Sociologists commonly define the intersection of the state and the economy (within a society’s institutional structure) as political economy. In the political economy of ‘laissez faire’ capitalism of the Victorian era, it was commonly assumed by mainstream political scientists that the state was largely independent and powerful over the economy, which comprised of a large number of small concerns. The state in such a conception was the driving force of history. According to a modern refinement of this view, termed pluralism, there is a ‘balance of power’, due to a stalemate of competing interest groups and elected politicians. In its sanitized world-view, pluralism considers the state as an honest broker of ‘free and fair competition’ for the ‘common good’ of society.

Pluralism found its opponent in Marx who attacked the view that there was an ideational common-good based ‘balance of power’ between the poor masses and the owners of the means of production. The misery of the proletariat, working in inhumane conditions as a cog in the industrial ‘mode of production’, captured by his historical/empirical and often very descriptive analysis, put the ‘false gods’ of capitalism, the symbolism of competition for the ‘common good’, to rest over 150 years back: power was unfairly skewed towards the owners of the means of production as the state decided in their favor, even as the immesiration of the proletariat increased to levels of absolute deprivation.

The worker becomes all the poorer the more wealth he produces ... The worker becomes an ever cheaper commodity the more commodities he creates. With the increasing value of the world of things proceeds in direct proportion to the devaluation of the world of men. Labour produces not only commodities; it produces itself and the worker as a commodity -- and does so in the proportion in which it produces commodities generally. Marx, Economic and Philosophic Manuscripts (1844)

 Thus arose Marx’s ‘ruling class’, comprising of the bourgeoisie, the owners of the means of production, the leaders of the economic sphere, based on whose ‘relationships of production’ all other institutional spheres, religion, family, military and state took shape, bound by an ideology generated by them. The state according to Marx, thus became a subordinate ‘committee’: “The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie”. Marx, The Communist Manifesto (1872)

 As capitalism evolved into an advanced form, ownership, control, power and the means of communication became centralized and concentrated, but this concentration was not limited to one institutional sphere, as Marx had suggested. Direct control of the proletariat broke down and evolved into mind control by domination of the media of mass communication. Management shifted from a management of profits to the management of levels of deprivation. Further, the manipulation of ‘mass consciousness’, became the key to domination, using modern technological means unknown in Marx’s day. As a result, the control of the state by the captains of industry became enshrouded in mystery as contradictory decisions, sometimes benefiting the working class and sanctioning industry, went against the Marxist idea of an omnipotent ‘ruling class’. The New Deal in the United States that incorporated several ideals of socialism, in a diluted form, into the machinery of the capitalist economy, suggested to many the inadequacy of Marx’s definition of the state and its relationship with the economic institution. World War II and the ascent of the new militarism further altered the world situation. The military institution, previously considered parasitic upon the means of production, now became the driver of a ‘permanent war economy’: The ‘military metaphysic’- the military definition of reality was embraced avidly by elites in the economic, political and military spheres. It was in this atmosphere of academic confusion and vacuum that C. Wright Mills (1916-1962) formulated his Power elite model in the 1950s.

 In this pioneering work, The Power elite (1956), Mills pointed out that the Power Elite (as applied to the U.S. elite) involves the (1) “Uneasy coincidence of economic, military and political power” (Mills 1956:278 , where (2) Chosen elites, those at the pinnacles of the economic, military and political institutions (chosen through co-optation and socialization) move within and between these three institutional structures. Further, this Power elite possesses a (3) specific and clear ‘class consciousness’ and unique image of self as a psychological fact (considering themselves separate and superior to the rest of society), regardless of ideological label or party membership. Factions might exist among the Power elite but their coinciding (4) “community of interests” and the resulting inner discipline bind them together even across differences (Mills 1956:283). Given these forces that are at play among them, the way they have emerged and the (5) institutions that have shaped them, it is impossible for them to break away from the corporate world and its interests in the decisions they make while in public office. These interests are driven by their worldview, (6) the “Military Metaphysic”, which has, since the end of World War II, come to describe the economic life of the U.S, in the form of a permanent war economy, and thus the military institution has gained in importance.

 The model when it first appeared was attacked by pluralists as being ‘Marxist’ and by Marxists as being a confused representation of Marx’s ‘ruling class’, while others ignorantly discredited it as a conspiracy involving ‘some people meeting in dark rooms’.  Pluralists today suggest that since the ‘power elite’ is becoming increasingly ‘diverse’ (with the inclusion of Colin Powell and Condoleezza Rice- who are supposed to symbolize the empowerment of African Americans), Mills was wrong in attributing near uniformity to the elite and underestimating the political struggle of a multitude of groups. Marxists attack the model stating that Mills assumes that the three institutional orders, the economic, the political and the military are equally powerful, thereby obscuring Marx’s ‘ruling class’. These common criticisms of the model by university academics and popular commentators alike, reveal a basic misunderstanding of the components of Mills’ power elite.

