette factory, Philipp Fürchtegott Reemtsma. As an ardent Nazi, running around in the uniform of an SA of cer, he was later awarded the monopoly contract to supply the German troops ghting in Russia with his cigarettes. 10 This may have been to the detriment of the jews in Europe as the Nazi leadership concluded that in eradicating jews methods needed to be worked out that involved as</p>
<p>The Structure of the German Elites ² 101 Already in 1934 the Nazi government had passed a program of euthanasia, requiring the sterilisation of those “un t to breed.” Euthanasia on a by far larger scale was ordered in September 1939, decreeing the “merci killing” of all those presumed incurably ill. When this pogram for mass murder became known, violent protests arose in the population, and they were backed by such institutions as the Christian churches. This caused the program to be continued under a cover, and ultimately to be terminated by an order of Hitler two years after its inception. By that time approximately 100 000 humans had been murdered in this program — by far most of them clandestinely (Lutzius 1987). It is an indication of the importance that the regime attributed to the evaluation of its actions in the general public that Goebbels looked for mea- suring instruments with the kind of information that at hat time “Gallup Polls” provided in the USA. Finally, something akin to “Mass Observa- tion” in England was institutionalized — a combination of eavesdropping to conversations in public place, unsystematic interviews, analyzing pri- vate letters and collecting jokes. SS-Standartenführer Ohlendorf was in 1938 entrusted with developing this service. His “Meldungen aus dem Reich” provided a by-and-large correct description of the mood of the country, and this caused them to be discontinued in June 1943 by order of Goebbels. Since 1942 the reports had become ever gloomier, and that was not the kind of information which the Nazi leadership could put to use (Boberach (ed.) 1965). Of course there remained some resistance in all parts of the elite in a concealed manner. And there were around forty attempts to assassinate Hitler, — most of these as acts of individuals. The most important attempts by groups of conspirators were ve incidents in 1943 and 1944 — the most signi cant one occurring in July 20, 1944. All of these latter conspiratorial attempts were carried out by high ranking of ciers of aristocratic origin who had planned these assassinations as the start of a regime change. Some of these assassination attempts came very close to succeeding, despite the fact that none of the conspirations had support from outside the country (Lill and Oberreuter (eds.) 1984). Developments in academia offer an inside view of how a corporatist social structure reacts to an attempt from outside to impose loyalty to a few executioners as possible. Cf. William Sheridan Allen 1981, op. cit., p. 409. And indeed such procedures were developed: in the 14 months prior to the opening of the rst “holocaust camp,” the special forces “Einsatzgruppen” murdered nearly 2 million jews with “conventional” methods on the territory of the USSR, although at any one time no more than 3000 executioners were acting (Dawidowicz 1976, pp. 167-171). Jens Albers (University of Constance) calculated the number of SS — Members involved in killing by cyanide gas around four million jews in the death camps at a mere 5000 persons.</p>
<p>102 ² Erwin K. Scheuch totalitarian regime. Shortly after the takeover in 1933 there was a massive exodus of senior professors from German universities. Contracts of Jewish professors were cancelled by law, and dissenting voices colliding with the of cial ideology of the NSdAP — in so far as it was spelled out — had to be silenced. In sociology this meant that positions had to be vacated, or that the emphasis of a scholar’s work had to shift to other elds. An example is the at that time most prominent sociologist in Germany, von Wiese, who from 1933 on taught only the history of economic doctrines. Only the group around Hans Freyer in Leipzig tried to develop something called “German Sociology.” Yet in spite of the ideological enmity between professors e.g. in the School of Economics and Social Science at the University of Cologne. there was not a single case of denunciation before 1945, or of public attacks after 1945. The bonds of professional loyalties were stronger than commitments to political ideologies. And the norm of professional loyalty was also in most cases a suf cient deterrent against the temptations of being bought (Scheuch 2001, pp. 113-168). Whether this resistance to outside pressure would have stood the test of time has to remain open. The Nazis did begin to build up a counter elite with the SS, and a system of elite party schools (“Ordensburgen,” Napola’s) committed to the ideology of the system: “A new social order in which class con ict and ideological cleavages would disappear and be replaced by a sense of national solidarity and by a commitment on the part of every individual to put the interests of the nation before self — Gemeinnutz vor Eigennutz” (Noakes and Pridham 1984, p. 376). However, the regime had merely six years of quasi-peace, followed by six years of an increasingly burdensome war — in any case there was no time to restructure a system. Elite Change after “Denazi cation” in the Bundesrepublik In their plans for a new Germany after the end of World War II the Allies were determined to eradicate national socialism, and as a central element of this policy they devised a program for “denazi cation.” In December 1944 law no. 5 of the Military Government for Germany listed 52 organisations and of ces that were declared illegal “in order to end the regime of lawlessnes, terror, and inhumanity” (Gerhardt in: Gerhardt and Mochmann (eds.) 1992, p. 28f.). Directive JCS 1067 of the Joint Chiefs of Staff of the US High Command read: “All members of the Nazi party who have been more than nominal participants in its activities, all active supporters of Nazism or militarism, and all other persons hostile to allied purposes will be removed and excluded from public of ce and from positions of importance in quasi-public and private enterprises (Merritt 1995, pp. 180-181).”</p>
<p>The Structure of the German Elites ² 103 By the end of 1945 around 100 000 of cials of the Nazi party had been interned in US camps alone. Following the four power agreement “Allied Control Council Directive” no. 24 of January 12, 1946, all Germans were to be sorted into one of ve categories: Class I major offenders, Class II offenders (activists, militarists, pro teers), Class III lesser offenders, Class IV followers, Class V exonerated. 545 tribunals (“Spruchkammern”) were instituted, employing 22 000 persons in all four zones of occupation (Friedrich 1948, pp. 253-275). In the end, 12 000 000 Germans had been checked, at rst 1 500 000 persons were removed from their of ces, and a number of large corporations were split into smaller parts — notably the largest banks, and the chemistry giant IG Farben (Scheuch and Scheuch 2001, pp. 37ff.). Finally, 25 000 persons, many of them in elitist positions, were classi ed as major offenders (Plischke 1947, pp. 807-827) — all of this in addition to the well known Nuremberg — Trials between November 20, 1945 and October 1, 1946 of the 22 top gures of the Nazi system. The unity between the four Allies was a condition for a program of coordinated elite change, and this agreement began to fractionate of cially with the “Iron Curtain” speech of Churchill on March 5, 1946. With the coup d’état in the CSSR in February 1948, the retreat of the USSR from the Control Council for Germany in March, and the Berlin Blockade in June of the same year the end of the denazi cation program was inevitable, and became of cially so in the Russian occupied East Germany also in 1948. However, the determination to realize a complete elite change had waned already before. All the allies realized that getting the war-torn country to function required the cooperation of the old elites of at least the second and third level of importance. Even in the Russian founded East German GDR where “antifacism” was proclaimed as the raison d’étre, outright Nazis were given posts, provided they were not personally responsible for crimes and promissed loyalty to state socialism. Among the parties of the “popular front” there was even a party speci cally for former Nazis, the Nationaldemokratische Partei (NPD) (Kappelt 1997). It is politically correct among intellectuals now to view the gigantic bureaucratic effort of the denazi cation program as inef cient. If the benchmark in evaluating denazi cation were to be the removal of the personnel of elites during the Nazi-time, then indeed denazi cation was a partial failure. Most of the top level of that part of the elite that actively supported Nazi programs were removed — but by no means all. The managers of Deutsche Bank were according to a report by OMGUS (Of ce of Military Government US Zone) war criminals, but Hermann Josef Abs of that management led the post-war delegation of the Federal Republic that in 1953 negotiated the settlement of Germany’s war debts, the “Londoner Schuldenabkommen.” Hans Globke in 1935 as a high ranking</p>
