C Wright Mills has presented a new version of the elite theory. Mills limits his analysis to the American society only. He does not believe that elite rule is inevitable. In fact he sees it as fairly recent development. He rejects the view that the members of the elite have superior qualities or psychological characteristics which distinguish them from the rest of the population.+ Instead he argues that the structure of institutions is such that those at the top of the institutional hierarchy largely monopolized power. Certain institutions can be pivotal positions in societies and the elite comprise those who hold command posts in those institutions. Mills identifies three key institutions: The major corporations, the Military and the Federal government.
Those who occupy the command posts in those institutions form three elites. In practice however the interest and activities of the elite are sufficiently similar and inter connected to form a single ruling minority which Mills terms the Power Elite. The cohesiveness and unity of the power elite is strengthened by the similarity of the backgrounds of its members and another change and overlapping of personnel between the three elites. Members are largely drawn from the upper strata of the society. They share similar educational backgrounds and mix socially in the high prestige clubs. Within the power elite there is frequent interchange of personnel between the elites. Mills has also rejected the Marxian view that political power automatically follows economic power. He has shown a preference for power elite rather than ruling class.
According to him class is an economic term and rule is a political one. The ruling class in its political connotations does not allow enough autonomy to the political order and its agents and it says nothing about the military. Thus power elite is a more suitable term than ruling class.R.K Merton has further supported Mills view that the power elite are recruited from the same social class and are educated in similar prestigious colleges and schools and have similar orientation.