 The different levels of power confuse the pluralists hence the accusation that Mills downplays the importance of group struggle. They appear seemingly oblivious to the role played by un-elected elites that populate the president’s cabinet, influential policy boards and think tanks. They downplay the fact that institutional mechanisms ensure that major decisions, policy parameters, campaign issues, campaigns and the people who will compete are predetermined before any voting takes place.

The ability to mobilize resources for effective interest group formation as well as access to power networks for successful lobbying are dominated by the wealthiest. The fact that the weathiest 1% of U.S. society controls more wealth than the rest of the 99% combined and how that disrupts the 'balance' for the 'common good' is conveniently ignored by pluralists. Further, they cannot explain political apathy and alienation among the masses given their ‘balance of power’ parameter and the fact that the few that diligently vote among the public are given extremely restricted choices, which are further restricted by being structured through mass-mediated information by privately owned media. Group struggle might be significant on the local levels of power but on decisions of national and global significance there has been near uniformity of decision by the US power elite, regardless of party label or popular opinion. Thus we see the continuous military adventures of this elite in the post World War II world. Further, as Mills pointed out this alliance of the power elite is an uneasy one. In order to maintain a critical mass of power, members from the lower echelons have to be allowed into the elite group. Membership however is based upon ‘social type’ and worldview. In other words, the new inductees are ‘social clones’ of the existing elite. As Mills stated, the power elite are not bound by ‘any one community (or country)’. The elite are a near homogeneous group, and their homogeneity is based more on social type and ‘interests’ rather than any physical characteristics or geography. Those that interfere with these broad ‘community of interests’ are removed, their membership is revoked (the entry and exit of Colin Powell from the current Bush administration would be a contemporary example).

 The criticism by the Marxists of the power elite model is based on ideological belief in classical Marxism and a misunderstanding of ‘interchangeability’, which is an important component of the Mills model. The ‘power elite’ is a status-group that wields power, an ability to get their will even though others might oppose it: ownership of wealth is just one dimension in the prestige accorded to this group, hence the ‘interchangeability’. Talking about relative strength of institutions becomes redundant when we note the interchangeability that exists among the big three: the military, political and economic institutions. When the roles and statuses that exist at the pinnacles of institutions are interchangeable among a select group of uniform ‘social types’, it becomes redundant to talk about relative strength: take the example of Alexander Haig Jr. a four star military general in the U.S. Army who moved to the economic institution as president of United Technologies, a major defense contractor, then moved to the political institution as secretary of state under Reagan, then moved to the economic institution again; or take the example of Dick Cheney, who moved from the political to the economic, and back to the political (similar to Donald Rumsfeld). Colin Powell moved from the military to the economic, and was serving as board member for America Online in January 2000, when it announced its merger with Time Warner; a year later he moved to the political institution and was secretary of state in the Bush administration. When the same people are filling leadership positions among the big three: the military, economic and political institutions, due to interchangeability, it becomes meaningless to talk about relative strength of the big three institutions, neither can they be described as a ‘committee’ of any one institutional sphere. Using the ‘ruling class’ analysis how would we explain that the ‘committee member’ becomes a ‘ruling class’ member and then gets demoted to ‘committee member’ and after a brief interlude becomes ‘ruling class’ member again.

 A look at the 1991 Gulf war reveals that there were a ‘community of interests’ (both short and long term) that coincided to bring about a massive military response by the U.S elite against Iraq: Oil profits increased by 75% during the first weeks of the war, also the major defense contractors (like Raytheon and its Patriot missiles) got a live battlefield trade show and saw increasing sales thereafter. For the protection of the economic elite, permanent military bases in an (oil) resource rich region were ensured as were huge military budgets. The military, increasingly under pressure by Congress to cut budgets after the collapse of the Soviet Union, didn’t have to give them up. Politically, the administration of Bush senior was in deep trouble over the Savings & Loan disaster, and approval ratings were extremely low. With the media’s new round-the-clock war coverage, social solidarity was managed and public opinion channeled in tune with the desires of the power elite. It was not one institutional sphere that benefited from the destruction of Iraq but a nexus of three institutional spheres based upon a common ‘community of interests’.

 The power elite model is not the same as Marx’s ‘ruling class’, neither is it historically and empirically confused as the utopian pluralist model. The use of the ‘military metaphysic’ by the current day elite, as suggested by Mills, is an empirical fact seen by the unbroken chain of continuous wars instigated by the U.S. elite since the end of World War II. Compare this to the ‘labor metaphysic’ utilized by classical Marxism (where revolutions and the resulting rule by the proletariat result from class struggles in advanced capitalist societies), which has to-date never become empirical reality (the Russian and the Chinese "revolutions" occurred in largely rural societies and not advanced capitalist as predicted by the Marxist dialectic, neither did the state 'wither away'). Ideological adherence to the Marxist model, regardless of fact, which has become the norm among many latter-day Marxists, will only obscure the understanding of the current world situation. In the broad sense of historical specificity of particular social structures coupled with empirical evidence, emphasized by Marx himself, the Mills model though different than Marx’s ‘ruling class’ is more faithful to his methodology than current day Marxists, whose almost religious adherence to his ideas are based more on ideology than scientific analysis.