CAPITALISMcommodity producers or petite bourgeoisie. These
people produce goods and services (commodities)
for sale on the market, but they work for them-
selves and use only their own labor in production.
Most capitalist societies also contain cooperative
economic organizations that are distinct from capi-
talist enterprises. Cooperatives are commercial,
nonprofit enterprises, owned and democratically
controlled by the members. The nonprofit status
and democratic distribution of control (one mem-
ber, one vote) set cooperatives apart. The coopera-
tive is an especially important form of economic
organization for those simple commodity produc-
ers, like farmers, described above. All capitalist
societies today also contain elements of socialist
economy. Key social services, such as health care,
and even some commodity production are provid-
ed by the state in many societies commonly recog-
nized as capitalist. The United States is perhaps
among the most resistant to this movement to-
ward mixed economy. Yet even the United States
has, to some extent, socialized education, mail
delivery, libraries, police and fire protection, sci-
entific research and technological development,
transportation networks (e.g., highways, airports,
urban transit), military production, industrial
infrastructure provision, and so on. The mixed
character of this economy is further indicated by
the common practice of the government contract-
ing capitalist firms to produce many goods and
services. In a related way, the development of
welfare has influenced the nature of capitalist
society. The increased intervention of government
into the economy has generated the notion of the
welfare state. While popular conceptions of the
welfare state tend to focus on the role that govern-
ment plays in alleviating the impacts of poverty on
individuals, sociology also recognizes that welfare
reduces the cost of reproducing the commodity—
labor. In this sense, welfare functions, in the long
run, as a subsidy to capital. Further, many of the
socialized sectors of capitalist economies function
to ensure a profitable environment for capitalist
firms (O’Connor 1973; Offe 1984). In many in-
stances, such subsidization of capital is biased
toward the largest corporations.
Some sociologists have contended that the
rise of the large capitalist corporation, with its
dispersed stock ownership and bureaucratic form
of organization, has eroded the power of individu-
al capitalists to control the corporation in which
they have invested their capital. Instead, it is ar-
gued, bureaucratic managers have gained control
over corporate capital. Such managers are thought
to be relatively free of the drive to maximize
profits and are willing to accept average rates of
profit. In this way, the ruthless character of earlier
forms of capitalism are seen as giving way to a
capitalism that is managed with broader interests
in mind. Further, the dispersal of ownership and
control is said to eliminate the misuse of capital in
the interests of an elite and wealthy minority. This
‘‘managerialist’’ position complements pluralist
political theory by providing greater authority for
institutions of representative democracy to con-
trol the allocation of society’s resources.
This view is challenged in a variety of ways.
Other sociologists contend that while manage-
ment may have gained some formal independence,
its job requires devotion to profit maximization,
and its performance is assessed on this criteria. In
this view, the larger companies’ executives and
owners are able to use interlocking directorates
and their common class background (e.g., elite
schools, private clubs, policy-planning organiza-
tions) to minimize price competition and thus
sustain high profit levels. Others argue that those
informal ties are of less consequence than their
common dependency on banks. In this view, banks,
or finance capital, play a disproportionately pow-
erful role in centralizing control over the alloca-
tion of capital resources. This position strongly
opposes the managerialist arguments and those
who envision an independent corporate elite whose
power lies in the control of corporate bureaucra-
cies rather than in personal wealth (Glasberg and
Schwartz 1983). Further, to the extent that it is
valid, this argument is particularly important given
the increasing internationalization of capital dis-
cussed above, since a great deal of that develop-
ment has occurred in the sphere of finance capital.
These sorts of arguments reflect an important
shift in sociology’s understanding of the relation-
ship between capitalism and democracy. Sociolo-
gy’s Enlightenment roots provided a traditional legacy
of viewing capitalism and democracy as intertwined
in the process of modernization. While this parallel
development is certainly recognizable in early forms
of modern capitalism, more recent forms of capi-
talism call into question the extent to which capi-
talism and democracy are inevitably bound togeth-
er. Indeed, recent works suggest that capitalism