<p>104 ² Erwin K. Scheuch civil servant was the author of the of cial commentary for the Nuremberg Racial Laws, but nevertheless served between 1953-1963 as junior minister (Staatssekretär) in the cabinet of Konrad Adenauer. Denazi cation as a program for the removal of those having served the Nazi regime was least successful with major companies, above all in nance, and with the “classical” professions of law and medicine. Somewhat greater were the effects in administration and in education — though not in academia, — and the strongest impacts were among the elites in communication and politics — there down to the third level (Herbert 1998, pp. 93-115). 11 The combination of personal networks, and the crucial place of a functional elite, given that neither the Nazi regime nor early post-war developments were wholesale societal revolutions, blunted efforts at elite changes. Thus, a high degree of continuity is diagnosed among the second- level elites (Hoffmann-Lange in: Revue Internationale de Sociologie 2001, p. 210). In addition, the Cold War division changed priorities, adding importance for each side in this con ict to get its part of Germany to function again as quickly as possible (Edinger in American Political Science Review 1960, pp. 58-82). “In avenging individual wrongdoing, the efforts at denazi cation were by and large not very effective, but as an initiative to delegitimize the NS-Regime and its ideology denazi cation was both necessary and all in all successful” (Scheuch and Scheuch 2001, p. 40). During the rst 25 or so years of the new Federal Republic most observers agreed that the system of strati cation was open for upward social mobility, and that leadership was recruited from a rather broad social base. Aristocratic origin, and beyond that nobility in general, were no longer relevant for the strati cation system after two World Wars during which the blood toll of the nobility was by far the highest among all social groups; in addition, the economic base of most of the remaining family clans had eroded. By now most persons in positions of greater in uence came from the upper middle class, though there were no ltering institutions such as the elite universities in England, the USA, or Japan, and the special schools in France. In the Kaiserreich student fraternities had acted as the functional equivalent for the ltering effect of a system of elite universities, but in later times they had only residual in uence. As a consequence the coherence among the elites in beliefs and manners was rather low, and 11 However, even in these elite sectors corporatistic mechanism proved stronger than political divisions. Thus, the trio that founded Germany’s leading daily, Frankfurter Allgemeine Zeitung, was composed as follows: long-standing Nazi Peter Grubbe, jewish emigrant Paul Medina, and a Nazi-fellow-traveller Erich Welter; the left-of-center “Der Spegel” had two ranking SS-of cers as editors alongside Rudolf Augstein as editor-in-chief who despised Nazis (Lutz Hachmeister and Friedemann Siering 2002).</p>
<p>The Structure of the German Elites ² 105 this prompted observers such as Dahrendorf to question whether those in positions of leadership deserved to be called “elite” (Dahrendorf 1965). Two factors contributed to the openess for upward mobility and the resulting heterogeneity of beliefs and manners. The rst of these were until the mid fties waves of migration, the largest one being the exodus of about 12 million between 1945 to 1949 as the result of “ethnic cleaning” in the territories ceded to Poland and Chechoslovakia, and later until the erection of the Berlin Wall in 1961, 2.6 million from the GDR to the Federal Republic. The second factor was the lack of access to higher education until about 1968: Until this expansion especially between 1968 till about 1975 less than 2% of an age cohort attended universities, but subsequently this share went up to 18%. At the same time observers from outside the country claim that during the formative period of Republic the German elites were highly consensual (Higley and Burton 2000). The pressing need for reconstruction, the success of the “economic miracle” during the fties, and until the early sixties the unpredictable reaction of the superpowers in con ict situations fostered a spirit of solidarity among sectoral elites. 12 A rst concentration of elite studies occurred in the 60s. The majority were investigations using the so called positional approach, and in rare cases the reputational approach. We know of no study involving a large number of cases employing the issue approach (Deutsch et al. 1967; Scheuch in: Die Neue Gesellschaft 1966, pp. 356-370; Zapf 1965). Studies agree that there was less difference between formal positions and actual in uence in the Federal Republic than is true for Britain, but a somewhat lower agreement between formal position and factual power than in France; and it is nearly impossible in Germany to wield in uence at the elite level without some formal position. There is also agreement that career lines are long — some 20 to 30 years — and during this time characteristically only a small minority moves from one sector to another. The regional and sectoral segmentation of the elite remained strong. “Quite knowledgeable members of the elite usually knew only a very small number of persons from other elite sectors even within their region” (Scheuch, op. cit. 1988, p. 61). 13 Cooptation is the standard 12 The acceptance of the Berlin Wall by the USA, and the backing down of the USSR in the Cuba Crisis can in hindsight be understood as a turning point, away from confrontations without predictable rules of the game for the superpowers to a stable system of confrontation. 13 Scheuch, Erwin K. 1988, op. cit., p. 61 — reprint of a manuscript from 1966 written at that time for an anthology on Germany with Henry Kissinger as an editor. When Kissinger became Secretary of State for the USA, he found the text in con ict with his new status and withdrew agreements for publication.</p>
<p>106 ² Erwin K. Scheuch practice on the way to elite status, and it tends to take place in two steps: step 1 is the selection as a hopeful (in business this is called being tagged as a “potential”); step 2 is being singled out by a “mentor,” who then assigns a challenge. It is helpful to be included in a network of hopefuls, but the support of a mentor is crucial. A second concentration of studies on elites occurred in the eighties, showing some new trends: 54% of the elites came from parents with upper middle class status and higher, while at that time 11.4% of the general population was so classi ed (Hoffmann-Lange et al. 1992, table 4.1). In all sectors, including the economic elites, personnel from white collar homes dominated; among economic leaders only about a third had fathers that were self-employed (ibid, table 4.2). The most important of these changes was the “academization” of the elites in nearly all elds. This trend has now begun to reach the three avenues where earlier access was possible without an academic degree: trade unions, the social democratic party, and starting one’s own business. The rapid expansion of universities had an effect opposite from the expectations in politics — namely a much larger number of academics now blocking the mobility of non-academics. In 1981 nearly one quarter of the economic elites reported membership in a student fraternity, and one sixth of leaders in education and research. Given that less than 5% of the students at that time were members in a fraternity this means that fraternities had regained some of their former importance in the Kaiserreich. Unchanged was the numerical dominance of protestants, the scarcity of women, and the geographical disperson accross the territory of the Federal Republic: only 15% of the top in uentials were located in the Bonn-Cologne area, with Bonn at that time the capital of the country. A comparison of the class origins of the elites from the economic sector in the Federal Republic and the USA shows that inhereting the elite status from one’s parents is 2.5 time more frequent with the owners of larger businesses in the US than in Germany. Also, the frequency of a parents background as self employed was considerably higher in the US (27.3%) than in Germany (19.6%). This replicates our earlier observation that the background of economic elites in the Federal Republic is predominantly a salaried parent. This may contribute to the preference for the more restraint “Rhineland Capitalism” among German managers (Hoffmann- Lange, ibid., p. 245; Moore and Alba in: Marsden and Nan Lin (eds.) 1982, pp. 39-60). 14 14 Data on Germany from Hoffmann-Lange, ibid., p. 245; data on the USA are from Gwen Moore and Richard D. Alba (1982). “Class and Prestige Origins in the American Elite.” In: Peter V. Marsden and Nan Lin (eds.): Social Structure and Network Analysis. Beverly</p>
<p>The Structure of the German Elites ² 107 Cohesion across sectors was now somewhat stronger than in the sixties. There was some cross-over between the positions of manager and being a of cer in an association, between a high rank in the trade unions and being a full time politician, and between a high rank in a party and top positions in the civil service. However, even in these cases most of the time — often around 90% — was spent within one sector. Important positions across sectors were held by merely 2.9%. The importance of advisory positions had increased over decades of the existence of the Federal Republic. By the 80s, 9.9% of the elites were members of an advisory group in politics, 3.3% sat on one of the important boards in business, 5% were part of a supervisory body in the media, but 20.7% had some functions in economic and professional associations. The most important change in the linking of sectors was the increase in party membership of the elite up to 43.4% — while in the population at large the percentage of members hovered around 2% (Hoffmann-Lange, ibid., table 4.12). All these gures however, do not shed much light on the structure of the top elite. The depth and the reliability of the data from so called ego-centered networks leave much to be desired. However, this remains currently the most practical base to diagnose the relative in uence of elites from the various sectors (Hoffmann-Lange in: Moyser and Wagstaffe (eds.) 1987, pp. 227ff.). 15 One study uses the so called “structural equivalence technique” to identify network relations leading to an “inner circle” of 559 in uentals (Burt in: Sociological Methods and Research 1978, pp. 189- 212). 16 One important aspect of networks is the degree to which formal positions and actual in uence coincide. 89% of the members of the “inner circle” of in uence occupy a high ranking formal position; only 11% do not. We observed this high degree of formalization in networks of in uence already in 1966: “A formal position of at least middle rank in national hierarchies is a prerequisite for exercising in uence in practice. Hills, pp. 39-60. Population gures may appear strange at rst; they represent only those active in the workforce and aged above 40 — the age span of those in elite positions. 15 Hoffmann-Lange reports two different sets of percentages from the same elite survey: one in the article in 1989 already cited p. 257; and another one in 1987 in “Surveying National Elites in the Federal Republic of Germany.” In: George Moyser and Margaret Wagstaffe (eds.): Research Methods for Elite Studies. London , pp. 227ff. We cite gures from the article in 1987 because the categories used in this somewhat earlier publication permit a better interpretation. 16 In the article of 1989 the number of persons in this “inner circle” is given as 340. For a methodological discussion in using the “structural equivalence” instead of a snowball procedure see Ronald S. Burt, 1978, “Cohesion versus Structural Equivalence as a Basis for Network Subgroups.” In: Sociological Methods and Research , vol. 7, pp. 189-212.</p>
<p>108 ² Erwin K. Scheuch From then on the actual in uence exerted may diverge grossly from the presumed in uence of the formal rank of a position” (Scheuch in: Die Neue Gesellschaft 1966, p. 368). Another important characteristic of networks is their “density,” meaning for a given circle of persons the number of actual relations relative to the possible relations. This density is in Germany for the elite in general lower than for the USA; in the inner circle the density is higher, but again that is only about half the value for the top in uentials in the USA (Hoffmann-Lange, op. cit. 1992, pp. 379f.). More important still is the observation that 77% of all the relations mentioned by the members of the “inner circle” as important contacts crossed sector lines. Thus, one may characterize the position of the top in uentials among the elite in general as “brokers” in a segmented system. For the elite in general, politicians trail in numbers the elites represent- ing the economic sector, but this is not so for the “inner circle.” In this top group the share of politicians was 40%, and a further 12% were top administrators. Given that most of the top bureaucrats in today’s Germany owe their job to party patronage, one may add a further 9% to the political sector (Hoffmann-Lange in Kaase (ed.) 1986, p. 393). In the elite in gen- eral the economic sector was represented not only by 23.4% owners and managers of larger companies, but also by a further 11% of cers of im- portant interest groups. Unfortunately, Hoffmann-Lange groups all three categories for the “inner circle” together and arrives then at a total share of 25.3% (Hoffmann-Lange, op. cit. 1989, p. 257). On the basis of our own analysis we estimate that at least one third of the of cers of associations were full time involved in party politics. Thus we arrive at a total share for politicians in the “inner circle” of 53%. In case there is a high degree of consensus between the leadership of the major parties CDU-SPD-FDP, this centrality of the politicians in linking sectors makes for a high ability of the elites to act. However, unlike the situation during the rst two decades of the newly founded Federal Republic this was no longer true at the be- ginning of the eighties. As we know from surveys the major political parties were divided on such issues as dealing with the USSR, the use of nuclear energy, genetic enginering, and generally on a wide range of the topics of the “new politics.” Under such conditions the centrality of politicians in linking sectors of a segmented elite means that the dissent in politics spreads to many sectors and reduces the ability of the system to act. This was the situation lasting until 1989 — the eve of the process of reuni cation. Elite Structure after Uni cation According to the conventional wisdom in the social sciences a sudden uni cation should have had a major effect on the composition and the modus operandi of the elites. Fortunately, for the time after uni cation in</p>
<p>The Structure of the German Elites ² 109 1990 there are 10 quantitative studies available, although most of them covering only the sectoral elites of politics and the economy. However, as we could observe earlier these are the two most important sectors for political decisions. In addition there are a number of quantitative studies on interlocks in the elite, and also some qualitative investigations into the style of operating. The overall conclusion is that some of the already noted features of the German elite have become more pronounced, especially in the top leadership of the economy and in politics; there are in addition signs of an “bureaucratization” in big business with features recently added to German business culture. A sweeping change of personnel can be observed in the administration in the East of the country, speci cally on the communal level for the simple reason that a communal administration common to democracies did not exist in communist East Germany. Where the structures in East Germany were speci c to a Communist society, personnel was imported from the West. Otherwise one could not diagnose a general exchange of personnel! Contrary to the situation until the end of the 70s there had been no plans for reuni cation. Civil servants had been ordered to discontinue from then on to work on such plans. Not only for the political elite but for the majority of elites in other sectors it was politically incorrect to even consider such an eventuality. 17 When the rule of communism began to evaporate rapidly by October 1989, the policy of the government of the Federal Republic was to strive for a confederation of two German states. It was only after the unexpected defeat of the East German care-taker government Modrow in the elections of March 1990 that reuni cation became the of cial policy of the Federal Republic. The general line that Helmut Kohl admonished his political colleagues to follow was: change only what is unavoidable, and do that in a manner that causes as little noise as possible. Kohl and the political elite in the West were beset by the fear that the process of uni cation could be branded the colonization of the GDR by the FRG. In addition the West German government proved to be very ignorant about conditions in the GDR, believing e.g. the claim of the East German government that this were to be the eighth largest industrial state. As part of this policy to tread softly in unknown territory, the change of the economy was entrusted to an institution of the last communist government, the giant holding company for some 8500 companies in public ownership, the “Treuhand.” The large majority of those working in the Treuhand with 17 Horst Teltschik, the of cial in charge of foreign policy and security issues in the Chancellery, had in 1988 ventured that a collaps of the East German economy might be eminent. He was of cially chastized for this.</p>
<p>110 ² Erwin K. Scheuch the general policy “privatization before rehabilitation” were personnel of the former communist institutions, with West German managers on top. After approximately four years, nearly half of the East German companies had been privatized — half of these privatizations being a management buy-out by the former communist appointed company heads (Scheuch and Scheuch, op. cit. 2001, pp. 186-190). The second and third level leadership was hardly affected by Treuhand induced personnel changes. There was of course some elite change, mostly at the very top. The rst and second level leadership of the East German political parties were largely removed — though not totally. The leader of the Christian Democrats, Angela Merkel, was a ranking member of the communist youth organization FDJ, and the new head of the trade union federation, Sommer, was an of cer of the communist workers organization. Most supporters of the communist regime from other sectors of society, such as the Protestant church, disappeared from public life — though not all. The former prime minister of the Land Brandenburg Manfred Stolpe had used his of ce as high-ranking church-of cers to support the communist regime. A number of agents of the communist secret service hold political of ces. As the Western legal system was extended into the East, the professional base for those working there in the legal system was cut away. While those in the East German army were given a choice to join the western “Bundeswehr,” and a sizable number did, this was not true for the military leadership. Nearly all journalists continue in their trade, as do most professors — with the exception of such elds as economics, social sciences and modern history. There is even a political party, the Party of Democratic Socialism (PDS), that in its membership and ideology is a successor to the Socialist Unity Party (SED) — the state party of the communist German Democratic Republic (GDR). The “Potsdam Elite Study” is meant to represent the elite of Germany as of 1995, ve years after uni cation. The positional approach was used, and with a completion rate of 59% alltogether 2341 respondents were interviewed in East and West Germany (Bürklin and Rebenstorf (eds.) 1997). All those living in the GDR between the building of The Wall in 1961, and its coming down in 1989, were classi ed as East Germans. Given a share of nearly 20% East Germans in the total German population, the part of the elite from the east among the elite of all Germany is with 11.6% generally underrepresented — with a strong exception in the sector politics where the eastern share is 32.1% (Bürklin (ed.) 1996, p. 3). The system change away from a communist to a western model was not tantamount to a general elite change. True, for some sectors the rst rank of the elite was replaced or thinned out, but by and large levels two and three were absorbed into the structure of the Federal Republic. This was</p>
<p>The Structure of the German Elites ² 111 Table 1 Composition of the German Elite in 1995 (Bürklin and Rebenstorf 1997, pp. 65-67) 18 Elite sector Share among the Eastern share of it Western share of it Elite (%) (%) (%) Politics 23.9 32.1 67.9 Administration 16.6 2.5 97.4 Economy 16.5 0.4 99.6 Economic associations 8.3 8.1 91.9 Trade unions 4.2 12.4 87.6 Professional associations 1.5 ? ? Justice 1.8 0.0 100 Academia/research 5.1 7.3 92.7 Mass media 11.6 11.8 88.2 Culture/the arts 4.9 12.9 87.1 Churches 1.4 ? ? Military 4.0 0 100 Other 0.9 8.9 91.1 not unlike the processes between 1918-1920, 1930-1936, and 1946-1953. In all these instances the changes in the political sector were by far the most sweeping, followed by personnel changes in sectors affected by polit- ical ideologies. All these instances are therefore to be viewed as primarily political revolutions and not equally as societal revolutions. During the course of the 20th century there were obviously important changes both in the social structure (e.g. blue collar workers becoming a shrinking minor- ity), and in the elite composition (e.g. replacement of elites by birth and property through elites by education and occupation), but these changes were incremental and cumulative rather than abrupt. Part of the explana- tion for this is the fact that the three-to-four replacements that took place among the political and politically related elites occurred with the outgoing elites being either unwilling or unable to resort to major violence. And this undoubtedly contributed to the continuity of elites of rank two and three. The uni cation process was and is of course controversial. A recurrent feature of this controversy were arguments about the pertinence of economic versus political considerations. Thus, nearly all economists argued against the immediate introduction of the “hard” western currency, and against an exchange rate of 1:1 for the Eastern currency; a realistic rate of exchange would have been 1:7. There is surprisingly not much controversy about the sum total of the yearly transfer payments totalling 18 We combine in this table two tables from the authors that differ a bit from each other in their classi cations. A question mark means that this breakdown for the total row gures was not available.</p>
<p>112 ² Erwin K. Scheuch now at least 750 million Euro to the ve Länder that were once the German Democratic Republic — but a continuous criticism of economic elites that 80% of this is used to subsidize the standard of living in the East. An estimated billion Deutschmark was given to Volkswagen to build a super-modern automobil factory in Dresden (former GDR) to demonstrate the will to modernity in the East. The political class of Germany countered such criticism from elites of the economic sector by arguing that all of this was politically inevitable in order to bridge the gap between East and West in responding to uni cation. This was and is indeed a real problem as in June 1999 59% of those surveyed in the East reponded that they identi ed neither with the Federal Republic nor with the former GDR; only 25% saw themselves as citizens of the new Germany (Sozialreport 2/2001, p. 17). 19 The problem that the elites from the political sector perceive is real, and the arguments from an economic perspective are valid. It is relevant for a diagnosis of the structure of the German elite that the major dissent in evaluating needed action exists between sectors and not primarily within sectors. Signi cantly, by now the value hierarchy of the political elite prevails over that of the economic elite. Two Key Elites: Political and Economic While we emphasized the segmentation of the Geman elite, this picture needs to be complemented by demonstrating the corporatist character of the German system, and the emergence of something like an establishment at the very top. We can tap several recent empirical studies — alas the most informative ones concentrating on the political und the economic elites only. One of these studies is a comparative investigation of the leadership of the 500 largest companies, and of the deputies of the Federal Parliament, the 12th Bundestag (Scheuch and Scheuch 1995). Despite the rapid academization of the leadership in politics and business, the openness for upwards mobility has further increased. Table 2 Class origins of Economic Leaders (Scheuch and Scheuch 2001, p. 302) Class of origin Economic leaders (%) Population (%) 1981 1995 1995 Upper and upper middle 45 41 6 Above average 28 25 18 All lower origins 27 34 76 19 Survey by “Sozialwissenschaftliches Forschungszentrum Berlin-Brandenburg” in June 1999. Sozialreport , special issue 2/2001, p. 17.</p>
<p>The Structure of the German Elites ² 113 The head of Daimler-Chrysler Jürgen Schrempp is a trained auto- mechanic, and is on a rst-name basis with the then CEO of Deutsche Bank, Hilmar Kopper, who also moved upward through the ranks. The new head of Bayer Leverkusen, Werner Wenning, began his career as a mere apprentice. Chancellor Gerhard Schröder’s mother was a cleaning woman, foreign minister Joschka Fischer was a dropout from High School and had to earn a living by driving taxis. Such careers are however an exception, especially for the top positions of very large companies. Darmstadt sociologist Klaus Hartmann showed that for 100 largest companies in Germany 90% of the CEOs were recruited from the upper and upper middle class. For these top position it is primarily the demeanor that makes the difference, and this one does not learn in day schools but from parents. CEOs of such top companies are now not just economic leaders but representatives whose self-assurance and image in public is at least as important as their technical knowledge. It has become fashionable to call promissing candidates for careers “high potentials.” By now both in politics and in business high potentials single themselves out very early — for better or for worth. In business, 78% of the high potentials were speakers for their age class in school, 60% had spent some time abroad when of school age, 35% had worked for the student papers (Noelle-Neumann in: Gut (ed.) 1997, p. 180). Among the deputies of the 12th German Bundestag, about half had joined the party youth organization before reaching the age of 22, and among the CDU national deputies 39% had been youth functionaries (Scheuch and Scheuch 1995, pp. 121 & 127). There are two main ways to become a “potential”: you act as part of a clique, or you catch the attention of an already powerful gure, a “men- tor.” An example of a clique succeeding in politics were Eberhard Diepgen (until recently lord mayor of Berlin), Gerd Langguth (former representative of the EU in Germany), Matthias Wissman (spokesman on economic affairs for the CDU) who jointly sat on the editorial board of a political magazine for students, “Die Sonde,” and later synchronized their careers. In our sur- vey of top managers, a majority reported that they continued to keep con- tact with fellow high potentials. An example for the importance of mentors is Jürgen Schrempp (CEO of Daimler-Chrysler) who was rst sponsored by a local chief of Mercedes; subsequently being asked by the boss of Mer- cedes in South Africa to meet a “challenge” — the usual turning point in the careers of top managers; after that being called back to Germany by the then head of Mercedes to deal with an ailing tractor subsidiary; succeeding again then being invited by the new head of Daimler Benz, Edzard Reuter, to manage the just acquired companies in aero-space. Edzard Reuter’s reign turned out to be a desaster, as was Schrempps per-</p>
<p>114 ² Erwin K. Scheuch formance with aero-space companies. Reuter as Social Democrat had been promoted to CEO during the closing years of the cold war with expectation that Daimler Benz could become a major armament procurer; this was no longer a reasonable perspective, and Reuter was expendable. Schrempp, however, had a record of previous successes in diverse missions. Mean- time Schrempp had caught the eye of the CEO of Deutsche Bank, Hilmar Kopper, who appreciated the brusque manners of Schrempp. Combined with board room politics akin to the intrigues customary in high level party politics, Schrempp managed to become the CEO of the renamed Daimler-Chrysler “global” company ( Jacobi 2000, p. 15). By and large in politics cliques as a crucial element in careers tend to be more frequent, and in big business careers by cooptation through a mentor. Also, careers via cooptation tend to be shorter, and lead to top ranks more frequentlly. A third variant in careers is opting to be a courtier of a big-time leader/manager. Ronald Reagan surrounded himself with Californians, George Bush with helpers from the North East of the USA, and Bill Clinton with politicians from Arkansas. This American custom has by now reached politics in Germany and begins to be imitated in big busi- ness. Chancellor Gerhard Schröder is a case in point, as is CEO Jürgen Schrempp. An overview of the larger companies in Germany reveals that the rst decade after uni cation was a period of considerable change (Liedtke 2001). 20 According to our analysis of this material, around 30% of the 100 most important companies experienced a change of ownership or control, were the object of a take-over, or initiated one of their own, or are newcomers in the front rank at the expense of other former top Table 3 The Structure of Ownership of the 100 largest Enterprises in Germany in 2000 (Liedtke 2001) Public ownership (federal, Land, communal) 9 enterprises Financial institutions (including funds) 22 Other large companies 17 Many shareholders — no concentration 16 Personal ownership 5 Family/dynasties 27 Other (e.g. non-pro t foundation) 4 20 This diagnosis is based on an a compilation that Rüdiger Liedtke published, covering the 100 largest enterprises in Germany. 2000. Wem gehört die Republik? Die Konzerne und ihre Verechtungen 2001 . Frankfurt.</p>
<p>The Structure of the German Elites ² 115 companies. The resulting picture shows some similarity with the structure of the economy in France, and considerable dissimilarity to the USA and the United Kingdom. Some of the blue chip companies as of 1990 are no longer among the 100 most important — such as Allkauf, Degussa, FAG Kugel scher, or Grundig. By and large important rms founded in the 19th century appear more resistant to changes und threats to survival than rms started in the 20th century. Increases in size are most spectacular in the New Economy, but also in trade. In economic theory stock markets are understood to direct the course of the rms. It is a characteristic of the German system that this is not so. Consequently the position of managers is quite varied. This is very much the case where the owners are rich individuals or dynasties. With owners of the rst to the third generation since founding, the managers tend to be family members. Examples are such big name companies as Bertelsmann, Metro, Oetker, Tchibo, or Tengelmann. For older companies a dynasty may number around 30 part-owners as in the case of Henkel, with Röchling the number increases to 200, and reaches 930 in the case of the Ruhrdistrict giant Haniel (Liedtke 2001). 21 For decision making in such companies one needs to recall what one knows from aristocratic dynasties (Downer 1994). 22 We suspect that for the USA descriptions of pure cases of a share holder capitalism are overdone, and that personal ownership even there is of more than residual importance. For the highly developed countries the major differences between the economic systems and the interlocks between managers of different companies result from the dependency on alternative forms of nancing. In the USA around 80% of the needed funds come the sale of shares, in Germany 80% are credits mainly from banks. This is the consequence of political decisions in the USA dating back to the end of the 19th century and added to during the early days of the Roosevelt-presidency. A coalition critical of big business succeeded in restricting the operation of banks: Banks could no longer act as broker houses and at the same time as credit institutions. By way of contrast, in the Kaiserreich the leading political circles favored the strengthening banks as tools to help the economic late comer Germany to catch up. And banks in Germany were authorized to exercise voting rights for the shares of private owners deposited in trust (“Depot-Stimmrecht”). 23 21 The companies named here are listed in alphabetical order in this source books. 22 London analysis the effects of enmities within dynasties in the case of Japanese rms. 23 The reliance on the stock Market is expressed by the degree of capitalization = Percentage of the combined values on the stock market in relation to the GNP. The</p>
<p>116 ² Erwin K. Scheuch The Network Structure of In uence Since the sixties social scientists in the USA have become interested in the degree to which even in a market economy interlocks exist between the leadership of competing rms. In the eighties this became a topic of several quantitative investigations in Germany, too. Before reporting and commenting on ndings, some information is necessary about differences in the forms of governance for public companies in the USA (and largely in Britain as well), and in Germany. 24 The two systems are fundamentally different: In Germany the policy of the public company is decided by a board (“Vorstand”), and the board is controlled by a supervisory body (“Aufsichtsrat”) who appoints the board, and is in turn controlled by the yearly assembly of shareholders (“Hauptversammlung”); in the USA there is no separation of the two functions of operating and controlling but just one unitary “board.” The board in Germany was supposed to act as a collegiate body with the chairman (“Vorstandsvorsitzender”) being a primus inter pares. To serve on the supervisory body was to be a part-time position. However, increasingly the supervisory body is now being subdivided into committees. An American Board of Directors is also subdivided with the assignment of different titles for board members: President (often being called chief executive of cer — CEO), Vice- President, Secretary, Treasurer, and Controller. Frequently there is a further subdivision for boards between (full time) Inside-Directors and (part time) Outside Directors. Thus, in practice the differences between the German and the American System are becoming blurred. 25 Analyzing data from 1976 in a handbook on big business with sociometric techniques Rolf Ziegler had demonstrated that in Germany a mere 89 persons out of a total of 4.727 positions on boards and supervisory boards were responsible for 69% of all interlocks (Ziegler in: KZfSS 1984, p. 589). Four companies dominate the networks of interlocks in Germany: the three largest banks “Deutsche Bank,” “Dresdner Bank” and “Commerzbank,” plus the insurance company “Allianz” (ibid., p. 595). Deutsche Bank as the most central of all companies is directly connected higher the percentages, the greater is the dependency on the stock market as a source of nance; the lower the percentages, the greater is the importance of credits. In Germany, the degree of capitalization is 27%, in the USA 122%. Deutsche Bundesbank: “Monatsberichte,” January 1997, p. 28. By the way, a better term would be “Börsen-Kapitalisierung.” 24 The “conseil d’administration” in France is still another variant. 25 With the movement of board-chairman Ernst Breuer to become chairman of the supervisory body, the “Vorstand” of Deutsche Bank becomes in practice an American stile board. To please the new chief Josef Ackermann the Vorstand was reduced from 13 to 5 of cers, and the two main elds of business became the sole responsibility of Ackermann.</p>
<p>The Structure of the German Elites ² 117 with 78 enterprises, and via one intermediary indirectly with a further 161 rms (ibid., p. 601). Using the same data as Ziegler, Franz Urban Pappi concentrated on the personal characteristics of the “big linkers” for the 325 largest corporations. More than half of the “big linkers” were former board members who moved on into positions of the supervisory bodies. Nearly one half, however, had not previously been part of the economic elite, but were or had been fulltime politicians or of cers of associations (Pappi et al. in: KZfSS 1987, p. 699). The interlocks become less frequent the further one moves away from the eld of nance and investment goods towards consumer goods. Despite the emphasis in much of the literature on basic differences between Germany and the USA, an American investigation using parallel material from about the same time period concludes: “Banks and insurance companies have increased rather than decreased in importance within the corporate economy. In summary, the evidence on corporate interlocking points to an increasingly pervasive and integrated structure of elite cooptation among major corporations, in which nancial institutions occupy the central position” (Allen in: American Sociological Review 1974, p. 404). The structure of the German economy, and the character of the economic elite did not change much with uni cation. Around two third of the German work force is employed in small and middle sized rms, and consequently the impact on society at large of most of the owners and managers is limited in scope. The interaction with other elites is very largely concentrated locally or regionally. Very important for the network of interrelations is the dense web of voluntary associations at local levels where owners and managers meet and arrange deals with local elites in politics and administration, decorated by some cultural and academic elites (Scheuch and Scheuch 2000, pp. 167-210). This pattern developed quickly also in the former GDR, where it obviously was merely dormant during the communist reign (Scheuch in: Best 1993, p. 162f.). Local publicly owned banks are economically more powerful than local banks in the USA, and on their boards powerful local politicians negotiate deals with local business leaders. A third party in these networks are the politically appointed leaders of the administration that tend to be helpful in overcoming restrictions. 26 During the 90s, differences between the elites of middle sized rms and of those of major companies increased, but the pattern of interlocks 26 If this reads as though one were describing conditions in American communities, than one reads correctly. We undertook a series of empirical investigations on community power structure, and citations from those can be found in the books published jointly by Erwin K. and Ute Scheuch between 1992-2000. The one major difference is the important involvement of German middle sized companies in the export trade.</p>
<p>118 ² Erwin K. Scheuch remained. The 30 largest companies in Germany, representing 53% of the capital of all the securities that are traded publicly, are listed on the DAX — the equivalent of the Dow Jones or the Nissei. 73 of all seats, or 25%, on the supervisory boards of those agships of the German economy are occupied by bankers, and in 13 of the 30 boards bankers are the chairpersons (Adams 1997). 27 By virtue of the authorization for banks to have voting rights for all shares of private owners deposited in trust with them, banks have control over the voting rights of between 50% to 99% of the 24 largest companies with scattered ownership, on the average a share of the votes of 84%. In addition, they tend to dominate many publicly traded companies with concentrated ownership anyway (ibid., pp. 6-7). The power of the banks is enhanced as the boards of the ve then most important German banks also control the majority of the votes during their own shareholder meetings (Baums and Fraune 1995, p. 106). As public companies in Germany are fairly free to decide what information they are to pass on to their shareholders, and as nearly all hide the amounts they pay to the individual board members and members of the supervisory board, these complicated structures offer ample opportunity for corrupt practices. One has to add to this picture the interlocks between banks and insurance companies to realize the full weight of the nancial sector in this economy. In the comprehensive internationally comparative investigation of the network structure of the largest rms of a country, data on interlocks between the economic elites in Germany, France, Switzerland, the Netherlands, the United Kingdom, and the USA were analyzed (Windolf and Nollert 2001). In addition information on Japan was also considered. The most corporatist economy was that of Japan, the most decentralized economy was that of the USA. England was closer to the USA than any other country, while Switzerland followed by Germany were closer to Japan than to England. In France there appear two systems coexisting: The large companies with a high density of direct plus indirect (via intermediaries) interlocks; and smaller companies very often family owned who are existing in isolation. In France 43% of the companies are not connected via direct and indirect personal relations, while this percentage for Germany is only 9% (Windolf in: Revue francaise de sociologie 1999, pp. 501-530). The large companies are often state owned, and they are typically connected by the practice of “pantou age” from the personnel of the Grandes Corps d’Etat. This 27 Professor M. Adams in a written statement during the hearing of the Legal Committee of the German Bundestag on the reform of the law on public companies (accessed 17 February 1997, p. 1).</p>
<p>The Structure of the German Elites ² 119 in turn motivates many family enterprises to identify with free markt capitalism (Pastré 1992). Characteristic for Germany is the frequency of majority share holders or owners. Of the 650 largest companies 51% are controlled by one share holder or owner (Windolf and Nollert 2001, p. 15). The functional equivalence in the case of the USA may be the large number of pension and investment funds. Even though the share that any one investment fund may hold in any one company is by law limited to 5%, the fund managers are said to often act in concert (Useem 1996). The German law regulating public companies allows an economic leader to be on the board of one company, and also accumulate seats on the supervisory bodies of ten other companies. The single strongest group making use of this right to accumulate positions of in uence are of cers of the two main interest groups representing business: The Federal Association of Industry (BDI), and the Federal Association of Employers (BDA). Nearly half of the of cers of these associations hold two or more positions in controlling bodies of large corporations. Of the 82 functionaries of the BDI and the BDA 65% occupy positions of control in large corporations, 7 of them in 7 and more bodies (Windolf and Beyer in: KZfSS 1995, pp. 22-23). This represents a con rmation of the tradition in the German economy to have the interests of rms often represented through associations — but this may be changing now for big companies. A fuller picture of the accumulation of positions of in uence is to count not only the positions held by individual members of the economic elite, but also consider indirect in uences — in a given body meeting another multi-functionary, i.e. looking at chains of in uence. The results cited here are calculations by Prof. Windolf, University of Trier. The gures refer to 1997 and are as yet unpublished. The then head of the board of Dresdner Bank, Wolfgang Röller, was connected with 78 of the total of 308 multiple of ce holders of the 700 largest German companies, followed by the speaker of Deutsche Bank Hilmar Kopper. The rst 24 members of the economic elite in terms of their connectedness were related each to 51 and more other multiple of ce holders. In contrast to this practice, the highest number of connections in the United Kingdom had Sir Michael R. Angus with 18 connections. Of course, one can ask whether any member of the economic elite in Germany can really ll out his 10 positions in supervisory boards plus the Vorstand, and the answer is: certainly not if we were to view this body as its designation suggests. In reality two functions other than controlling the board have become central to the “Aufsichtsrat”: to reward outgoing members of the economic elite and politicians with</p>
<p>120 ² Erwin K. Scheuch ample payments (Lüdtke 2001, pp. 292f.), 28 and to coopt in uence agents who today are mostly ranking politicians. A prime example was Chancellor Gerhard Schröder who as a member of the supervisory board at Volkswagen was credited serving this function; after several interventions with the EU authorities he earned the nickname “Automobil Chancellor.” These two functions can be viewed as responsible for the great size — up to 21 members for large companies — of German “Aufsichtsräte.” The supervisory board of the already mentioned Linde AG includes 16 members: The chairman being the former president of the board (usual in Germany), three executives of very large nancial institutions, three executives from blue chip companies, a high functionary of the Protective Association for Shareholders (“Deutsche Schutzvereinigung für Wertpapierbesitz”), and as a consequence of the Co-determination Law eight union members, which politically translates into Social Democrats. In some instances the function of controlling the board (Vorstand) is given weight, and then members of the supervisory board (Aufsichtsrat) are either appointed to serve full time, or are given a staff — an analogy to the differentiaton of functions on boards of American companies. Otherwise, the wide-spread mockery seems to apply: If things are going well, the “Aufsichtsrat” is super uous, if things are going bad it is useless. Usually in identi ying national political elites parliaments are analyzed. In the case of the Federal Republic the most important result is the lopsidedness of representations of occupational settings (Korte 2000, p. 34). The dominant pattern of an interwining of professional politics and public administration is obvious. This is not restricted to the federal level, but is repeated in the Länder (the 16 states into which the Federation is divided at the next level of politics), and very pronounced for the large municipalities. 29 It is not easy to judge what this means today, as the importance of parliaments especially at the Federal level are being reduced. Already in the late 60s important decisions, or at least the preparation of such, were delegated to extra-parliamentary bodies. This steadily increased during successive governments. Initially Chancellor Schröder delegated policy recommendations to ght unemployment to an “Alliance for Work” 28 Renumerations vary widely. In the case of the Linde AG — a world leader in refrigeration — at the end of the 90s the payments averaged around 80 000 Euros a year. Cf. Rüdiger Lüdtke 2000, op. cit., pp. 292f. 29 In the case of the city of Cologne — 1 million inhabitants — there are 96 councillors, presumably controlling about 20 000 civil servants and deciding a regular budget of 3 billion Euro.</p>
<p>The Structure of the German Elites ² 121 (Bündnis für Arbeit), an of cial committee with representatives of the employers, the unions, politicians (including the ministerial level), and social scientists. This looked as though he were to continue with the familiar corporatist responses in situations of stagnation. 30 The reaction of Schröder is to invent ever new committees with representatives of the camps that tended to block each other. An example is the controversy about the scope of genetic engineering, where at rst a committee was called to recommend the use of socalled “stem cells,” and when it proved dif cult to reach an agreement to invent another committee on ethics in research. As leading politicians make snap decisions in bestowing or withdrawing the authority of committees, the parallelism of parliaments and committees signals a further de-institutionalization of politics. A third development has increased this trend, while paradoxically adding to the weight of the elites from the political sector: accumulating memberships in public bodies and associations. Already at the time of uni cation, 76% of the professional politicians, and 44% of the top administrators (usually party appointees) were members of sport clubs.The large majority of all politicians were members in several voluntary associations and in supervisory bodies (Scheuch and Scheuch 1992, p. 51). The cabinet of the prime minister of Northrhine Westphalia, Wolfgang Clement, represents the Land NRW in 128 supervisory bodies, institutes, and associations. Clement alone is member in 35 bodies — such as a Max- Planck-Gesellschaft, the controlling council of the no. 2 in German tv, the ZDF, and the “Friendship Circle of the Stiepeler Village-Church.” His deputy Michael Vesper accumulates 30 memberships including councils of several museums, and of the international tennis-youth competion. Together with top civil servants (usually party appointees) the Land NRW is represented in 797 bodies and associations (SZ 2001). The tendency of top politicians to move into a broker position between the various sectoral elites that we mentioned earlier has increased further. With around 50% of the spending from the GNP being directed by public bodies, there exists in Germany a strong interdependence between private rms and politically supervised institutions. Political parties and individual politicians appear to have an insatiable appetite for money, and rms are dependent on administrations and politicians. The dependency is strongest where contracts are passed by public bodies, if a licence or an exception is needed for doing business, and if subsidies are required. There is a thin line between politicians in their current position as the brokers 30 As progress on substantive issues eluded the Alliance, energy went into a Byzantine complication of the internal structure, with a steering committee, a benchmarking group, and 9 expert groups.</p>
<p>122 ² Erwin K. Scheuch between private interests and public money, and outright corruption (Scheuch and Scheuch 2000). 31 TV tycoon Leo Kirch could rely on the in uence of former chancellor Helmut Kohl when he had trouble with the EU authorities, and on top dignitaries of the Bavarian CSU-party when he needed credits from the publicly owned Bayerische Landesbank; these credits are now ailing to the tune of more than a billion Euro. Philip Holzmann is one of the largest construction rms in the world, and could look back upon a history of 150 years. However, after uni cation the rm overextended, and in November 1999 lacked 1.2 billion Euro to continue operations. In order “to save 60 000 jobs” Gerhard Schröder intervened personally and managed to combine credits from several banks with a government cash guarantee that caused grumblings in the EU. Observers link the readiness of the banks to help in an economically questionable deal to one of the biggest tax breaks ever given to big business: Schröder managed to have taxes waved for pro ts resulting from selling shares in companies, provided the seller was a company listed on the stock exchange. The deal with the banks plus tax money afforded the Chancellor the opportunity to declare via television that he had saved thousands of jobs. In 2002 after having ruined hundreds of smaller construction rms through dumping prices, Holzmann was nevertheless terminally bankrupt. This pattern of dubious dealings being supported by representatives of at least both major parties is by now common. A further case in point is the sale of tanks to Saudi Arabia during the Gulf War, resulting in a huge pro t for producer Thyssen. Thyssen claimed successfully with the help of the SPD-Minister of Finance of Northrhine Westfalia that a bribe paid to further the sale to the tune of 110 million Euros was tax deductable as legitimate expenditure, saving the company around 75 million Euros in taxes. None of these cases were ever fully cleared, and no one of the protagonists had so far serious legal dif culties. A major case in point are the circumstances surrounding the sale of Leuna in the east of Germany to Elf Aquitaine in 1992. A coalition of politicians and bureaucrats related to both major parties has up to now in Germany been able to prevent serious investigations (Kleine-Brockhoff and Schirra 2001). Following examples from other democracis, Germans have become used to the fact that State Visits by its Chancellor are giant sales shows for big companies, for instance promoting Siemens in China. Transparency International, who regularly evaluates surveys of business 31 See Erwin K. and Ute Scheuch 2000, op. cit. for cases and modes of corruption at all levels of the polity.</p>
<p>The Structure of the German Elites ² 123 practices in 41 countries, rates Germany (alongside France and Spain) as “not so clean” (Newsweek 2002, p. 18). In our 1995 surveys we asked business CEO’s and professional politicians directly for episodes where attempts to in uence decisions were experienced The most frequent topics were issues concerning the competitiveness of Germany (which translates into the cost of structures in which one has to run one’s business), and the nancing of the welfare state. All other issues, including political issues of general interest, trailed these two topics. The most frequent agents in these attempts to in uence business leaders were Federal Ministers, followed by the Prime Ministers of the Länder. It is evident that top leaders in the economic sector are the object of political in uence exerted by top politicians. Already Chancellor Kohl became active in many speci c cases that in the literature are usually understood to be the object of concern for the of cers of interest groups. Chancellor Schröder contacts personally individuals of key importance for the business elite. For the top economic leaders, of cers of interest organizations and ministers of Länder governments are now of secondary importance. The new class of “global players” of the top enterprises needs intermediaries no more (Scheuch and Scheuch 1995, pp. 92ff.). Among the 25 managers that we identi ed as the top in uentials in business, hardly anyone failed to report such episodes (ibid., p. 94). The initiative in such episodes is more often taken by the political elites rather than by the economic elites. This is especially so in the case of functionaries of the EU in Brüssels, by associations representing non-economic interests, by the top leadership of political parties — and surprisingly by the Chancellor himself. The reverse, namely that attempts more frequently originate with the business elites themselves, have as targets the top of nancial institutions, the decision level of the media, and the leaders of research institutes (ibid., p. 96). The most frequent partners for the top elite in business were the top level of ministries as well as the leaders of national economic associations, and much less so the full time politicians that are the bread-and-butter fare of daily reporting in the media. Thus, the deals with structural importance, and politics for the general public are two different “narratives” — to use a term by the post modernists. The importance of the Chancellor and some Federal Ministers in cases that are considered crucial is matched on the local level. In crucial cases some key politicians intervene personally, but otherwise heads of administrative units and economic leaders cooperate on a regular basis. This is especially true for all decisions even remotely related to real estate, and for large investments — e.g. a purchase of rolling stock for public transportation. The dense network of associations connects the lesser players from politics and business in less spectacular deals.</p>
<p>124 ² Erwin K. Scheuch Originating from the United States, so called “service clubs” have tried to unite elites across sectoral boundaries. 32 Unlike the Free Masons they profess to be ideologically neutral, to be devoted to good deeds (“activities”), and to the maintenance of friendship (mutual visits). Of these the Rotary Clubs are the most prestigious. Indeed top bankers, industrialists, and prominent politicians in Germany are often “Rotarians.” However, while in Sweden there are 3262 Rotarians for every one million population, and in the USA 1.644, the relation in Germany is a mere 380 to 1 million — considerably less than even in France and Italy (Böhmer and Behrens in: Wirtschaftswoche 1995, pp. 90-98). While according to a survey of top business leaders in 1994, 70% were members also in clubs such as the Kiwanies or Lions, social prestige rather than in uence appears the dominant motive. In 1995 the opinion research institute FORSA asked 200 members of the economic elite (3% were Rotarians) about the importance of service und other prestige clubs. 33% judged them to be helpful in discussing some action, but only 13% mentioned them as the settings for decisions (ibid., p. 96). More important are formal circles of in uence that are built up systematically. Deutsche Bank is reputed to provide successive Chancellors with top advisors (Adenauer with Abs, Brandt with Klasen, Schmidt with Christians, Kohl with Herrhausen and Kopper, Schröder with Kopper and Breuer). In addition and equally important for the political system, Deutsche Bank introduced regional councils for its Länder outlets, and local councils for the municipalities. In all the bodies Deutsche Bank tries to assemble the elites from the various sectors. To sit on these councils is both prestigeous and lucrative. Friedel Neuber of Westdeutsche Landesbank (WestLB) initiated the “savings club” IC 72 where elites especially from politics and the media were given prefential advice on investments. The “Deutsche Vermögens AG” which holds about 70 billions Euro in contracts, has problems with its reputation because of a door-to-door sales force of 26 000 agents. Its large advisory council includes the late Chancellor Kohl, a number of further politicians that held of ce as ministers, the former head of Nestlé international, several CEOs from major nancial institutions, and the former head of a public tv company. The function of a body composed in this way is less to provide in uence but primarily the building of con dence for customers, and especially of motivating the 26 000 agents. By way of constrast the much smaller council of Nestlé lists primarily professors from various ares of competence and is thus a body of real advisors. “mg Technologies” (the renamed 32 They try to mix occupations by observing quotas, and set upper limits for membership of local clubs in order to intensify interaction.</p>
<p>The Structure of the German Elites ² 125 Metallgesellschaft) has assembled in its newly founded “Frankfurt Forum” an expensive assembly of personalities that in the media are credited with anticipating the future. As the company emphasizes new technologies, including the improvement of the environment, this new body can be viewed as a combination of a resource for expert advice, and also very much as serving purposes of public relations. For public gures deliberating the location for an important address, the Düsseldorf “Industrieclub” is still an important forum. Although its standing has declined somewhat, compared to the times when Adolf Hitler on his way to the Chancellery gave a speech assuring industrialists that he was not the wild man he was reputed to be, it is still a necessary address for a business leader in the Rhine-Ruhr area. Alltogether the zenith for these formal arrangements to bridge distances between sectoral elites appears to have been passed, informal groupings are taking their place. Perhaps they will be the new establishment. The Top Elites in the Media Increasingly during the 80s and the 90s managers of top companies tended world wide to follow fashions in business philosophy originating in the USA (Scheuch and Scheuch 2001). 33 Managers in Germany were no exception to this trend. Examples were the admonition to diversify, followed by the next fashion “lean management.” Take-overs were a fashion speci cally during the second half of the 90s. Examples including German rms are the take-over of Hoechst by Rhone-Poulenc to become Aventis S.A., or of INA Holding to swallow FAG Kugel scher, or Eon to acquire the British PowerGen. A large share of all take-overs, however, are economic failures (Olbermann and Mel in: Wirtschaftswoche 2001, pp. 47-53; Student and Werrres in: managermagazin 2002, pp. 59-66). This is even more frequent with international fusions of rms: The maintained “synergy” effects are usually weaker than the clash of different company cultures (Papendick in: managermagazin 2002; Katzenjammer in: Neue Zürcher Zeitung 2002, p. 10). Alien to the German business culture were hostile take-overs, such as the take-over of Mannesmann by Vodafone. Cases like these created a climate of resistance to such largely American practices that in the case of Germany led to restrictive legislation. 34 One of the most spectacular international cases was the take-over of Chrysler by Daimler-Benz — a company that after also becoming part- 33 Scheuch, Erwin K. and Ute 2001, op. cit., cite a number of cases. 34 Insiders maintain that the real motive behind the initiative of Chancellor Schröder in this aera is the defense of the undervalued VW company where Schröder was a board member, against a hostile take over.</p>
<p>126 ² Erwin K. Scheuch owner of Mitsubishi and Hyundai now rates as one of the real “global Players.” As is common for international fusions this take-over, too is nancially a failure. However, Mercedes in Germany regularly reports such surplusses that this covers the losses of the mentioned acquisitions abroad. A loophole in the German taxation system permits companies to claim losses abroad as expenditures that can be deducted from earnings at home. This makes acquisitions abroad mostly risk free for CEOs that aspire to rate as “global players.” 35 Big businesses in Germany such a Daimler-Chrysler or Siemens do not pay a single cent in income taxes any more. “From now on you get nothing more from us!” told Jürgen Schrempp the nance committee of the Bundestag during a dinner. He referred to another tax loophole allowing rms to shift earnings between years with different rates of taxation (Spiegel 10/2001, p. 24). The German Law for public companies assumes that the board acts as a collegiate body, and that within an American board the legal position of the president can be much stronger than that of the German chairman. Some decades after World War II an American president began to be called “Chief Executive Of cer,” in short CEO. This was more than a change in title, this new wording marked a change in perspective. “The mythologizing of the CEO began in earnest about 20 years ago, as a wave of Herculean corporate restructurings gave rise to a brash new breed of corporate miracle worker. Lee Iaccoca, “the man who saved Chrysler Corp., was the prototype : : : But it is Welch who has come to epitomize the CEO as maximum leader for all seasons” (Bianco and Lavelle in: Business Week 2000). Somewhat later this perspective coincided with the dominance of neoliberalism in American economic thinking, and the fashion “share holder value.” The competence of a manager was to be measured solely by the performance of a company on the stock market, and if that was above average, this should be rewarded by a super high income. Charles Wang of Computer Associates had in 2000 an income of 655,4 millions US$, and the already mentioned business hero of General Electric, Jack Welch, of 93,1 millions US$ (Wirtschaftswoche 2000, p. 14). During the 90s these perspectives and values were embraced by the chairmen of large German rms with an important part of their business in the USA. The mentality and behavior of the largest part of the elite in the economic sector in Germany have not been “Americanized” in this way, but the heads of many major companies have drifted in this 35 In an exchange of letters with the then nance minister of Northrhine Westphalia we were told that this tax loophole was meant to encourage the export of German capital, but that it would be closed soon. The Federal Republic is today one of the world biggest exporters of capital but the loophole has not been touched.</p>
<p>The Structure of the German Elites ² 127 direction, making for a considerable gap within the business community. Deutsche Bank and Dresdner Bank are envious of the earnings of American broker houses when these convince a company to go public. And German automobile rms go in for (mostly economically unsuccessful) international take-overs, the major reason being vanity of the managers, namely the wish to become a member of a new international caste of “global players” (Wirtschaftswoche 1997, p. 123). German Managers begin to think of themselves as CEOs such as Thomas Middelhoff of Bertelsmann, or Henning Schulte-Noelle of Allianz-Holding. Traditionally the earnings of a top manager in Germany were approximately 11 times that of a skilled worker — which meant for very large companies between 1/2 and 2.5 millions Euro a year. The comparative gure for a manager in the United Kingdom was up to 20 time that of a clerk (Financial Times 1999, p. 9). Now the head of the publishing house Axel Springer in 2001 made 23 million DM, Rolf E. Breuer as speaker of Deutsche Bank 16.4 million DM, and Jürgen Schrempp 12 million DM; the former chairman of Mannesmann who sold out to Vadofone received 60 mio DM as a settlement. The exploding incomes, coupled with massive cuts in the work force of large companies, begin to strain the social consensus that was a characteristic of “Rhineland Capitalism.” The top political class begins also to “Americanize” itself rapidly. Chan- cellor Schröder (SPD), Foreign Minister Fischer (the Greens), Chancellor Candidate Westerwelle (FDP), and PDS leader Gysi are prime examples. An approximate dozen of German politicians monopolize tv talk shows, with American leaders as role models. 36 Here they meet with a dozen or so business leaders who have learned from American CEOs that a charis- matic executive can talk the share prices of his company up and down. Leaders of top companies and top politicians as well have begun to compare themselves with the top gures of the entertainment world. Traditionally a business leader was discrete, was known primarily to other business leaders. Now most Germans know bankers Breuer and Kopper, heads of car companies as Schrempp and Piëch, as they know the politicians Schröder or Fischer. The public grumbles not only about the phantasy-incomes for German imitations of American CEOs, but even more so about the constant claim of politicians that they are underpaid at 36 Already during the election campaign for the Bundestag of 1994 the then Chancellor Kohl had been on tv programs 32.2 hours, the opposition candidate Scharping 22.9 hours and the leader of the 3rd largest party, FDP, Kinkel, 18.1 hours. The leaders of the 6 parties represented in parliaments were on tv alltogether 95.6 hours. Source: Media Control , Cologne.</p>
<p>128 ² Erwin K. Scheuch the same time when they keep on increasing their income. But compared to the stars of entertainment and professional sports these tv politicans and CEOs are indeed underpaid. “Inner circles” abound at all levels. There is the “Schrempp Circle” which in addition to German CEO’s and the top business leaders includes also the Chancellor. One meets in Berlin’s most prestigious Hotel Adlon over gourmet dinners. The Chancellor in turn invites hand picked leaders of big business into the posh chancellery, and this apparently atters the economic elite. A selection of top business executives, calling themselves “Similauner,” joins in high altitude climbing. That this is practiced in earnest is demonstrated by Ulrich Cartellieri from the board of the Deutsche Bank and treasurer of the CDU, who had to be hospitalized after sliding from a mountain top in the Alps (Bild 2000, p. 9). Quite a few of the German version of an American style CEO now cultivate a macho image. Germany is beginning to have an upper class again, a “society” in the sense of prominence, that shows itself off by festivities and unconventional behavior, with the expectation that this will make the media of entertainment. Well known politicians begin to mingle with entertainers, business leaders with the greats of sports, top administrators with weapons dealers, and scientists with the shady-rich, and with what is left of the aristocracy. 37 Two ballroom events have become stages for “the rich and the beautiful” to show off: the “Bundespresseball” (Ball of the Federal Press) in Berlin and the “Ball des Sports” (Ball of Sports) in Mainz. The wives of top leaders increasingly dabbel in expensive charity “events.” Is there an establishment in the making? Conclusion The Kaiserreich was the last period where Germany had an establishment that determined policy. The core was the landed gentry east of the Elbe river, the “Junker” caste. The nobility had a monopoly for top positions in the military and the public administration. The loss of World War one abolished this order imposed by uni cation after 1870, and a corporatist structure became dominant that we assume to be much older, dating back into the early Middle Ages. According to many empirical studies there can be no question that since the twenties the prime loyalty of most of those in top positions belong to fellow elite gures in the same sector. At the same time, being rmly 37 For lists of names see the lead-paper for this development, Bunte , but also the list of those invited to attend the “Innovationspreis der Deutschen Wirtschaft” — Frankfurter Allgemeine Zeitung (accessed 19 January 1998, p. 19).</p>
<p>The Structure of the German Elites ² 129 based in a sector has so far been a presupposition for effectiveness across sectoral divisions. In addition, interlocks with elite positions and persons from other sectors adds weight to one’s standing in the “home” sector of a top in uential. The segmentation that was described here for the interbellum period and after that until the early 80s may have been a transitory response to the turbulences of the times. Local and corporatistic embeddedness has a very long tradition in Germany, with the nation state never penetrating as deeply into daily life as in the cases of France or England. The international dependencies of European states enforce now either the existence of an establishment with a strong “we-feeling,” or as a functional equivalent to that strong network relations connecting elites from various sectors — as it exists already at the communal level in Germany. The conventional wisdom interprets the international dependencies as corrosive for the nation state. This may be half true for the cultures of daily life. However, it is not discernible so far for majority responses to national challenges at the elite level. At the national level in spite of Federalism, the media and speci cally tabloids and tv, may foster the development of an establishment of prominence, but for decision making in determening careers and decisions, networks rooted in the corporatist structure of the country will continue to dominate. References A LLE N , M ICHAE L P AT RICK 1974 “The Structure of Interorganizational Elite Cooptation — Interlocking Corporate Directorates.” American Sociological Review , p. 404. A LLE N , W ILLIAM S HERIDAN 1981 “Die deutsche Öffentlichkeit und die Reichskristallnacht.” In: Detlev Peukert and Jürgen Reulecke (eds.), Die Reihen fast geschlossen. Wuppertal, p. 397. B AUM S AN D F RAUNE 1995 “Institutionelle Anleger und Publikumsgesellschaft.” Die Aktiengesellschaft , p. 106. B EHREN S , B OLK E 1997 “Vom Sockel gestiegen.” Wirtschaftswoche (accessed 11 December 1997, p. 123). B ERGHA HN , V OLK ER R. 1987 Modern Germany . Cambridge (UK), 2nd edn. B ESIER , G ERHAR D 2001 Die Kirchen und das Dritte Reich . Berlin. B EST , H EINR ICH 1989 “Mandat ohne Macht. Strukturprobleme des deutschen Parlamentarismus 1867-1933.” In: Heinrich Best (ed.), Politik und Milieu , St. Katharinen, pp. 185- 200.</p>
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